ACTIONABLE ADVICE FOR FINANCIAL ADVISORS: Newsletters and Commentaries Focused on Investment Strategy

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2014-09-16 Career Center by Various (Article)

Find career opportunities for firms that seek to add financial advisors and planners to their staff. Read more to find out how to post opportunities at your firm.

2014-09-16 Advice in the Shadow of Dementia by (Article)

Hear straight from someone with dementia about what financial advisors can do better.

2014-09-16 Gundlach on Today's Surprising Driver of Bond Prices by Robert Huebscher (Article)

Inflationary pressures could ultimately trigger an uncontrollable spike in interest rates, according to Jeffrey Gundlach, but such predictions are likely at least five years too early. In the short run, he identified the key driver that will keep rates low - the strong performance of European bond markets.

2014-09-16 It's All About the Little Things: 10 Small Steps for Treating Clients Well by Sponsored Content from Transamerica (Article)

The secret to offering service that's so good that it's memorable is to pay attention to the details. Here are 10 small steps for treating clients well, starting with one that's so simple, yet sometimes easy to mess up.

2014-09-16 The Key Problem with Monte Carlo Software - The Need for Better Performance Metrics by Joe Tomlinson (Article)

Popular financial-planning software packages have shortcomings in the metrics they use to evaluate the outputs from Monte Carlo simulations; other metrics provide more useful information. I will address how to measure the performance of financial plans when variable investment returns and longevity are introduced and demonstrate that the most-commonly used measures have weaknesses.

2014-09-16 Authoritarianism versus Democracy: The Key Challenge to Chinese Ascendancy by Michael Edesess and Kwok L. Tsui (Article)

An intense debate has been underway for more than a decade about whether the East - China in particular - is in the ascendancy. Some argue this is so and that the West is in decline. Others say China's flawed political institutions will limit its monumental growth and render it precarious. This an especially opportune time to address these questions.

2014-09-16 Why Account Minimums Threaten Your Business by Dan Richards (Article)

The disciplined implementation of ever-increasing account minimums has boosted productivity for many advisory practices. Yet those same account minimums threaten the future sustainability of advisor practices, if applied too rigidly. Here's why.

2014-09-16 A Powerful New Weapon to Gather AUM by Daniel Solin (Article)

Establishing a bond with a prospect through shared interests - such as hobbies - is a powerful way to improve your chances of them becoming a client. But what if those common interests don't exist?

2014-09-16 What are the 'Magic Words' to Re-engage Past Clients? by Beverly Flaxington (Article)

My partner and I left a firm where we worked with clients for years. It's very disheartening how few of our former clients have followed us to our new firm. In some cases, they won't even return a phone call. What magic words can we use to get them re-engaged with us?

2014-09-16 Now is the Time to Build Your 2015 Marketing Plan by Mandy Fisher (Article)

There are four building blocks that create a well-balanced marketing plan for financial advisors: infrastructure, awareness, lead generation and conversion. I will walk you through each block so that you have a clear understanding of what they are and how you can build your 2015 marketing plan.

2014-09-15 CEF News Update featuring Maury Fertig by (Article)

Patient investing is advised with closed-end funds, says Maury Fertig, in a roundup of recent CEF news reports and commentary.

2014-09-15 Implications of European Central Bank actions by Phil Apel and James McAlevey (Article)

Phil Apel, Head of Fixed Income and James McAlevey, Head of Interest Rates examine the implications of the recent European Central Bank (ECB) monetary stimulus measures where policy rates were cut by 10bp while a program of asset-backed securities and covered bond purchases was announced. With the ECB taking up the QE baton, Europe is clearly decoupling from the US, intensifying the contrasting fortunes of the two markets. Phil and James share their views and explain how their portfolios are positioned in light of the recent market trends.

2014-09-15 Bulls Charge Despite Weak Data by Scott Minerd of Guggenheim Partners

As the U.S. Federal Reserve debates withdrawing accommodation the doves have the upper hand, but that does not mean they won’t make a concession to hawks and hike sooner than the market expects.

2014-09-15 A Wee Problem for the UK by John Browne of Euro Pacific Capital

Last weekend several polls emerged that shockingly forecast Scottish independence from Great Britain is within the realm of political possibilities.

2014-09-15 General Electric’s Business Strategy by Erik Kobayashi-Solomon of YCharts, Inc.

Despite the many products and services provided by GE, its business strategy is actually startlingly simple. In short, GE is betting on the continued flourishing of the human race. The company is divesting consumer-facing assets and acquiring or boosting commercial-facing ones in what we term the PIT Strategy. An analysis of the company’s valuation drivers suggests an upside potential of the 40% range for GE.

2014-09-15 Emphasize Barriers to Entry? by Mark Kiesel of PIMCO

We see many bottom-up investment opportunities in the global credit markets, particularly in industries with high barriers to entry. We view healthcare, lodging, Asian gaming, master limited partnerships/pipelines, energy, wireless telecom, cell towers, cable, satellite, media and U.S. banks as attractive industries. Companies’ unique patents, licenses, brands, content and intellectual property, among other advantages, can help support investment returns in both bull and bear markets.

2014-09-15 Understanding the Potential Risks and Rewards of Alternative Investments by Bob Andres of Andres Capital Management

Today, Investors are confronted with constructing or restructuring an asset allocation model in an environment where traditional equity and fixed income securities are fully valued. As a result, investors may be facing a period of nominal or negative returns from both of these traditional asset classes. In this environment, alternative investments may play a pivotal role in providing investors with broad diversification, lower correlations, and as a result, enhanced downside protection.

2014-09-15 The Economy: September Viewpoint by Bruce Laning of Bronfman E.L. Rothschild

The U.S. economy experienced a robust summer for economic expansion and job growth, however recent consumer data is casting doubt as to whether the current level of activity can be sustained. Our position is to maintain an emphasis on higher-quality bonds and be prepared for short-term rate increase(s) in the months to come. The road ahead for stocks continues to look positive, but it would be prudent to keep in mind the inevitable speed bumps that will likely present themselves down the road, as we have not had a meaningful pullback since 2011.

2014-09-15 The U.S. Is Diverging From Other Developed Markets by Robert Doll of Nuveen Asset Management

U.S. equities fell amid a relatively quiet week, with the S&P 500 Index dropping 1.1%. The upcoming Federal Open Market Committee (FOMC) meeting drew quite a bit of attention amid increased speculation that the Federal Reserve may start signaling its long-awaited move to increase rates.

2014-09-15 Why Development Trumps Acquisitions in Our Real Estate Portfolios by Paul Curbo of Invesco Blog

One of the trends affecting real estate markets this year is the increasing difficulty commercial real estate companies are facing as they seek to complete potential acquisitions. Strengthening commercial real estate fundamentals, coupled with the low cost of financing, have resulted in a large increase in the number of bidders for assets in the past several quarters.

2014-09-15 Whitney George on Two Domestic Stock Picks by Whitney George (Article)

Portfolio Manager and Managing Director Whitney George talks about why he currently likes digital and analog chip maker Cirrus Logic and real estate asset manager Kennedy Wilson.

2014-09-15 Bill Hench on Health Care and Energy by Bill Hench (Article)

Portfolio Manager Bill Hench talks to Principal Dave Gruber about value opportunities he saw in the Health Care and Energy sectors and events in those areas that benefited some of his stock picks.

2014-09-15 How Quality Can Lead in the Small-Cap Market by Chris Clark and Chuck Royce (Article)

While quantitative easing has allowed financially leveraged companies to improve their fiscal health over the past several years, Chuck Royce sees signs of small-cap leadership for quality moving forward.

2014-09-14 What’s on Your Radar Screen? by John Mauldin of Mauldin Economics

So let’s look at what’s on my radar screen today. First up (but probably not the most important in the long term), I would have to say, is Scotland. What has not been widely discussed is that the voting age was changed in Scotland just a few years ago. For this election, anyone in Scotland over 16 years old is eligible. Think about that for a second. Have you ever asked 16-year-olds whether they would like to be more free and independent and gotten a “no” answer? They don’t think with their economic brains, or at least most of them don’t.

2014-09-13 Patiently Waiting for Mean Reversion by Frank Holmes of U.S. Global Investors

Because small caps tend to have higher beta than blue chips, you would expect them to outperform in a generally rising market—which we’re currently in. So it appears that a major rotation out of these riskier, more volatile stocks has inexplicably occurred, leading to the wide bifurcation between small and large companies. The good news is that, based on 20 years of historical data, stocks in the Russell 2000 tend to rally in the fourth quarter and continue steadily until around the end of the first quarter. Over this 20-year period ending in December 2013, the Russell has generat

2014-09-13 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The implications of Scottish independence; U.S. consumer spending outlook remains positive.

2014-09-13 Anarchy in the U.K. by Robert Isbitts of Sungarden Investment Research

This week’s blog borrows its title from one of the early anthems of the 1970s Punk Rock era. At a time when terrorism dominates the global newswire, another part of the world is erupting in what could become a market-moving chain of events. This is accompanied by an atmosphere that can appropriately be described as vicious (Baby Boomer alternative music buffs from their college days hopefully get the pun there).

2014-09-13 Will the Russia-Ukraine Crisis Chill Europe’s Recovery? by Philippe Brugere-Trelat of Franklin Templeton Investments

As the crisis in Ukraine and resulting geopolitical tensions between Russia and the West continues with no durable solution yet, many investors have responded by exiting European companies with exposure to the Russian economy. But even as evidence mounts that the Ukraine crisis is taking a toll on many European economies, it would be imprudent for long-term investors to give up on investing in Europe. Strong corporate earnings momentum, high dividend yields and the possibility of additional support from the European Central Bank (ECB) are just some of the reasons why he remains confident that,

2014-09-12 Distressed Corporate Credit: A Tale of Two Markets? by Sai S. Devabhaktuni of PIMCO

Middle market distressed credit may be an attractive source of higher returns in an overall low yield environment for investors able to access these opportunities. However, the higher return potential comes with greater risks. Imbalances in middle markets are building. ?Investors looking toward distressed credit markets should focus on companies that will likely be able to withstand periods of economic inertia, to undertake careful valuation practices and to strictly adhere to the absolute priority rule (in which senior creditors are paid in full before junior creditors).

2014-09-12 U.S. rates — The Draghi floor by Zach Pandl of Columbia Management

In typical fashion, last week’s European Central Bank (ECB) announcements found a way to bury the lede. The deposit rate cut to -20 basis points from -10 basis points was characterized as a “technical adjustment,” and the asset purchase program, while important, lacked a specific quantitative target—forcing investors to infer a rough figure from Mario Draghi’s comments in the press conference.

2014-09-12 Conditions are right for the dollar to weigh on gold by Ade Odunsi of AdvisorShares

In last week’s Gold Report we looked at the historical relationship between the gold price in dollars and the value of the dollar, as measured by the Intercontinental Exchange US dollar trade weighted index (USDX) and found a strong inverse relationship between the two – a strong dollar has historically tended to be associated with a weak gold price.

2014-09-12 Schwab Market Perspective: Diverging Paths…Growing Risks? by Liz Ann Sonders of Charles Schwab

The U.S. stock market continues to reach new highs but sentiment is extended and we are entering a period that has historically seen weakness. We believe the ultimate trend is higher, but bumps could get more pronounced in the near future. The U.S. economy is improving, with data suggesting self-supporting expansion is taking hold. Whether this means accelerated Fed interest rate hikes is being closely watched, while midterm elections often inject some more uncertainty into the market. The European Central Bank (ECB) finally acted, but structural issues and lack of demand remain problems.

2014-09-11 Understanding China's Property Market by Andy Rothman of Matthews Asia

One of the biggest misconceptions about China’s property market is that most buyers are speculators. In fact, the residential market is driven by owner-occupiers, and even many poor Chinese are homeowners; China is a global leader in homeownership with urban ownership rates at 89%. The boom days may be over, but fundamental demand remains healthy. New home prices rose at an average annual pace of 9% over the last eight years, but nominal urban income rose 13% per year. Communist Party leaders do not appear too worried about property; they’ve taken only modest steps to support the m

2014-09-11 Doubling Down on Inflation by Peter Schiff of Euro Pacific Capital

Friday's release of disappointing August payroll numbers should have been a jarring wake-up call warning Wall Street that the economy has been treading on thin ice. Instead the alarm clock was stuffed under the pillow and Wall Street kept sleeping.

2014-09-11 Calm Down 2 by Jeffrey Saut of Raymond James

In last Friday’s Morning Tack I referenced some sage advice from the legendary Dow Theorist Richard Russell of Dow Theory Letters fame.

2014-09-11 As The World Turns ... by Scott Brown of Raymond James

U.S. economic data were mixed last week, but there was nothing in the August Employment Report to suggest that growth is slowing down. A surprise move from the European Central Bank pushed the euro lower, but there appears to be a lot more that the ECB can do.

2014-09-11 Diversifying With the Yen? Not if Japanese Equities Are Involved by Jeremy Schwartz of WisdomTree

The discussion of currency-hedged strategies has shaken some of the core beliefs of investors. Traditional investment vehicles that package equity risk plus a secondary currency risk on top of the equity risk have been referred to as the traditional “plain vanilla” exposure because they were the first to the market, and it is what investors have been using for so long.

2014-09-11 The Leapfrog: The Role of Technology in Accelerating Emerging Markets’ Growth by Mark Mobius of Franklin Templeton Investments

The potential for emerging and frontier markets to realize accelerated economic growth as a result of new technology transfer comes up regularly in our research findings. We have been increasingly excited about a new development—the capacity for new technology, particularly related to data over the Internet, to completely bypass swathes of older technology and business activity. We think this could lead to even more dramatic economic progress. In effect, the emerging markets are leapfrogging over the old technology and taking advantage of the newest technology today.

2014-09-11 Mind the Gap-- or Absence Thereof! by Team of GaveKal Capital

In spite of recent headlines and developments at the ECB, market action has remained fairly subdued, as evidenced by the number of stocks that jump (in a positive or negative direction) at the open of trading.

2014-09-11 ECB Measures Highlight Draghi’s Determination by David Zahn of Franklin Templeton Investments

The reduction in eurozone interest rates announced on September 4 by European Central Bank (ECB) President Mario Draghi came as a bit of a surprise to some market players. But David Zahn, Head of European Fixed Income and portfolio manager, believes that this move, along with the confirmation of the commencement of the bank’s asset-backed securities purchase program, is very much in line with its previous action and suggests a central bank president who is in control and determined to get the eurozone’s economy back on track.

2014-09-11 Why Growth Stocks Now? by John Calamos of Calamos Investments

After five years of a strong bull market, I believe there’s still room for stocks to advance. Growth stocks look especially attractive. At 1.23, the premium for growth over value remains lower than the historical average of 1.44. Even when we omit the tech bubble from the long-term average, the 1.23 premium for growth is lower than that 1.37 average.

2014-09-11 Parallels to 1937 by Robert Shiller of Project Syndicate

The depression that followed the 1929 stock-market crash took a turn for the worse eight years later, and recovery came only with the enormous economic stimulus provided by World War II, a conflict that cost more than 60 million lives. The global situation today is not nearly so dire, but there are parallels, particularly to 1937.

2014-09-10 Pray for Rain by John Heldman of Triad Investment Management

California, along with many other parts of the country, is experiencing a severe drought. The state's major reservoirs are at 60% of capacity. Agriculture, consumer of 80% of California water, is reeling.

2014-09-10 Labor Force Participation Lowest in 36 Years - Why? by Gary Halbert of Halbert Wealth Management

Last Friday’s unemployment report for August was significantly weaker than expected. While the headline unemployment rate dipped back to 6.1% (same as it was for June), the number of new jobs created last month was substantially below expectations and marked the lowest number of the year.

2014-09-10 Scottish Independence Vote: Investor Implications by Axel Merk of Merk Investments

Is your portfolio’s fate dependent on Scotland’s? Why is it that when a place known for haggis, kilts and bagpipes indicates it might want to be independent, the markets pay attention?

2014-09-10 Why Take Currency Risk if Diversification Benefit is Declining? by Jeremy Schwartz of WisdomTree

We have been exploring the case for layering in foreign currency (“FX”) on top of foreign equity returns. One of the most common arguments I have heard for taking on FX risk in international equity portfolios in an unhedged fashion is that FX can be a portfolio “diversifier.”

2014-09-10 High Yield Bonds and Interest Rates by Heather Rupp of AdvisorShares

Over the last month, we have seen the equity markets hit all-time highs, all the while bond investors seem to be indicating there are reasons to be concerned, sending the 10-year Treasury to the lowest yields seen over the past year.

2014-09-10 A Global Growth Slowdown? by Russ Koesterich of BlackRock

As 2014 is shaping up to be another year of below-trend economic growth, many investors are wondering: Is economic growth once again slowing? Russ explains why his answer is no.

2014-09-10 Strong U.S. Dollar Weakens Gold Prices this September by Frank Holmes of U.S. Global Investors

Last week I wrote about the historic correlation between the month of September and the strength of gold. Now it appears that this September might be shaping up as one not to remember but forget.

2014-09-09 MLP View featuring Mike Taggart by (Article)

MLPs have been a hot area in the investment world, including the closed-end fund market, says Mike Taggart of Nuveen Investments.

2014-09-09 Family Web by (Article)

Meet the Baker family. This modern American family is the perfect example of how an individual client's finances often involve members of every generation.

2014-09-09 Current Opportunities in International Small-Caps by (Article)

International Smaller-Companies Portfolio Manager and Director of International Research David Nadel tells Co-Chief Investment Officer Francis Gannon where he is finding opportunities in the international small-cap market.

2014-09-09 What is "Fee-Only?" Is the CFP Board Taking the Right Approach to Defining it? by Bob Veres (Article)

Which is more important to your advisory practice - your CFP designation or your fee-only status? Before you answer, consider this: Your CFP mark says very little about whether you adhere to a fiduciary standard, and less about your mode of compensation. Those issues are at the forefront of an ongoing controversy pitting the CFP Board against a prominent advisor, and there is little sign that its outcome will resolve the ongoing debate about how to define a fee-only professional engagement. If anything, it raises more questions than answers.

2014-09-09 How Rare are Housing Bubbles? Understanding the Case-Shiller Index and its Counterparts by Cesar A. Orosco and Laurence B. Siegel (Article)

Do house prices experience periodic bull and bear markets like the stock market? Or are they stable in real (inflation-adjusted) terms most of the time, with big disruptions once or twice in a century? Two popular house price series tell these very different stories. Knowing which is better will lead to superior investment outcomes and improved policy decisions.

2014-09-09 The #1 Hot-Button Topic for Wealthy Families by Dan Richards (Article)

The financial and emotional cost when important topics go undiscussed is so great that in many cases, facilitating that conversation is the No. 1 way that advisors can make a positive impact in the lives of wealthy clients.

2014-09-09 Why Using Humor Will Increase Your AUM by Daniel Solin (Article)

We take ourselves too seriously. As investment advisors, it's appropriate that we view our responsibilities with a solemn sense of mission. After all, we are often accountable for the prudent management of our clients' life savings. But that doesn't mean our relationships with clients should be humorless.

2014-09-09 Why Multifamily Housing is Booming (and Single-Family Isn't) by David Schawel (Article)

The rebound in single-family housing has been tepid. Investors must understand the underlying structural changes, especially why demand has shifted toward multifamily housing and why this shift will persist in the years ahead.

2014-09-09 Why You Shouldn't Trust Client Surveys by Beverly Flaxington (Article)

Our clients said in the survey that they recommend our firm to others, but our actual client referrals are relatively low.

2014-09-09 Growing Income and Wealth with High-Dividend Equities by C. Thomas Howard, PhD (Article)

High-dividend equities have significant advantages for growing income and wealth: getting sufficient yield, keeping up with inflation and outliving available funds. Such a portfolio produces higher income per dollar invested, growing income and principal over time, higher total returns, lower volatility and a reduced risk of outliving savings.

2014-09-09 Market Perspective by The CCR Wealth Management Investment Committee of CCR Wealth Management

In our office we frequently make sport of the countless headlines we encounter on a daily basis from various media outlets across the web. These headlines are often splashed across the “home” pages of market or financial sites—though often across mainstream “news” outlets, or the business sections of Sunday newspapers as well.

2014-09-09 Divergence by Kristina Hooper of Allianz Global Investors

A widening gap in monetary policy in the United States and Europe reveals the disparity in economic growth that exists. Kristina Hooper explains the implications for investors and what history reveals about periods of Fed tightening.

2014-09-09 Hiring Flounders in August and Extreme Seasonal Distortions by Chris Maxey, Ryan Davis of Fortigent

With expectations high, the August labor report landed with a reasonably loud thud. Economists expected recent improvements in labor markets to continue aplenty, but that proved not to be the case during the oftentimes-volatile month of August. It is never wise to read too much into a singular month, and the details of this report support that notion.

2014-09-09 Xi’s Purge by Bill O'Grady of Confluence Investment Management

Since taking power, Chinese President Xi Jinping has implemented a strong program to punish corruption. A large number of the Communist Party of China (CPC) have been under investigation or punished for their failings. We believe these purges are being implemented for reasons beyond the simple exercise in political power. This report will discuss the purge in detail, introduce the concepts of environmental and social capital, and discuss China’s four stages of growth. We will conclude, as always, with market ramifications.

2014-09-09 Escape Fandango? by Paul McCulley of PIMCO

When I entered the Fed-watching business over three decades ago, a clichéd phrase of advice from graybeards was: “Watch what they do, not what they say.” Thinking back, there was not actually much Fed rhetoric to either watch or hear.

2014-09-09 Is it Time to Take the Euro Out of Europe? by Jeremy Schwartz of WisdomTree

On September 4, the European Central Bank (ECB) took further accommodation to support the economic growth environment in Europe. As a result, the euro collapsed about 1% immediately after the news, while European stocks rose on prospects for more monetary policy easing. This reaction mirrors what we saw in Japan in 2013, and it strengthens the case for taking the euro out of Europe.

2014-09-09 The Risk of Permanent Loss by William Smead of Smead Capital Management

Since the stock market has done extremely well from its “abyss-like” low in March of 2009, many investors are worried about the risks associated with owning U.S. large-cap stocks. A cacophony of articles have been written which not only look for the stock market to correct, but also have an expectation of the kind of bear market decline which would set investors back for five years, like the declines in 2000-02 and 2007-09. Those declines each hit the S&P 500 Index for a loss of 40% or more.

2014-09-09 Back to School With the Three Rs: Revenues, Reinvestment, and Renaissance by Burt White, Jeffrey Buchbinder of LPL Financial

We believe the “three Rs” are keys to the outlook for the stock market: revenues (and profits), reinvestment, and the renaissance in manufacturing. We expect stocks to garner support from these three Rs in the form of continued growth in revenues and profits, more corporate reinvestment, and continued steady gains for the U.S. manufacturing sector.

2014-09-09 Staying Ahead of the Curve by Chris Diaz of Janus Capital Group

Investors could soon face an environment of rising U.S. interest rates and heightened rate volatility. Already, the Federal Reserve has begun setting the stage by tapering its quantitative easing program. Once rates start to rise, it’s difficult for a fixed income portfolio to make up lost ground if it’s not already positioned for higher rates. We think it’s crucial for investors to diversify their yield curve exposure by investing abroad.

2014-09-08 Correlation Convergence is Hurting Your Investment Performance by Vern Sumnicht of iSectors

Correlation is a statistical term that helps describe the relationship between two investments, enabling an investor to determine how similar two investments are to each other. By understanding the correlation between the investments in a portfolio, an investor can understand how likely it is, for example, for two or more of those investments to gain or lose money at the same time.

2014-09-08 Are Municipals Allergic to Basel? by Bob Andres of Andres Capital Management

One of the bogeys of the Basel Accords calls for dramatic improvements in bank liquidity. The most recent changes to the Liquidity Coverage Ratio (LCR) test changed the numerator in the equation to ease the strictness of qualifying assets. The formula divides a banking institution’s stock of high quality liquid assets (HQLA)—the numerator—by estimated total net cash outflow over a 30-day period in a stressed environment. The calculation must be at least equal to or greater than 100 percent at all times.

2014-09-08 The Two Pillars of Full-Cycle Investing by John Hussman of Hussman Funds

History teaches clear lessons about the varying merits of accepting market risk.

2014-09-08 Searching for Value in Global Small-Cap Stocks by Virginia Au of Invesco Blog

While many global small-cap companies have gotten their balance sheets in good shape over the last few years, valuations are currently a concern. The MSCI World Index is up 184% since the market low on March 9, 2009, and we believe most equities are at or near full value. This makes it much harder to find high-quality companies at cheap prices. Against this backdrop, the challenge is to find the hidden gems within the vast universe of global small-cap companies.

2014-09-08 Only 37% of Companies Are Seeing Rising Sales Estimates by Team of GaveKal Capital

Yesterday we noted the fact that EPS estimates have fallen versus 3 months ago for most stocks in the developed world. In a similar vein, today we note that top line estimates are rising for only 37% of stocks in the MSCI developed world index, meaning they are falling for 63% of stocks. The only region in which more than half of stocks are seeing rising sales estimates is North America, where 62% of companies have seen top line estimates rise versus three months ago.

2014-09-08 A Choppy Path Stretches Ahead, but It Could Favor Equities by Robert Doll of Nuveen Asset Management

U.S. equities continued their winning ways, with the S&P 500 Index advancing 0.2% last week. Although the August employment data were somewhat disappointing, investors were cheered by strong manufacturing trends. Events outside of the U.S. also contributed to the positive tone.

2014-09-08 What Tax Strategies Make Sense for You? by Tara Thompson Popernik of AllianceBernstein

Many investors adopt tax-reducing strategies from year to year without taking a step back to look at the big picture. But how you save or spend money today can have a profound impact on your after-tax wealth over the long term and, ultimately, on your legacy.

2014-09-07 Europe Takes the QE Baton by John Mauldin of Mauldin Economics

This week we’ll look at what is happening across the pond in Europe, where the above-mentioned negative rates are only one ingredient in a big pot of Bizarro soup. And we’ll think about what it means for the US Federal Reserve to be so close to the end of its quantitative easing, even as the ECB takes the baton to add €1 trillion to the world’s liquidity. And meanwhile, Japan just keeps plugging away.

2014-09-06 The New Challenges of Price Discovery by Frank Holmes of U.S. Global Investors

In the past few years, price discovery—or the act of finding the “right” price for a security—has become much more challenging because of falling stock volume and widening bid-ask spreads. These challenges are directly attributable to the infiltration of high-frequency traders into the market, not to mention the expansion of dark pools and non-exchange trading.

2014-09-06 Are US Stocks Reacting Rationally? by Grant Bowers of Franklin Templeton Investments

When major market indexes reach new heights, some investors may become wary. Given that the US stock market has enjoyed robust total returns over the past five years (2009–2013), it’s only natural to question the sustainability of rising stock prices.Grant Bowers, portfolio manager of Franklin Growth Opportunities Fund, believes many of the same drivers of stock market performance over the past few years remain in place, including low inflation, healthy corporate profits and accommodative monetary policy. However, he also cautions that volatility is likely to pick up, particularly

2014-09-06 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Can the eurozone avoid “Japanification?”; U.S. employment: Less rosy than expected; The U.S. capital spending outlook is promising

2014-09-06 Roll ‘Em if You’ve Got ‘Em by Robert Isbitts of Sungarden Investment Research

Investors and their advisors have eased into the perceived comfort of evaluating investment results over standard, fixed time periods, such as year-to-date or the past 1-3-5 years. These are all valid time periods to review, but I don’t think they are enough.

2014-09-06 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 134.9, little changed from the previous week's 134.8. The WLI annualized growth indicator (WLIg) dropped to 1.8 from the previous week's 2.3. Last Friday, August 29th, ECRI treated the general public to a new commentary on its website focused on the Fed's seeming complacency about inflation becaused of stalled wage growth. ECRI sees a substantially higher inflation risk.

2014-09-06 Back in the Saddle Again: Time to Pull in the Reins? by Liz Ann Sonders of Charles Schwab

Interest rates and seasonal tendencies are taking some attention away from the stronger economy and pose short-term risks for the stock market. Another pullback would be welcome from a sentiment perspective and would not dent our longer-term optimism that we are in a secular bull market that still has room to run. But just as fear has been the strongest emotion keeping many investors out of this bull market, greed is an emotion to rein in as well.

2014-09-05 Markets Climb as World Faces Crisis by John Browne of Euro Pacific Capital

On August 28th while the geographical area formerly known as Iraq descended further into chaos, President Obama announced to the world "We don't have a strategy, yet." A few days later, another brave American journalist was brutally beheaded by a slickly televised cockney-accented jihadist. Clearly things are not going well outside the bubbly confines of the S&P 500.

2014-09-05 True Grit: The Durable Low Volatility Effect by Feifei Li, Philip Lawton of Research Affiliates

There is no assurance that low-risk stocks will continue to produce superior long-term returns. Nonetheless, due to investors’ preferences and managers’ incentives, the outlook remains promising. And the market does not seem to learn from experience.

2014-09-05 Will Russia Derail the Eurozone Recovery? by Nicola Mai of PIMCO

Geopolitical tensions from Ukraine and the evolving trade war with Russia are threatening what is already a weak recovery in Europe, and could shave approximately 0.3%–0.4% off eurozone growth. Should the situation escalate, we could expect an even greater drag with potential to push the eurozone back into recession. Looking ahead, we see attractive opportunities in peripheral bonds and favour an underweight currency position in the euro.

2014-09-05 Gold in the Time of the US Dollar by Ade Odunsi of AdvisorShares

Continuing on the theme of the impact that strength in the US dollar might have on the price of gold in dollars, in this week’s discussion we investigate the close historical relationship between the price of gold expressed in dollars and the value of the dollar.

2014-09-05 Cyclicals: Early or Late by Team of GaveKal Capital

For the first part of the year, early cyclicals (consummer discretionary sector) in North America underperformed late cyclicals (energy, material and industrial sectors), which made perfect sense given the appearance of a strengthening economy and the tapering of FRB asset purchases. Recently, however, early cyclicals have come back to lead late cyclicals. Since June 23, early cyclicals have outperformed late cyclicals by 7%. In the chart below, we compare an equal weighted basket of early cyclical companies in North America against late cyclicals.

2014-09-05 Remember, Remember, Gold in September by Frank Holmes of U.S. Global Investors

In American poet W. S. Merwin’s poem “To the Light of September,” the speaker calls the ninth month “still summer,” yet with a “glint of bronze in the chill mornings.” I agree—to an extent. Here in San Antonio, Texas, home of U.S. Global Investors, we’re most definitely still in the summer season. But in the investing world, when we talk about September, there’s a glint not of bronze but another precious metal: gold.

2014-09-05 Voya Global Perspectives – Market Update by Douglas Coté of Voya Investment Management

A hawk in dove’s clothing, Yellen will likely be ahead of the curve when it comes to hiking rates. Driven by strength in manufacturing and a revitalized consumer, corporate America is thriving. The euro zone is an economic basket case, forcing Draghi to reach for another “bazooka” solution, to the likely benefit of risk assets. Broad, globally diversified portfolios can help protect investors against the volatility that policy normalization may bring.

2014-09-05 Tennis star Li Na exemplifies China's newfound entrepreneurial spirit. by Patricia Huang of Matthews Asia

After advancing to her first grand slam semifinals, Peng Shuai is China's newest late-career surprise at the U.S. Open. Her compatriot, tennis star Li Na, was the first Chinese player to claim a grand slam singles title, and her success has bolstered the sport's popularity back home in recent years. Both players were among the handful of pioneers to break from the country's state-sponsored teams to take greater control of their futures. This week Patricia Huang writes about China's newfound entrepreneurial spirit.

