TINA, or There Is No Alternative, has been a common refrain from public market investors the last several years. The truth is, with inflationary pressures and very low bond yields, it has felt that way for people without access to private markets. Today there are in fact alternatives and the big financial firms have started naming names. Goldman refers to TARA (there are reasonable alternatives), Deutsche Bank is hungry and wants TAPAS (there are plenty of alternatives), and Insight Investments wants to be queen and wear a TIARA (there is a realistic alternative). For the first time since the GFC, yield on the 10-year US Treasury Note is close to 4%. This is a somewhat attractive yield for cash even if inflation remains somewhat elevated. 4% yield may not sound like a lot, but when the S&P 500 is trading more than 5 turns higher than it’s average price to earnings multiple. A guaranteed 4% sounds much more attractive than the current 21.67x multiple on the S&P (implied earnings yield of 4.6%), and there is obviously significant risk to that number. There are much bigger yields available in many private vehicles, but TINA is no more.
Sources: Wall Street Journal and Multipl