SGOV: 1929 Was Cheaper

The author uses SGOV (iShares 0-3 Month Treasury Bond ETF) as a springboard for macro commentary, warning that S&P 500 valuations are stretched (Shiller PE > 41) even as equities keep rising. He highlights the oddity of fixed-income sensitive ETFs (e.g., PFF, KBWY) outperforming despite higher Treasury yields and recommends short-duration Treasury ETFs like SGOV as a defensive cash substitute. Key macro datapoints cited: annual deficits of roughly $1.6–$1.8 trillion and a national debt near $39 trillion. The piece argues for maintaining some low-volatility allocations (short-duration Treasuries, floating-rate preferreds, baby bonds) given rich equity valuations and potential downside risks.