2014-09-05 A Letter to My Grandson About Entering the Working Life by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, shares a letter he wrote to his 21-year-old grandson, who is entering his final year in college. "I then realized that some of this advice might also come in handy to several of my younger clients – those who belong to the third generation of the families whose fortunes I manage on three continents."

2014-09-04 Developed Europe: Regional Economic Review - Q2 2014 by Team of Thomas White International

Europe’s ability to sustain its economic recovery is back in the spotlight. The latest second quarter estimates of statistics agency Eurostat, which were released in mid-August, show that compared to the first quarter, GDP merely inched up 0.2 percent in the 28-country European Union (EU) but failed to grow at all in the 18-member Euro-zone.

2014-09-04 International Equity Commentary: July, 2014 by Team of Thomas White International

International equity prices saw a modest correction in July as geopolitical tensions worsened in Ukraine and the Middle East. The risk of these conflicts spreading to wider areas and pulling in more countries unnerved the markets.

2014-09-04 Emerging Markets Equity Commentary: July, 2014 by Team of Thomas White International

Emerging market equity prices continued to outperform the developed markets in July and ended the month with moderate gains. Markets in Asia significantly outperformed during the month, helped by signs of stabilizing economic growth in major markets such as China.

2014-09-04 Could a China Recession Cause $50/barrel Crude Oil? by William Smead of Smead Capital Management

Globalization has created an interconnection between major world economies and commodity prices. China, as the world's most populous country, rearranged the commodity landscape by growing their economy at double-digit compounded rates from 2000-2010. By doubling their use of oil, copper and other major commodities, China created a golden era for commodity investors and everyone involved in oil exploration and production.

2014-09-04 Midterms May Mean More Gains for Stocks by Burt White, Jeffrey Buchbinder of LPL Financial

With the midterm elections now just two months away and campaigning starting to heat up, we thought we would share our current views on the political landscape and what it may mean for U.S equities. In our two Outlook 2014 publications for this year, we posited that the U.S. economy and corporate profits may drive the stock market higher and investors could turn their attention away from policymakers in Washington, who were such a distraction in 2013 and earlier in the current economic expansion.

2014-09-04 Central Banks Pump Up the Volume by Scott Minerd of Guggenheim Partners

Aggressive central bank accommodation from Europe to Japan and a dovish Federal Reserve bode well for equities and bond prices.

2014-09-04 What's Next for the Dollar and Gold? by Axel Merk of Merk Investments

One reason markets tend to get a little nervous in September is that it’s time for investors to ponder about their asset allocation for the remainder of the year and beyond. With the markets at or near record highs and the US dollar on a roll, what could possibly go wrong? Let’s look at what’s next for the dollar, gold, and currencies.

2014-09-04 Global: Recovery Continues, but Headwinds Persist by Keith Wade of Schroders Investment Management

Keith Wade, Chief Economist at Schroders, discusses why Schroders has trimmed global growth projections for 2014 and 2015.

2014-09-04 Congress Will Go Out With a Whimper, But the Next Could Come In With a Roar by Libby Cantrill of PIMCO

A government shutdown is highly unlikely this year, and most need-to-pass bills will likely pass either before the election or during the "lame duck" session of Congress. Should Republicans take the Senate, we should expect heightened policy uncertainty around issues such as the debt ceiling increase in 2015.

2014-09-04 What Clients Really Want by (Article)

Transamerica has been listening to hundreds of investors around the country. Hear from them about what they want.

2014-09-04 She's the Decider by (Article)

Transamerica's New Age of Advice went to a Denver park and asked these couples who makes the financial decisions in their households. Guess what they had to say.

2014-09-04 MIT AgeLab by (Article)

The groundbreaking Massachusetts Institute of Technology AgeLab is doing research, sponsored by Transamerica, that is reinventing the future of financial advice.

2014-09-04 U.S. Oil Industry, Economy Feel Effects of Shale Revolution by David Ginther of Ivy Investment Management Company

The term “Shale Revolution” reflects the booming oil production from shale basins in the U.S. The rapid pace of oil output from these fields is spurring growth across the energy industry, providing a wide range of benefits to the U.S. economy and generating potential opportunities for investors.

2014-09-04 Risk Revisited by Howard Marks of Oaktree Capital

In April I had good results with Dare to Be Great II, starting from the base established in an earlier memo (Dare to Be Great, September 2006) and adding new thoughts that had occurred to me in the intervening years. Also in 2006 I wrote Risk, my first memo devoted entirely to this key subject. My thinking continued to develop, causing me to dedicate three chapters to risk among the twenty in my book The Most Important Thing. This memo adds to what I’ve previously written on the topic.

2014-09-03 Consumer Confidence Hits a Seven-Year High... But by Gary Halbert of Halbert Wealth Management

Last week, the Conference Board reported that its Consumer Confidence Index rose to a near seven-year high in mid-August. It was the fourth consecutive monthly rise in the Index and handily beat the pre-report consensus.

2014-09-03 Voya Fixed Income Perspectives – August 2014 by Christine Hurtsellers, Matt Toms of Voya Investment Management

Like the buzz of the alarm clock on the first day of school, the July/early August market selloff awoke investors to the fact that the lazy, carefree days can’t last forever. Though a single catalyst for the latest shift in sentiment is tough to identify, there are a number of suspects: ample geopolitical uncertainty, the possibility that strong U.S. economic data may hasten fed funds rate normalization and Fed rhetoric about froth in certain markets.

2014-09-03 S&P Hits the 2,000 Mark by Ryan Davis of Fortigent

Equity markets moved modestly higher last week, with the S&P 500 closing above the 2,000 level for the first time. The S&P 500 added 80 bps on the week and now stands up 9.9% on the year following a 4% gain in August. Bonds also rallied last week, rising in tandem with European sovereigns. The rate on the 10-year Treasury fell to 2.33% by week’s end.

2014-09-03 Despite Growing Risks it's Still Janet Yellen's Market by John Browne of Euro Pacific Capital

The current stock market is earning a deserved reputation as being coated in Teflon. Bad or disappointing news just doesn't appear to stick, and has done nothing to slow the market's upward trajectory. Bad news is good and good news is good news. But where does this all end? A minority of investors have begun to wonder whether negative geo-political risks, embodied in the steely-eyed stare of Vladimir Putin, are exerting more influence on the market than the sunny smiles of Janet Yellen.

2014-09-03 State and Local Governments Outpace the Feds by Milton Ezrati of Lord Abbett

The fiscal health of state and local governments appears robust when compared with that of the federal government.

2014-09-03 The Peritus Process Managing Risk by Tim Gramatovich of AdvisorShares

What is risk and how is it defined? To us, risk is about losing money and managing risk is what portfolio management is all about. Let’s begin with credit risk, which is something we take on and expect to get paid for. First of all, credit investing is a negative art. What you don’t buy is more important than what you do buy. Investors will not appreciate this until the cycle turns, which will inevitably happen at some point.

2014-09-03 For Wonks Only??? by William Gross of PIMCO

A credit-based financial economy (as opposed to pure cash) depends on an ever-expanding outstanding level of credit for its survival. Without additional credit, interest on previously issued liabilities cannot be paid absent the sale of existing assets, which in turn would lead to a vicious cycle of debt deflation, recession and ultimately depression.

2014-09-03 International Developed and Emerging Markets by Riad Younes of R Squared Capital Management

This commentary explores what the author believes to be the best opportunities in international investing along with challenges facing investors in developed and emerging markets.

2014-09-03 All Eyes on the ECB as Europe’s Recovery Remains Fragile by Matthew Dennis of Invesco Blog

While the European Central Bank (ECB) has successfully eased financial market stress over the past two-plus years, Europe’s long-awaited recovery still remains fragile and imbalanced.

2014-09-02 Why Individual Stock Selection Matters in Today's Environment by Bill Hench (Article)

No matter how expensive the market might be at any given time, there will always be stocks that look inexpensive to us on an absolute basis. Portfolio Manager Bill Hench discusses how he's been handling current valuations and what he's been seeing in the way of M&A activity with Principal Dave Gruber.

2014-09-02 Ranking the Top 10 "Differentiators" for Advisory Firms by Bob Veres (Article)

If we have a clear idea of what foregrounds one advisory firm ahead of others, then we can deliberately cultivate those characteristics. The problem is, nobody has ever compiled a comprehensive list of differentiators, much less ranked them according to importance. So, to fill that obvious void, I've ranked the top 10 differentiators that I've personally seen advisors use in their positioning and marketing.

2014-09-02 Can Retirees Still Use a 4% Withdrawal Rate? Practical Applications of Monte Carlo Analysis by Wade Pfau and David Blanchett (Article)

Some advisors remain critical of Monte Carlo simulations, instead preferring to use analysis based on rolling historical periods or specific pre-defined scenarios. We believe Monte Carlo is a superior tool for measuring the uncertainties in long-term financial planning. As an example, we use it to predict the likelihood of a successful 4% withdrawal rate under today's market conditions.

2014-09-02 How to Raise Sensitive Issues with Clients by Dan Richards (Article)

Important issues - so-called elephants in the room - threaten the financial futures of clients and their families. Clients and advisors normally recognize these issues, but because they are emotionally charged, they are difficult to discuss. Here are three steps to talk about these subjects.

2014-09-02 Use Your Fingerprints to Gather More AUM by Daniel Solin (Article)

A colleague of mine calls it "assumicide" - trying to convince a prospect to say yes by offering a careful and exhaustive presentation of a proposal's assumptions and merits. There's a more powerful route to yes, however: using heuristics to align yourself with your prospect.

2014-09-02 A Marketing Strategy to Reach Millennials by Melanie Cressman (Article)

Millennials are a hands-on generation in every aspect, including finances. How can financial advisors connect with them?

2014-09-02 Helping Clients Redefine Retirement by Beverly Flaxington (Article)

Sometimes I fear my clients do not know what retirement will look like to them and so planning for it, financially or otherwise, is challenging. It's why I believe they need an advisor, but I want to be sure I am doing the best I can for them in these discussions.

2014-09-02 Your Clients Don't Care About You by Megan Elliott (Article)

Conversations with clients should be about them, not you.

2014-09-02 The Exaggerated Death of Inflation by Kenneth Rogoff of Project Syndicate

Modern central banking has worked wonders to bring down inflation. Ultimately, however, a central bank’s anti-inflation policies can work only within the context of a macroeconomic and political framework that is consistent with price stability.

2014-09-02 Late, Not Lost: The Economic Drag From the Millennial Generation by Joshua Anderson, Emmanuel Sharef, Jason Mandinach of PIMCO

We believe concerns of a student debt "bubble" and perpetual financial weakness among Millennials are largely overstated. Understanding Millennials' financial trajectory is critical to our secular (3-5 year) outlook for home prices and the broader economy. We expect Millennials' financial position to improve, and pent-up demand could result in longer-term strength in housing and housing-related assets.

2014-09-02 US Home Prices Rise In July by Team of GaveKal Capital

CoreLogic released their home price index for July today and it showed another 1.25% month-over-month gain in June (including distressed sales). Their index is 7.4% higher than one year ago.

2014-09-02 Banking on BRICS by Mark Mobius of Franklin Templeton Investments

In July, leaders of the five emerging market countries known as the “BRICS” (Brazil, Russia, India, China and South Africa) met in the Brazilian city of Fortaleza and announced the creation of a New Development Bank (NDB).

2014-09-02 China’s Reforms Open New Path to Equities by Stuart Rae, John Lin of AllianceBernstein

For investors in China equities, there have traditionally been two ways of approaching the market: through expensive growth stocks, or risky contrarian plays. Now, thanks to China’s reforms, there’s a third way which may offer a better balance of risk and return.

2014-09-02 Stronger Growth Should Push Equities Higher by Robert Doll of Nuveen Asset Management

A rash of positive news propelled stock prices higher for the fourth consecutive week, marking the longest winning streak for equities since last November. The S&P 500 Index pushed above the 2,000 level for the first time as it gained 0.8% for the week.

2014-09-02 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (

Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1,961.53. The ratios in parentheses use the monthly close of 2003.37. For the earnings, see the table below created from Standard & Poor's latest earnings spreadsheet.

2014-09-01 Growth by John Mauldin of Mauldin Economics

This week I will respond to the second part of David Brin’s letter. Please note that David and I characterize our conversations as joyous deliberations, excited parry and thrust in the realm of ideas. I especially appreciate David because he forces me to think about many of my casual assumptions, although in a battle of wits with David I often feel as if I’m bringing a knife to a gunfight. (Every writer needs a few David Brins in his life. Sometimes I think I have more than my share.)

2014-09-01 Democracy in the Twenty-First Century by Joseph Stiglitz of Project Syndicate

The economist Thomas Piketty’s forecast of still higher levels of inequality does not reflect the inexorable laws of economics. Indeed, the main question today is not really about capital in the twenty-first century; it is about democracy in the twenty-first century.

2014-08-31 Abenomics, European Style by Nouriel Roubini of Project Syndicate

Two years ago, Shinzo Abe’s election as Japan’s prime minister led to the advent of “Abenomics,” a three-part plan to rescue the economy from a treadmill of stagnation and deflation. It now appears that the European Central Bank has a similar plan in store for the eurozone.

2014-08-30 Anticipate Before You Participate: Patterns in Trading by Frank Holmes of U.S. Global Investors

The primary unit of time measurement for high-frequency traders might be the microsecond, but for normal retail traders, it’s vital to know the best months, days and even half-hours of the day to make market transactions.

2014-08-30 Sound Familiar? by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

Stocks seem likely to continue their upward momentum although volatility could increase with Federal Reserve interest rate uncertainty combined with midterm elections and geopolitics. An improving economy, decent valuations and a still-accommodative Fed leave us confident that dips should be viewed as buying opportunities. Conversely, Europe is looking worse and we would be cautious in adding new cash at this time, concentrating additional international exposure instead on China and to a lesser degree Japan, always with a diversified portfolio in mind.

2014-08-29 Bond Yields Around a First Rate Hike by Anthony Valeri of LPL Financial

Historically, bond yields have begun to move more forcefully four to six months ahead of a first rate hike from the Fed. We believe the rise in interest rates may begin sooner this cycle due to lower yields and more expensive valuations. We favor capitalizing on year-to-date bond strength and recommend a defensive posture consisting of short to intermediate bonds.

2014-08-29 The Long-Term Value of Active Management in the Small-Cap Space by Chuck Royce of The Royce Funds

As the ongoing debate about the effectiveness of active management, especially since the proliferation of ETFs and index funds, continues unresolved, it is difficult for us not to be biased. Our focus, however, remains solely on long-term outperformance and the interests of our shareholders, and we believe the best way of accomplishing this is through careful stock selection and having an absolute standard.

2014-08-29 The Modern Day Widow Maker Trade is to Short Treasuries by Team of GaveKal Capital

As treasury yields plunge again today to new 1-year lows (the 10 and 30-year treasury bond yields are both down 3bps to 2.33% and 3.07%, respectively), we are reminded of a popular trade over the last decade to short Japanese government bonds, which has aptly been named the "widow maker" trade.

2014-08-29 Three Investing Lessons from the Napa Earthquake by Russ Koesterich of BlackRock

Last week’s Bay Area earthquake was a stark reminder that there are risks to living in California. It also was a violent, but good, metaphor for the dangers lurking in financial markets. Russ shares three investing lessons – and one busted movie myth – that he took away from the Napa earthquake.

2014-08-29 Lucara Diamond Stock Sparkles, Reports Another Strong Quarter by Frank Holmes of U.S. Global Investors

Often it seems that gold gets all the fun when I write and speak about precious metals and minerals. But Vancouver-based Lucara Diamond has been turning heads here at U.S. Global Investors lately for a number of reasons, the most notable being that it continues to report stellar returns.

2014-08-29 Why 2K? by Robert Isbitts of Sungarden Investment Research

This week, the S&P 500 stock index crossed the 2,000 mark for the first time (this figure and other historical returns referred to in this article do not include dividends). Round numbers always get the media’s attention, so avid market-watchers already know this. But why? Why, just six years after the financial world seemed to be ending, are we celebrating a milestone that at that point seemed a generation away?

2014-08-29 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Flexible labor markets are key to recovering from recession; Wage trends present a challenge for the Fed; Bank settlements are sizeable, but the benefit to housing has been limited

2014-08-28 Data Dilemma: When Final Isn't Final by John Canally of LPL Financial

Revisions to GDP don’t often change the overall picture of the health, or lack thereof, of the economy. Despite cutbacks to congressional funding of data collection at the federal level in recent years, the GDP data are a lot more accurate than they used to be. About every five years, the BEA does a “comprehensive revision” to GDP, and at that point, GDP for any specific quarter is just about as final as it will get, as the BEA has 98% of the data it needs to calculate GDP.

2014-08-28 I Can’t Save Europe Alone – Mario Draghi at Jackson Hole by Bob Andres of Andres Capital Management

Janet Yellen began her prepared speech on monetary policy and the labor markets in Jackson Hole at 10:00am on Friday. Within minutes, analysts were offering insights into future interest rate policy. The equity markets dipped slightly only to recover quickly to pre-speech levels. The consensus view, which emerged after sifting through the release, was that Ms. Yellen’s view on interest rates may be a tad less dovish than previously expressed. With no video feeds emanating from the conference and with tepid market reaction, we asked ourselves, “Is she whispering or is she Yellen?&rd

2014-08-28 Frustrations of a Frugal Investor by Kendall Anderson of Anderson Griggs

The other day I was leaving the office and a gentlemen who has known me for quite some time asked about the model year of my truck. I told him it was a 2001 and that it should still be good for another 100,000 miles. Of course my truck is known to me and many of my friends as “Big Red,” and it has become a family member of sorts, capable of and willing to take on any job, rather than just “a truck that hauls things around.”

2014-08-28 Washington Recaptured by Simon Johnson of Project Syndicate

Two hundred years ago, Washington DC was captured by the British – who then set fire to official buildings, including the White House, Treasury Department, and Congress. Today, it is a domestic interest group – very large banks – that has captured Washington, and the costs are likely to be far higher than they were in 1814.

2014-08-28 The World is in Crisis…the Markets Are Not by Zachary Karabell of Envestnet

Markets have been gyrating for the past months in the face of a wave of geopolitical crises. But the chance of any of these crises dramatically altering the behavior of markets beyond the short-term is very, very slight.

2014-08-28 Brazil: A Ripe Market for Bottom-Up Stock Pickers by Jim Harvey, Dilip Badlani of The Royce Funds

Royce International Micro-Cap Fund Portfolio Managers Jim Harvey and Dilip Badlani talk about their recent trip to Brazil, the country's current challenges, the importance of careful stock selection, what insider ownership reveals, Brazil's real estate market, learning from experience, looking for competitive advantages and the importance of corporate governance, and where they've been finding opportunities.

2014-08-28 Market Internals—Breadth Weakness Troubling But Not Dire by Doug Ramsey of Leuthold Weeden Capital Management

Last month we argued "stock market participation is too broad for an imminent cyclical top to form," and we're not retreating from that statement. But interim market tops of varying degrees of importance can form with little or no warning. We've characterized stock market action alternately as uniform or in gear throughout most of 2014, but it's clear that market participation has not been nearly as "egalitarian" as it was throughout 2013. We've marveled at how well measures of market breadth were able to shrug off Small Caps' dramatic relative strength breakdown.

2014-08-27 EM Growth Provides Tailwind for Automation Companies by Nick Niziolek, Paul Ryndak of Calamos Investments

The pullback in Japanese equities earlier this year brought the valuations of select automation companies to attractive levels that do not fully reflect the long-term growth potential we see. The days of Henry Ford's assembly line are long gone, replaced by automated conveyor systems and robots that do much of the heavy lifting. Chinese labor costs are rising quickly, providing incentive for manufacturers to be more productive and contain costs. Also, the technical and quality requirements for manufacturing cars, phones and other electronics is increasing, requiring more precision.

2014-08-27 The Demise of Active Management is Greatly Exaggerated by William Smead of Smead Capital Management

Financial advisors and registered investment advisors feel severe pressure to throw in the towel on manager selection methodologies and accept index returns. Yet, many of these stories forget one central concept: indexes are actually inexpensive actively-managed portfolios. Every actively managed fund is an index itself.

2014-08-27 From the Alps to the Tetons by Brian Andrew of Cleary Gull

Central bankers seem to be the focus once again. If the global economy were strong enough to stand on its own, we wouldn’t spend every waking moment worrying about what Fed Reserve Chair Janet Yellen and her European Central Bank counterpart Mario Draghi are going to do next. The fact that these bankers are front and center again in investors’ minds, is a function of both how sluggish the global economy is and how persistent the hangover from the mid-2000’s real estate party continues to be.

2014-08-27 The Price is Right - The S&P 500 Index Deconstructed by Edward Talisse of Chelsea Global Advisors

Is the widely followed S&P 500 equity index wildly overvalued at its current price of 2,000? Well, that depends upon your assumptions about earnings and dividend growth and your risk adjusted required rate of return.

2014-08-27 Fed's Getting Anxious About Interest Rate "Liftoff" by Gary Halbert of Halbert Wealth Management

While I have been a Fed watcher for over 30 years, rarely have I seen as much media angst over the central bank’s next move as we are seeing today. We all know that the Fed is going to raise short-term interest rates at some point. We expect the Fed to “normalize” interest rates slowly in measured steps over the next few years. The main question is, when does this process begin?

2014-08-27 Gold: Keeping Calm And Carrying On by Ade Odunsi of AdvisorShares

We continue from last weeks discussion on the role of interest rates in the gold market by looking at trends in the cost of carry of gold as priced in dollars, euro, yen and pounds. By way of a brief primer we define the cost of carry of gold in dollars as the London Bullion Markets Association 3 month Gold Forward Offered Rate (GOFO). GOFO is published every day by the LBMA and is calculated as US dollar Libor minus the gold lease rate.

2014-08-27 The Stall-Speed Syndrome by Stephen Roach of Project Syndicate

As tempting as it may be to attribute developed economies' latest growth slowdown to idiosyncratic factors, weakening performance in the US, Europe, and Japan is not so easily dismissed. In all of these cases, the post-recession rebound has not been nearly large enough to alter the sluggish underlying trend.

2014-08-27 Gold Jewelry Demand in India Improves by Frank Holmes of U.S. Global Investors

Those who root for gold root for India. Despite a welcome June rally, it’s been a rocky second quarter for the world’s second-largest consumer of the metal, with demand down 18 percent compared to last year.

2014-08-26 International Opportunities - a look at the bigger picture by Stephen Peak (Article)

Stephen Peak takes a look at the bigger picture and provides commentary on the world as we see it. He discusses expectations of rising interest rates and notes that geopolitical tensions in Europe and the Middle East are causing uncertainty and hesitation among investors. Stephen believes we are in a process of change and that clients should consider their international allocations, and at the margin, increase them subject to the needs of individual clients.

2014-08-26 BDCs featuring John Cole Scott by (Article)

Business Development Companies, a CEF "cousin," are gaining attention from yield-seeking investors, says John Cole Scott of CEF Advisors.

2014-08-26 2014's Market So Far by Chris Clark and Chuck Royce (Article)

During the March 4, 2014 interim high for small-caps into the middle of May, the Russell 2000 declined roughly 9.1%. Chief Executive Officer Chuck Royce talks with President Chris Clark about what he saw during this period and how this correction affected the performance of The Royce Funds.

2014-08-26 The Power and Limitations of Monte Carlo Simulations by David Blanchett and Wade Pfau (Article)

Explaining the past is much easier than predicting the future. This uncertainty raises a significant number of issues when creating a financial plan for a client. Monte Carlo simulations will illuminate the nature of that uncertainty, but only if advisors understand how it should be applied - and its limitations.

2014-08-26 Feedback That Motivates Your Team by Dan Richards (Article)

Last week's article outlined new research into how to motivate your team. One of the best strategies is giving consistent, quality feedback. Here are nine ways to provide feedback that motivates your team.

2014-08-26 The Ticking Time Bomb Stressing Your Success by Daniel Solin (Article)

Here's some insight on how stress reduces your ability to work effectively - and what to do about it.

2014-08-26 Why Germany's Economy is So Strong by Marianne Brunet (Article)

After spending more than a month this summer living in a rural part of Eastern Germany, I discovered that the source of Germany's economic strength extends far beyond the fields at the World Cup.

2014-08-26 Successful Succession Planning - Building Your Legacy and Keeping It by Alan Rosenfield (Article)

RIAs need a succession plan. But what does that mean, and how can you get one?

2014-08-26 Advisors Dealing with Illness in Their Family by Beverly Flaxington (Article)

My only brother is dying of cancer, my parents have both moved into nursing homes and we have a sick son who is in need of care. Given the number of advisors in my age category, I am maintaining my business but I can't focus on growth. Any suggestions on how to find resources to help me?

2014-08-26 These Four Mistakes Will Shipwreck Your Email Marketing Campaign by Alan Del Rosario (Article)

Here are four common mistakes that will shipwreck your email marketing campaign.

2014-08-26 Global Economic Overview: July 2014 by Team of Thomas White International

Recent economic data from the developed world have shown divergent trends while growth in the emerging economies appears to be stabilizing. The U.S. economy expanded at a faster than expected pace during the second quarter, more than offsetting the first quarter decline, which revised estimates show was not as severe as thought earlier.

2014-08-26 Event Driven Managers Encounter a Short-Term Hiccup by Chris Maxey, Brian Payne of Fortigent

After a period of very strong deal activity during the first half of 2014, traders and investors were hit with “arbageddon” in early August. “Arbageddon” struck after a series of large deals fell apart, sparking concern that the pickup in activity from earlier in the year was coming to an abrupt halt. Activity since that time would suggest otherwise, and it appears that the M&A train is back on course.

2014-08-26 Markets Want a Date, Fed Wants More Data by Kristina Hooper of Allianz Global Investors

Instead of getting clarity about when rate hikes will happen, investors are finding an increasingly divided Fed doing careful analysis and making nuanced arguments, writes Kristina Hooper.

2014-08-26 A Nation of Shopkeepers by John Mauldin of Mauldin Economics

One of the great pleasures of writing this letter is the fascinating correspondence and the relationships that develop along the way. The internet has allowed me to meet a wide range of people all over the world – something that never happened to me pre-1999. Not only do I get to meet a wide variety of people, I also come into contact with an even wider range of knowledge and ideas, much of which comes my way from readers who send me work they think I’ll have an interest in. I have a bountiful, never-ending source of thoughtful material, thanks to you.

2014-08-26 How Do You Anticipate the Unexpected? by Jerry Wagner of Flexible Plan Investments

It always seems to begin the same. A “News Flash” scrolls across the lower portion of our TV screens. Or the music trumpets a change is coming on the radio. (For those always plugged in on their phones or iPods, though, I have no idea how they learn about anything!)

2014-08-26 Yellen at Jackson Hole by Zach Pandl of Columbia Management

I must have heard it on the radio recently, because Janet Yellen’s speech at this year’s Jackson Hole conference brought to mind lyrics from one of my favorite Beatles songs.

2014-08-26 Republic or Empire? An Update, Part 2 by Bill O'Grady of Confluence Investment Management

Over the past two years, how American society answers this question is becoming increasingly critical. There is a steady undercurrent in American politics that seeks to withdraw the U.S. from world affairs. Last week, we introduced this topic. This week, we will conclude our analysis, including market ramifications. This report will detail the costs to the U.S. for taking on the superpower role.

2014-08-25 Equities Climb as Investors Focus on Fundamentals by Robert Doll of Nuveen Asset Management

Equities have recovered all of the losses experienced in July through early August. The Fed appears to be slowly paving the way for interest rate increases, but we’re not expecting any immediate changes. The global economy is growing, but remains weak. In this environment, we believe investors should be more selective.

2014-08-25 Broken Links: Fed Policy and the Growing Gap Betweeen Wall Street and Main Street by John Hussman of Hussman Funds

The issue is not whether the U.S. economy does or does not need “life support.” The issue is that QE is not life support in the first place. How can policy makers help to build the economy from the middle-out, and slow the both the unproductive diversion and the lopsided distribution of resources in our economic system? We should begin by stopping the harm.

2014-08-25 Consumer Spending & Economic Recoveries: What They Mean Going Forward by Matt Lloyd of Advisors Asset Management

As a follow-up to the discussion on the rollover of the duration of the unemployed, the byproduct of an accelerating improvement in the undercurrents of the job market is consumer spending. The measure of consumption has a primary correlation to wages and income workers receive. As such, the benign improvement in wages has an obvious correlation to the benign improvement in consumption. There is a strong secondary driver which we will discuss shortly.

2014-08-25 Catching Up On Performance by Team of GaveKal Capital

It's time for our weekly ritual of looking back before we look too far forward. Where has it paid to be invested and where has it not? Let's start with the Developed Markets.

2014-08-25 Active or Passive? How to Blend Aspects of Both by Russ Koesterich of BlackRock

While the official debate between active and passive investing strategies will never truly be settled, Russ advocates embracing a simple approach that blends aspects of both, and he provides five criteria to consider as you’re figuring out the right mix for you.

2014-08-25 New US Bank Rules a Boon for Bond Investors by Jeff Skoglund, Shrut Vakil of AllianceBernstein

US banks have come a long way since the financial crisis, and that’s good news for fixed-income investors. We think better fundamentals and stricter regulations are creating a good formula for banks’ preferred securities.

2014-08-25 Correcting a Common Misconception about Alternative Investments by Walter Davis of Invesco Blog

A common misconception about alternative investments is that these investments have failed anytime they underperform the stock market. Investors need to know that alternative investments … are designed to achieve returns that are more consistent and less volatile than those of the stock market on a long-term basis across multiple market cycles.

2014-08-23 Managing Expectations by Frank Holmes of U.S. Global Investors

The third part of this series on managing expectations is devoted to fundamental resource stock evaluation. I’ll discuss some of the statistical tools we use to pick quality stocks during a treacherous bear market, such as what we’ve seen in gold stocks the last three years

2014-08-23 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The View from Jackson Hole; U.S. Auto Sales: Tailwinds Will Prevail; The Mystery of Long-Term Bond Yields

2014-08-23 An Unconstrained View of Corporate Credit Amid the Rate Debate by Eric Takaha of Franklin Templeton Investments

July 2014 brought a summer swoon to the US high-yield sector, as selling pressure hit despite what many analysts by and large dubbed a respectable second-quarter corporate earnings season. Whatever the reason, many investors became suddenly spooked. Eric Takaha, director of the Corporate & High Yield Group and senior vice president, Franklin Templeton Fixed Income Group®, is not terribly concerned by what he views as short-term market volatility. He sees the recent selloff as not necessarily unhealthy, and he still sees supportive long-term fundamentals for corporate credit. He takes a

2014-08-23 One-Handed Guidance for Investors by Scott Minerd of Guggenheim Partners

Markets do not move in straight lines, so yields could retrace to 2.5 percent in the near term after breaking out as low as 2.35 in early August. Ultimately, as rates head back toward 2 percent investors should use the rally to reduce interest rate risk.

2014-08-23 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 134.3, unchanged from the previous week. The WLI annualized growth indicator (WLIg) dropped to 2.8 from the previous week's 3.5. On Monday of this week, ECRI broke its silence to the general public with a new commentary on its website focused on housing affordability and home price growth

2014-08-23 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Company

Sometimes, I’m tempted to write “same as last time.” This is one of those times.

