Commentary
The Silicon Valley Bank (SVB) collapse occurred because two simple investment rules were violated. The first is the simple overarching strategy of safety, liquidity, and then yield, with the acronym of SLY. The internal investment team reversed the order. They focused on yield, which requires going out longer on the yield curve and purchasing longer term bonds. This reduces liquidity, as selling these bonds before maturity will result in investment losses if interest rates have risen.
