Bill Zapf

Save this. This is the most important post you'll ever see. With BOTH the 10-year yields and the U.S. dollar rising, here is how to plan for the worst-case scenario. I've experienced this market scenario already in my life. Markets kept making all-time highs for 4 - 5 months, and then a -57% crash happened in the markets. But rising yields and dollar rising does NOT crash the markets alone. Something UNDERNEATH is typically the trigger. The 2026 - 2027 triggers would be: 1. Private credit - this is the scarier one in my opinion. Seven major platforms (Blue Owl, Apollo, Ares, BlackRock, and Blackstone) have capped or blocked investor withdrawals. $4.6 billion is trapped basically. 2. Auto loan delinquencies hit a record - 5.5% at 90+ days, worse than 2008 peak (5.3%). The consumer is cracking at the bottom. 3. Commercial real estate is at record deliquicieis - office CMBS delinquiency at 12.3%, higher than 2008 crisis. 4. Corporate bankruptcies at 16 year highs - 372 large filings through mid-2026. Small business bankrupties up 50% as well. 5. S&P 500 is looking a lie right now - every sector fell in Sept except for tech - banks, utilities, equal weight S&P 500, only a few BIG tech names are holding up the markets 6. Six banks have failed in 2026 - small ones, but the most in any year this decade. I find that the pattern is the same throughout our history; rates stay high, something that was relying on cheap money can't handle it, then that thing breaks, the break spreads to other things, and by the time the Fed cuts rates to fix it, the damage is already done. So how do you prepare for this since we cannot TIME a top? 1. Raise cash gradually - don't sell everything. Don't go all-in on a few names. Raise cash from work and you'll have the opportunity of a life time waiting for you when the dip comes 2. Buy the 10 year - a 5.35% risk free yield is the highest in 24 years. You can park cash in short term Treasuries (SHV, BIL, SGOV) and get paid 5%+ while you wait. My wife and I have started buying 10 year as well. 3. Watch the leaders, not the index - the S&P is being held up by 5-7 names. When $NVDA, $AAPL, $MSFT start breaking lower on volume, that's your signal the last pillar is cracking. The rest of the market is already weak. 4. Avoid the junk, or size appropriately - small caps, unprofitable tech, high debt companies, anything that needs to refinance soon. The Russell 2000 has a third of its constituents classified as zombie companies. These get destroyed when credit tightens. 5. Quality over momentum - if you're staying long, own companies with no debt, strong cash flow, and pricing power. Think $GOOGL, $AMGN, $BRK. Companies that don't need to borrow money at 5%+ don't care about rates. 6. Don't short the top - the market can stay irrational longer than you can stay solvent. In 2007 the S&P rallied 5% for 4 months after the 10Y peaked. Being early on a short is the same as being wrong. Can hedge with defensives instead and/or raise cash. 7. Have a plan before you need one - decide now what you'll do if the S&P drops 10%, 20%, 30%. Write it down. When panic hits, you execute the plan instead of making emotional decisions. The goal isn't to predict the crash. It's to survive it with enough capital to buy the bottom and become a multi-millionaire.