2014-08-22 What "Smart Beta" Means to Us by Rob Arnott, Engin Kose of Research Affiliates

The controversial term “smart beta” is used so broadly in the marketplace that it risks becoming meaningless. This article describes the characteristics of equity strategies that, in our view, merit the smart beta designation.

2014-08-22 Our Take on the Fed Minutes by Doug MacKay, Bill Hoover of Broadleaf Partners

Usually, I don't have anything intelligent to say more than once every month or so and since I'm not a journalist, I'm never forced to make stuff up just to sell papers. I do believe, however, that the release of the Fed Minutes was worth a few of my minutes and perhaps yours. Even if you're yawning right now, please know that putting my thoughts in writing helps me to better manage your investments. As a money manager, we pick your investments, not your money managers. The buck starts and stops with us.

2014-08-22 Assessing Corporate Credit Risk in Asia by Satya Patel of Matthews Asia

Investing in foreign markets requires a constant questioning of many long-held assumptions that underpin traditional security analysis. This issue of Asia Insight is the first in a series of commentaries to explore the fixed income themes of credit, currencies and interest rates. Given the complexities of Asia’s fixed income markets, we will examine the many considerations that investors need to take into account to fully appreciate the inherent risks of investing in this market.

2014-08-22 Stock Indexes Break to New Highs on Less Participation from Individual Stocks (Again) by Team of GaveKal Capital

Earlier this week we touched on the fact that new highs in individual stocks have not expanded much despite the continued new highs all year in the headline indices.

2014-08-22 What Your Parents Didn’t Tell You About Saving for Retirement by Anne Bucciarelli of AllianceBernstein

Chances are, your parents have told you to max out your 401(k) plan. That’s good advice, but the hard truth is that your 401(k) plan is highly likely to fall short. To live comfortably in retirement, our research shows, you will almost surely need more.

2014-08-22 Current Opportunities in Consumer Discretionary by Charlie Dreifus (Article)

Poor holiday sales in 2013 and harsh winter weather have taken their toll on many Consumer Discretionary names so far in 2014. Portfolio Manager Charlie Dreifus tells Principal Dave Gruber why he's still attracted to the retail industry.

2014-08-21 An Inefficient Asset Class by Tim Gramatovich of AdvisorShares

We believe that the best approach to credit investing is to be agnostic on the credit ratings. This ratings agnosticism is central to our investment philosophy and process. We believe that credit ratings have created inefficiencies in corporate credit and an opportunity for those willing to step down on the ratings spectrum.

2014-08-21 Fed Revises Down Potential GDP In More Hawkish Minutes by Team of GaveKal Capital

In our latest quarterly presentation in July, we noted how spare capacity in the economy may be much smaller than is generally perceived. We found out today the FOMC came to similar conclusions in their latest FOMC meeting.

2014-08-21 Touring the Investment Landscape in the Czech Republic by Mark Mobius of Franklin Templeton Investments

My team and I have been touring Central and Eastern Europe this summer, and our travels recently took us to the Czech Republic. It’s a country with an interesting history, and from our perspective, it also holds a variety of interesting potential investment opportunities, too.

2014-08-21 Lucid Dreaming! by Jeffrey Saut of Raymond James

Evidentially, the “lucid dreamers” on Wall Street practiced their skills two weeks ago as professional traders were sneaking large “buy orders” into the equity markets on the closing bell. Simultaneously, the Commitment of Traders’ Report showed those same traders were dramatically reducing their “short sale” bets.

2014-08-21 A Roadmap, Not a Timetable by Scott Brown of Raymond James

On Friday morning, Fed Chair Janet Yellen will deliver the keynote address at the Kansas City Fed’s annual monetary policy symposium in Jackson Hole, Wyoming. Those looking for clues on the timing of the first Fed rate hike are likely to be disappointed.

2014-08-21 Skittishness by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Stocks suffered some of their bigger daily and weekly declines of the year recently with geopolitical and Fed concerns the likely culprits. We don’t believe this was the start of a sustainable downtrend, although there could be further selling to come in the near-term. The U.S. economy appears to be strengthening, leaving us optimistic on the longer-term outlook for stocks. Likewise, worries over the Fed and the timing of the first rate hike have increased, but the initial stages of a tightening cycle tend to be positive for equities.

2014-08-21 The TCW Advantage: Constructing Proprietary RMBS Collateral Benchmarks by Harrison Choi, Brian Rosenlund of TCW Asset Management

This TCW Advantage installment highlights ways in which our analysis is integrated across RMBS metrics through benchmark analysis. We review how TCW develops and maintains custom collateral benchmarks that help our portfolio management team spot risk and value that may be overlooked by others in the marketplace.

2014-08-21 Inspiring Economic Dynamism within Japan by Christopher Gannatti of WisdomTree

WisdomTree has been excited about Abenomics since its genesis in November of 2012. We believe that markets have responded well to the progress made on the first two arrows—namely decisive monetary policy and increases in fiscal spending.

2014-08-21 Hospitals: No Longer in the ICU by Kyle Schneider of Diamond Hill Capital Management, Inc.

The hospital industry has traditionally been below average from an investment standpoint, given its high levels of regulation, capital intensity, and leverage. Pricing power with private insurers is dependent on local market share, while Medicaid and Medicare rates are non-negotiable.

2014-08-20 Americas: Regional Economic Review - Q2 2014 by Team of Thomas White International

Economic trends from the region during the second quarter were in line with earlier periods, as the developed economies in North America are seeing healthier growth while most of the emerging economies in Latin America are facing a slowdown.

2014-08-20 What's Your Exit? by Axel Merk of Merk Investments

Are you prepared for an “Exit”? If the Fed pursues an “exit” from ultra low interest rate policy, are you be prepared for an exit from the stock market should things turn South? We discuss how investors prepare, noting the most common mistakes investors make along the way.

2014-08-20 Detroit bankruptcy — One year later by Ty Schoback of Columbia Management

In the summer of 2013, Detroit filed the largest municipal bankruptcy in history. One year on, how has the filing played out and what insights can be gleaned?

2014-08-20 Diversification and Discipline Are Key to Investing in Gold by Frank Holmes of U.S. Global Investors

Like training for a marathon, investing in gold isn’t for the apathetic or indifferent. It requires strong-willed discipline.

2014-08-20 5 Charts Showing The Taper Effect by Team of GaveKal Capital

We noted yesterday how treasury bond yields keep falling along with the reduction of fed purchases. This inspired us to dig deeper into our chart library to see how other asset classes or economic statistics have performed in relation to our taper model.

2014-08-20 A Peak at Yellen’s Labor Market Dashboard Highlights Fed Concerns by Rick Harper of WisdomTree

In this piece, we attempt to re-create the labor market dashboard and assess the progress the economy has made post-financial crisis. While many indicators suggest a full recovery (or at least substantial progress), a few indicators hint at little progress from crisis lows.

2014-08-20 Is a Big Equity Correction Imminent? Not Yet by Vadim Zlotnikov of AllianceBernstein

Many investors think US stocks are due for a correction: They feel that the market has run too far, that the Fed has been slow to act, that complacency has created pockets of excess. Do these gut feelings mean a major equity correction looms? Not yet, in our view.

2014-08-20 Clarity in Emerging Markets: Indonesian Election Outcome by Team of Manning & Napier

On July 9th, Indonesians turned out en mass for the country’s national election. The contest pitted the young governor of Jakarta, Joko Widodo (Jokowi), against a former general and businessman, Prabowo Subianto.

2014-08-19 Macro backdrop in Europe by Stephen Peak (Article)

Stephen Peak discusses the macro backdrop in Europe noting that while we've seen some signs of recovery coming through, we're now in one of those more difficult transition phases. We've seen positive progress in the UK with expectations on GDP upwards of 3% from some commentators and unemployment in Spain is below 25% for the first time in years. Additionally, Stephen touches on currencies, geopolitical tensions and where he sees opportunity in the region. Stephen believes there is still money to be made between now and the end of the year.

2014-08-19 What's Driving the Rebound for Our Approach? by Whitney George (Article)

The strengthening economy, the possibility of higher interest rates, and ongoing tapering may benefit those with a quality-driven investment approach. Portfolio Manager Whitney George discusses why our disciplined approach has been out of sync over the past few years and the recent rebound for economically sensitive businesses?and the asset managers who invest in them.

2014-08-19 Muni Appeal featuring John Miller by (Article)

Municipal bonds may especially appeal to income-seeking investors in high tax brackets, says John Miller of Nuveen Asset Management.

2014-08-19 How to Choose the Right Fixed-Income Strategy by Joe Tomlinson (Article)

The fixed-income portion of retirement portfolios is just as important as the equity allocation, yet far less research has been devoted to it. Advisors must decide whether to pursue active or passive strategies and which types of bonds to recommend. I'll address those strategic choices and argue that the best approach is the simplest, lowest-cost one.

2014-08-19 7 Characteristics of the Client of the Future by Sponsored Content from Transamerica (Article)

American families are changing, along with what they're demanding from their financial advisors. At a Transamerica Coaching Forum event last spring, Massachusetts Institute of Technology AgeLab director Joseph Coughlin, Ph.D., outlined some of the ways in which clients of retirement age have changed.

2014-08-19 Five Steps to a Passionate Team by Dan Richards (Article)

Few things are more important than keeping your team motivated and staying motivated yourself.

2014-08-19 Do Moving Average Strategies Really Work? by Paul Allen (Article)

Moving-average-crossover strategies have worked out very well in recent years. They prevented their followers from being invested in equities during the tech bubble and the financial crisis. Nevertheless, most of those strategies have underperformed the broad equity market since 2009. In this article, I will analyze all possible moving-average-crossover signals for the S&P 500 since 1928, to see if these strategies provide any value for investors.

2014-08-19 When Senior Managers Make Bad Decisions by Beverly Flaxington (Article)

What do you tell an insurance-based planning organization that owns a mutual fund company, a broker-dealer and an annuity company and has a 150-year track record as a mutual life-insurance company but does not require its recruits to be equities licensed at even the Series 6 level? These so-called advisors meet with clients but cannot provide the full suite of products and services that the parent company has available.

2014-08-19 Three Ideas for Changing Your Investment Perspective by Mariko Gordon (Article)

Drawing, as with most skills, is something that can be learned. I share how a simple drawing trick unleashed my inner artist and how tricks, similarly applied, can improve your investment skills as well.

2014-08-19 Strange Days Indeed by Kristina Hooper of Allianz Global Investors

In the dog days of summer, investors are buying both US stocks and Treasuries. Why the pull toward two asset classes that normally diverge? It could be a simultaneous expression of bullishness and hedge against risk, writes Kristina Hooper.

2014-08-19 To Meet Or Not to Meet by Matthew Page of Guinness Atkinson Asset Management

We do not generally consider meeting management as a high priority, nor a prerequisite for investment, as some do. We much prefer to focus on the objective metrics of a company such as long-term profitability, balance sheet metrics, valuation etc. There are two main reasons for this. First, it is impossible to assess the impact of management or quantify the degree of success or failure that should be attributed to management in any objective way. Second, meeting management can put your objectivity at risk.

2014-08-19 Europe Taking a Negative Turn by Chris Maxey, Ryan Davis of Fortigent

Among the highlights of a busy calendar of economic data last week was the flash estimate of second quarter Eurozone GDP. The region has come under greater scrutiny in recent months amid a disinflationary trend and slowing economic data. As we discussed a few weeks ago, the high profile failure of Portuguese bank Banco Espirito Santo has also inflamed worries that Europe’s financial system remains vulnerable to a systemic shock.

2014-08-19 Republic or Empire? An Update, Part 1 by Bill O'Grady of Confluence Investment Management

This topic was last discussed in our report from 2012. We have expanded sections of it in this update and, due to length, will present it in two parts. Over the past two years, how American society answers this question is becoming increasingly critical. There is a steady undercurrent in American politics that seeks to withdraw the U.S. from world affairs. In this report, we will discuss how the American republic began, how it evolved into an empire and how America conducted this role. Next week, we will finish our analysis and discuss market ramifications.

2014-08-19 Share and Share Alike?? by Richard Clarida of PIMCO

Labor compensation as a share of national income fell sharply in 2009–2010 and has remained depressed: The share of national income at the end of 2013 was the smallest slice paid to labor in at least 60 years! During the last three U.S. business cycles, the rise in labor’s share that commenced during the expansion phase of the business cycle was not accompanied by a material rise in PCE inflation.

2014-08-19 Gold – Keeping it Real by Ade Odunsi of AdvisorShares

One of our favorite measures to monitor in relation to the gold market has been the relationship between the gold price expressed in US dollars and the US 10 year real yield with the real yield being the nominal yield on a government bond adjusted for inflation expectations. Over the long term studies have shown that gold has a much stronger relationship with real interest rates versus nominal interest rates.

2014-08-19 Not A Single Developed Sector Is Trading Below 22x P/E by Team of GaveKal Capital

Markets rarely turn on valuation levels alone. Most of the time it takes a case of irrational greed or fear to mark a turning point in the stock market. However, it is always wise to keep one eye on valuations in order to calibrate just how much more greed or fear can be squeezed out of current earnings.

2014-08-19 “Bad News is Good” – A Hard Habit for Investors to Kick by Russ Koesterich of BlackRock

Last week’s market performance proved that investors are having a hard time kicking a certain habit: treating “bad news as good.” Russ explains, suggesting that investors continue to focus on relative value.

2014-08-19 European Bank Stocks: Time to Buy, or Bail? by Cindy Sweeting of Franklin Templeton Investments

In recent months, European banks have been under increased regulatory scrutiny, meeting the ire of regulators (in the United States in particular) for a range of alleged improprieties, resulting in sizable financial penalties. Throw in a bailout-inducing crisis at Portugal’s Espírito Santo bank, and it’s perhaps no surprise that share prices of many bank stocks in Europe have languished this year. These developments have provided investors with a stark reminder of the risks associated with investing in the banking sector.

2014-08-18 Dimes on Black and Dynamite on Red by John Hussman of Hussman Funds

An informed view of market history easily admits the likelihood that the S&P 500 will lose half of its value over the completion of the present cycle.

2014-08-18 Dynamic and Durable Growth Part 4: The Coming Mobile Advertising Boom by Ido Cohen of Invesco Blog

This is the fourth in a four-part series examining dynamic and durable growth themes that affect the US economy and present opportunities for investors. The first post examined the biotech revolution, the second explored the enormous implications of shale energy, and the third looked at the impending mobile data tsunami.

2014-08-18 Why Gilead Is The Most Exciting Growth Opportunity In 2014 by Team of F.A.S.T. Graphs

Earnings drive stock price in the long run and Gilead Sciences Inc (GILD) is entering a remarkable period of what could only be called astounding future earnings growth. This has not gone unnoticed by the market, as the stock price has been on a steady ascent for the past several months.

2014-08-18 Don’t Be Passive About Rising Rates by Chris Marx of AllianceBernstein

Though they’ve defied expectations this year, higher interest rates appear to be all but inevitable. Investors need to take measure of the rate sensitivity in their portfolios—and stay agile—to negotiate the rough market crosscurrents a rate reversal may bring.

2014-08-18 Global Economic Perspective: August by Franklin Templeton Fixed Income Group® of Franklin Templeton Investments

The US economy seemed to move into a higher gear during the second quarter, when gross domestic product (GDP) growth reached an estimated annual rate of 4%, supported by personal consumption and inventory build-up. Its first-quarter downturn also was not quite as severe as previously thought, falling by an annual rate of 2.1% instead of the 2.9% initially reported by the Bureau of Economic Analysis.

2014-08-18 Australia’s Terms of Trade: Implications For Credit Investors by Tracy Chin, Aaditya Thakur of PIMCO

Australia is contending with a multi-year decline in the terms of trade and a rebalancing toward the non-mining sectors of the economy. For companies, the macroeconomic consequences of a downswing in the terms of trade provide both challenges and benefits. For investors, it is important to find companies that have a clear, demonstrated understanding of the macro environment and can navigate the headwinds through operational efficiencies, cost control, market positioning and balance sheet management.

2014-08-18 A Different Take on an Advisor's Fees by Daniel Solin (Article)

Some traditional advisors feel pressure to lower their fees to compete with robo-advisors, even though the services they offer are more comprehensive. These advisors have succumbed to the basic premise used to justify robo-advisors' existence: Cheap is good. Expensive is bad. Do the data support this premise?

2014-08-18 Don’t Ignore Higher Taxes Until Tax Day by Eaton Vance Municipal Insight Committee of Eaton Vance

During the 2013 tax season, many investors in higher tax brackets were rudely awakened to the reality of paying 50% of their income in federal and state taxes. Given the new tax landscape, the federal tax-free income municipal bonds provide may look more appealing than ever.

2014-08-18 Tug of War Continues Between Fundamentals and Geopolitics by Robert Doll of Nuveen Asset Management

Important progress in the global recovery, U.S. labor market and corporate earnings has been masked by geopolitical tensions. The conflict involving Russia could have a significant impact on the eurozone and global growth. Market volatility is likely to increase in the short term, causing headwinds for risk assets.

2014-08-16 The “Unfortunate” Truth About the Bond Market? by Bob Andres of Andres Capital Management

During the past four years, we investors have been inundated by financial commentators, strategists, economists and equity gurus prognosticating the coming collapse of the bond market. I can say with confidence that they have been woefully wrong during this period – I can also say with confidence that if they keep saying it, they will eventual get it right. These negative views on interest rates gained momentum in August of 2010 when Jeremy Siegel and Jeremy Schwartz authored, “The Bond Bubble and the Case for Equities.”

2014-08-16 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

I have to digest a great deal of written material to keep up with the global economy. When I have free time to read, I often choose to decompress by enjoying the cartoons in “The Authoritative Calvin and Hobbes Treasury” or the food pictures in Bon Appétit. I know that sounds shallow, but it helps keep me sane.

2014-08-16 7 Phrases Investment Professionals Should Never Say by Robert Isbitts of Sungarden Investment Research

Robert Isbitts posted: "As a big Robin Williams fan, this was a tough week. Ironically, before this comedic genius's shocking death on Monday, my team and I planned for this week's blog to be a parody of the work of another comedian taken from us too soon, George Carlin.

2014-08-16 Managing Expectations - Part III by Frank Holmes of U.S. Global Investors

In the first of this three-part series on managing expectations, I discussed the role cycles play in the investment management process. At U.S. Global Investors, we actively monitor both short- and long-term cycles, from the annual seasonality of gold to four-year presidential elections, in order to manage expectations based on historical patterns.

2014-08-16 Bubbles, Bubbles Everywhere by John Mauldin of Mauldin Economics

You can almost feel it in the air. The froth and foam on markets of all shapes and sizes all over the world. It’s exhilarating, and the pundits who populate the media outlets are bubbling over. There’s nothing like a rising market to lift our moods. Unless of course, as Prof. Kindleberger famously cautioned (see below), we are not participating in that rising market. Then we feel like losers. But what if the rising market is … a bubble? Are we smart enough to ride it high and then bail out before it bursts? Research says we all think that we are, yet we rarely demonstrate th

2014-08-15 Quick Thoughts 2 by Doug MacKay of Broadleaf Partners

Our last piece, Quick Thoughts, generated one of the highest open rates of any Economic Update we've sent, so we'll take that as a clue and stick with the format.

2014-08-15 Neighborhood Bully - America Recklessly Throws its Weight Around by Peter Schiff of Euro Pacific Capital

On June 30, U.S. authorities announced a stunning $9 billion fine on French bank BNP Paribas for violations of financial sanctions laws that the United States had imposed on Iran, Sudan and Cuba. In essence, BNP had surreptitiously conducted business with countries that the United States had sought to isolate diplomatically (sometimes unilaterally in the case of Cuba).

2014-08-15 The Fragmentation of Bretton Woods by Mohamed El-Erian of Project Syndicate

In recent years, political support for economic multilateralism has eroded, undermining the effectiveness of the Bretton Woods institutions and disrupting the international monetary system. This is not only hampering the global economy’s ability to meet its potential; it is also contributing to geopolitical insecurity.

2014-08-15 What Middle East Tensions Mean for Oil Prices & Equity Portfolios by Russ Koesterich of BlackRock

With turmoil in the Middle East dominating headlines, many investors are wondering what the recent and growing unrest in the region means for oil prices and for equity portfolios. Russ explains why oil prices are likely to remain elevated for the foreseeable future and why there’s a strong case for sticking with energy stocks even if oil prices don’t spike.

2014-08-15 Ready to Board the "Through Train?" by Henry Zhang of Matthews Asia

What is the significance of the soon-to-be rolled out Shanghai—Hong Kong Connect, also known as the "through train?" This pilot program is designed to provide mutual access for equity investors between the Shanghai and Hong Kong exchanges. What will be the impact? While incremental, this could be an important step toward opening China's capital account and aiding in the liberalization of China's currency.

2014-08-15 Small Cap Performance Suggests Another Leg Of Counter-Cyclical Leadership by Team of GaveKal Capital

Liquidity sensitive assets such as small cap stocks have had a difficult 2014. Over the last three months they have underperformed large caps by roughly 9%.

2014-08-15 Lifted by Germany and China by Alexander Giryavets of Dynamika Capital L.L.C.

We briefly review the interplay of the global and regional (Europe and Asia) business cycles and where we stand. It turns out that the global business cycle is muddling through, continuing deceleration of China is still trying to find bottom and Germany recently turned the corner and is back to deceleration. While this state of affairs is no news the interesting aspect of this regional interplay which we want to bring to your attention is that US is helped and lifted by deceleration of both neighbors. That said US itself is in a mixed state.

2014-08-14 How Much Slack Is There In the Job Market? by Scott Brown of Raymond James

The amount of slack in the labor market will be a key driver of monetary policy in the months ahead. Fed officials differ in their perceptions of job market slack, leading some to want to tighten policy sooner rather than later. Labor market data can present somewhat different pictures, but on balance, there is still a large amount of slack remaining.

2014-08-14 A New York State of Mind by Jeffrey Saut of Raymond James

I met Arthur, as well as a host of other friends, last Thursday afternoon during my NYC sojourn to see institutional accounts and do media events. Over a scotch, he related the aforementioned story to me. The timing was propitious because another one of our friends had just telephoned to tell us the President was authorizing air strikes against ISIS. After a dinner at Mr. Chow’s, I went back to my hotel to find the preopening S&P 500 futures printing down roughly 11 points.

2014-08-14 Global Policy Divergence - Really?? by Axel Merk of Merk Investments

If you own dollars, the euro or gold, you might want to pay attention to this one.

2014-08-14 A Change In Consumer Behavior? by Team of GaveKal Capital

Retail sales in the US were unchanged in July, which prompted us to dive into our chart library to figure out what may be going on underneath the surface of the economy. Job growth has been pretty solid this year, which when combined with increases in hours worked, has led to a an almost 4% year over year increase in personal income. So what gives?

2014-08-14 Winds of Change in Saudi Arabia’s Investment Climate by Mark Mobius of Franklin Templeton Investments

One of the most anticipated financial events in the Middle East region finally could come to pass in the near future — the opening of the Saudi Arabian stock market to foreign investors. From my point of view, the Saudi Capital Market Authority’s announcement is a game-changer for the region.

2014-08-13 Timing the Bond Market by Edward Talisse of Chelsea Global Advisors

Economic journalism has never inspired what historians refer to as “strict historical impartiality.” Financial Analysts are as likely as any editorial page writer to misinterpret or misrepresent, intentionally or not, the past to suit their current view.

2014-08-13 There’s No Place Like Home by William Smead of Smead Capital Management

The Comic-Con convention comes to Seattle every year. The city teams with 15 to 45-year-old folks who love to emulate their favorite comic and movie characters. We have joked lately that we should hire a young woman to dress up like Dorothy from the Wizard of Oz and come with us when we speak in public. We’d have her click her ruby red heals together and say, “There is no place like home!”

2014-08-13 Banking on Banks by Bradford Evans of Heartland Advisors

Banks have not fully participated in market advances, but we believe they stand to benefit from growth in loan demand, rising short rates, or both. Opportunity for earnings growth and multiple expansion offer something you can take to the bank. It's a compelling space with attractive valuations, especially at the regional level, and merits a closer look.

2014-08-13 How Are Tigers Like Bears? by Jerry Wagner of Flexible Plan Investments

I left home for my niece Kendell’s birthday party at my brother Charlie’s, and my Tigers were ahead 5-0 over the Blue Jays at the end of the 5th inning. Our newly acquired ace, a Cy Young winner three seasons ago, was on the mound. There was nothing to worry about, right?

2014-08-13 Municipal Market Perspectives by Portfolio Team of SMC Fixed Income Management

Heightened international unrest and the likelihood of accelerating economic weakness in Europe will provide further support for fixed income securities. It is unlikely central banks will move from their current accommodative monetary positions anytime soon. Since we do not anticipate a meaningful upward move in Treasury rates, municipal bond prices should also benefit. Yields are likely to remain close to current levels and even possibly move lower. Strong market technical factors will also provide support.

2014-08-13 Toward the Sounds of Chaos by Richard Bernstein of Richard Bernstein Advisors

Stock market volatility is always a scary thing. Investors nearing retirement fear their nest eggs will evaporate. Younger investors saving for a home or a child’s college education fear their families’ futures might be in doubt. However, history suggests that allowing volatility to overrule a good investment plan tends to lead to poor performance. It’s not volatility itself that generally leads to poor longer-term performance, but rather it appears to be investors’ emotional reactions to volatility that ultimately lead to poor performance.

2014-08-13 Time to Consider Korea Hedged Equities by Jeremy Schwartz of WisdomTree

The Korean won has been on a tear as one of best-performing emerging-market currencies in 2014. And this has the Korean government and central bank officials worried that the rising Korean won is eroding the competitiveness of Korea’s exports.

2014-08-13 August Economic Update and Trends by Bruce Laning of Bronfman E.L. Rothschild

Bronfman E.L. Rothschild President Bruce Laning provides commentary on the economy, the bond market and stocks for August 2014. His article includes an analysis of various indicators, their trends, and Bronfman E.L. Rothschild’s resulting outlook.

2014-08-13 The Border Crisis: Why Is It Happening & Why Now? by Gary Halbert of Halbert Wealth Management

The recent surge of tens of thousands of unaccompanied children to the United States from Central America has sparked an intense and emotional debate over the crisis on the US-Mexico border. Unlike illegal immigrants from Mexico that can be deported within 48 hours, illegals from “non-contiguous” countries must be provided a deportment hearing in a court of law.

2014-08-12 Finding Value in a Challenging Bond Market by Payson Swaffield of Eaton Vance

We are in a challenging environment for investing in the bond market – investors have bid up the prices of non-Treasury debt to the extent that no sector is particularly “cheap” relative to its history. In our view, we are likely to see a flattening of the yield curve, with short-term rates increasing more than long-term rates. In today’s market, we believe it is possible to find value in sectors such as floating-rate loans and high-yield municipal bonds.

2014-08-12 Confronting the Tax Drag by Tom Metzold, Jim Evans, Lew Piantedosi, Peter Crowley of Eaton Vance

The 2014 tax season brought home the unwelcome reality of higher taxes, particularly for high-income earners who bore the brunt of the tax increases. While people immediately saw the impact on their income, the effects higher taxes can have on investment returns is not as well recognized. People may know about using retirement plans, such as IRAs and 401(k)s, to manage the taxes on their investment returns, but they are often not familiar with a variety of other approaches that could help reduce their tax burden.

2014-08-12 The Tax Harvesting Mirage by Michael Edesess (Article)

Recently, some advisors have been competing to show that their tax loss harvesting strategies produce a substantial "tax alpha." While this source of alpha is not wholly mythical, its benefits are vastly overstated. Indeed, they may be negligible.

2014-08-12 Misunderstanding Buffett by John Alberg and Michael Seckler (Article)

In November 2013, Connecticut-based money management firm AQR published a paper considering how to construct a quantitative model emulating the way Warren Buffett has selected his investments and generated attractive long-term returns. As we believe AQR's conclusions do not represent how Buffett actually invests, we considered how we might build a "Buffett model" in a different way.

2014-08-12 CEF Market Update featuring Mike Taggart by (Article)

Higher risk fixed income-oriented CEFs and MLP CEFs have generally done well in the past few months, but investors remain cautious, says Mike Taggart of Nuveen Investments.

2014-08-12 Global Macro Update and Outlook by Bill McQuaker (Article)

Bill McQuaker, Co-Head of Multi-Asset reviews how Fed tapering was a significant change of direction for US monetary policy away from open end support to financial markets. The big picture story really was the end of a liquidity driven market and the beginnings of a phase where markets were more dependent on growth to drive performance. Bill notes that markets didn't behave as though liquidity was coming to an end during the first half of 2014 and returns in asset markets around the world have been very encouraging, and asks "Where do we go from here?"

2014-08-12 Current Economic Conditions May Push Valuations Higher by Charlie Dreifus (Article)

Portfolio Manager Charlie Dreifus talks with Principal Dave Gruber about the current economy and the possibility of higher equity valuations.

2014-08-12 Low-Pressure Ways to Follow Up With Prospects by Dan Richards (Article)

For many advisors, the part of the business they hate the most is following up with prospects. I was reminded of this in a recent conversation with a veteran advisor who has done a great job of building visibility and relationships among an affluent community of prospects, but is struggling to turn those relationships into clients. I made three suggestions to help him move forward with the people in his target community.

2014-08-12 The Right Data Will Increase Your AUM by Daniel Solin (Article)

I have often wondered what kind of data resonates most with prospects and moves them to choose an advisor. It turns out that it's not any of the investment-oriented subjects advisors typically spend so much time discussing.

2014-08-12 Lessons from Steve Jobs on Delivering a Brand Experience by Kevin Marsh (Article)

Apple has little in common with the advisory business. But financial advisors, whose clients depend on them for sound investment management and financial-planning advice, can learn lessons from the tech giant when it comes to delivering a unique brand experience.

2014-08-12 Passing on Passive by Randall Abramson (Article)

The benefits of indexing are obvious - low cost, low turnover (read: tax efficient), diversification and performance that mimics the averages. Unfortunately, over longer stretches, about two-thirds of active money managers underperform the indices. If it's "middle-of-the-road strategies" (John Bogle's description of index-based investing) you're after, then that's the route you ought to take. However, it'll be a sad day when we all decide to embrace mediocrity.

2014-08-12 Developing the Next Generation's Leaders by Beverly Flaxington (Article)

How do you teach younger advisors to sell effectively?

2014-08-12 Weekly Market Update by Team of Castleton Partners

In a week devoid of meaningful economic data, financial markets were once again led by intensifying geopolitical events. With stock indices across the globe recording losses of 1%-3% on the week, US ten year yields declined to a low of 2.35% on Friday—a new low for 2014 and the lowest such point since June 2013. Since the onset of the Ukraine crisis in February, and later followed by the Iraq/ ISIS and the Israel/ Gaza conflicts, global sovereign yields have declined to levels unthinkable at the turn of the year.

2014-08-12 What a Credit-Shy Consumer Means for Growth by Kristina Hooper of Allianz Global Investors

Consumers have been cautious about running up credit-card debt since the financial crisis. But is that necessarily bad for the economy? Kristina Hooper breaks it down.

2014-08-12 Baseball, Hot Dogs, and Apple Pie by Michael Kayes of Willingdon Wealth Management

What really is, or perhaps isn't, economic patriotism? Read on to find out how this issue is impacting our economy and markets.

