Don’t Rely on the Seer of Seers

by Doug Drabik of Raymond James, 2/5/26

It may be fitting that Groundhog Day occured on a Monday this year. Punxsutawney Phil has been officially prognosticating the weather since 1887. I’m guessing he must be the oldest groundhog to ever walk the planet. How nice it would be to have a “Washington Wally” to be the Seer of Seers for financial prognostication. Fortunately for us, fixed income portfolio allocations are more about strategic planning than prediction. We are in a healthy financial environment that lends itself to fixed-income opportunities, many of which have been covered in the Bond Market Commentary and other Raymond James white papers. Let’s review the important highlights.

  • The stock markets are amid a historic run. Six of the last seven years have boasted double-digit returns, including the last three consecutive years. There is an opportunity to lock in some of those gains. It may also be prudent to rebalance your portfolio's asset-class allocations to maintain a well-composed strategic allocation into wealth preservation assets. This is not about exiting equities. It is about harvesting gains, reinvesting them in fixed income, and improving certainty.
  • Rebalancing helps to preserve what you have already earned. High-quality, investment-grade fixed income locks in that growth while still preserving future growth potential through maintained growth balances.
  • The bond market yields available today allow these wealth-preserving assets to produce dependable income. This dual benefit exists because of the elevated rate environment.
  • Rebalancing is a risk-management moment, not a market call. There is no need to tap into Punxsutawney Phil or Washington Wally and rely on uncertain projections.
  • It is easy to get caught up in tactical trading, which often makes short calls on market direction to capture proceeds, while the stock market is basically moving straight up. This isn’t about relying on this tactical trade but rather injecting fixed income as a strategic stabilizer. This is less about predicting what comes next and more about locking in the benefits already made.
  • The yield curves have been steepening, which means that longer maturities are providing greater potential income benefits for investors willing to extend out.
  • Bonds are typically not purchased with the hope that they go up in value (a different mindset from buying stocks). Bonds are held in portfolios so that your capital performs as it is supposed to, providing consistent cash flow, income, and return of principal.

We are in that moment. Waiting to capture increasing future benefits risks the ability to lock in gains in hand. Let’s leave the prognosticating to our weather seers.