by Larry Swedroe
With approximately $600 billion under management, T. Rowe Price has been entrusted with the assets of countless investors over its nearly 80-year history. Its eponymous founder popularized the concept of active management through growth-stock investing. I will examine whether the firm’s funds have historically added value for investors relative to a passive benchmark.
by John Coumarianos
The English journalist and economist Andrew Smithers has called “stockbroker economics” the belief that all news is good news and stocks are always cheap. Advisors recognize the fallacy of that logic and rely on diversification to counter the inevitable asset-class volatility that markets deliver. But, according to many forecasts – including those from GMO – virtually all asset classes are likely to perform poorly over the next decade.
by Dan Solin
In my previous articles, I’ve given advice on how to dress and use gestures to give an effective presentation. But the underlying key to being a great speaker is not to focus on yourself; it is to anticipate what the audience wants from you – and give it to them. Here’s how to do that.
by Marianne Brunet
Here is what happened in the most-followed conversations on APViewpoint last week.
by Beverly Flaxington
I can’t take much more of the negativity and abuse here. Please do not recommend that I speak to HR. Is there anything I can do or say to these people who are being so abusive?
Visit our recruiter spotlight to hear from our monthly sponsors about opportunities available for advisors in the industry.
by Teresa Riccobuono
Many advisors use the beginning of a new quarter as a time to review their investment choices, sometimes called a “pick list.” If you fall into this group, consider including a review of your investment philosophy as part of the overall process.
by Jeffrey Briskin
Investment strategy research has become a cottage industry, with hundreds of studies published every year claiming that actively managed strategies, from factor-based investing to market timing, have greater potential to generate alpha. Those claims are usually based on backtesting performance over various market timeframes. Campbell Harvey views most of this research with a high degree of skepticism.
by Robert Huebscher
Study an industry and you will observe that it follows a prescribed capital cycle. As prices rise, firms invest to expand production capacity; inevitably, overcapacity results and drives prices down. Investors understand the capital cycle, according to Edward Chancellor, but don’t always heed it. If they did, they would have averted market crashes, such as those following the dot-com and real-estate bubbles.
by Robert Huebscher
Manufacturing is dying on a global basis, according to Bruce Greenwald, and its collapse will mean the demise of economies – like China – that are highly dependent on exported goods. Contrary to what Robert Gordon and others have contended, productivity is growing in the manufacturing sector – roughly twice as fast as the demand for those products. If third-world countries don’t adjust their economies to reflect this reality, Greenwald said it would be a “crisis greater than global warming.”
by Evan McCulloch of Franklin Templeton Investments
We do not believe anyone wants to ‘kill the golden goose,’ however, and even politicians would likely admit that draconian price controls would reduce the incentive for investing in drug research and development, which has resulted in many breakthrough therapies in the last several years.
by The CCR Wealth Management Investment Committee of CCR Wealth Management
In mid-January we felt compelled to send out a blast-email to our clients based on the volume of calls and concerns related to the bouts of volatility which roiled stock markets the first few weeks of the year. We certainly empathize with our clients’ very real concerns. Our empathy stems from the fact that in today’s hyper-connected world with media outlets “screaming” headlines to attract eyeballs, it is nearly impossible to separate fact from narrative.
by Tarik Jaleel of Matthews Asia
Thailand’s rapidly greying society discourages some investors. But while its population trend may necessitate a restructuring of its economy, some short- and long-term policies can improve the country’s basic infrastructure and more quickly foster the right environment to accommodate a more sustainable governance system.
by John Canally of LPL Financial
The 75% run-up in oil prices from the multiyear lows hit in mid-February 2016 has raised concerns that the U.S consumer may run for the hills. However, a look at what consumers actually did over the past two years as oil prices fell more than 70% (from nearly $110 per barrel in mid-2014 to just above $25 in early 2016) can help us better understand what consumers may do now that energy prices could be on the way back up.
by Patty Quinn McAuley of Clark Capital Management Group
If you’re seeking to grow your high-net-worth client base, I’d like to propose a new framework for the portfolio construction process: co-creation or collaborative portfolio construction. As we embark on a post-DOL reality, this model may be the most appropriate way to ensure that investment strategies are truly in the client’s best interest and fully support their long-term goals.
by Anatole Kaletsky of Project Syndicate
As central bankers worldwide continue to struggle to boost growth, inflation, and unemployment, the real issue is not whether more powerful monetary instruments are still available. The question is whether using them is necessary – or even threatens to do more harm than good.
by Dr. Brian Jacobsen, CFA, CFP® of Wells Fargo Asset Management
Are U.S. businesses really sitting on cash, versus investing in capital? Capex spending is evolving, not fading, says Well Fargo Asset Management’s Dr. Brian Jacobsen. Here’s where investors should look, for the next wave of business investment from U.S. companies.
by Peter Schiff of Euro Pacific Capital
On a lengthy interview on CNBC this morning, Donald Trump, the now presumptive Republican nominee, looked back on his business history to lay the groundwork to what he would do as President. He came as close as any major presidential contender to saying that America's formula for economic recovery might involve repaying our creditors less than what we owe. This is a major development that should be rewriting the playbook on Wall Street and call into question the risk-free nature of U.S. Treasuries.
by Brian Hahn of Neuberger Berman
Are Republican presidents better for markets, or are Democrats?
Recent dshort Posts
This commentary has been updated to include this morning's release of Nonfarm Employment for April. As the adjacent thumbnail of the past year illustrates, Nonfarm Employment remains in its upward trend. However, the April report of 160K new jobs was substantially below expectations (Investing.com was looking for 202K). Furthermore, the February and March numbers were revised downward by 19K (12K and 7K, respectively).
Today's release of the publicly available data from ECRI (Economic Cycle Research Institute) puts its Weekly Leading Index (WLI) at 135.7, up 0.2 from the previous week. Year-over-year the indicator is now at 1.16%, up from 0.95% the previous week and the sixth week in positive territory. The company's Weekly Leading Index annualized growth indicator (WLIg) is at 5.4, an increase of 0.9 from the previous week, and well off its interim low of -4.7 in January of last year.
Today's report of 160K new nonfarm jobs in April was lower than the Investing.com forecast of 202K. March's nonfarm payrolls was revised downward by 7K. The unemployment rate was unchanged, remaining at 5.0%.
Major markets around the globe saw little price movement today. Our benchmark S&P 500 rallied at the open, despite the biggest jump in new unemployment claims since January of 2015. The index hit its modest 0.44% intraday high about 45 minutes into the session. It then sold off to its -0.26% early afternoon low. The index then struggled to its -0.02% close. The 500 essentially went nowhere in advance of tomorrow's employment report for April.
In yesterday's ADP employment report we got a March estimate of 156K new nonfarm private employment jobs, April estimate of 156K new nonfarm private employment jobs from ADP, a decrease from March's 194K, which was a downward revision from 200K. The popular spin on this indicator is as a preview to the monthly jobs report from the Bureau of Labor Statistics. But the ADP report includes a wealth of information that's worth exploring in more detail.
RecessionAlert has launched an alternative to ECRI's Weekly Leading Index Growth indicator (WLIg). The Weekly Leading Economic Index (WLEI) uses fifty different time series from these categories: Corporate Bond Composite, Treasury Bond Composite, Stock Market Composite, Labor Market Composite, Credit Market Composite. The latest index comes in at 2.6.
Today's seasonally adjusted 274K new claims, up 17K from last week's 257K, was worse than the Investing.com forecast of 260K. The four-week moving average is at 258,000, up from last week's 256,000.