2014-08-12 Reflections on WWI: Geopolitics and Markets by Bill O'Grady of Confluence Investment Management

WWI was a devastating conflict and the postwar effects were substantial. From a market perspective, measuring the impact of geopolitics is difficult. Some events are short-term; others are more substantial but mostly cyclical. There are also events that permanently change the investing landscape. This report gives a short recap of the onset of WWI, and examines the problem that comes from induction, the logical process of observing the world and predicting the future. From there, we discuss the “lessons learned” from the post-WWII and post-Cold War era with an analysis of what may

2014-08-12 Flexible Income Strategies - Avoiding Side Effects from the Fed’s Medicine by Dave King of Columbia Management

The U.S. economy went into recession in 2008, and it looked serious. As our fiscal deficit piled up, the political appetite for high government spending waned, leaving monetary policy as the primary available weapon to prevent recession from becoming depression. By mid-2011, Treasury bond yields had reached all-time lows. This strong monetary medicine now seems to be working. Many economic statistics have rebounded to peak levels, while some forward-looking ones, like major stock market indices, have hit new highs.

2014-08-12 Developed Asia Pacific: Regional Economic Review - Q2 2014 by Team of Thomas White International

During the first half of 2014, developed Asia Pacific economies faced challenges arising from lukewarm consumption and meek trade growth. Most countries in the region tried boosting their economies with a mix of infrastructure spending and loose monetary policies. Countries that had their trade skewed to China, Asia’s largest economy, faced prospects of slowing trade.

2014-08-12 International Equity Commentary: June-2014 by Team of Thomas White International

International equity prices advanced further in June on expectations that the major developed economies are likely to see healthier trends during the second half of this year. Japan and Canada saw robust gains during the month while markets in Europe underperformed.

2014-08-12 Global Economic Overview: June 2014 by Team of Thomas White International

Recent data from the major countries suggest that the global economy is emerging out of the slower growth period experienced at the beginning of this year. Though the Euro-zone economy continues to see softer trends, data from the U.S. has become more positive.

2014-08-12 Middle East/Africa: Regional Economic Review - Q3 2014 by Team of Thomas White International

With a geopolitical setback and a positive market development, the Middle East had a mixed second quarter. Amid the civil war in Syria, another conflict erupted in the region during the quarter as a militant group started systematically seizing territory from Iraqi security forces.

2014-08-12 Federal Reserve Tapering Part II: Emerging Market Local Debt Performance by Bradley Krom of WisdomTree

In part two of our discussion, we focus on the impact of recent changes in Federal Reserve (Fed) policy on locally-denominated fixed income across emerging markets (EM).

2014-08-12 Long/Short Funds Go 'Unhedged' in Energy by Brian Payne of Fortigent

Over the course of 2014 investors have come to notice the increase in net exposures amongst long/short equity managers. Many investors have grown somewhat wary of this development. Given the market’s relatively uninterrupted run-up since late 2012, it is rational to think that these types of strategies might naturally lower their overall net exposure.

2014-08-11 Low and Expanding Risk Premiums are the Root of Abrupt Market Losses by John Hussman of Hussman Funds

Compressed risk premiums normalize in spikes. Day-to-day news stories are merely opportunities for depressed risk premiums to shift up toward more normal levels, but the normalization itself is inevitable, and the spike in risk premiums (decline in prices) need not be proportional or “justifiable” by the news at all.

2014-08-11 Transformation or Bust, Part 2 by John Mauldin of Mauldin Economics

Envisioning a clear path through the issues from where we are today is not easy, though China certainly has more options than the world had with subprime by the middle of 2008, when there was so much toxic waste on the balance sheets of banks all over the world and there was no turning back. As we have emphasized in the past and will do today, China does have options. But each of the options has costs associated with it, and those costs are going up every day. Who pays and when is the simple question that most readers want to have answered, but therein lies the conundrum.

2014-08-11 Dynamic and Durable Growth Part 3: The Mobile Data Tsunami by Ido Cohen of Invesco Blog

This is the third in a four-part series examining dynamic and durable growth themes that affect the US economy and present opportunities for investors. The first post explored the biotech revolution, and the second looked at the enormous implications of shale energy. The final post will examine the coming mobile advertising boom.

2014-08-11 Market Perspectives: The Corporate Inversion Debate by Sandy Lincoln of BMO Global Asset Management

Merger and acquisition activity in the U.S. is on the rise this year with over 4,000 deals pending, and corporate inversions have played a significant role. High corporate and global tax rates are major reasons why so many U.S. companies have left their profits overseas, opting not to pay a big tax bill to bring them home. Many other countries not only have lower rates, but they also tax on a territorial basis only.

2014-08-11 What Countries are Hot? What Should a Momentum Investor be Looking at Now? by David Garff of Accuvest Global Advisors

In a previous whitepaper, we looked at using Momentum as a factor when investing across countries, and found it to be effective in generating outperformance vs. the benchmark.

2014-08-11 A Strengthening Case for European Bonds by David Zahn of Franklin Templeton Investments

The pace of the eurozone’s economic recovery has been so slow that many people are now asking whether quantitative easing (QE) is inevitable to support a recovery and prevent deflation. But David Zahn, portfolio manager for Franklin Global Government Bond Fund, thinks recent European Central Bank (ECB) interventions in the European financial markets already amount to QE. More importantly, he thinks the extensive set of measures that the ECB has announced not only may support Europe’s economic recovery, but bring a highly favorable backdrop for European fixed income investments gene

2014-08-11 Is the Improving Economy a Good Sign for Active Managers? by Chuck Royce, Chris Clark, Francis Gannon of The Royce Funds

There are still enough opportunities out there to keep returns in positive territory through the end of 2014. This could make the market's next act a very happy one for active small-cap managers.

2014-08-09 Managing Expectations by Frank Holmes of U.S. Global Investors

Financial markets are influenced by relatively predictable cycles, a lesson we at U.S. Global Investors rely on to help us manage expectations and be effective stewards of your money. This is a theme I've frequently written about and discussed in investor presentations, one of which, “Anticipate Before You Participate,” is a classic that I often use to remind investors of these timeless principles.

2014-08-09 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Wage Growth May Not Be the Best Gauge of Labor Market Progress; The ECB's Summer Holiday May Not Be Very Relaxing; A Novel Proposal for Mortgage Lending

2014-08-09 What in the World?! (Sungarden’s Thoughts on Current News Headlines) by Robert Isbitts of Sungarden Investment Research

Summer slowdown? No way! The news is full of compelling story lines. Some of them have investment implications, some do not. Here, we briefly sort them out.

2014-08-09 Important Reform Progress by Andy Rothman of Matthews Asia

Last week's announcement that the Communist Party will reform the hukou, or household registration system, is an important first step toward reducing the contradictions and conflicts in Chinese society. Migrant workers were primarily responsible for China's rapid economic growth, and today account for the majority of the manufacturing and construction workforce.

2014-08-09 Summer Void by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

Although Wall Street and other corners of the business and political world may empty over the next few weeks, risks of a pullback in U.S. equities have gone up. Although we believe it would represent a buying opportunity and are optimistic longer term due to improving economic growth, nervous investors may want to consider a hedging strategy. China's stock market performance has improved and we remain positive, while European economic data has been more concerning, although the stocks still look attractively valued in our view.

2014-08-08 The Potential Impacts of Geopolitical Risks on Financial Markets by Team of Manning & Napier

As a global investment management firm, it is critically important that we monitor any and all varieties of risk that could threaten the performance of financial markets both domestically and abroad. Today, developments in a number of regions, particularly the Middle East and Eastern Europe, have brought geopolitical risk to the forefront of our minds. Below we describe some of the issues, why risks are rising, and how they may impact financial markets.

2014-08-08 Investor or Speculator? by Scott Minerd of Guggenheim Partners

The recent selloff in U.S. stocks is healthy and could set markets up to reach new highs by year end. Long- term investors should not fall victim to panic and sell.

2014-08-08 Finding Smart Beta in the Factor Zoo by Jason Hsu, Vitali Kalesnik of Research Affiliates

In the latest piece from Research Affiliates, Jason Hsu, Co-Founder and Vice Chairman, and Vitali Kalesnik, head of equity research, look at how the "publish-or-perish" syndrome and the smart beta movement have motivated academics and practitioners to come up with a spate of new investment factors. How can investors determine which ones are legitimate and how to use them in their equity portfolios?

2014-08-08 How to Hold Gold Financed in Euro by Ade Odunsi of AdvisorShares

We are often asked how US based investors can construct a long position in gold that is financed in a foreign. In the discussion below we show the components of trade that gives an investor long exposure to gold that is financed with European euro. A useful way to understand how the portfolio would be constructed is to look at the cash flows associated with a gold transaction. Looking first at a gold transaction that is funded in dollars we show a diagram of the associated cash flows.

2014-08-08 The Temptation of Market Timing by John Geissinger of Christian Brothers Investment Services

Highway drivers who shift lanes when traffic slows rarely get home faster. Likewise, investors who try to time market moves don’t improve returns with any consistency. Rebalancing to thoughtful asset allocation targets is the best way to keep your portfolio in the fast lane.

2014-08-08 Yellenization by Cliff Draughn of Excelsia Investment Advisors

On Thursday, July 31st, the market had a one-day sell-off of 2%, the most negative day since June, 2012. You heard the market pundits and the talking heads of CNBC opine that the reason for the selloff was the convergence of geopolitical risks.

2014-08-08 Argentina's Default: A Devastating Lesson in Unfunded Government Liabilities by Dickson Buchanan Jr. of Euro Pacific Capital

Last week, on July 30, the Republic of Argentina was declared to be in default for the third time in 30 years. Let's put that into perspective. If you were a bank officer who offered a 30-year mortgage to the Government of Argentina in the early '90s you would have spent nearly the entire life of the loan in a perpetual nightmare of refinancing. You would likely be not only fired from your job, but a pariah in the entire industry. This is what Argentina's international creditors and domestic citizens have faced in real life.

2014-08-08 The Big Picture: Who’s Afraid of Shiller’s CAPE? by Erik Kobayashi-Solomon of YCharts, Inc.

This Big Picture special report investigates the use of the Cyclically-Adjusted Price-to-Earnings Ratio (CAPE) for the S&P 500 to assess the relative over- or under-valuation of the U.S. Market at present.

2014-08-07 Banking on the Trends by Pamela Rosenau of HighTower Advisors

As the Fed has continued to roll back (“taper”) its bond purchase program, which will end in October 2014, the question remains: when will the central bank hike rates and what will the impact of monetary tightening be on the broader markets? This uncertainty has contributed to some of the recent market volatility.

2014-08-07 Argentina’s Griesafault by Joseph Stiglitz, et al. of Project Syndicate

Argentina's recent default was the work of one man: US federal judge Thomas Griesa, who prohibited the country from repaying its creditors until it repaid in full the 7% who refused a restructuring deal. Ultimately, however, it may be America that pays the steepest price.

2014-08-07 Federal Reserve Tapering Part I: Emerging Market Currency Performance by Bradley Krom of WisdomTree

While many investors tend to focus on changes of currency spot rates, a primary reason we have long advocated that investors allocate to EM currencies is the income potential driven by the higher interest rates in many emerging market countries. In today’s yield-starved environment, EM currencies remain one of the most significant means of generating income in a portfolio while limiting interest rate risk.

2014-08-07 With US Volatility on the Upswing, Take a Look at Asia by Russ Koesterich of BlackRock

While the U.S. economy appears to be gaining steam, lofty stock prices and rising geopolitical risks are finally taking a toll. Russ discusses one area that still represents an opportunity: Asia, both developed and emerging.

2014-08-07 Detailing The European Correction by Team of GaveKal Capital

Over the last 50 days European equity markets have taken a beating. The average stock in Europe is down 6%, and both Portugal and Austria are down more than 10%--putting them in correction territory. Down almost 9%, Germany isn't far behind.

2014-08-07 A Mid-Year Crossroads for US Equities? by Don Taylor of Franklin Templeton Investments

After a year when it seemed as if US equities could move only higher, vulnerabilities have begun to surface in 2014. Equities now seem to be at a mid-year crossroads, with many investors asking whether there is still potential upside to explore in the market—or at least, certain sectors. Don Taylor, chief investment officer, Franklin Equity Group®, US Value, and portfolio manager of Franklin Rising Dividends Fund, thinks there’s still value to be found in the US market over the long term. And, he’s using setbacks to add stocks to his dividend-minded portfolio.

2014-08-06 The Tocalino Index©: applying Demographics to a variation on Arthur Melvin Okun´s Misery by Sebastião Buck Tocalino of SBTCapital Clube de Investimento

The similarity between the trajectory of this new indicator (Tocalino Index©, or Indice Tocalino©) and the behavior of the stock market index corrected for inflation is clearly visible and a surprise. Even more importantly, it shows clearly the benefit and necessity of taking the demographic profile into consideration when analyzing data that concerns the economy of a country and any reflections of it on the behavior of stock markets.

2014-08-06 Grey Owl Q2 Investment Commentary by Team of Grey Owl Capital Management

Even after a second quarter rebound, gross domestic product (GDP) growth is barely positive for the first half of 2014. That has not stopped the S&P 500 from climbing to new highs. In fact, GDP growth has been weak for the entire “recovery” and, while improved, corporate sales and earnings also leave something to be desired. Stock market returns look better still, but only when compared to these weak results. Looking over a longer timeframe, the US equity market is approaching fifteen years of low single-digit returns.

2014-08-06 Coming Down from a Rocky Mountain High? by Jerry Wagner of Flexible Plan Investments

It was a little after 6 AM as the plane rose from the tarmac of Denver International Airport Saturday morning. Out the windows on the right the sun was just peeking above the horizon. The warm glow of the early morning light washed quickly across the prairie. The land was golden … and flat.

2014-08-06 Global Dividend Insights by Nathan Fischer, Louie Nguyen of Soledad Investment Management

For many foundations and individual investors, the usefulness of a portfolio lies in its ability to provide cash flow to support charitable activities or to cover living expenses. Like a wise orchard farmer, investors are looking to harvest apples from the branches without damaging the orchard. This article will explore how dividend is the key to managing wealth in terms of sustainable spending and how global dividend paying stocks, in particular, are a great equity investment for a sustainable spending strategy.

2014-08-06 Consumer Confidence Hits 7-Year High - Really? by Gary Halbert of Halbert Wealth Management

Today we’ll look at several key economic reports over the last week or so. Most have been better than expected. The Conference Board reported that its Consumer Confidence Index surged to the highest level in seven years in July. However, a couple of other reports we’ll look at below paint a very different picture.

2014-08-06 What Asset Class Rallied Last Week amid the Sell-Off? by Luciano Siracusano III of WisdomTree

Last Thursday’s sell-off in U.S. stocks (the Dow was down 317 points, the S&P 500 Index was down nearly 2%) marked the biggest stock market decline in nearly four months. The S&P 500 Index closed at 1,930 after it broke its 50-day moving average for the first time since April.

2014-08-06 Reconnected? by John Canally of LPL Financial

With the release of the GDP figures for the second quarter of 2014 (along with revisions to the data back to 1999), the disconnect appears to be fading. The data released so far for the third quarter suggest that the underlying economy had decent momentum as the third quarter began. The data continue to suggest that the U.S. economy is poised to post growth in the second half of 2014 above the long-term run rate of the economy. With plenty of slack still in the labor market, in our view, the Fed is not likely to begin raising rates until late 2015, or even early 2016.

2014-08-05 CEF Investing Tips featuring John Cole Scott by (Article)

Closed-end fund investors of varying levels of experience may benefit from tips for success from John Cole Scott of CEF Advisors.

2014-08-05 Are Small-Caps Overvalued? by Chris Clark and Chuck Royce (Article)

President Chris Clark and Chief Executive Officer Chuck Royce respond to Fed Chairwoman Janet Yellen's comments on current small-cap valuations and overpriced sectors.

2014-08-05 Ten Reasons the Advisory Business is Unlike Any Other by Bob Veres (Article)

The business dynamics that an advisory firm faces are so fundamentally different that any small business owner, dropped into your executive chair, would feel like she had been transported to another planet. To see how exceptional your business climate really is, let's take a quick tour of some of the differences between an investment advisory firm and a typical member of the business landscape.

2014-08-05 The Toughest Conversation with Clients by Dan Richards (Article)

Good advisors are used to challenging conversations with clients about unrealistic expectations and sticking to plans in tough markets. But going forward, no conversation will be more difficult than the one about how much you charge - especially when we enter the next market downturn. You need to do three things to handle those conversations effectively.

2014-08-05 Use the Rule of Reciprocity to Gather AUM by Dan Solin (Article)

Advisors seeking to convert prospects into clients commonly overlook the rule of reciprocity. The rule states that a debt must be repaid. What's fascinating is how far people will go to pay what they perceive to be a "debt," even when they didn't incur that debt voluntarily.

2014-08-05 The Alpha and the Beta of Investing by Adam Jared Apt (Article)

This article conveys two distinct practical lessons worth remembering and applying. One concerns the relationship between risk and return, and it will behoove you to keep this lesson in mind whenever you're inclined to throw caution to the wind in pursuit of better stock returns. The other concerns what counts as skill in selecting stocks.

2014-08-05 The Wealth-Builder Model by C. Thomas Howard, PhD (Article)

While the math of compounding is straightforward, building wealth is difficult. But if you use an approach based on the principles outlined in this article, the accumulation of real wealth is within reach.

2014-08-05 Dealing with Your Less Experienced Team Members by Beverly Flaxington (Article)

Are we the only place where the soon-to-retire advisors struggle to communicate with the newer staff members? We are not as tech-savvy or are marketing-savvy as they are, but they could learn a lot from our experience too. They seem too cocky to me, and I don't know how to get through.

2014-08-05 Mixed Signals by Brian Andrew of Cleary Gull

Over the weekend I had the opportunity to take in baseball tryouts. I know you are thinking it is August so what tryouts would be taking place in the middle of the season? These tryouts were for U-8 boys. For the uninitiated, this is when boys aged 7 and younger try out for next season’s teams. My son spent two days at a baseball camp and then finished yesterday with team tryouts. During tryouts there were six stations covering the fundamentals of the game.

2014-08-05 Banco Espirito Santo: Opportunity for the ECB? by Ryan Davis, Brian Payne of Fortigent

Over the weekend, it was announced that Portugal’s Banco Espirito Santo (BES) would be split into a ‘good bank’ and ‘bad bank.’ This came after the Bank of Portugal assured that BES could raise enough money from private investors to recover from the bank’s first-half loss of €3.58 billion.

2014-08-05 Getting a Grip on the Fed Tightening Tizzy by Kristina Hooper of Allianz Global Investors

Stocks have been immune to many of the threats to their prolonged march higher, but the prospect of the Fed raising rates sooner has many investors in a twist. Kristina Hooper explains why the eventual rate hike—and even a correction—won’t be so bad.

2014-08-05 Numbness to Numbers by Matt Lloyd of Advisors Asset Management

I’ve often pondered the continuing headlines over the lack of progress in the area of mathematics in the United States relative to our peers and think the issue may lie in one area. The rest of the world has adopted the metric system, while we are only peripherally aware of it. As such, when standardized scores are compared, maybe translating from the metric system is needed and we may score higher.

2014-08-05 Drawing Parallels Between Company Quality and Economic Strength by Francis Gannon of The Royce Funds

First-half results were mildly bullish, and included a brief period where higher-quality companies reasserted themselves during the more volatile months of April and early May. Co-Chief Investment Officer Francis Gannon talks about how the market has responded to the Fed's monetary stimulus, the economically sensitive characteristics that populate most of our firm's portfolios, and where we have been finding opportunities.

2014-08-05 Avoiding the Unintended Migration from Investor to Speculator by Bob Andres of Andres Capital Management.

The identification of value/price in the allocation of capital is essential to successful investing. Assets purchased at levels above intrinsic value reflect an approach based on hope and momentum not sound risk/reward analysis and normally portend negative results.

2014-08-05 Would John Templeton See Light at the End of Aflac’s Tunnel? by William Smead of Smead Capital Management

As someone who came into the investment business in 1980, I was immediately enamored by the logic of Sir John Templeton. He was the founder and portfolio manager during the first 40 years of the Templeton Growth Fund. During his tenure the fund beat the S&P 500 Index by 2% per year, net of annual expenses. We believe his best concept as a contrarian investor was his idea of buying common stocks at “the point of maximum pessimism.”

2014-08-05 Stock Market Valuations Suggest That This Bull Market Still Has Teeth by Team of LPL Financial

Losing under 3% in a week seems a minor concern given historical market ups and downs; nevertheless, investors may begin to wonder if stock market valuations are signaling a decline. Since the end of the last significant sell-off for stocks, the market has been in a pretty consistent upward trend. Valuation is a poor market-timing indicator; while valuation should always be considered, it is a blunt tool that should be taken into broader context.

2014-08-05 So, What Did We Learn? by Scott Brown of Raymond James

The busy week of economic news left investors uneasy. The 4.0% GDP growth figure contributed to concerns that the Fed may be forced to raise short-term interest rates sooner rather than later. However, while the economic data reports, and even the Fed policy statement, had something for everybody, the outlook for monetary policy should be essentially unchanged.

2014-08-05 Always Wrong?! by Jeffrey Saut of Raymond James

s the public always wrong? This is probably the most frequently asked question about the Theory of Contrary Opinion. For a correct answer we need to change the words in the question. Let me put it this way: Is the public wrong all the time? The answer is decidedly, “No.”

2014-08-04 Dynamic and Durable Growth Part 2: The Enormous Implications of Shale Energy by Erik Voss of Invesco Blog

This is the second in a four-part series examining dynamic and durable growth themes that affect the US economy and may present opportunities for investors. The first post explored the biotech revolution, and the third and fourth posts will discuss the massive changes in mobility.

2014-08-04 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The dynamics of the world energy market have changed dramatically since the Organization of Petroleum Exporting Countries first restricted the supply of crude oil. Today, there are many more producers, many more consumers and many more alternatives than anyone could have imagined 40 years ago.

2014-08-04 US Stocks Make 31 Record Highs in 2014, But Investors Panic During 3% Selloff by David Edwards of Heron Financial

US stocks as defined by the S&P 500 made 31 record highs in 2014, most recently on July24th. Through Friday afternoon, stocks declined 3.3%, which is to say less than the decline of 4.2% we saw in April of this year, and decline of 5.6% in January.

2014-08-04 Inflation Trumps Growth by Jim Nelson of Euro Pacific Capital

With the first half of 2014 now in the books, many investors are happy with the performance thus far, especially given the economic headwinds that few saw coming. The 26% rally in U.S. stocks in 2013 gave way to a more modest 7% gain in the first half of 2014. Most see this as a positive development in a maturing market. But beneath the surface, important trends are emerging that should give investors reasons to re-evaluate their assumptions.

2014-08-04 Mounting Pressure Weighs on Equities by Robert Doll of Nuveen Asset Management

U.S. equities experienced a sharp pullback last week, with the S&P 500 Index falling 2.7%, its largest weekly decline in over two years. A number of factors contributed to the downturn, including rising geopolitical tensions, concerns over Federal Reserve policy, Argentina’s debt default, a slowdown in the housing recovery and a sense that the market rally has been getting tired. Not all of the news was negative, however, since we also saw some strong economic and earnings data and increasing merger and acquisition activity.

2014-08-04 Weekly Market Update by Team of Castleton Partners

After months of record low volatility and little directional bias in price, fixed income markets were finally awoken from their summer doldrums, driven by a string of robust economic data. Not to be outdone, equity markets sold off sharply on the data, with the DJIA recording a 317 point drop on Thursday, its largest such decline since March.

2014-08-04 A Hint of Advance Warning by John Hussman of Hussman Funds

Historically-informed investors are being given a hint of advance warning here, in the form of a strenuously overvalued market that now demonstrates a clear breakdown in internals.

2014-08-02 5 Takeaways from the Vancouver Natural Resources Conference by Frank Holmes of U.S. Global Investors

Last week I was happy to speak at the Vancouver Natural Resources Conference in beautiful British Columbia. I also had the pleasure of listening to a variety of presentations by some of the most influential names in the investment world, and met a few new faces along the way. Here is what I took away from this year’s visit to Vancouver:

2014-08-02 ‘Index funds beat active 90% of the time.’ Really? by Robert Isbitts of Sungarden Investment Research

My last article suggested six ways in which retired and retiring investors may be lulling themselves into a false sense of comfort. They do this by adhering to ideals that were originally postulated many years ago, and which today still have some merit. But they’ve become clichés to a point where their foundation is no longer questioned when it needs to be. They are myths which need to be busted

2014-08-02 Kicking the Habit in Korea by Michael Han of Matthews Asia

Walk the streets of Seoul’s central business district, and you will still likely see smokers congregating in a few designated areas—narrow alleys between buildings, sending up smoke like chimneys. But even that is seen less and less these days as government officials crack down on public smoking. The next phase of Korea’s anti-smoking crusade may involve further taxing its comparatively cheap tobacco products.

2014-08-02 Transformation or Bust by John Mauldin of Mauldin Economics

China continues to be front and center on my list of concerns, even moreso than the latest Federal Reserve press release or fluctuation in the Dow (although you should pay attention). I believe China is the single biggest risk to world economic equilibrium, even larger than Japan or Europe. This week my young associate Worth Wray provides us with a keenly insightful essay on what is currently happening in China. I will admit to not having written about China very much in the past five years, primarily because, prior to Worth’s coming to work with me I really had no secure understanding o

2014-08-01 A Tear for Argentina by Kenneth Rogoff of Project Syndicate

Argentina’s latest default poses unsettling questions for policymakers. Though the country’s periodic debt crises are often the result of self-destructive macroeconomic policies, the default has been triggered this time by a significant shift in the international sovereign-debt regime.

2014-08-01 Second Quarter 2014 Investment Commentary by Team of Litman Gregory

Overall, our macro view and assessment of the risks and returns across the major asset classes has not changed meaningfully since last quarter. We continue to see the U.S. and global economies on a slow path of recovery from the 2008 financial crisis. ... Despite our more positive fundamental outlook, we also continue to view the markets as too dependent on central bank largesse, too short-term focused, and too complacent about the risks and imbalances that remain in the global economy in the aftermath of the financial crisis.

2014-08-01 ProVise Bullets by Ray Ferrara of ProVise Management Group

Earnings season got started on the right foot with Alcoa, the company that traditionally reports first, handily beating expectations and then company after company following. That is not to say that all companies beat expectations, but many surprised to the upside. Standard & Poor’s now expects earnings for the S&P 500 companies to come in at $29.12 for the second quarter which is a 10.4% improvement over the $26.36 during the same period last year. S&P is projecting total earnings for 2014 at $119.18 versus $107.30 for 2013, or an increase of 11%. The projection for 2015 is

2014-08-01 Russia’s Eurasian Vision by Nouriel Roubini of Project Syndicate

The escalating conflict in Ukraine between the Western-backed government and Russian-backed separatists has focused attention on the Kremlin’s long-term objectives. Though Russian President Vladimir Putin’s immediate goal may have been limited to retaining some influence in Ukrainian affairs, his longer-term ambition is much bolder.

2014-08-01 Getting Closer: Fed Continues its Tapering & Moving Toward Rate Hikes by Liz Ann Sonders of Charles Schwab

The Fed continues its taper; moving closer to rate hikes. Strong GDP report elevating chatter about possible earlier-than-expected rate hikes. Although volatility/pullbacks are possible, history shows initial rate hikes are NOT negative for stocks.

2014-08-01 Gold Bullion… Don’t Jump the Gun by Mark Ungewitter of Charter Trust Company

The job of a trend follower is to identify long-term trends as early as possible and ride them as long as possible. After a 39% decline since September 2011, we suspect that gold has become undervalued versus stocks, bonds and cash. It’s long-term trend, however, remains unhealthy or neutral at best.

2014-07-31 Opportunities in Developed International Equities by Christopher Gannatti of WisdomTree

Each year, WisdomTree screens the universe of dividend payers in developed international markets so that we can refocus the weights of constituents back to relative value and away from simply holding increasing amounts of stocks that have performed well. The rebalance was recently completed, suggesting that this is an opportune time to review the positioning of our broad developed international Indexes.

2014-07-31 Which Denomination of Gold is Your Parachute? by Ade Odunsi of AdvisorShares

We continue on the theme of gold as a defensive asset in this week’s discussion by examining the performance of gold priced in dollars (USD), European euro, British pound and Japanese yen through a number of different periods which were characterized by a sudden rise in investor risk aversion.

2014-07-31 The Sino-American Trust Deficit by Stephen Roach of Project Syndicate

The recently concluded Strategic and Economic Dialogue between the US and China was a major disappointment. Most significant, it failed to address an increasingly corrosive trust deficit that poses the most serious threat to Sino-American relations in 25 years.

2014-07-31 The Chinese Wall of Worry: Uncertainty Rhymes with Opportunity by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at the over-valued global market environment and points out that "While we wait for the day of reckoning…we should not be oblivious to potential opportunities, wherever they may exist. China may be a case in point." Digging deeper, Sicart looks at the negative media perception of China and believes "Many of the problems invoked in the headlines are real. But they are neither new nor, I believe on investigation, as catastrophic as implied."

2014-07-31 Normalize to What? by Scott Minerd of Guggenheim Partners

Despite a disconcerting, growing consensus among investors, the likelihood of a sudden increase in U.S. interest rates is fairly remote for now.

2014-07-31 Principled Populism? by Paul McCulley of PIMCO

In the years before retiring from PIMCO in 2010, I often interviewed candidates for professional positions here, usually at the end of the process, after they had been thoroughly vetted through several rounds of interviews. My task was not so much to test candidates’ qualifications as to “take their measure” – and for them to take mine!

2014-07-31 Bond Investing in a Rising Rate Environment: How to Widen Your Options by Gareth Isaac of Schroder Investment Management

Bond valuations now look stretched in a number of areas of the market. However, the global economy now has far fewer headwinds to contend with. One way bond investors can reduce this risk - or even prosper from a rate rise - is via unconstrained bond funds.

2014-07-31 Are You Concerned about Small-Cap Valuations? by Tripp Zimmerman of WisdomTree

Stocks often move more than is justified by changes in their underlying fundamentals, and as a result, investors run the risk of paying too much for stocks that have become more expensive relative to their fundamentals.

2014-07-31 Calling the Fed’s Bluff by Anthon Valeri of LPL Financial

Futures continue to indicate the bond market believes the Fed does not have an ace up its sleeve and that ultimately they will not raise rates as high as they project. A host of top-tier economic data may influence bonds more this week given the absence of new forecasts and a press conference following this week’s Fed meeting.

2014-07-31 Expanding the Opportunity Set for Income Generation by Heather Rupp of AdvisorShares

High Yield investors should understand the difference between an index-based product and its yield generation characteristics and portfolio composition based on the underlying index, versus some of the expanded opportunities available to active managers. For instance in the high yield bond and bank loan space, we see index-based, passive products that are largely high yield bonds or largely floating rate bank loans, not a blend of each.

2014-07-30 The Bank of England’s Balancing Act by Team of Manning & Napier

The United Kingdom (U.K.) has recently been a subject of increased attention in the media and investment circles. An improving economy—particularly relative to its Eurozone neighbors—has provided a reason for optimism among economists and investors alike. However, rapidly rising home prices and accommodative monetary policy have also raised potential red flags.

2014-07-30 Anything Built By the FED, Can Also Be Destroyed by Edward Talisse of Chelsea Global Advisors

Bond Investors have had a great run so far in 2014. It's time to take some profit. Inflation expectations are rising, should we be worried? Why has the Japanese Yen been strengthening against the USD?

2014-07-30 The Outlook for MLPs and Midstream Energy Infrastructure Continues to Look Bright by David Chiaro of Eagle Global Advisors

The quarter saw a number of positive developments that underpin our long term positive outlook on MLPs. Firstly, the need for new midstream infrastructure remains significant, and a number of announcements of large new projects highlighted that this need is not abating. Also, a significant new development in the quarter was the emergence of new export markets for ethane and condensate which will entail associated infrastructure development and other possible profit opportunities for MLPs.

2014-07-30 Fed's Janet Yellen To Continue Punishing Savers by Gary Halbert of Halbert Wealth Management

New revelations have suggested that our new Fed Chair, Janet Yellen, may be the most liberal person to ever hold the highest monetary office in the world. This news comes after a recent extended interview Ms. Yellen did with The New Yorker Magazine and her testimony before Congress earlier this month.

2014-07-30 High Stock Dividends: A Competitive Retirement Income Solution by C. Thomas Howard of AdvisorShares

Sufficient yield, keeping up with inflation, and outliving the funds available are three major concerns facing investors who are building a retirement portfolio. A high dividend yield equity portfolio can provide a competitive approach to addressing each of these concerns.

2014-07-30 Goodnight Vietnam? by William Gross of PIMCO

It was a matter of happenstance I suppose – certainly not serendipity. Our meeting may have been an inevitable coming together, but it was certainly not initially welcomed by me. Happenstance is the better word. Fateful happenstance.

2014-07-30 Treasury Bond Yields Still Catching Bid in Line with Slowing QE by Team of GaveKal Capital

Last week we wrote that the bond market is following perfectly the reduction of QE with new 1-year lows and with today's bond moves that trend is still firmly in place. In what may seem counter intuitive, treasury bond yields have had a high positive correlation with the rate of Federal Reserve asset purchases. When the rate of Fed asset purchases rises, bond yields rise, and vice versa. If one thinks of Fed asset purchases as stimulative to growth and inflation expectations (the two components that make up risk-free bond yields) then this positive relationship makes sense.

2014-07-30 Investor Fatigue Setting In? by Russ Koesterich of BlackRock

Despite a generally positive tone to earnings season, investors may be finally showing signs of fatigue, as seen by aggressive selling of risky assets, namely high yield and U.S. equities. Russ K explains the implications.

2014-07-30 Should Be an Eventful Week by Scott Brown of Raymond James

The economic calendar is packed with important items this week. Oddly, Wednesday afternoon’s policy announcement from the Federal Open Market Committee may be the least interesting. One shouldn’t put too much weight on the advance GDP estimate, as the figures will be revised, but the initial estimate, along with annual benchmark revisions, should have important implications for the outlook for growth in the second half of the year.

2014-07-30 Trains and Boats and Planes? by Jeffrey Saut of Raymond James

hose of you who know me know that I have had a love affair with boats ever since I was a kid. In my youth it was speedboats on various lakes in Michigan. In my teens, and into my forties, it was sailboats combined with an occasional trawler. In later life, however, it has been strictly powerboats.

2014-07-29 Managed Futures Mutual Funds: A Story of Growth by (Article)

The Innovation Spotlight at the Managed Futures Pinnacle Awards, held on June 17th in Chicago, recognized PIMCO and Milliman for their innovative use of futures within funds to manage risk for those nearing or in retirement.

2014-07-29 Thomas White's 2014 Mid-Year Market Outlook by Thomas White (Article)

45-year industry veteran Tom White offers a review of current global economic trends and the outlook for the second half of 2014, with insights on the investment opportunities that may arise in the near future. Listen to why he sees "interest rates continuing to fall" and why "we are positive about what is going on" in the global economy.

2014-07-29 Larry Summers' Sleepless Nights by Michael Edesess (Article)

Former Treasury Secretary Larry Summers has said that a new book, House of Debt, is "likely to be the most important economics book of 2014." It's authors argued that the causes of the Great Recession have been misdiagnosed and, therefore, the solutions - many of which were designed by Summers - were inadequate.

2014-07-29 How Much Tilt? What Kind of Tilt? by William Bernstein (Article)

The first question is whether tilting towards small and value stocks still carries a premium.

2014-07-29 20 Predictions for 2039 by Dan Richards (Article)

The shifts in the next 25 years will be just as substantial as those in the previous 25 years, and the most successful advisors will be those who are able to anticipate and adapt to these changes. Here are 20 predictions for what the financial-advising business will look like in 2039.

2014-07-29 How to Solve the Referral Conundrum by Daniel Solin (Article)

There is a considerable amount of sound data on how to acquire referrals. But the initial issue you must address is whether you should ask for them at all.

2014-07-29 The Great War, the NYSE and a Legacy of Strength by Andrew D. Martin (Article)

A century ago this week the NYSE closed for four months. Most would dismiss this as a natural response to the beginning of World War I. But no war before or after has shuttered the exchange for more than 10 days in its 222-year history. I will discuss why it was necessary to close the exchange and what lessons we can draw from the events of 100 years ago.

2014-07-29 Ten Habits of Successful Advisors by Jennifer Geoghegan (Article)

What are the tactical habits you can introduce to make business development a larger part of your new routine? Here are 10 habits that I have seen some leading advisors adopt as behaviors that have helped them consistently grow their practices.

2014-07-29 What Makes a Compelling Marketing Hook? by Beverly Flaxington (Article)

How do we improve our image in the market? We are not well known for what we do, although we believe we do it better than the competitors. We talk about being fiduciaries and having an objective voice, but I don't know if our message is powerful enough. What else could we do?

2014-07-29 Protect Your Business with a Marketing Plan by Kristen Luke (Article)

Even if you don't have the capacity to take on any more clients until you add staff, here are the marketing strategies you should be following today.

2014-07-29 Strengthening the Euro’s Governance Structure? by Andrew Bosomworth of PIMCO

?Today’s relative tranquillity in eurozone financial markets owes largely to the ECB’s willingness to hold the single currency together. However, history suggests the eurozone’s citizens ultimately will have to choose between returning to a regime of flexible exchange rates or retaining the single currency and deepening political and fiscal integration.

2014-07-29 Weekly Market Update by Team of Castleton Partners

Increasing geopolitical tensions, mixed economic data, low volatility, and little directional bias in interest rates; sound familiar? Last week produced more of the same in fixed income, as prices across the entire maturity spectrum remain in a well-defined (and very narrow) trading range. With a yield of 2.48%, the ten year US Treasury note has been oscillating within a twenty basis point band since May 1st: 2.65%- 2.45%.

2014-07-29 The Philippine Growth Story Looks Set to Continue by Nick Niziolek of Calamos Investments

We are optimistic that the Philippine growth story has several long chapters ahead, a view supported by the country’s progress in infrastructure investments and reform initiatives. Following a slow recovery from the Asian Financial Crisis, the Philippine financial sector is in a much better economic position for sustainable growth than many other emerging markets. The overall economic backdrop in the Philippines remains favorable…as economic freedoms continue to increase so too will the flow of foreign capital, fuelling for the economic investments necessary to further develop thi

2014-07-29 Blowback: The Tragedy of Flight MH-17 by Bill O'Grady of Confluence Investment Management

On July 17, a Malaysian Airlines passenger plane was shot down over Ukraine, killing all 298 persons aboard. Evidence suggests that Russian-backed rebels fired the rocket, inadvertently attacking the civilian aircraft. In this report, we will discuss the recent escalation of tensions in Ukraine that led to the mistaken attack. We will examine the use of proxies in warfare between nuclear powers, both the costs and benefits. In terms of cost, the problem of “blowback” will be analyzed, with a focus on how this situation affects President Putin. We will conclude with market ramificat

2014-07-29 Deconstructing the State of the Housing Recovery by Kristina Hooper of Allianz Global Investors

The rebound in the US housing market has slowed in the first half of 2014 for a number of reasons. But local economies and their respective job markets tell the real story. Kristina Hooper breaks it down.

2014-07-29 Corporate Earnings Season Update by Ryan Davis, Brian Payne of Fortigent

As the so-called punchbowl provided by the Federal Reserve is slowly withdrawn, $10 billion at a time, investors are increasingly looking to corporate fundamentals to see what might drive equity markets higher in the quarters ahead. Now three weeks into second quarter earnings season, market participants have a better idea of just how the most recent cycle is shaping up.

2014-07-29 Land Is the Riskiest of Asset Classes by Sean Fergus of John Burns Real Estate Consulting

Investing in land carries significantly more volatility than nearly all other real estate asset classes. As a general rule, a 1% change in home values results in a 3% change in finished lot values because almost all of the change is attributable to a change in the value of the land rather than the structure. Investing in raw land carries an even greater level of volatility and price swings.

2014-07-29 Fed Exit a Blue Pill? by Axel Merk of Merk Investments

While we are busy arguing whether the Fed’s exit will consist of rising rates, reverse repos or the trimming of its massive portfolio, the Fed may well be fooling all of us. Investors must have been swallowing lots of blue pills not to see the illusion hiding in plain sight.

2014-07-29 How to Blend In a Currency Hedge by Jeremy Schwartz of WisdomTree

Looking across developed markets today, a common thread is that central bank policies have pushed interest rates to very low levels to support their economies.

2014-07-29 Who’s “Mr. Excitement” and What’s He Got To Do With Stocks? by Jerry Wagner of Flexible Plan Investments

Born here in Detroit in 1934, he died just short of 50 years later after lying in a coma for nine years. In 1975 he had a heart attack on stage while singing his hit single “Lonely Teardrops,” reportedly as he mouthed the lyric “My heart is crying.” Much earlier a royalty dispute between his managers had led Barry Gordy to split and form Hitsville USA (Motown records). “Mr. Excitement,” as he was known, thrilled fans worldwide doing the splits and sip sliding across the stage while he sang R&B and soul throughout the fifties, sixties, and seventies.

2014-07-28 Second Quarter Economic & Capital Market Summary by Gregory Hahn of Winthrop Capital Management

It seems there is a growing disconnect between what the financial markets are discounting and the reality of what is transpiring in the domestic and global economies. While economic growth has the potential to increase during the second half of the year we are not expecting a dramatic acceleration since there are still structural problems in the economy. The result is slow private credit expansion, a lack of fixed investment and a slow rate of business formation.

2014-07-28 Money Market Reform: Reflections on This Critical Inflection Point for Cash Liquidity Investing by Jerome Schneider of PIMCO

Under the SEC’s new regulations, institutional prime and institutional municipal money market funds will transition to a floating net asset value. All money market funds (except government-focused funds) are required to impose liquidity fees and may use redemption gates if liquid assets fall below certain levels. Investors, both institutions and individuals, should view this industry inflection point as an opportunity to revisit their approach to cash investing. Actively managed short duration strategies are a compelling solution.

2014-07-28 Yes, This Is An Equity Bubble by John Hussman of Hussman Funds

Make no mistake – this is an equity bubble, and a highly advanced one. On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme.

2014-07-28 Are Interest Rates “Too Low?” by Scott Brown of Raymond James

In her monetary policy testimony to Congress, Federal Reserve Chair Janet Yellen offered no new clues regarding when the central bank will begin raising short-term interest rates. The Fed has been criticized for being “behind the curve” on inflation and for fueling bubbles. Neither criticism is right.

2014-07-28 How High is High? (To Whom?) by Jeffrey Saut of Raymond James

I have a number of friends who succeeded as investors in the late 1960s, and they are succeeding now. The key to their success more than 20 years ago was that they managed to get out with most of their capital when the market turned down. Most investors were not so astute.

2014-07-28 Foreign Investors are Fancying Japanese Stocks Again by Team of GaveKal Capital

Whether front running more easing by the BOJ or taking bets on deep valued Japanese stocks, foreign investors are starting to accumulate Japanese equities once again.

2014-07-28 Desperately Seeking a Cheaper Kilowatt Hour by Frank Holmes of U.S. Global Investors

Let’s imagine that an aluminum manufacturer is eyeing two locations to build a new factory. In location A, an industrial kilowatt hour (kWh) is priced at 4.21 cents, whereas in location B, it goes for 12.67 cents. The difference is upwards of 200 percent.

2014-07-28 Emerging Europe: Regional Economic Review - Q2 2014 by Team of Thomas White International

During the second quarter of the year, the Emerging Europe region appeared to be displaying divergent trends. The fallout of the Ukraine crisis was not as damaging to the Russian economy as feared, with the economy even expanding during the review period. However, as the IMF pointed out, the sanctions imposed by the West appear to have dented investor confidence.

2014-07-28 And That's The Week That Was by Ron Brounes of Brounes & Associates

More favorable earnings; more decent economic releases; more devastating global turmoil. Stocks were little changed during the week (though the S&P did move into record territory) as many investors went on much-deserved summer vacation. Hope they are well-rested because next week brings a new month, a vast array of key data, financial word from Big Oil and others, and hopefully progress on peaceful resolutions to the never-ending geopolitical conflicts.

2014-07-28 Indian Budget: Converting Promises into Policies by Jeremy Schwartz of WisdomTree

India has been a hot market in 2014, as investors anticipated the election of business-friendly prime minister Narendra Modi. If Election Day was the most important day of the year, perhaps the second most important day was the release of the annual budget on July 10.

2014-07-28 Dynamic and Durable Growth - Part 1: A Biotech/Pharma Revolution by Janet Luby of Invesco Blog

This is the first in a four-part series examining dynamic and durable growth themes that affect the US economy and may present opportunities for investors. The remaining three blog posts will examine the enormous implications of shale energy and the massive changes in mobility.

2014-07-27 Time to Put a New Economic Tool in the Box by John Mauldin of Mauldin Economics

I don’t think GDP as it is measured today is a Keynesian plot. GDP is a valuable measurement tool, if you understand what is being measured and all those asterisks with caveats that attend any such measure. But as we will see in this week’s letter, there are other ways to measure GDP that would suggest additional policy dials for spurring economic growth.

2014-07-26 Consumption and Services Deliver Healthy Growth by Andy Rothman of Matthews Asia

Three interesting economic trends, each relevant to investors, are clear from China’s first half macro data. First, economic growth has stabilized at a healthy pace despite a weak property sector. Second, driven by strong income growth, China remains the world’s best consumption story. Third, ‘rebalancing’ continues, with consumption accounting for a larger share of GDP growth than investment, and with the services sector bigger than manufacturing and construction.

2014-07-26 Mid-Year Outlook: Beware that Peaceful, Easy Feeling by Andrew Pease of Russell Investments

Has a sense of unfounded complacency settled in among investors as we move through the second half of 2014? In our Strategists’ 2014 Global Outlook – Third Quarter Update, we discuss the possibilities.

2014-07-26 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Re-regulation has diminished market liquidity. Updated U.S. budget projections are improved but not comforting. The EU searches for the right response to Russia.

2014-07-26 Second Quarter Earnings: Marching Toward a Strong Recovery by Frank Holmes of U.S. Global Investors

It’s earnings season once again, and though only a quarter of the Russell 1000 has reported so far, the news is just north of positive. All signs indicate that the market has dusted itself off and is back to its cheerful self after a ho-hum first quarter, which was negatively affected by harsh winter weather.

2014-07-26 “WIMPY” – Implications of Massive Government Stimulus by Robert Isbitts of Sungarden Investment Research

The question we have is “how are we going to pay for all of this borrowed money?” If you are the government and own the Mint, you can print more money. That pays your debts but devalues your currency, so you replace one problem with another. When you hear that the Fed is "pumping liquidity into the system" there is a good reason - they are the only ones left who can. The consumer’s financial condition is again fading into treacherous territory.

2014-07-25 Think Floating-Rate Loans Are Just a Rate Hedge? Think Again. by Scott Page, Craig Russ, Christopher Remington of Eaton Vance

The prospect of higher interest rates has many advisors and investors considering floating-rate loans. Because loans’ coupons regularly reset, these debt instruments can maintain their value even as rates rise. But the characteristics of loans, as well as their performance track record, suggest they may deserve a place in strategically allocated portfolios in any interest-rate climate.

2014-07-25 The 401(k) Event Horizon by Scott Klimo of Saturna Capital

Who would have guessed in 1973 that Roger Waters' meditation on life's fleeting passage would describe the dilemma faced by many today as they consider how best to save for retirement? The good news is that missing the starting gun doesn't prevent you from joining the race. We have all seen the calculations of how big our nest eggs could be if we started saving and investing at a young age, but those unable to do so still have an opportunity to build substantial savings.

2014-07-25 Market Valuations and the Theory of Relativity by Zachary Karabell of Envestnet

Depending on what metric you use to assess the stock market, equities could be cheap, expensive, or anywhere in between. Try not to be swayed by simplistic arguments based on selective analysis of historical valuations, patterns or averages. Advisors and investors should keep in mind that with so few opportunities today to find yield and appreciation, if long-term gains are to be had, stocks are where such gains are likely to be found.

2014-07-25 Yellen: Where No Man Has Gone Before by Peter Schiff of Euro Pacific Capital

Although Fed Chairwoman Janet Yellen said nothing new in her carefully manicured semi-annual testimony to Congress last week, her performance there, taken within the context of a lengthy profile in the New Yorker (that came to press at around the same time), should confirm that she is very different from any of her predecessors in the job. Put simply, she is likely the most dovish and politically leftist Fed Chair in the Central Bank's history.

2014-07-25 Maintaining A Constant Standard Of Living Is Very Difficult by Team of Optimus Advisory Group

Ever wonder why rises in the Consumer Price Index ("CPI") seem low compared to your own personal experiences? Or why social security annual cost of living increases seem to get smaller and smaller? Or why inflation-adjusted pensions can't seem to keep up with general price increases? Or why the American worker gets such meager annual raises (if at all) that they seem to fall further behind year after year?

2014-07-25 The Hangover by Scott Minerd of Guggenheim Partners

The Fed’s not taking the punch bowl from the party, but investors should be wary of the hangover.

2014-07-25 The Outlook for Emerging Market Bonds by Shane Shepherd of Research Affiliates

Emerging market bonds exhibit high real yields and improving credit quality. In addition, emerging market currencies are likely to strengthen. This article explains why emerging market bonds issued in local currencies might be a solid addition to a diversified portfolio.

2014-07-25 What Are Gold Option Markets Telling Us? by Ade Odunsi of AdvisorShares

It is often a valuable exercise for investors to monitor the option market associated with the cash market as option markets may carry useful information about how the balance of supply and demand in the cash market is evolving over time. In this week’s note we review the history since January 2006 from when we have available data, of the market’s relative preference to own gold calls (seeking to profit from rising gold prices) versus owning gold puts (seeking to profit from falling gold prices) and how this has related to the price action in the gold cash market.

2014-07-25 Looking for Attractive Income with Less Volatility than Equities? by Michael Weilheimer, Steve Concannon, Will Reardon of Eaton Vance

High-yield bonds offer investors the potential to earn total returns comparable with equities without the level of volatility stocks have. While many income investors are naturally concerned about the prospects of higher interest rates, high-yield bonds have a set of characteristics that may enable them to maintain their value even as rates rise.

2014-07-24 More Volatility Ahead? by Russ Koesterich of BlackRock

Despite recent market swings, volatility is still very low by historic standards, suggesting that markets aren’t taking into account the prospect of bad news and that investors should prepare for more turbulence ahead.

2014-07-24 Standing By Convictions in European Equities by Philippe Brugere-Trelat of Franklin Templeton Investments

European equities have garnered a fair share of attention lately as leading indicators suggest economies in the region are starting to recover from years of crisis and austerity-induced recessions. While some observers will point to recent equity market volatility as a sign that investors should remain defensive when selecting stocks in the region, Philippe Brugere-Trelat, executive vice president and portfolio manager, Franklin Mutual Series®, says he’s encouraged by recent developments.

2014-07-24 Keep An Eye on Commercial Bank Liquidity Trends by Team of GaveKal Capital

An interesting development this year has been the increase in purchases of US Treasury bonds by commercial banks. In the chart below, we show the year over year increase in the holding of US Treasury bonds by US commercial banks set against the interest rate on 10-year UST. This goes some way in understanding the move lower in rates this year.

2014-07-24 Instability is the New Normal? by Axel Merk of Merk Investments

Once upon a time, there were safe havens in this world, places where investors could hide when the going got rough. If you believe this fairy tale world will persist, pinch yourself. In our assessment, not only are there no safe havens left, but instability may be the new normal. Is your portfolio ready?

2014-07-24 Mar Vista Investment Partners Second Quarter 2014 Review by Brian Massey of Mar Vista Investment Partners

Mar Vista Investment Partners second quarter commentary reviews the market and their large cap growth strategies during the most recent period and discusses the opportunities they see for their portfolios in the coming months.

2014-07-24 The Sub Par Recovery Continues: Fixed Income Investment Outlook by Carl Kaufman, Simon Lee, Bradley Kane of Osterweis Capital Management

There is a well-known trading adage, “Sell in May and go away,” which espouses selling your stocks to avoid a seasonal pre-summer decline in prices. Selling in May (or April or June) did not work this year as the markets continued their rise to new highs. Perhaps the reason for this is that the weather-induced economic weakness of the first quarter has been followed by increased optimism for growth in the second quarter and beyond. We have seen inflation, even in the core (ex- food and energy) rise, although this may be transitory.

2014-07-24 Small Caps in Focus Following Fed Comments by Jeremy Schwartz of WisdomTree

In conjunction with Janet Yellen’s testimony before Congress on July 15, the Federal Reserve produced a “Monetary PolicyReport1” that provides an update on monetary policy, economic conditions and financial markets.

2014-07-23 Innovation Wanted Featuring Ken Fincher by (Article)

The closed-end fund market needs innovative ideas to generate more IPO activity and help it grow, says Ken Fincher of First Trust Advisors.

2014-07-23 Corporate Governance featuring Cara Esser by (Article)

Monitoring a closed-end fund's corporate governance may provide important insights for investors, says Cara Esser of Morningstar.

2014-07-23 CEFs: The Future Featuring Cecilia Gondor by (Article)

For success in the future, closed-end funds need to stress their potential structural advantages, says Cecilia Gondor of Thomas J. Herzfeld Advisors.

2014-07-23 Truth and Consequences by Gary Stroik of WBI Investments

After last year's robust stock market performance, returns this year seem a bit meager by comparison. This is especially true of the kind of big, blue chip companies that make up the DJIA, which is up only 1.51% for the first half of the year. This may be one of the reasons behind the topic of conversation that seems to be popping up more frequently lately. Many investors – including many conservative investors – appear to be asking themselves if they're being too cautious now that some of the major stock indices are hitting all-time highs.

2014-07-23 Long Commodities, Short Contango via Commodity Currencies by Rick Harper of WisdomTree

On the back of a resurgence in Chinese economic data and rising geopolitical risk in Eastern Europe and the Middle East, increases in global commodity prices have reinvigorated investor interest in allocating to commodity-based investment strategies.

2014-07-23 Does Active Management Succeed in International Small-Caps? by Team of The Royce Funds

Divergent conclusions about the relative success of active management in the international small-cap universe prompted us to do our own examination, which stresses the importance of choosing the appropriate benchmark and evaluating the consistency of a fund's performance over long-term time periods.

2014-07-23 The German Spy Scandal by Bill O'Grady of Confluence Investment Management

Last year, Edward Snowden revealed documents indicating the NSA was actively gathering information on Americans and foreigners to the point where German Chancellor Merkel's cell phone was monitored. This revelation greatly unsettled relations between the U.S. and Germany. In this report, we will reiterate the "German Problem," the geopolitical situation that has shaped German behavior since its inception. We will delve into the recent spy scandal in more detail, discuss the underlying issues that are affecting American/German relations, and conclude with market ramifications.

2014-07-23 It’s Not Time to Pull the Portfolio Ripcord… Yet by Rick Vollaro of Pinnacle Advisory Group

The second quarter started in somewhat choppy fashion as small cap and other high flying momentum stocks continued to face pressure as investors decided to shed stocks with swollen valuation multiples. The major averages fared better than their risky counterparts, and after a brief dip stocks began their ascent towards record breaking highs on the back on improving economic data, decent earnings growth, and continuing liquidity support from global central banks.

2014-07-23 Should EMC Corp Break Itself Apart?: FAST FUNdamental Analysis by Team of F.A.S.T. Graphs

On Monday a Wall Street Journal article reported that the hedge fund Elliott Management Corp has taken a more than $1 billion stake in EMC Corp (EMC) and revealed that it intends to petition the company to break itself apart. Elliott believes that this would unlock shareholder value. Implicit in that thesis would be the idea that EMC Corp is not receiving full value from the market. This article is offered as an in-depth analysis of the fundamental value of EMC Corp in relation to how the market is evaluating its business.

2014-07-23 U.S. Equities Continue to Look Attractive: Equity Investment Outlook by Team of Osterweis Capital Management

As we sit down to write this Outlook we are struck by two trends: the consistency of the economic recovery in the U.S. and the dramatic escalation of geopolitical turmoil. Whether these two trends will collide to derail the bull market is an open question, but usually geopolitical flare-ups have only short-term effects and do not overwhelm long-term economic trends. Thus, they tend to appear as hiccups in stock market progress.

2014-07-23 Economic Outlook Dimming, Yet Fed Plans Rate Hikes by Gary Halbert of Halbert Wealth Management

The mainstream media was largely successful in convincing the public that the dreadful 1Q GDP number (-2.9%) was the result of the bitter winter in January and February. The media spin was that the economy would snap back strongly in the 2Q with growth of 4%, 5% or even 6%. While there were some encouraging economic reports in April, May and early June, the economy now appears to be losing momentum again.

2014-07-23 U.S. Stock Market on the “Edge of Tomorrow” by William Smead of Smead Capital Management

Recently we heard a market prognosticator declare that we could have a 30 percent decline in stock prices in the next 12 months. Presumably because investors fear starting over again, like many did at the market bottom in 2009, the talking head had ample emotion on which to make such a grandiose assertion. This fear of starting over reminded me of the recent Tom Cruise movie, "Edge of Tomorrow," where Tom Cruise plays a soldier forced to live the same day again and again in efforts to develop answers on how to defeat a force which would end the world. Hence, living on the "Edge

2014-07-22 2014 Another Ho Hum Year from Hedge Funds by Ryan Davis, Brian Payne of Fortigent

Through the first six months of the year, hedge funds have generated a positive, albeit somewhat modest return. According to data compiled by Hedge Fund Research, the Fund Weighted Composite of hedge funds in their universe had generated a 3.2% return, compared to the S&P 500’s 7.1% gain. While not terrible on a standalone basis, many investors had greater hopes for the asset class following five straight calendar years of underperformance versus the broad equity markets.

2014-07-22 Anatomy of a Moat by Kenneth Lowe of Matthews Asia

At Matthews, we often talk about investing in “quality” companies with “economic moats.” We believe that these are the entities best placed to succeed over the long term in Asia. As Warren Buffett has noted, investors should seek businesses with “economic castles protected by unbreachable moats.” It is these moats that enable a company to survive and thrive as decades pass, creating economic value along the way by generating returns on capital ahead of their cost of capital. But what exactly is an economic moat?

2014-07-22 Is Timing Everything? Practical Implementation of Tail Risk Hedging?? by Michael Connor, Markus Aakko of PIMCO

“Just in time” hedging is nearly impossible: By the time an investor decides to hedge, the market may already price in the significant risk of a tail event. Instead, hedges could be included as a permanent part of an asset allocation: what we might call “just in case” hedging. An optimal strategy may involve averaging into a hedging allocation. In addition, using a broader set of hedge instruments may help lower the costs. We believe that tail risk hedges have a place in any portfolio that has a substantial allocation to risk assets. ?

2014-07-22 Cause and Effect: Bank of Japan Becomes Government’s Largest by Bradley Krom of WisdomTree

Although central banks often use their holdings of government debt to affect monetary policy, the meteoric rise in the expansion of the BOJ’s balance sheet is unprecedented. With the BOJ continuing to signal its willingness to aggressively stimulate the economy, we highlight here what we believe are the most significant implications of these policies.

2014-07-22 The Opportunity in Unconventional Oil by Doug Holt, Tim Gramatovich of AdvisorShares

Be it energy geopolitics or pipeline politicking, oil markets are clouded by noise that push prices up and down. In order to make long-term investments in the space the trick is to boil it down to the bare bones of the issue. Recently an article was published espousing that oil was headed to $75. It was an interesting notion but not one we would put much stock in for a variety of reasons, the most basic of which being supply.

2014-07-22 Five Reasons to Buy and Hold Shares of Great Companies by Kendall Anderson of Anderson Griggs

The world is full of stock traders. They firmly believe that they can trade stocks and create unlimited wealth for themselves and their families. These traders could be your neighbor, your co-worker, your physician, your lawyer, and even your CPA. But traders can also include professionals entrusted to take care of other people’s money. They are mutual fund managers, managers of pension plan assets, managers of separate accounts, and hedge fund managers, many of whom you would think know better.

2014-07-22 Weekly Market Update by Team of Castleton Partners

The intensifying geopolitical backdrop of Ukraine/ Russia, Israel/ Gaza, and Iraq/ ISIS continued to influence market activity and investment flows last week. As a result, intermediate and longer-dated Treasury rates were able to revisit their low yields of the year, last touched in May. However, the one thematic constant that continued unabated last week was the persistent flattening of the yield curve—the one trend that we are unwilling to fade.

2014-07-22 Re-Envisioning the Core with Tilted Strategies by Shundrawn Thomas (Article)

See how FlexShares trio of tilted index funds gives you the power of investing in the entire global stock market.

2014-07-22 Jumping into the Fray with Divorcing Clients by Beverly Flaxington (Article)

When is it appropriate to recuse ourselves from a nasty divorce situation between existing clients? We are in a losing place if we take sides, and I do not prefer one member of the couple over the other. I enjoy both and what they are doing to each other - and to their investment portfolio - is atrocious.

2014-07-22 APViewpoint Reaches Critical Milestones by Justin Kermond (Article)

Two months after its launch, our APViewpoint service has quickly expanded. The secure discussion forum now has 1,200 members and 80 online conversations on a wide range of topics of interest to the advisory profession.

2014-07-22 The Secret Weapon for Gathering AUM by Daniel Solin (Article)

Getting a prospect to agree to a meeting takes an enormous amount of time, effort and money. I estimate that at least half of those efforts fail. Research shows that a small change to the way you handle prospect and client meetings could greatly improve those results.

2014-07-22 Time to Rethink How You Deal with Top Clients by Dan Richards (Article)

Airlines like American, Delta and United are unlikely role models for customer service. Yet there is one area in which these airlines excel and from which advisors can learn: how they treat their very best customers.

2014-07-22 Why Market-Timers Go Nuts by Stephen Huxley, Brent Burns (Article)

How do you drive a market-timer nuts? Remind them of the evidence against them. That is, the evidence of shifting and even reversing correlations between stock and bond returns that make it improbable - if not impossible - to use market timing to make profitable investment decisions.

2014-07-22 How to Choose the Best Retirement Income Strategy by Joe Tomlinson (Article)

In the competition among retirement-planning methodologies, systematic withdrawals have been winning the battle against the essential-discretionary approach. But given today's low interest rates, the essential-discretionary approach may work better for many clients, especially if SPIAs are used.

2014-07-22 Why Have We Been Focusing on Cyclical Growth? by Chris Clark and Chuck Royce (Article)

Chuck Royce and Co-Chief Investment Officer Chris Clark talk about our attraction to economically sensitive sectors and what we've been learning from our meetings with companies.

2014-07-21 Optimism vs. Arithmetic by John Hussman of Hussman Funds

Current market conditions provide an ideal moment to highlight the distinction between investment and speculation.

2014-07-21 Smart Beta in Action: Taking Chips Off the Small-Cap European Table by Jeremy Schwartz of WisdomTree

European equity markets performed strongly throughout much of 2013 and into the first five months of 2014. While it is difficult to time market tops and bottoms for individual stocks on a consistent basis, we believe there are benefits to undertaking a disciplined practice to rebalance weight based on changes in relative valuation.

2014-07-21 A Farmland Investment Primer by Julie Koeninger of GMO

Farmland is a real asset that combines solid investment fundamentals with the potential for attractive cash yields, inflation hedging, and consistent returns from biological growth. Furthermore, farmland total returns tend to be uncorrelated with financial asset returns, offering genuine portfolio diversification for institutional investors.

2014-07-21 German And French 10-2 Spread Flattest In The Last 5 Years by Team of GaveKal Capital

The front-end of the yield curve has flattened in many bond markets this year. The German and French bond markets closed last week with their 10-year bond yield minus 2-year bond yield spread at it's smallest level since January 2009. The German spread fell to 1.13% while the French spread dropped to 1.42%. The 10-2 spread for the United States has also narrowed this year to 2%. That's the lowest level in a little over a year.

2014-07-21 Mid-Year Review: Interest-Rate Sensitive Stocks May Correct With First Fed Rate Hike by Rick Golod of Invesco Blog

With the recent strength in the economy and decline in the unemployment rate, the probability that the Federal Reserve (Fed) increases rates in the first half of 2015 is rising, in my opinion. Given the volume of media noise about this, it’s understandable that many investors are still worried about the stock market’s potential for correction.

2014-07-20 GDP: A Brief But Affectionate History by John Mauldin of Mauldin Economics

In this week’s letter we look at the construction of gross domestic product (GDP). As we will see, GDP is a relatively late-to-the-party statistic, thoroughly malleable in its construction and often quite contentious in its application. Yet the mainstream media regularly releases GDP numbers with the implicit assumption that they are in fact an accurate reflection of the general economy. We shall soon see that GDP is instead a fuzzy reflection of the economy, derived from a model that is continually readjusted in a well-intentioned effort to understand the scope of the economy.

2014-07-19 Bull Stumbles by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

Any near-term correction would be healthy in the context of an ongoing secular bull market. Trying to time the market is always difficult, even though the market is in a potentially weak phase, both in terms of the annual and election cycles. And while sentiment is elevated in the United States, both Europe and China provide opportunities to invest where the mood is decidedly less enthusiastic.

2014-07-19 Understanding Chinese Volatility by Andy Rothman of Matthews Asia

Sinology by Andy Rothman is a publication designed to provide investors with a framework for developing a deeper understanding of China and its economy. The focus will be on discussing the longer-term trends that are taking place in the country and their impact on the global economy. Rising volatility in China is a consequence of economic modernization and should not be feared by long-term investors.

2014-07-19 Perspectives from the Franklin Templeton Fixed Income Group by Christopher Molumphy, Michael Materasso, Roger Bayston, Michael Hasenstab, and John Beck of Franklin Templeton Investments

In early July, there was a noticeable disconnect between the median forecast of Fed officials for interest rates by end-2015 and the markets’ forecast, as expressed in the federal funds futures rate. But if unemployment continues to decline and inflation to pick up in the coming months, the danger for bond market participants is that their predictions for interest rates may be too low and will have to be adjusted.

2014-07-19 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 135.2, down from the previous week's 136.2. The WLI annualized growth indicator (WLIg) slipped to 4.5 to 4.2.

2014-07-19 Red Shoots - Today's Top Investor Concerns (Also Known as the Investors "Dirty Dozen") by Robert Isbitts of Sungarden Investment Research

A while back, we published a list that we continually update at Sungarden. We call them Red Shoots. They are essentially the opposite of a set of conditions which gave investors hope that not all was lost, in the throes of the financial crisis of 2008. Those reasons for optimism were called “Green Shoots”, like a patch of short green grass about to show up on the dirt area you will one day call your lawn. Red Shoots are the opposite: they are the reasons for extreme caution when the market and many investors seem to be forgetting that security prices are not a one-way propositi

2014-07-19 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

From the Suez Canal, to Japanese bullet trains, to the American interstate highway system, to the Millennium Bridge to the Three Gorges Dam, the grandeur of infrastructure is on full display the world over. Awe-inspiring and beautiful to some, these fixtures also play a critical role in the functioning of the global economy. The choices nations make in the area of infrastructure can bear critically on prosperity.

2014-07-19 The Municipal Bond World, According to John Derrick by Frank Holmes of U.S. Global Investors

I sat down with Director of Research John Derrick, who also manages our Near-Term Tax Free Fund (NEARX), to get his thoughts on interest rates, the bond market and what investors should pay attention to as we move into the second quarter of 2014.

2014-07-18 Summer Essays by Jeremy Grantham of GMO

In a new quarterly letter to GMO's institutional clients, co-head of asset allocation Ben Inker uses the evolving Boston culinary landscape as a backdrop to examine the tendency of investors to pursue a "free lunch," when they should be looking for the "investing equivalent of an inexpensive and tasty food truck meal instead." In his section, chief investment strategist Jeremy Grantham looks back at investing mistakes made over his 47-year career, paying special attention to his formative investing years and the "painful lessons" learned therein.

2014-07-18 Free Lunches and the Food Truck Revolution by Ben Inker of GMO

Over the past year or so, there has been a welcome change to the culinary landscape of the Boston financial district. After two decades of wandering to largely the same old haunts for lunch, I am now faced with a whole new set of inexpensive and tasty choices literally outside our door, changing daily as the food trucks perform their mysterious nightly dance.

2014-07-18 Is it Time to Prepare for Inflation? by Russ Koesterich of BlackRock

Inflation has ticked up recently, leaving many investors fearing that it’s time to prepare portfolios for rising prices. According to Russ, while this fear isn’t irrational, it’s too early to restructure a portfolio around a big shift in the inflation outlook. Russ explains.

2014-07-18 Domestic and Indian Gold Rally Points to a Strong Second Half by Frank Holmes of U.S. Global Investors

Earlier this week we reported that gold, defying expectations, is one of the best-performing commodities of the year so far.

2014-07-18 Fixed Income Outlook: Moving From Zero by Christopher Molumphy, Roger Bayston of Franklin Templeton Investments

Some prior market prognostications of rising rates have proven slow to play out as global central banks, namely the Bank of Japan and European Central Bank (ECB), have continued to ramp up easing measures and the US Federal Reserve (the Fed) has only slowly begun to lay off the gas pedal recently.

2014-07-18 Why Japan? Why Now? by James Calhoun of AdvisorShares

One of the most popular investment themes coming into 2014 was Hedged Japanese Equity (owning Japanese equities while simultaneously hedging out the risk of the Japanese Yen weakening against the US Dollar). At its core, this theme leaves investors long Japanese equities in US Dollar terms, not Japanese Yen terms. This investment turned in very poor performance for the first half of 2014. By the end of Q1 2014, Japanese equities had sold off rather sharply and the US Dollar had weakened 2.01% versus the Yen.

2014-07-18 Decomposing the S&P 500 PE Ratio by Market Cap: Most Stocks Look Expensive by Team of GaveKal Capital

Back in December we wrote a piece entitled, "Decomposing the S&P 500 PE Ratio: How Can the Market PE be "Low" and Stocks be Expensive at the Same Time?" in which we showed how the market capitalization of the S&P 500, and many other indexes for that matter, is dominated by a few mega-cap companies which distorts index level valuation statistics. It's been a few months so we thought we'd provide an update on that analysis.

2014-07-18 ProVise Bullets by Ray Ferrara of ProVise Management Group

The June unemployment figure of 6.1% was the lowest in six years. A total of 288,000 new jobs were created and the government increased May’s number to 224,000 jobs created. While the summer can be very volatile, we expect solid gains for the rest of the year. Last week’s applications for unemployment fell to only 304,000, which was below expectations of 315,000. It will be hard for the numbers to keep falling as 300,000 is a very low number even in a healthy economy. The Fed expects job creation for the rest of the year to be steady as the economy continues to improve. It is possi

2014-07-18 Why We Favor Owning Gold in Euro Terms by Ade Odunsi of AdvisorShares

In this discussion piece we discuss the rationale for why investors looking to buy gold as a defensive asset during these uncertain times should consider buying gold in euro terms. When an investor buys gold in dollars they are expressing the view that they expect the price of gold to increase relative to the dollar. Similarly when an investor buys gold in euro, they express the view that they expect the value of gold to increase relative to the euro.

2014-07-18 And That's The Week That Was by Ron Brounes of Brounes & Associates

Gaza, Iraq, Ukraine...ongoing turmoil and global tensions have been topping the headlines far too frequently these days. At times, markets are affected; at times, business is disrupted. Even more sadly, lives are lost. Hopefully calmer heads can prevail, but history is not often on the side of common sense.

2014-07-18 Physics Envy by Matthew Page of Guinness Atkinson Asset Management

Economists have long sought to identify a deterministic "natural law" of markets in the same way that physicists have discovered natural laws such as gravity and electromagnetism. This is sometimes referred to as "physics envy". If economists could identify a deterministic natural law of markets then we would be able to make useful and accurate predictions. Sadly no such law exists. Human actions are not governed by simple predictable laws.

2014-07-18 Lack of Corporate Hubris Means Elongated Cycle by Richard Bernstein of Richard Bernstein Advisors

When we started Richard Bernstein Advisors roughly five years ago, we thought the US was entering one of the biggest bull markets of our careers. Today, we are likely in the midst of this long bull market. Despite the general consensus that a bear market is on the horizon and investors’ ongoing interest in protecting potential downside risk, we do not think the Fed, investors, or corporations are yet sowing the seeds for the next recession.

2014-07-18 High Yield versus Equities by Heather Rupp of AdvisorShares

Investors are often led down the path that they must invest in equities in order to generate a decent return, and that the high yield market is too risky and speculative. However, reality and the data points prove otherwise. Looking over the past couple decades and various periods in between, you can see that high yield has consistently outperformed the equity market (as measured by the S&P 500 Index) on a risk adjusted basis (return/risk).

2014-07-18 Fireside Chats by Jeffrey Saut of Raymond James

While I was in the Pacific Northwest and Canada most of last week, I did have the privilege of listening to J.P. Morgan’s (JPM/$55.80/Strong Buy) Chief Market Strategist last Monday. Dr. David Kelly has long been known for his keen insights on the equity markets, with JPM’s senior portfolio managers like George Gatz and Tom Luddy steering their mutual funds, on said strategic views, to outsized gains for many years.

2014-07-18 Reaching Escape Velocity? by Scott Brown of Raymond James

The strong pace of growth in nonfarm payrolls suggests much more than a rebound from bad weather. While recent economic figures have been generally mixed, the job market is clearly improving, led by increased hiring at small and medium-sized firms. The hope is that good news will feed on itself, lifting the pace of growth in the second half of the year. However, there are a few concerns in the outlook.

2014-07-18 Comparison of Rising Rates Strategies by Yung Lim of AdvisorShares

With the ultra low interest rate environment becoming more of a norm in many investors’ mind, complacency has driven portfolio managers to maintain the status quo and stick to traditional duration and asset allocation targets. Recent history of bond market behavior has also supported this view. On a forward looking basis, however, the important questions center around how risk/return profiles change under rising interest rate environments and what investors should consider in evaluating the risk of their current portfolio mix.

2014-07-17 Quarterly Review and Outlook, Second Quarter 2014 by Van Hoisington, Lacy Hunt of Hoisington Investment Management

Hoisington and Hunt review the second quarter in their regular review.

2014-07-17 Quick Thoughts by Doug MacKay of Broadleaf Partners

We made a final trip to Latvia to complete an adoption, had a graduation party for my high school senior, and attended orientation weekend at The Ohio State University. In between all that, we squeezed in no fewer than sixty baseball games for our three boys. I think I have a daughter too, but I’m not entirely sure if she lives with us or her girlfriends. As much as I love summer ball, the season ends this weekend and I’m hoping life will settle down to a more sustainable pace and not one reminiscent of a minor leaguer with four kids, a mortgage, and a full time business.

2014-07-17 How the Europe Small-Cap Portfolio Changed at the Rebalance by Jeremy Schwartz of WisdomTree

A key differentiator of the WisdomTree Index methodology is our annual rebalance to focus on changes in relative value. In this blog, we will zoom in on how this approach led to changes in exposure in the WisdomTree Europe SmallCap Dividend Index (WT Europe Small).

2014-07-17 The Tolling Bells of Complacency by Scott Minerd of Guggenheim Partners

A few years ago, facing a world in crisis, central banks aggressively employed monetary policy to avoid catastrophe in financial markets. Now, they must be equally aggressive in fighting complacency.

2014-07-17 Trading Secrets: The Fed’s Maginot Line by Tad Rivelle of TCW Asset Management

It has been six years since the Fed zeroed out rates and still we wait for “assisted growth” to become “real growth.” Beginning with the “recovery summer” of 2010, the Fed has proclaimed that cheap money would rocket the economy to escape velocity, launching an organic, self-sustaining economic recovery. Instead, central bank policy has vaulted asset prices into the stratosphere even as wages wait their turn on the launch pad. Low rates have failed to deliver the goodies, but the Fed has its story and is sticking to it.

2014-07-17 Municipal Market Perspectives by Team of SMC Fixed Income Management

Financial market conditions were as good as could be expected during the first half of the year, as evidenced by positive investment performance across all asset classes.

2014-07-17 Equities Remain Resilient in Current Environment by Charlie Dreifus of The Royce Funds

While there was a brief shift towards higher quality from April through mid-May, low quality reasserted itself in June to mark a fairly muted—and mixed—second-quarter performance for small-caps. Forty-plus-year industry veteran Charlie Dreifus discusses the market's behavior during this period, as well as the U.S. economy and stock market.

2014-07-17 Mind the Gap by Tod Schneider of Diamond Hill Investments

Every company’s earnings can be evaluated on a quantitative and qualitative basis. Strictly speaking quantitative analysis is straightforward—is the company growing sales, profits, free cash flow, etc.? Analyzing these metrics in the context of competitive factors, sources of revenue and profit growth, and broader secular trends is a more subjective exercise but a very important one to pair with quantitative analysis.

2014-07-17 Constraints of Convention - Does a Portfolio Design Have to Be Static? by Jeff Knight of Columbia Management

There was a charming story from the world of youth sports featured in Malcolm Gladwell’s book "David and Goliath: Underdogs, Misfits and the Art of Battling Giants."

2014-07-16 Dissecting the Japan Hedged Equity Rebalance by Jeremy Schwartz of WisdomTree

We think it is important to be mindful of how an annual rebalance back to an underlying fundamental such as dividends can help manage valuation risks. With market capitalization-weighted indexes, when constituents increase in price compared to other stocks, they gain greater weight and increase their impact on the performance of the index.

2014-07-16 Analysis of Ayres and Curtis Critique of 401(k) Plans by Brian Donohue of October Three Consulting

In our previous article we reviewed [Professors Ayres and Curtis's paper Beyond Diversification: The Pervasive Problem of Excessive Fees and 'Dominated Funds' in 401(k) Plans] (John M. Olin Center for Studies in Law, Economics, and Public Policy Research Paper No. 493). Our purpose in that article was simply to describe what Professors Ayres and Curtis are saying. In this article we evaluate their findings and proposals, discussing the limits of and possible objections to their conclusions.

2014-07-16 U.S. Now World’s Largest Producer of Oil & Gas by Gary Halbert of Halbert Wealth Management

Recent reports have confirmed that the US is now the world’s largest producer of crude oil with output exceeding 11 million barrels per day in the 1Q of this year. This surpasses the daily oil production of Russia and Saudi Arabia.

2014-07-16 Road Kill by Edward Talisse of Chelsea Global Advisors

Ten years ago I started working in Japan as a fixed income sales-trader for an international investment bank. I was frequently called upon to travel to other parts of Asia such as Beijing, Hong Kong, Seoul, Singapore and Sydney. My mandate was to invite clients to explore the many money making opportunities available to them by trading the (G4) U.S., German, U.K. or Japanese yield curve. The touchstone recommendation always seemed to be some combination of going long or short U.S Treasuries and establishing an offsetting position in like maturity German Bunds.

2014-07-16 Danger of Increased Risk Taking as Markets Boom by Geoff Davey of FinaMetrica

While some investors (and their advisors) believe risk tolerance changes with major events such as a stock market correction, typically it is an investor’s perception of risk that changes, which results in a change in their behavior. At the moment, many investors are buying stocks with elevated P/E ratios. Prices are going up a lot faster than corporate earnings and the risks are getting bigger. Yet people are still buying stocks.

2014-07-16 What Inning is the Bull Market In? by Edward Perkin of Eaton Vance

Since the low of the bear market in March 2009, U.S. equities have been on a 5-year bull run. Investors naturally wonder how much longer this can last. To use a baseball metaphor commonly applied to the markets, they wonder what inning we are in. The answer depends on what “game” one is watching.

2014-07-15 High-Yield and Bank Loan Outlook by Team of Guggenheim Partners

Certain areas of leveraged credit are overvalued, particularly CCC-rated bonds and bank loans, but often some of the best profits come in the final phase of a cycle. Low yields on U.S. Treasury bonds and European sovereign debt have kept the global search-for-yield theme alive and have lured more capital into U.S. credit markets, helping the ongoing rally in high-yield bonds and bank loans, which gained 2.4 percent and 1.2 percent (as represented by the Credit Suisse High Yield Index and Credit Suisse Institutional Leveraged Loan Index) in the second quarter of 2014, respectively.

2014-07-15 2Q 2014 Newsletter: Avoiding Your Portfolio’s Enemies by William Smead of Smead Capital Management

“Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful.” We often hear the last part of this wonderful quote from Warren Buffett, but here at Smead Capital, we find the beginning just as instructive. We thought we would unpack the entirety of his thoughts and dissect it for our faithful investors.

2014-07-15 The New Neutral: Investment Implications for Insurance Companies by David Braun of PIMCO

Low rates are unhelpful to an industry with legacy long-term liabilities containing rigid embedded credited rates; they exacerbate asset-liability mismatches and pressure earnings margins. Insurers may want to recalibrate their expectations of future interest rates, as well as broad bond and equity market returns. In The New Neutral, with beta from stocks and bonds likely to be relatively low, insurers should look to enhance buy-and-hold return potential via active management.

2014-07-15 Do You REALLY Know How to Tie Your Shoes? by Jerry Wagner of Flexible Plan Investments

This morning, for the fourth time, I had to interrupt my workout to re-tie my shoe. My trainer, John Zilli, joked that I was simply stalling. But not wanting to trip on my shoe laces as I headed to the treadmill, I dropped to one knee, yet again, and tied my laces.

2014-07-15 Is the Euro the New Yen? by Jeremy Schwartz of WisdomTree

Currency-hedged equity strategies broke onto the exchange-traded fund (EFT) investment scene in late 2012 following significant weakening of the yen, which led to a wide disparity in performance between unhedged and currency-hedged Japanese ETFs.

2014-07-15 Booming Until It Hurts? by Robert Shiller of Project Syndicate

In recent months, concern has intensified among the world’s financial experts and news media that overheated asset markets – real estate, equities, and long-term bonds – could lead to a major correction and another economic crisis. The general public seems unbothered, but the experts' concern is healthy.

2014-07-15 The Dollar Weapon by Bill O'Grady of Confluence Investment Management

Over the past few years, various prosecutorial arms of U.S. government entities have brought charges against foreign banks that have violated U.S. sanctions that were placed on different countries. In this report, we will discuss the general nature of U.S. sanctions and how these banks violated American law. From there, we will reiterate the dollar’s reserve currency role from both a historic and theoretical perspective and show how this role makes the currency and the U.S. financial system pivotal in the global economy. We will conclude with market ramifications.

2014-07-15 Flip Floppers Drive Stocks Lower by Kristina Hooper of Allianz Global Investors

In the course of one slow news week, stocks went from celebration to selloff. What changed? Not the strong economic data, says Kristina Hooper. It’s a classic flip-flop from investors who had time to mull over recent numbers and change their minds.

2014-07-15 Weekly Market Update by Team of Castleton Partners

Geopolitical headlines, coupled with renewed stress in European markets, led to a strong rally in US Treasuries last week. Further supporting the decline in interest rates was the perceived dovish overtone to the minutes of the June Federal Open Market Committee meeting.

2014-07-15 The Fed Announces Its Intentions by Chris Maxey, Ryan Davis of Fortigent

Minutes from the mid-June FOMC meeting were released last week, offering keen insight to the Federal Reserve’s current thinking on the economy. While the Fed suggests that the economic outlook is benign, the minutes offered guidance on the Fed’s exit path, which is expected to arrive by the end of the year.

2014-07-15 What Risks Are Worth Taking in the Bond Markets Now? by Kathleen Gaffney of Eaton Vance

Pursuing returns from the bond market’s traditional risks – such as interest-rate and credit-risk – has become quite expensive. Treasury bonds, which are the most sensitive to interest-rate risk, have low yields and high prices now. Corporate debt, which also has credit risk, is similarly high priced. Investors may be better served by avoiding these “systematic” risks (so-called because they tend to have a blanket effect across whole categories of bonds). Greater opportunities may lie in pursuing “idiosyncratic” risks that are unique to each issuer of

2014-07-15 The High Tide in China by Matt Lloyd of Advisors Asset Management

One axiom that has been used over the last couple decades is that high tide lifts all boats; meaning that a rise in economic or market conditions will lift every component of an economy or market to some degree. While true, we deal with relative measurements when discussing returns comparable to a benchmark. So, while the high tide does lift all boats, if the boat is tethered too tightly, you may be higher than being beached, but you also could still be underwater.

2014-07-15 Time to Invest in Change by Dan Kozlowski of Janus Capital Group

After significant multiple expansion in 2013, some of the best remaining opportunities for equity investors may lie with stocks that are due for a change in market sentiment as the company enacts dramatic changes to its business.

2014-07-15 Fixed Income market review H1 2014 by Jenna Barnard (Article)

Jenna Barnard, CFA, Deputy Head of Retail Fixed Income and Co-Manager of the Strategic Income Fund, looks at the recent drivers of this market and explains how their portfolios have been able to take advantage of the conditions.

2014-07-15 How Operating Margins and Capital Allocation Affect Small-Caps by Chris Clark and Chuck Royce (Article)

Chuck Royce and Co-Chief Investment Officer Chris Clark talk about operating margins being at or near peak levels, increased M&A activity, and the absence of any real CAPEX activity.

2014-07-15 Two Top Experts Debate the Outlook for Growth by Laurence Siegel (Article)

Growth may slow, as Robert Gordon contends, at least when measured by GDP - if only because population growth is slowing. But that is not a foregone conclusion. And even if it were to happen, it doesn't mean that global standards of living would face a similar deceleration. Moreover, GDP doesn't fully capture the improvements in the standard of living that come with advanced technology.

2014-07-15 Retirement Planning with Annual Available Spend by John Craig (Article)

Sound financial planning requires neither the determination of safe withdrawal rates nor the use of Monte Carlo simulations. Relying on the past to predict the future is unnecessary. Instead, one must focus on how much can be spent each year, given expected returns and inflation, and then consider how negative and worst-case scenarios would affect retirement planning. That is the basis for the annual available spend methodology I describe here.

2014-07-15 The Tool to Get Clients to Make Tough Decisions by Dan Richards (Article)

Research on an approach called "pre-commitments" sets out a path to help you persuade clients to make a tough decision when the original rationale for making a purchase has changed.

2014-07-15 Information That Will Increase Your AUM by Daniel Solin (Article)

You most likely approach investing based on a defined set of sound academic principles. In contrast, many advisors approach meeting with prospects on an ad hoc basis. If this dichotomy describes the way you do business, you should consider making some changes.

2014-07-15 Q2 Venerated Voices™ by Various (Article)

Advisor Perspectives announces its Venerated Voices awards for articles published in the second quarter of 2014. Rankings were issued in three categories: The Top 25 Venerated Voices by Firm, The Top 25 Venerated Voices by Author and The Top 10 Venerated Voices by Commentary.

2014-07-15 Survey Best Practices, Part 2: Question Intent and Types by Elizabeth Snyder (Article)

Here are some tips that will increase your chances of gathering meaningful survey results.

2014-07-15 How To Make Better Hires by Beverly Flaxington (Article)

We just fired our fourth operations manager in six years. I find it tough to believe that filling a simple role like this can be so hard, but we've had no luck in keeping someone for the long haul. My partner thinks we need to hire an expensive recruiter. I don't agree. Can paying someone 30% of the salary plus bonus (the recruiter's fee) to identify the right person make a difference?

2014-07-15 How to Debunk 35 Years of High School Myths by Mariko Gordon (Article)

I highlight three key insights from "The Debunking Handbook," and explain how these can prevent misinformation from doing harm in the world.

2014-07-14 Col. Jessup and Rufus T. Firefly by Michael Kayes of Willingdon Wealth Management

There is a tried and true methodology for dealing with disconcerting trends in the equity market. Read on to find out what it is.

2014-07-14 Rising Rates and the U.S. Dollar by Bradley Krom of WisdomTree

While interest rates in the U.S. have fallen so far year-to-date, we continue to believe that rates may be poised to rise in the second half of 2014. Over the last several weeks, we have seen increased interest from clients about how best to prepare their portfolios for an eventual rise in U.S. interest rates.

2014-07-14 Energy: Shale Generates Tectonic Changes by Stephen Toy of Invesco Blog

The shale revolution, only seven or eight years old, has been the catalyst for a tectonic change in US energy production and policy. It has also created a new paradigm in US manufacturing, launched a renaissance in the chemical industry, and is driving infrastructure spending. So how do we think about the shale revolution in terms of investing? It’s twofold.

2014-07-14 Ockham's Razor and the Market Cycle by John Hussman of Hussman Funds

“This time is different” requires a lot of counterfactual assumptions. Ockham’s razor would suggest a nice shave.

2014-07-14 Risk of European Counter-Cyclical Underperformance in 2H2014 by Team of GaveKal Capital

Last week, we noted the outperformance of European counter-cyclicals and the group's relationship to the German Bund (here). A quick look at sector performance in Europe so far this year shows the top three market leaders have indeed been the counter-cyclicals (with the exception of the Consumer Staples sector).

2014-07-14 Strategies for Income-Seeking Investors by Ed Perks of Franklin Templeton Investments

Many income-seeking investors have traditionally centered their portfolios around government bonds, often failing to consider other asset classes. Ed Perks, executive vice president and director of portfolio management, Franklin Equity Group, believes equities can be a key part of an income-oriented portfolio, although individual stock selection is particularly important as valuations rise and interest rate dynamics may change.

2014-07-14 Economic Signals Are Improving, Which Should Help Equity Prices by Robert Doll of Nuveen Asset Management

U.S. equities lost ground last week, with the S&P 500 Index dropping just under 1%, its largest weekly loss since early April.1 Cyclical sectors lagged, while defensive areas (chiefly utilities and telecommunications) led the way. A number of factors could be blamed for the decline, including signs of slowing European growth and lingering debt problems, as well as some downward revisions in corporate earnings guidance. In our view, however, the most reasonable explanation for the pullback may simply be fatigue and consolidation following the multi-week price advance.

2014-07-14 How to Debunk 35 Years of High School Myths by Mariko Gordon (Article)

I highlight three key insights from "The Debunking Handbook," and explain how these can prevent misinformation from doing harm in the world.

2014-07-13 Life has Changed in Burma by Patricia Higase of Link Road Capital Management

Changes come from within a country on a day to day basis and are happening far longer without being obvious. Life in Burma has changed drastically uncovering new opportunities. The changes are real and certainly isn’t all hype.

2014-07-12 2014 Commodities Halftime Report by Frank Holmes of U.S. Global Investors

What a difference six months can make. After a disappointing 2013, the commodities market came roaring back full throttle, outperforming the S&P 500 Index by more than 4 percentage points and 10-year Treasury bonds by more than 6.

2014-07-11 Housing Starts, Personal Consumption Expenditure and Durable Good Orders Show the Truth by Dawn Bennett of Bennett Group Financial Services

The U.S. GDP number doesn’t lie. Housing starts, Personal Consumption Expenditure and Durable Goods Orders show the truth.

2014-07-11 Forward P/E is Poor Valuation Tool by Stephen Blumenthal of CMG Capital Management Group

I cringe when I hear someone on Wall Street say that the market is cheap based on forward P/E (price-earnings ratio). Unfortunately, profit margin cycles change (revert back to trend) and those lofty earnings estimates get revised lower, making forward P/E a poor valuation tool. I came across this chart this week. Note where forward P/E was in October 2007 (15.2) and where it is today (15.6).

2014-07-11 Why The Fed Needs You To Sell Your Bonds by Gary Halbert of Halbert Wealth Management

Today I will attempt to explain why longer-term interest rates have fallen significantly this year when almost everyone expected rates to rise. This discussion focuses on the fact that there is a shortage of Treasury securities in the marketplace today, especially in maturities of 10 years or longer. The shortage is due to a combination of factors that I will discuss below

2014-07-11 Solving the Income Puzzle by Christopher Remington, Michael Cirami, Kathleen Gaffney, Scott Page of Eaton Vance

With interest rates at near historic lows, investors are starved for income. Government bonds and high-grade corporates have generally been the core of investors’ income portfolios, but yields on these bonds are minimal. Delivering a potential double whammy for investors, the prospect of rising interest rates could bring principal losses because the prices of bonds in these core sectors are highly sensitive to changes in interest rates. Diversifying into nontraditional income sectors may provide investors with greater income and lessen their exposure to interest-rate risk.

2014-07-11 Indonesia: Hope for Change by Siddharth Bhargava of Matthews Asia

On Wednesday, Indonesia went to the polls to elect its seventh president. Unofficial results predict Joko Widodo, or Jokowi, to be the winner in a very tight race with rival Prabowo Subianto. Widely considered a man of the people, Jokowi came from humble beginnings as a furniture salesman. Although still lacking in experience on the national stage, his leadership is expected to be a stark contrast from Prabowo’s likely authoritarian style.

2014-07-11 Hong Kong: A Rich Market for Long-Term Investors by Jim Harvey, Dilip Badlani of The Royce Funds

While largely out of favor, we are finding Hong Kong-listed Chinese companies that possess the characteristics we typically look for in our investments—high returns on invested capital, strong balance sheets, and attractive dividend yields. Portfolio Managers Jim Harvey and Dilip Badlani run through some names they currently like and talk about why the market is still appealing.

2014-07-10 Is Dow 17,000 Dangerously High? This Comprehensive Review May Surprise You! by Chuck Carnevale of F.A.S.T. Graphs

The Dow Jones Industrial Average recently closed above 17,000, a historical record and milestone. Consequently, the question at the forefront of every investor’s mind has understandably been raised. Has the market now become dangerously high and therefore destined for a crash? The truthful answer to this important question is that nobody can know for sure what the stock market might do over the short run.

2014-07-10 Are Prices Too High in U.S. Commercial Real Estate?? by John Murray of PIMCO

The recovery in commercial real estate (CRE) has been driven more by low rates than improvements in fundamentals. However, fundamentals are improving and capitalization rates should remain low amid low New Neutral policy rates. We expect capital flows in both debt and equity to CRE to continue to increase, and we see opportunities for investors resulting from capital flows, demographics, loan maturities and regulatory reforms. ?

2014-07-10 Guarding Against Complacency by Scott Minerd of Guggenheim Partners

Investors should expect a quiet summer with markets rolling along, but with valuations becoming frothy now is a time to consider greater exposure to assets with higher credit quality.

2014-07-10 Europe’s Dividend Growth Explained by Jeremy Schwartz of WisdomTree

An interesting aspect of the WisdomTree annual rebalance process is identifying trends in aggregate regional Dividend Stream of major markets. As we just rebalanced our developed world Indexes, including Europe, we wanted to provide some insight into how Europe’s dividends grew in the 12 months prior to the rebalance.

2014-07-10 S&P500 is the Most Extended Above its 4-Year Moving Average Since 2000 by Team of GaveKal Capital

Stock prices as measured by the S&P 500 have risen some 190% from the low in March of 2009. The spectacular thrust this bull market has seen has put stocks above their moving average price levels by a wide margin. Our most recent data indicate the current price level of the S&P 500 is about 33% above its four year moving average price, which is exactly one standard deviation from the mean going back to 1931.

2014-07-10 Perspectives on Puerto Rico Municipal Bonds by Sheila Amoroso, Rafael Costas of Franklin Templeton Investments

Rafael Costas and Sheila Amoroso, Co-Directors, Municipal Bond Department, Franklin Templeton Fixed Income Group® offer some fresh perspective on ongoing developments in Puerto Rico, including a new Act that was signed into law there.

2014-07-10 Two Portfolio Moves to Consider after Second Half’s Strong Start by Russ Koesterich of BlackRock

Economic data showing improving U.S. growth helped the market kick off a strong start to the second half of the year. Russ believes the economic strength is likely to continue, and he shares two moves investors may want to consider to position portfolios for such an environment.

2014-07-10 The Three-Track Middle East by Mohamed El-Erian of Project Syndicate

Rather than achieving internal convergence, the Middle East is now following at least three distinct paths, and already-large differences will persist and grow for a number of years to come. The main question is what will become of countries like Egypt, which can end up following the path of Syria or of the UAE.

2014-07-10 The End of Quantitative Easing by Gregory Hahn of Winthrop Capital Management

During the Financial Crisis, as the capital markets seized up and interbank lending froze, traditional tools of monetary policy proved ineffective. The Federal Reserve implemented a series of initiatives called Quantitative Easing that essentially used the central bank’s balance sheet to purchase bonds in the open market and directly manipulate interest rates lower. This tool proved extremely powerful and allowed the Fed to manipulate interest rates across the yield curve which, in turn, allowed for a wave of refinancing activity that helped to lower borrowing costs.

2014-07-09 Dealing With Red-Hot Markets by Mark Ungewitter of Charter Trust Company

This summer the streets are sizzling… and so is the stock market. To the chagrin of value investors, US equities have not experienced a normal correction since May 2013. But what is “normal” and what is “hot”? This article discusses a behavioral measure of market extremity, the put/call ratio, and offers some basic advice for dealing with the current environment.

2014-07-09 New Analysis of 401(k) Plan Performance and Fees by Brian Donohue of October Three Consulting

In the paper Professors Ayres and Curtis conclude that 401(k) plan participants suffer significant losses from (1) sponsor-fiduciary fund menu construction decisions, (2) participant asset allocation mistakes and (3) high fees on plan investment options. To remedy this problem they make several innovative proposals for changes in the rules for 401(k) plan fund menu construction.

2014-07-09 Choosing Winners in Asian Credit: Key Trends and Themes by Raja Mukherji, Ronie Ganguly of PIMCO

Key trends include Asian credit supply, which is on track for another record year in 2014, and China's priority to promote cleaner and more efficient energy. Our bottom-up research and careful risk assessments – informed by macroeconomic perspectives – have us favoring select investments in several sectors of Asian credit markets, including state-owned enterprises in China and Korea, investment grade new issues and Basel III Tier 2 bank capital bonds. ?

2014-07-09 Tocqueville Gold Strategy Investor Letter: Second Quarter 2014 by John Hathaway of Tocqueville Asset Management

John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), remarks in his latest quarterly letter that it appears "the precious metals complex, both mining shares and bullion, appears to be in the process of completing a major bottom extending back to mid-2013." He goes on to add that he is "becoming more comfortable with the proposition that the downside potential has been fully exhausted after nearly three years of declining prices and that the stage has been set for a major advance in the years to come."

2014-07-09 And That's the Quarter That Was by Ron Brounes of Brounes & Associates

The dismal winter weather is finally in the rearview mirror and stocks continued their record-setting ways.

2014-07-09 American Delusions Down Under by Joseph Stiglitz of Project Syndicate

For better or worse, economic-policy debates in the United States are often echoed elsewhere, regardless of whether they are relevant. Australian Prime Minister Tony Abbott’s recently elected government provides a case in point.

2014-07-09 U.S. & European Flows: Potential Opportunity in European Debt? by Bradley Krom of WisdomTree

In discussions with our clients, we often notice their interest in hearing where WisdomTree or the industry is seeing inflows in order to gain new ideas for investment. As the market for global exchange-traded products continues to evolve, we believe that investors will increasingly look to global ETP flows for investment ideas.

2014-07-09 Will Firming Fundamentals Lead to a Firmer Fed? by Team of Northern Trust

Real gross domestic product (GDP) of the U.S. economy declined at an annual rate of 2.9% in the first quarter. Bad weather and distortions from the Affordable Care Act (ACA) left overall growth significantly weaker than expected. Nominal GDP fell at an annual rate of 1.7% in the first quarter, the first such occurrence during an expansion in the entire post-war period.

2014-07-09 Gut Wrenching by Scott Brown of Raymond James

The greater-than-expected downward revision to first quarter GDP was a shocker (even more of a surprise than Spain, Italy, and Portugal not making it out of group play in the World Cup). However, investors were willing to dismiss the bad first quarter performance. An inventory correction and a wider trade deficit subtracted 3.2 percentage points from 1Q14 GDP growth.

2014-07-09 Making a Market Call by Jeffrey Saut of Raymond James

In last Monday’s strategy report I noted that the week before July 4th has an upward bias for the equity markets. On Tuesday I backed that up by writing, “From 1950 to 2013 the market has delivered positive returns 72% of the time during the last two days of June and the first five days of July.”

2014-07-08 GMO versus Blackrock: Divergent Views of Global Markets by Justin Kermond (Article)

GMO's Ben Inker says he wouldn't touch U.S. small-capitalization stocks "with a 10-foot pole" - and says he sees no asset class that is attractively priced. That isn't the way Blackrock, the world's largest asset manager, views things. Blackrock's Dennis Stattman likes Japanese equities and gold and isn't afraid of rising rates.

2014-07-08 Why Free Trade Hurts Economic Growth by Marianne Brunet (Article)

Free trade, deregulation and limiting the federal government's powers form what Columbia professors Joseph Stiglitz and Bruce Greenwald call the Washington Consensus - the core precepts that have dominated policymaking for the last 50 years. But those ideas are misguided, they contend. Tariffs and trade restrictions, for example, are fine, especially if they are part of a broad framework that stimulates learning throughout a society.

2014-07-08 The Importance of Likability by Daniel Solin (Article)

I am fascinated by the disconnect between what advisors say to persuade prospects to become clients and what data indicate would actually work. The truth is that most of us need to radically change our approach to prospect meetings.

2014-07-08 ETF Trading Tips by Ed Rosenberg (Article)

Ed Rosenberg of FlexShares ETFs shares his thoughts on trading tips at two critical moments in the trading day - the market open and the market close.

2014-07-08 The Power of Share Repurchases by Patrick O'Shaughnessy of O'Shaughnessey Asset management

One of the most effective stock selection strategies in the U.S. over the past several decades has been to buy stocks that are in the midst of repurchasing significant quantities of their shares—but just blindly following buybacks isn’t always the best strategy. While many companies that are repurchasing large quantities of their shares make for great investments, others are dangerous and should be avoided. There are several important factors that should be considered when evaluating a stock with impressive buybacks.

2014-07-08 Blowout Jobs Data Won’t Trigger Quicker Rate Hike by Kristina Hooper of Allianz Global Investors

The markets are digesting a stellar jobs report, which may fuel debate over when the Fed will start raising rates. But it’s important for investors to understand the Fed’s holistic approach in order to avoid a kneejerk reaction, writes Kristina Hooper.

2014-07-08 Slow but Steady Growth by Richard Michaud of New Frontier Advisors

In the second quarter of 2014 major asset class performance was positive. The Dow was up 2.4%, the S&P up 4.7%, and the NASDAQ up 5%. International equities nearly kept pace with US equities; the MSCI ACWI ex US was up 3.8%.

2014-07-08 How Jay Kaplan Interprets Royce's Investment Process by Jay Kaplan and Francis Gannon (Article)

At the heart of our investment process is risk management, a hallmark of our work put into practice by Chuck Royce more than 40 years ago. To this day, mitigating, controlling, and thinking about risk continues to guide our seasoned staff of investment professionals and to inform our long-term portfolio decisions. Co-Chief Investment Officer Francis Gannon sits down with Portfolio Manager Jay Kaplan to talk about our process.

2014-07-08 Looking Closer at Morningstar Peer Groups for Fund Analysis by Gunjan Banati and Francis Gannon (Article)

Director of Risk Management Gunjan Banati sits down with Co-Chief Investment Officer Francis Gannon to discuss the results of her Morningstar peer group research whitepaper and suggests ways in which investors can compare funds within peer groups more effectively.

2014-07-08 Absolute Returns with Less Volatility: A Premise of Our Firm by Chris Clark and Chuck Royce (Article)

In stark contrast to last year's virtually correction-free bull market, 2014 has already seen two pullbacks large enough to give investors pause. Chuck Royce and Co-Chief Investment Officer Chris Clark discuss the current environment and how we as a firm have attempted to guard against the market's volatile behavior.

2014-07-08 Newsletter by Harold Evensky of Evensky & Katz

Hi! I hope you had a great 4th and you’re having a great summer. It’s been a busy one at E&K as you’ll see from my closing note and a fun one for Deena and me as we recently returned from a cruise to Reykjavik, Iceland, a most charming city but a bit off-putting with over 20 hours of sunlight.

2014-07-08 Volatility Takes a Sabbatical by Mark Oelschlager of Oak Associates

The theme of the second quarter was low volatility, as stocks continued to grind higher. As June ended, the S&P 500 had gone 51 consecutive trading sessions without moving 1% or more in either direction. Not since April 16 has the index moved at least 1% in a given day. This is a remarkable streak and quite a contrast with the volatility of recent years. Naturally, when something like this happens, the inclination is to try to figure out what it means for the market going forward.

2014-07-08 Will Latest Jobs Report Force the Fed to Act? by Chris Maxey, Ryan Davis of Fortigent

After a reasonably bleak winter, labor markets are on the rebound, just in time for the Federal Reserve to decide when they should stop asset purchases. Recent figures suggest that labor markets are very near Fed targets, raising the possibility that interest rate hikes could begin sooner than expected.

2014-07-08 An Allocation to Currencies May Provide Income and Lower an Overall Portfolio’s Volatility by Michael Cirami, Eric Stein, John Baur, Matthew Murphy, Bradford Godfrey of Eaton Vance

Most investors understand the benefits of diversification and the risks of owning just one security. But many overlook the benefits of broadening their currency exposure and have all their investments concentrated in the U.S. dollar. Investing in a mix of foreign currencies may lower the risks of an overall portfolio, provide additional sources of income and can potentially enable investors to pursue a wider array of opportunities around the world.

2014-07-08 Managing Valuation Risk by Rebalancing by Tripp Zimmerman of WisdomTree

We think it is important to be mindful of how an annual rebalance back to an underlying fundamental such as dividends can help manage valuation risks—a key factor in why the non-cap-weighted indexes are included in the “smart beta” category of indexes.

2014-07-08 Four Characteristics of a Thunderstorm...and the Stock Market by Jerry Wagner of Flexible Plan Investments

Summer storms in the stock market tend to conform to Mother Nature’s version.

2014-07-08 The Internet is Brutally Efficient and Totally Agnostic by William Smead of Smead Capital Management

On my way home from work recently my progress was impinged by a group of protesters headed up 4th Avenue in downtown Seattle to the headquarters of the Gates Foundation. Bill and Melinda Gates are spending millions trying to figure out how to make the U.S. education system more efficient and successful. Some of their recommendations are thought to damage efforts by the most powerful teachers’ unions to protect the interests of teachers. The Gates Foundation wants to bring efficiency and seems to understand that they need to be agnostic in their approach.

2014-07-07 Adapt or Perish: The Retirement Financial Decision by Robert Isbitts of Sungarden Investment Research

Investors should pay very careful attention to how retirement investing has changed versus 10 or 20 years ago, get educated about it and then apply it to their specific situation. Financially-speaking, it’s a case of “adapt or perish.”

2014-07-07 TIPS Outperform in the 2014 Second Quarter and First Half by Stephen Percoco of Lark Research, Inc.

TIPS have been on a tear so far in 2014. While returns on straight Treasury securities have been strong, TIPS returns have been stronger. After scampering away from Treasurys last year out of fears about the winding down of Federal Reserve stimulus, bond investors seemed reassured, after the weak first quarter GDP report and statements by the Fed, that interest rates are not about to rise anytime soon.

2014-07-07 The Tide is High by Edward Talisse of Chelsea Global Advisors

It took a while but I think I finally get it. The Federal Reserve has embarked on a Parallel Campaign - operating on two separate planes that seemingly never intersect, yet both having readily recognized similarities. My eureka moment finally came this past week when Ms. Yellen, in a rebuff to the Bank for International Settlements, said "because resilient financial system can (now) withstand unexpected developments, identification of bubbles is less critical."

2014-07-07 Europe’s Debt Wish by Kenneth Rogoff of Project Syndicate

It is difficult to see how Europe can revive economic growth without significant debt restructuring or rescheduling. But Europe’s politicians seem utterly unable to contemplate this scenario, thus placing a huge burden on the ECB.

2014-07-07 The Prudent Investor’s Approach to Retirement Income by Kendall Anderson of Anderson Griggs

Each day, ten thousand people reach the age where retirement is a possibility. For some the choice is optional, but for others it is mandatory. A lively debate is taking place among academics and professionals in the investment industry regarding what the proper approach is for meeting financial needs in retirement.

2014-07-07 Track Daily Progress to Move Your Business Forward by Dan Richards (Article)

Few of us will ever run the 26 miles of a marathon. But you can apply some lessons from new research on marathon runners to hit your own goals and help clients hit theirs.

2014-07-07 Five Tips for Being a Great Wall Street Journal Source by Joe Anthony (Article)

When you get the call to be interviewed by a journalist, be ready to maximize the rare (not to mention cost-free) chance for exposure and messaging on a mass scale. Here are five top tips to become a top interviewee.

2014-07-07 Dealing with Employees Who Are All Ideas but No Action by Beverly Flaxington (Article)

I run a training group in a large company. One of my key employees frustrates me. He is an "idea guy" but not an implementer. I like his ideas and am supportive, but I need to see action to know they are working. How do I rein someone is who is a big thinker but not a big doer?

2014-07-07 Recovery in the Eurozone by Stephen Peak (Article)

Stephen Peak provides an update on the European economy and the Henderson European Focus Fund. He notes the EU is about to appoint a new president and it will be interesting to see if there are any changes with accountability. Stephen comments that more recently we've seen the ECB propose new measures to help promote and stimulate growth across the Eurozone. The issues remain in the south where we're seeing an 'anemic' recovery. Overall, his view is still constructive and sees opportunity within individual equities.

2014-07-07 Looking Back - Beta Drove Returns Last Week by Team of GaveKal Capital

As we tend to do at the beginning of a new week, we are going to look back briefly at the previous week to see what of our 30 factors had the highest explanatory value to the market. The "winner" last week was Beta which had a 0.90 r-square value to the market. TIPS yield had the second highest r-square at 0.87. Over the past year, the 3-month change in EPS estimates continues to have the greatest r-square value followed by P/E and P/B.

2014-07-07 Quotes on a Screen and Blotches of Ink by John Hussman of Hussman Funds

The ratio of market capitalization to GDP, which Warren Buffett (correctly) observed in a 2001 Fortune interview is "probably the single best measure of where valuations stand at any given moment" is now about 150% (not just 50%) above its pre-bubble norm, and beyond every point in history except for the final quarter of 1999 and the first two quarters of 2000. Much of what investors view as "wealth" here is little but transitory quotes on a screen and blotches of ink on pieces of paper that have today’s date on them. Investors seem to have forgotten how that works.

2014-07-07 India and Indonesia: Change, Challenge and Opportunity by Jack Deino of Invesco Blog

In both India and Indonesia, leaders are facing intense pressure from markets and investors to initiate reforms that are real rather than merely cosmetic. Our outlook is somewhat more bullish for India, but we believe change can lead to opportunity in both countries.

2014-07-05 I'm Grateful to Live in America. Here's Why. by Frank Holmes of U.S. Global Investors

An important principle of our investment process at U.S. Global Investors is a belief that government policies are a precursor to change. As a result, we closely monitor the fiscal, monetary and other impactful governmental policies of the world’s largest countries, both in terms of economic stature and population. We’re always listening for the proverbial shot heard around the world. As we approach America’s Independence Day, this belief rings especially true.

2014-07-05 June Employment Situation: Fitting Gift for America’s Birthday by Carl Tannenbaum of Northern Trust

Today’s U.S. employment report was a very good one. It was strong enough to suggest good economic momentum but not so strong as to alarm the Federal Reserve.

2014-07-05 Harnessing Solar in China by Teresa Kong of Matthews Asia

China has revised its solar energy targets several times in recent years. This year, it has set even more aggressive targets for solar deployment. But it still has a long way to go before large-scale adoption is possible. This week, Teresa Kong writes about her visit to a small town outside of Beijing to see a Greenpeace solar project that is encouraging households and enterprises to consider going green. What are the barriers to smooth implementation?

2014-07-05 2014 Mid-Year Outlook Update: “Living Actively” Forecast Continues by Stephen Wood of Russell Investments

Does 2014 at mid-year remain a “year of living actively” for investors as outlined in Russell’s 2014 Annual Global Outlook issued last December? In that report, my colleagues on the global team of investment strategists agreed on the macro-view that 2014 would be better represented as a year of validation than a year of appreciation. And now, as we examine the underlying fundamentals in the macro- data at mid-year, I don’t see a reason yet to alter our “year of validation” call.

2014-07-05 Central Bank Smackdown by John Mauldin of Mauldin Economics

And so it is that on a beautiful July 4 weekend we will amuse ourselves by contemplating the serious smackdown that central bankers are visiting upon each other. If the ramifications of their antics were not so serious, they would actually be quite amusing. This week’s shorter than usual letter will explore the implications of the contretemps among the world’s central bankers and take a little dive into yesterday’s generally positive employment report.

2014-07-03 Why Invest in International Now? by Team of AMG Funds

In light of the strong performance from U.S. stocks over the past five years, it’s reasonable for an investor to ask “Why international stocks now?”. We are convinced that the reasons for investing internationally are even more compelling today than they were twenty years ago. Permit us to illustrate the most significant reasons for investing internationally today.

2014-07-03 A Perspective on High Yield Spreads by Heather Rupp of AdvisorShares

There have been recent headlines about yields in the high-yield market hitting all-time lows. Yes, this is true, but let’s put this in some context. First, interest rates have been at or near all-time lows for years, pressuring yields in all fixed income securities as investors search for places to generate returns. Comparatively, we believe the high yield market still looks very attractive.

2014-07-03 Reality-Based Cost Of Living Index Tells The Real Reason Why So Many Americans Are Struggling by Steve Rumsey of Optimus Advisory Group

Ever wonder why rises in the Consumer Price Index ("CPI") seem low compared to your own personal experiences? Or why social security annual cost of living increases seem to get smaller and smaller? Or why inflation-adjusted pensions can't seem to keep up with general price increases? Or why the American worker gets such meager annual raises (if at all) that they seem to fall further behind year after year?

2014-07-03 One Big Idea?? by William Gross of PIMCO

?Investing and business success can often depend on one BIG idea and its timing. The peaking of short-term interest rates at 20% in the early 1980s and the bursting of the DotCom and NASDAQ bubble 20 years later were excellent examples of big ideas that made or broke investment portfolios.

2014-07-03 The Moneyball of Quality Investing by Vitali Kalesnik, Engin Kose of Research Affiliates

Factor investing has rightfully gained adherents among investors seeking superior risk-adjusted returns. Our research reveals that quality is not a factor that reliably commands a premium in its own right. Nonetheless, value investing conditioned upon certain indicators of company quality is a promising strategy.

2014-07-03 Mid-Year Emerging Markets Update: ‘Recovery Phase’ by Mark Mobius of Franklin Templeton Investments

As I’ve often said, investing in emerging markets requires patience, long-term perspective, and selective stock-picking. I think many investors focus too much on the short-term. As long-term investors, we view short-term bouts of volatility as an opportune time to find potential bargains for our portfolios, and we certainly experienced that in the first half of the year.

2014-07-03 The Consumption Drag: What it Means for Investors by Russ Koesterich of BlackRock

The one segment of the U.S. economy that still appears to be lagging is also the biggest: household consumption. Russ explains why slower consumer spending is likely to continue dragging down U.S. economic growth, noting three implications for investors.

2014-07-03 Can Copper Prices Continue Climbing? by Team of GaveKal Capital

Copper prices continue to recover from weakness earlier in the year, but are approaching an area of resistance.

2014-07-03 The Outlook for Yields by Scott Minerd of Guggenheim Partners

As U.S. economic growth gathers pace, yields on 10-year U.S. Treasuries should shift higher over the next two to three years, eventually moving as high as 3.75-4 percent.

2014-07-02 Alternative Investments: The Right Expectations by Roger Nusbaum of AdvisorShares

Every year around this time we hear about the fiscal year investment results for the various college endowments and typically there is much written about the endowments and 2014 is no exception but this year most of the attention seems to be on the extent to which various forms of alternative investments have been a drag on endowment results after years of their having provided outsized gains.

2014-07-02 Forget 2008 While Avoiding Popularity by William Smead of Smead Capital Management

We continue to be encouraged by the endless interest in doomsday writing about the next 2008 and the way asset allocators have positioned themselves to defend against its possibility. The most popular writers seem convinced dismal returns are in front of us, economic success in the US is impossible and that the next US stock market decline will punish fully-invested common stock owners. It is our belief the next ten years will include two bear markets of over 20%.

2014-07-02 June 2014 Pension Finance Update by Brian Donohue of October Three Consulting

Explore a real-time comparison of assets and liabilities for both a traditional pension plan and cash balance plan based on current market conditions. Our monthly snapshot provides immediate feedback as well as a look ahead for Plan Sponsors.

2014-07-02 1Q GDP Plunges Nearly 3% - What Will The Fed Do Now? by Gary Halbert of Halbert Wealth Management

Today we take a closer look at last week’s very ugly 1Q GDP report and see if we can discern why it was so much worse than anyone expected (hint: it was more than the severe winter weather). Fortunately, it continues to look like 2Q growth will come in at +3.0% or better. But even if GDP for the rest of the year comes in strong, the devastating 1Q will ensure yet another slow growth year.

2014-07-02 Gouging the Gauchos by Nouriel Roubini of Project Syndicate

Like individuals and private firms that rely on bankruptcy procedures to reduce an excessive debt burden, countries sometimes need orderly debt restructuring or reduction. But the ongoing legal saga of Argentina’s fight with holdout creditors shows that the international system for orderly sovereign-debt restructuring may be broken.

2014-07-02 On Top of the Market Chart Book - "Global Equities Inch Forward in the First Quater" by Team of AMG Funds

Now updated through 1Q. This compendium provides an historical perspective of economic data compared to today's results, and provides comments on any developing trends. We also include a synopsis of financial markets results. The OTOTM Chart Book is designed with easy-to-read graphics to tell a story and help you visualize the changes taking place in today's economy.

2014-07-01 What an Elite Group of Younger Advisors Has to Say by Bob Veres (Article)

I recently served as a facilitator for the annual NexGen conference, this year held on the campus of Augustana University in Moline, IL. I was able to gain insight into the very different way that the financial planning landscape looks through the eyes of younger advisors just starting their careers - and in many cases, from the bottom end of a planning firm's organizational chart.

2014-07-01 New Research on How to Choose Portfolio Return Assumptions by Wade Pfau (Article)

Care must be taken with portfolio return assumptions, as small differences compound into dramatically different financial outcomes over a lifetime. My research shows just how big those differences are and how they vary in the pre- and post-retirement phases.

2014-07-01 How to Make Happiness Happen by Daniel Solin (Article)

The strategies for becoming happier are not difficult to understand. However, changing entrenched patterns of behavior can be challenging. Here are some tips to help you achieve greater happiness in your life.

2014-07-01 Where are Municipals Headed in the Second Half by Roberto Roffo of Advisors Asset Management

With such strong performance in the first half of 2014 and interest rates at such low levels already, one would think that the municipal bond market has run its course and can’t possibly continue to produce positive returns.

2014-07-01 Five Social-Media Timesavers by Sarah Scorgie (Article)

Save time on your social-media efforts by planning ahead and using online tools.

2014-07-01 Fielding Complaints About Fees by Beverly Flaxington (Article)

We are telling clients who are closing in on retirement to keep a significant percentage in cash. One client asked us what he was paying us for if we recommend "the bank or the mattress." How do we respond to something like this?

2014-07-01 How $500 Can Propel Your Online Presence by Dan Richards (Article)

Summer is traditionally a slow time for many advisors. If your online skills aren’t up to snuff, the next eight weeks may be the best chance to ramp them up that you’ll see for another 12 months.

2014-07-01 The 2014 Mid-Year Geopolitical Update by Bill O'Grady of Confluence Investment Management

As is our custom, we take the middle of the year to reflect on the current geopolitical situation. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the year. It is not designed to be exhaustive; instead, it focuses on the “big picture” conditions that we believe will affect policy and markets going forward. They are listed in order of importance: America’s Strategic Drift, Chinese Maritime Expansion, The German Problem, and The Remaking of the Middle East.

2014-07-01 Fixed Income Markets Cruise - What's Next? by Chris Maxey, Brian Payne of Fortigent

For the better part of twelve months, fixed income markets have been in a rather benign state. After receiving a scare in early summer 2013 during the “taper tantrum,” volatility subsided, and normalcy returned to the world of fixed income. As money continues to pour into fixed income markets, there is growing concern that the investment opportunity is stretched and the time to rebalance is now.

2014-07-01 Housing Shows Fewer Cracks in Its Foundation by Kristina Hooper of Allianz Global Investors

Home sales are on the rise due to lower interest rates and increased demand following a difficult winter, but wage growth must follow in order to keep the housing recovery going, writes Kristina Hooper.

2014-07-01 Weekly Market Update by Team of Castleton Partners

Treasury yields fell across the maturity spectrum last week, with longer dated maturities recording the largest price gains relative to shorter dated bonds and notes. With geopolitical concerns continuing to weigh heavily on investors’ minds, interest rates were propelled lower on the surprising revision to the 1st quarter GDP and the resulting downward revisions to 2nd quarter GDP estimates.

2014-07-01 Reality Check by Robert Rodriguez of FPA Funds

Bob Rodriguez, Managing Partner and Chief Executive Officer of FPA, delivered a speech titled "Reality Check" to shareholders of FPA funds on June 2, 2014, on Fed policy and federal fiscal excess.

2014-07-01 LPL Financial Research Mid-Year Outlook 2014: Investor’s Almanac Field Notes by Jeff Kleintop of LPL Financial

At this year’s halfway point, we are pleased to offer the LPL Financial Research Mid-Year Outlook 2014: Investor’s Almanac Field Notes containing key observations and updates to our outlook for 2014. Similar to a farming almanac, our Investor’s Almanac is a publication containing a guide to patterns, tendencies, and seasonal observations important to growing. The goal of farming is not merely to grow crops, but to sustain living things—investing shares the same goal.

2014-07-01 Chuck Royce on 2Q14: Fundamentals Reassert Their Importance by Chuck Royce of The Royce Funds

Since the May 2013 low for the 10-year Treasury, we have seen the market shift its focus to more fundamentally and financially stronger companies with attractive long-term prospects—qualities that we have always championed at Royce.

2014-07-01 Turmoil in Iraq — Implications for the Oil Markets by Jonathan Mogil of Columbia Management

Oil prices and energy security have once again come back into the spotlight as the Islamic State of Iraq and the Levant, the group known as ISIS, has taken control over parts of northern and western Iraq. To date, the impact on oil prices has been fairly muted, but any escalation of violence could pose a serious threat to the stability of global oil markets and has a wide range of implications for future OPEC crude supply growth.

2014-06-30 The New Normal of Healthcare Spending by John Mauldin of Mauldin Economics

A rather interesting shockwave came across the newsfeeds this week. I was actually doing a TV interview when the host announced that GDP was down 2.9% for the first quarter. There was not much else I could do but note that that was a really bad, ugly, terrible, not very good number.

2014-06-30 Revisiting Valuation Extremes - 2008 to Now by Team of GaveKal Capital

Last week we took a look at how much price to book multiples have expanded since 2008. Today, we are undergoing the same exercise but this time we are looking at price to cash flow multiples.

2014-06-30 Taking a Balanced View of Equities by Lisa Myers of Franklin Templeton Investments

With the US S&P 500 Index and Dow Jones Industrial Average advancing into record territory this year and some European equity benchmarks likewise nearing new highs, some investors may be wondering whether it’s still wise to be jumping into the market at this stage. Lisa Myers, executive vice president, Templeton Global Equity Group, thinks that a long-term investment horizon, supported by bottom-up analysis, can reveal hidden value.

2014-06-30 The Delusion of Perpetual Motion by John Hussman of Hussman Funds

The Federal Reserve’s promise to hold safe interest rates at zero for a very long period of time has not created a perpetual motion machine for stocks. No – it has simply created an environment where investors have felt forced to speculate, to the point where stocks are now also priced to deliver zero total returns for a very long period of time. Put simply, we are already here. Investment decisions driven primarily by the question “What other choice do I have?” are likely to prove regrettable.

2014-06-28 Weekly Economic Commentary by Team of Northern Trust

The recovery which began in 2009 has been weak and uneven. Some have blamed scarring from the financial crisis: wounds to the balance sheets of households, banks, and governments are taking a long time to heal. Under this school of thought, returning to pre-crisis normalcy is simply a matter of time, with the mending promoted by accommodative monetary policy. If the strategy works, we’ll eventually return to the 3% real growth that we’ve averaged over the past generation.

2014-06-28 Health Care Sector Spurred by Population Growth and M&As by Frank Holmes of U.S. Global Investors

Recently I spoke with John Derrick, director of research here at U.S. Global, to pick his brain about what he thought was the most interesting sector right now. You might expect him to have said energy, perhaps because of the intensifying violence in Kurdistan Iraq, a major oil producer. But instead, he said that he had his eyes on health care.

2014-06-28 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 135.4, down from the previous week's adjusted 135.3. The WLI annualized growth indicator (WLIg) is unchanged at 4.3 (the previous week adjusted down from 4.4).

2014-06-27 F.A.S.T. Fundamentals On CSX Corp by Team of F.A.S.T. Graphs

CSX has performed exceptionally well over the past decade. The “usual suspect” metrics like P/E ratios, dividend yield and expected earnings growth indicate that the company might be a reasonable investment. This article takes a “behind the scenes” view of a variety of additional fundamental data.

2014-06-27 A Brief Note on Gold as a Defensive Asset by Ade Odunsi of AdvisorShares

In previous notes we have written about the defensive nature of gold relative to the broad equity market. Much of the discussion has focused on the low correlation and beta of gold versus equity markets. In fact, the ten year monthly returns of gold (priced in US dollar terms) and the S&P 500 show a correlation of zero with the beta of monthly gold returns versus S&P 500 returns also being essentially zero (0.1).

2014-06-27 Rethinking the Sino-American Relationship by Stephen Roach of Project Syndicate

In early July, senior US and Chinese officials will gather in Beijing for the sixth Strategic and Economic Dialogue. With bilateral frictions mounting on a number of fronts, the summit offers an opportunity for a serious reconsideration of the relationship between the world’s two most powerful countries.

2014-06-27 Timing Low Volatility Investments by Feifei Li of Research Affiliates

If a secular bear market is coming, a low-volatility strategy might serve well. The five-year return of a simulated low-vol portfolio beat cap-weighting 75% of the time when the market P/E exceeded 20.

2014-06-27 Time To Do Less Not More by John Browne of Euro Pacific Capital

The current situation in Iraq is a modern tragedy. But in more practical terms it is a very stark illustration of the folly of central planning and the limits of state power in the face of entrenched traditions and proven history. Although the parallels aren't perfect, the rapid dissolution of the puppet Iraqi state can offer some stark lessons to those who are optimistic about our current experiment in central bank dominated economic planning.

2014-06-27 How Road Construction Can Help With Portfolio Construction by R. Scott Dennis of Invesco Blog

Investors have long looked to real estate to provide income potential, hedge against future inflation and provide diversification to traditional stock and bond portfolios. More recently, an increasing number of investors have been expanding their horizons and including real assets in their portfolio construction as well – such as infrastructure and master limited partnerships (MLPs). At Invesco Real Estate, we believe the US — and the world — is heading for a building boom that would bode well for real assets.

2014-06-27 Avoiding the Losers by Team of Hotchkis & Wiley

In Hotchkis & Wiley's 2014 High Yield 2Q Newsletter, Ray Kennedy, Mark Hudoff, and the rest of Hotchkis & Wiley's high yield team discuss the team's belief "that averting mistakes is the single most important quality in successful high yield investing," and that an "avoid the losers” mentality can be achieved by focusing on securities that are senior in the capital structure, emphasizing asset coverage, and looking closely at covenant packages, a third level of defense that the team believes is often overlooked by high yield investors.

2014-06-26 Benefits of Optimizing Portfolio Capture Ratios by Don Schreiber, Jr., Craig French of WBI Investments

The world of investing has changed dramatically. Over the past decade, many investors have discovered that conventional passive growth stock approaches failed to meet their goals. Following a buy-and-hold approach, investors suffered losses of as much as 51% during the 2000 through 2013 period. We believe conventional portfolio theory regarding the benefits of diversification has been broadly misinterpreted to mean that market returns will bail you out, and so investors should not worry about short-term losses.

2014-06-26 Stock Picking Matters in the Current Market Climate by Whitney George of The Royce Funds

Has the current market environment begun to favor less speculative companies and investment managers with a more active orientation? Director of Investments, Managing Director, and Portfolio Manager Whitney George talks about valuations, sectors and industries that he believes look promising, and some names in which he has high conviction.

2014-06-26 Iraq Crisis Impact on Oil? by Tim Guinness, Will Riley, Jonathan Waghorn of Guinness Atkinson Asset Management

The rise and rapid expansion of the Sunni enclave known by its new rulers under Abu Bakr al-Baghdadi as the Islamic State of Iraq and al-Sham (or ISIS; al-Sham means greater Syria) comes as no great surprise. No-one can predict how far it can expand or how quickly it will be crushed (if ever).

2014-06-26 You Don’t Have to Love Soccer by Brian Andrew of Cleary Gull

The FIFA World Cup (for soccer aka football) is in full swing. There are 32 teams from around the world treating a world-wide audience of nearly 2 billion to a great show of sport. The teams are competing for $576 million in prize money. And while the U.S. will not likely make it to the final match, the tournament does offer some insight into diverse economies around the globe and why we should consider international investments as a pillar in any portfolio.

2014-06-26 Economic Update by Team of Northern Trust

U.S. real gross domestic product (GDP) fell at an annual rate of 2.9% in the first quarter. However, forward economic momentum is intact.

2014-06-26 The Signal and the Noise by Scott Minerd of Guggenheim Partners

U.S. Federal Reserve policymakers are dismissing as “noise” signs that inflation pressure is building, but perhaps they should be listening more closely.

2014-06-26 Behind the Curve? by Anthony Valeri of LPL Financial

Despite the Fed labeling the recent inflation increase as “noise,” longer-term bond yields rose, inflation expectations increased, and the yield curve steepened -- all signs of the bond market pricing in inflation risks. As the low inflation pillar of year-to-date bond strength fades, it may be one more reason to be cautious in the bond market.

2014-06-26 Could Events in Iraq Shock Your Portfolio? by Greg Sharenow of PIMCO

We expect a relatively small impact on oil prices for the rest of the year once the dust settles and sectarian lines are drawn. These events call into question Iraq’s ability to keep increasing oil production, which will likely support elevated prices in the years to come. We believe owning oil as a portfolio defense presents an interesting opportunity. ?

2014-06-26 U.S. Rates — Data Dependence by Zach Pandl of Columbia Management

The June FOMC meeting contained a little bit for everyone and interest rates reacted only marginally after the announcements. But looking across asset markets—including nominal and inflation-linked bonds, equities, commodities and the dollar—it’s clear that investors interpreted the news as another dovish surprise from the Fed. We are not sure that is the correct interpretation, and the reason comes down to the issue of “data dependence”.

2014-06-25 Approaching a Tipping Point by Mike Boyle of Advisors Asset Management

On Thursday, June 19, the S&P 500 made it 66th new high of this bull market and unfortunately, based on almost any metric available, one could argue that the U.S. equity markets are due for at least a mild correction – or more.

2014-06-25 World Cup and World CPI Are Heating Up, Risking Mistakes by Key Players by Jeffrey Kleintop of LPL Financial

Just as the World Cup has been heating up, increasing the risk of player mistakes, the world consumer price index (CPI) has also been heating up, complicating the task for policymakers at the world’s central banks and increasing the risk of mistakes that could have market implications.

2014-06-25 Economy: 1Q Looks Even Worse, But 2Q Looks Good by Gary Halbert of Halbert Wealth Management

The government’s final estimate of 1Q GDP comes out tomorrow, and it is expected to be revised from -1.0% to near -2.0%. Based on recently released data, it is clear that healthcare spending by consumers was considerably lower in the 1Q than first estimated. We’ll look at some of the reasons why.

2014-06-25 The Fed’s Outlook: Optimistic? Or Just Hopeful? by Scott Brown of Raymond James

As expected, Federal Reserve policymakers left short-term interest rates unchanged, did not alter the forward guidance on the federal funds target rate, and trimmed the monthly pace of asset purchases by another $10 billion (to $35 billion beginning in July). In its policy statement, the FOMC was a bit more optimistic about a pickup in growth. Fed officials’ forecasts of 2014 GDP growth were revised lower, but implicitly, forecasts for the final three quarters of 2014 remained strong.

2014-06-25 Truth or Consequences? by Jeffrey Saut of Raymond James

I am always trying to manage the “risks” inherent with investing (or trading), for as Benjamin Graham stated, “The essence of investment management is the management of risks, not the management of returns. Well-managed portfolios start with this precept.” And that, ladies and gentlemen, is why I often “wait” on an investment until its share price is at a point where if I am wrong, I will be wrong quickly, and the incidence of “loss” will be small and manageable.

2014-06-25 Self Sufficiency and Resourcefulness Over Complaining by Roger Nusbaum of AdvisorShares

There were several interesting and related articles from the last few days that could make for an interesting discussion.

2014-06-25 Are You Managing Volatility? ... Or Is It Managing You? by Team of Eaton Vance

Market volatility has often led investors to make emotional decisions, resulting in portfolio performance that may have hindered their progress toward long-term investment goals. Eaton Vance believes that a sound investment strategy can and should provide long-term investors with the tools needed to effectively manage volatility — not only by defending against it, but perhaps by turning it to the investor’s advantage. We do not believe there is a single, “silver-bullet” solution to the challenge of succeeding through the market’s inevitable ups and downs.

2014-06-25 Just Because the Fed Is Doing the Right Thing Now Is No Guarantee It Will Continue to Do So by Paul Kasriel of Econtrarian, LLC

The Fed is continuing to slow the growth in the amount of credit it is creating. In December 2013, the year-over-year growth in the sum of Fed outright holdings of securities and its net repurchase agreements (repurchase agreements minus reverse repurchase agreements) was 41.1%. As of May, the year-over-year growth in this sum had slowed to 24.8%.

2014-06-25 French Business Climate: Un Petit Problème by Team of GaveKal Capital

French business sentiment followed in the footsteps of the disappointing German Ifo survey from yesterday.

2014-06-25 Mid-Year Muni Market Update by Rafael Costas of Franklin Templeton Investments

The municipal bond market faced a rather tough year in 2013, with news of troubles in Detroit, Puerto Rico and elsewhere scaring off some investors. This year hasn’t exactly been smooth sailing for the muni market either, but the waters seem a bit calmer and many investors have returned to the sector. Rafael Costas, Co-Director, Municipal Bond Department, Franklin Templeton Fixed Income Group, could be called cautiously optimistic about the muni market. He provides an update on some key market developments, including progress in the aforementioned trouble spots.

2014-06-25 Can Tesla Motors Strengthen Its Brand by Giving Away Its Patents? by Frank Holmes of U.S. Global Investors

“Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” That’s according to Elon Musk, CEO of electric automaker Tesla Motors Inc., which we own in our All American Equity (GBTFX) and Holmes Macros Trends (MEGAX) Funds.

2014-06-25 Where the Equity Opportunities Are by Russ Koesterich of iShares Blog

Given that U.S. stocks are no longer cheap and most stock market bargains are now found overseas, Russ believes that U.S. investors should look abroad for equity opportunities.

2014-06-25 Rethinking Revenue Sharing by Daniel Notto of AllianceBernstein

While revenue sharing may be a legitimate way to pay for the costs of operating a plan, both US courts and the Department of Labor (DOL) have made it clear that plan sponsors have a significant responsibility as fiduciaries to fully understand, evaluate and monitor their revenue-sharing arrangements and determine whether they are reasonable. Therefore, the most prudent response for plan sponsors may be to rethink the practice of revenue sharing altogether.

2014-06-24 Recent Events Affecting Global Fixed Income Markets by Phil Apel and James McAlevey (Article)

Phil Apel, Head of Fixed Income and James McAlevey, Head of Interest Rates review the three most significant developments in financial markets over the last month: the 50bp (0.50%) cut by the Bank of Mexico, the improvement of US economic data, particularly employment reports and finally, most importantly, the policy response form the European Central Bank (ECB) to take interest rates negative and raise liquidity in the Eurozone. These have all been very positive for fixed income assets in the short term.

2014-06-24 The Long-Term Role of Fixed Income in a Portfolio by Shundrawn Thomas (Article)

This video provides an overview of the fixed income space, including current trends and where they might lead. It also delivers insights on the role fixed income plays in a portfolio and how innovation allows fixed income ETFs to enter the mix.

2014-06-24 What Opportunities Do Active and Passive Strategies Provide in the Current Market? by Chris Clark and Chuck Royce (Article)

In the post financial-crisis period, there has been much debate over active versus passive strategies. Co-Chief Investment Officer Chris Clark and Chuck Royce discuss this topic, along with active management in the small-cap space, the characteristics of an actively managed portfolio versus those of an index-based portfolio, current small-cap opportunities, and the case for active management in today's environment.

2014-06-24 Is the Equity Premium Getting Smaller? by Michael Edesess (Article)

An estimate of the expected return on equities in excess of the risk-free rate seems to be anybody's guess. It would be nice to have a sound theory that tells us how to estimate it.

2014-06-24 How Morningstar Category Flux Impacts Peer Group Analysis by Sponsored Content by The Royce Funds (Article)

Morningstar's mutual fund categories are among the most frequently cited for peer group performance and investment approach comparisons. Our study, however, has found that membership in a Morningstar category can evolve considerably over time.

2014-06-24 Are Dividend Stocks Too Expensive? by Geoff Considine (Article)

Dividend strategies tend to have a strong value tilt and lower price-to-book (P/B) and price-to-earnings (P/E) ratios than the market as a whole. But those strategies can become overvalued. When this occurs - we are currently in such a period - building a high-dividend, low-risk portfolio requires extra care.

2014-06-24 How Proactive Advice Increases Client Loyalty by Dan Richards (Article)

You can certainly have clients walk away feeling good about staying the course, but you have to typically work harder to get clients to buy into that than to making shifts in their portfolios. Here are five proactive conversations you can have with clients.

2014-06-24 How to Make Happiness Happen by Daniel Solin (Article)

The strategies for becoming happier are not difficult to understand. However, changing entrenched patterns of behavior can be challenging. Here are some tips to help you achieve greater happiness in your life.

2014-06-24 Announcing a Merger? You Need a Game Plan by Kristen Luke (Article)

It wasn't until I announced my own firm's merger that I truly appreciated how complex this seemingly simple task really is. The following checklist can help you simplify the process and develop a game plan for making a successful announcement.

2014-06-24 Coping With an Erratic Boss by Beverly Flaxington (Article)

We are all tired of the erratic behavior of the lead advisor in our firm. One day he is perfectly fine, then the next he is yelling in the hallways over some perceived infraction. I never know what is coming next. Can you suggest strategies that would better enable us to work with Doug?

2014-06-24 Red Sky in the Morn', Junk Bond Investors Be Warn'd. by Bryce Fegley of Saturna Capital

Investor appetite for income has pushed yields and spreads on high-yield bonds to very low levels, while corporate borrowers have fed that demand with record issuance of new debt. On top of low yields and heavy issuance, bond dealers have retreated from corporate bonds in response to new financial regulations. As a result of these factors, we believe now is a particularly risky time to invest in high-yield bonds. Here we offer some of our suggestions for seeking income and yield with less risk.

2014-06-24 Weekly Market Update by Team of Castleton Partners

With geopolitical risks abound, financial markets were resilient yet again last week, thanks to the mostly dovish tone struck by the Open Market Committee of the Federal Reserve and its Chair, Janet Yellen. Despite recent economic indicators registering a pickup in growth and inflation, namely CPI, the FOMC reiterated its “lower for longer” theme in managing interest rate policy.

2014-06-24 Hexavest Viewpoint: Neutral on Japan by Frederic Imbeault of Eaton Vance

Macroeconomy: With little traction from fiscal policy and structural reforms, the pro-growth policies of Prime Minister Shinzo Abe known as “Abenomics” will continue to rely on the Bank of Japan’s loose monetary policy to maintain economic momentum. Valuation: Rising profits and the 2014 correction have pushed down P/E ratios on Japanese equities into more attractive territory. Investor sentiment: As contrarians and as the crowd has become less bullish on Japanese stocks, we have become more constructive about investor sentiment.

2014-06-24 Equities Rally on Surprise-Free Fed by Chris Maxey, Ryan Davis of Fortigent

The Federal Reserve held its regularly scheduled meeting last week, and equity markets raced to their strongest daily gain of the week after the announcement was released. There were few surprises, as the Fed chose to maintain its course, while painting a cautious economic picture.

2014-06-24 A Mosaic Approach to Raising the Fed Funds Rate by Kristina Hooper of Allianz Global Investors

The Federal Reserve is using a wide swath of economic data and anecdotal evidence to determine when to raise its benchmark interest rate. While prudent, it may stir up anxiety and volatility for equity investors, writes Kristina Hooper.

2014-06-24 The ISIL Threat by Bill O'Grady of Confluence Investment Management

Recently, the insurgent group called the Islamic State of Iraq and the Levant (ISIL) has made stunning inroads into Iraq. ISIL represents a new threat to the region. In this report, we offer a historical analysis of how the modern Middle East was constructed and why the construct is coming under pressure. One of the keys to understanding why ISIL is so potent is to differentiate it from al Qaeda; we will analyze the differences. We will offer the strongest reason why we believe ISIL has staying power, also noting ISIL’s greatest weakness and the possibility of a broader sectarian confli

2014-06-24 Is The Fed Underestimating Inflation? by Robert Doll of Nuveen Asset Management

Following a week in which investors took pause and focused on the negatives, they reversed course last week and pushed equity prices higher. A number of factors seemed to contribute to the positive tone, not the least of which was an indication from the Federal Reserve (Fed) that there will be no near term change to its accommodative monetary policy.

2014-06-24 The True Opportunity in Today’s High Yield Market by Heather Rupp of AdvisorShares

There has been talk recently about the yield of the high yield market, as represented by the various indexes, and if there is return left to be had. While the high yield indexes are representative of the high yield “market,” we do not believe they are representative of the true opportunity in the high yield space.

2014-06-24 The Over-Capitalization Curse by William Smead of Smead Capital Management

At Smead Capital Management we are conscious of the few, but significant pitfalls which we believe exist for the long-duration common stock investor. One of the main pitfalls we want to avoid is the over-capitalization curse. This is a situation where investor enthusiasm gets very high, prices get historically high and investors drown the company, industry or sector with capital. In our experience, it pays to avoid the over-capitalized areas for as long as five to ten years as they work their way back to being hated and contentious.

2014-06-23 Italy: When Hope Is a Strategy by John Mauldin of Mauldin Economics

I came back from Italy this week, and one of my guilty pleasures was being able to sit down and watch the last three episodes, including the season finale, of Game of Thrones. For those readers who are not enthralled with the fantasy epic from HBO or have not read the first five books (will he ever finish?), author George R.R. Martin has written one of the most complex fantasy series ever, about a world where everyone is occupied with who will sit on the Iron Throne.

2014-06-23 What Exactly Is An Intangible Asset? by Team of GaveKal Capital

As another relatively quiet week in the market comes to a close, we thought we would step back from analyzing the market and briefly introduce to our readers a topic that we care greatly about and one that most of our readers are probably unfamiliar with. That topic is investments in intangible assets. The first question that probably comes to your mind after reading the previous sentence is...Why?

2014-06-23 Will Small-Cap Stocks Close the Gap with Large-Caps? by Vadim Zlotnikov of AllianceBernstein

Small-cap stocks have lagged large-cap stocks by a substantial margin over the past few months, but a close look at the causes makes us think they could be in for a reversal of fortune.

2014-06-23 This Time is Different, Yet with the Same Ending by John Hussman of Hussman Funds

The Federal Reserve’s policy of quantitative easing has produced a historically prolonged period of speculative yield-seeking by investors starved for safe return. The problem with simply concluding that quantitative easing can do this forever is that even speculative assets have to compete with zero. When a safe zero return is above the medium or long-term return that one can estimate for a very risky asset, the rationale for continuing to hold the risky asset becomes purely dependent on expectations of immediate short-term price gains.

2014-06-23 The Bond Trap by Peter Schiff of Euro Pacific Capital

The American financial establishment has an incredible ability to celebrate the inconsequential while ignoring the vital. Last week, while the Wall Street Journal pondered how the Fed may set interest rates three to four years in the future (an exercise that David Stockman rightly compared to debating how many angels could dance on the head of a pin), the media almost completely ignored one of the most chilling pieces of financial news that I have ever seen.

2014-06-23 The Rise of E-Commerce in Asia by Jerry Shih, Winnie Chwang of Matthews Asia

It’s no surprise that Asia—home to two of the world’s most populous countries—holds great potential for e-commerce. Much of this growth has been driven by the fact that e-commerce, particularly in India and China, has helped serve as a bridge between what people want and what people can get offline. This is especially true for those who live outside major urban areas.

2014-06-21 What Are Your Chances? by Robert Isbitts of Sungarden Investment Research

Today’s blog is an excerpt from our whitepaper, “The Sungarden Study” which addresses the retirement income crisis, standard solutions, and offers a recommended alternative to traditional approaches. To request a copy of the study, please use the “Contact Us” tab at .

2014-06-21 Weekly Economic Commentary by Carl Tannenbaum, Asha Bangalore of Northern Trust

The Bank of England changes course; U.S. inflation is rising, but the Fed seems unconcerned; The situation in Iraq creates additional uncertainty around oil prices.

2014-06-21 Ah, the Power of Mean Reversion. by Frank of U.S. Global Investors

The chatter this week has been gold. The precious metal flew up $45 an ounce on Thursday, surprising investors, the media and markets alike.

2014-06-20 A Brief Review of Year-to-Date Gold/Currency Performance by Ade Odunsi of AdvisorShares

As a brief primer on how the performance numbers are calculated, we note firstly that all figures shown here are expressed in US dollar terms.

2014-06-20 June Municipal Market Commentary by Team of SMC Fixed Income Management

In order to gauge the potential impact of an interest rate hike on a fixed income portfolio’s performance, not only does the amount of the rate move have to be ascertained, but the timing and duration must also be quantified. In summary, investors should not necessarily jump to the conclusion that rising interest rates automatically result in negative total returns.

2014-06-20 Volatility Continues To Grind Lower by Team of GaveKal Capital

Many investors, including ourselves, look at the CBOE VIX to measure market volatility. Over the past few days the VIX has made multi-year lows and is back at levels last seen in 2006-2007.

2014-06-20 Global Economic Perspective: June by Franklin Templeton Fixed Income Group of Franklin Templeton Investments

With 10-year US Treasury yields dropping below 2.5% at one point during early June in spite of improving forward economic indicators, the US bond market has continued to send out confusing signals, in our view. Purchasing manager indexes have remained well over the 50 mark that separates expansion from contraction for many months, consumer demand has remained relatively buoyant, and nonfarm payrolls show job creation running at over 200,000 per month for 13 of the 21 months to May 2014.

2014-06-20 Turkey Is the Big Winner Following the Crisis in Ukraine by Frank Holmes of U.S. Global Investors

Russia’s annexation of the Crimean Peninsula and the possibility of further action taken in Ukraine and other former Soviet Bloc nations have led many investors to wonder, understandably so, what impact the crisis has had on investment opportunities in Eastern Europe. To unravel these concerns and more, U.S. Global’s Director of Research John Derrick caught up with Gavin Graham of VoiceAmerica’s “Emerging and Frontier Markets Investing” program.

2014-06-20 Mexico’s Road to Reform by Mark Mobius of Franklin Templeton Investments

Many investors had high hopes for Mexico’s market this year given an improving global economic outlook and a slate of planned domestic reforms, but some of the enthusiasm seems to have faded and economic growth has been subdued there year-to-date. I have faith in Mexico’s future, even though there are likely to be a few short-term bumps as Mexico’s reform efforts continue to be implemented—and some challenged.

2014-06-20 Japan: Time to Give the Land of Falling Stocks Another Look? by Russ Koesterich of BlackRock

So far, 2014 has been the year of the falling stocks in Japan. But according to Russ, Japan still stands out as one of the few potential bargains in the developed world. He explains.

2014-06-20 Attractions of a "Walled Garden" by Vivek Tanneeru of Matthews Asia

Developments in free trade and a nurturing of open policies with relatively few barriers have helped Asia prosper for several decades now. But a restrictive “walled garden” environment, with tightly regulated market access, has nurtured China’s Internet sector and helped its firms dominate in such areas as online search, games, news, e-commerce, social networking and videos. This week Vivek Tanneeru explores a study in contrasts between the Internet sectors of China and India, the world’s two most populous nations.

2014-06-20 A Contrarian’s View of Value: Pharmaceuticals by Kevin Holt of Invesco Blog

The pharmaceuticals industry is in the midst of a renaissance. Patent expiration concerns, pipeline disappointments and setbacks, and a highly uncertain regulatory backdrop have forced managements to rethink the way they have historically conducted business. In this environment, certain companies stand out to us as deep value opportunities — businesses whose stock prices don’t reflect our view of their long-term potential.

2014-06-19 Mexico’s Breakout Moment? by Mohamed El-Erian of Project Syndicate

Mexico has a good chance to realize its impressive structural-reform agenda. Doing so would give the rest of the world an important example of how such programs can be designed, implemented, and, most important, sustained until a critical mass of revitalized sectors – and thus faster growth and greater prosperity – is achieved.

2014-06-19 Designing Balanced DC Menus: Considering Inflation-Hedging Strategies???? by Stacy Schaus, Ying Gao of PIMCO

Inflation-hedging strategies are fundamental to DC investment lineups and participants’ need to build and preserve purchasing power in retirement. Plan sponsors should evaluate these assets separately and in combination before adding them to core lineups and target-date strategies. Selected assets or blends should be designed to deliver the primary benefits of inflation responsiveness, diversification relative to stocks, volatility reduction and downside risk mitigation.

2014-06-19 The Fed Continues Tapering; Tightening Still Seems Far Off by Team of Northern Trust

At its June meeting, the Federal Open Market Committee (FOMC) extended its predictable string of asset purchase reductions. Most of the attention was trained on an updated set of forecasts from the Fed that offers some clues to the future path of American monetary policy.

2014-06-19 American Allure by Scott Minerd of Guggenheim Partners

The American economy is looking stronger, and with Europe improving and China working through its problems, the outlook for U.S. stocks and bonds looks positive heading into summer.

2014-06-19 Draghi Hits Savers To Salvage Faux Recovery by John Browne of Euro Pacific Capital

On June 5th, Mario Draghi, President of the European Central Bank (ECB), announced a package of measures, including a policy of negative interest rates, aimed at encouraging or even forcing Eurozone banks to increase their lending to businesses.Although previously imposed by Swiss banks on their depositors, this will be the first time that a central bank has charged negative interest rates.

2014-06-19 The Euro Goes Negative by Dickson Buchanan Jr. of Euro Pacific Precious Metals

The European Central Bank's (ECB) decision to charge a negative interest on overnight deposits is not going to lead to a higher targeted inflation rate, despite ECB President Mario Draghi's insistence that it will. Like all cases of central planning, this decision will have unintended and costly consequences - some of which are already starting to play out. In this particular case, instead of stimulating business lending or higher prices, the decision will only stimulate the increased buying of insolvent government debt - leading us all one step closer to the economy's eventual unravelling.

2014-06-19 Why the Middle East Matters: Oil Prices and the U.S. Economy by Brad McMillan of Commonwealth Financial Network

With rising turmoil in two major oil-producing states, Iraq and Iran, the world faces an increase in oil prices—and the consequent economic damage. Fortunately, the U.S. is much better positioned to ride out the storm than it has been in the past.

2014-06-19 Finding Opportunity in Chinese Reforms by Robert McConnaughey of Columbia Management

I spent last week in China, meeting with corporate management teams, government officials and investors in the Chinese markets. One of my motivations for making the trip was to get a better sense of the speed and scope of government reforms. It was a fascinating week, but I can’t say that I came away with sweeping, definitive clarity.

2014-06-18 Outlook on the US Dollar, Currencies & Markets: Look Out Below! by Axel Merk of Merk Investments

The FIFA World Cup and market predictions have in common that we are tempted to create a world of make-believe when it comes to predicting outcomes. While others ponder about the meaning of a round ball, we’ll focus on the implications of a make-believe world comprised of ever-higher asset prices. Our caution: look out below!

2014-06-18 Structure Matters Featuring Alison duPont by (Article)

Research shows more advisors recommend CEFs but see a need for more understanding of the CEF structure, says Alison duPont of Aberdeen Asset Management.

2014-06-18 Getting in Gear for The New Neutral – What Does It Mean for Investors? by William Benz of PIMCO

Smart beta is increasingly important when returns are likely to fall short of what most investors need and expect. Active managers can use multiple tools to help generate higher returns. With outcome-oriented strategies, investors can align their portfolios toward meeting specific risk and return objectives. Investors with more aggressive income or return needs may benefit from bespoke, multi-asset solutions. ?

2014-06-18 Hedged High Yield by Heather Rupp of AdvisorShares

A strategy that we have seen emerge over the past year within the high yield market has been “hedged high yield,” most recently with iShares rolling out an product last month that uses their passive, index-based HYG fund as the high yield component. The gist of the hedged high yield strategy is to go long high yield bonds and short Treasuries (or Treasury futures). The basic premise is that the strategy will hedge interest rate risk, with any bond pricing decline due to rising rates being offset with the short in Treasuries.

2014-06-18 Euro-Sterling Credit: Yield and Spread Still Appeal by Ketish Pothalingam of PIMCO

Framed by ongoing renormalisation in Europe and stronger UK growth, euro-sterling investment grade credit markets are in a favourable part of their respective cycles as corporates continue to deleverage, default rates are expected to remain low ahead and market liquidity has improved across Europe. We believe the sterling credit market provides a more balanced credit market and offers investors the opportunity for better total carry versus euro and global investment grade credit markets.

2014-06-18 United Technologies: Uniquely Positioned to Capitalize on the Future by Brad Stauffer of Diamond Hill Investments

While the financial performance of many industrial companies is at the mercy of the economic cycle, those with the ability to identify and exploit long-term opportunities are able to successfully navigate short-term cyclical volatility and reward shareholders over the course of multiple cycles. United Technologies Corp. (UTX) designs, builds, and supports complex and costly equipment with long life cycles, and its products (aircraft engines/components/systems, air conditioners, elevators, etc.) are critical components of large and expensive customer projects.

2014-06-18 Average Stock Is 8% Off 252-Day High and 31% Above 252-Day Low by Team of GaveKal Capital

While the MSCI World Index is just a smidge off it's all-time high, the average stock is about 8% below it's 252-day high. Recent history suggests that we will need a slight consolidation, either through price or time, in order to make way for further gains.

2014-06-18 On-the-Ground Perspective in Thailand by Dennis Lim of Franklin Templeton Investments

Thailand has been in the throes of political crisis over the past few months, leading to the imposition of martial law in May after months of protests and threats of violence between two opposing groups—the anti-government People’s Democratic Reform Committee (PDRC), known as the “yellow shirts,” and the pro-government United Front for Democracy against Dictation (UDD), known as the “red shirts.”

2014-06-18 Conflict in Iraq: What Rising Oil Prices Mean for the Economy & Investors by Russ Koesterich of BlackRock

For much of 2014, equities advanced despite disturbing world news headlines. However, that changed last week because there is a clear link between the events in Iraq and the global economy: energy prices. Russ explains, noting two investing implications of an energy price spike.

2014-06-18 Fed Outlook: Playing It Close to the Vest by Scott Brown of Raymond James

The Federal Open Market Committee will meet this week to set monetary policy. The FOMC is widely expected to further taper the monthly pace of asset purchases (not “on a preset path,” but continuing “in measured steps”). The bigger question is when the Fed will begin to raise short-term interest rates. The correct answer is “it depends.” Fed officials are currently debating the order of steps to be taken as they begin to normalize monetary policy.

2014-06-18 Bizarro World by Jeffrey Saut of Raymond James

I feel like I am living in Bizarro World. First named "Bizarro World" in DC Comic books, the term has come to mean a situation or setting that is weirdly inverted or opposite of expectations. I mean we’ve had the ATF’s Fast & Furious where we sold guns to Mexican smugglers. The NSA is spying on us. The IRS is using its power to target select groups and now the IRS claims it has lost 28 months of Lois Lerner’s emails. Benghazi. The Department of Justice going after the Associated Press and Rosengate.

2014-06-18 One Step Closer: Public Sector Taking Deleveraging Baton from Private Sector by Liz Ann Sonders of Charles Schwab

The budget deficit has plunged; but government debt remains extraordinarily high. Private sector deleveraging began alongside the financial crisis; and may be largely in its finale. Objective measures of household/consumer stress have come down markedly.

2014-06-17 Latin American Update by Nick Cowley (Article)

Nick Cowley, Investment Manager Global Emerging Markets Equities, recaps the rollercoaster ride that Latin American equities have been on year to date led by currency volatility and rotations in sentiment in Brazil and Mexico. Nick discusses the clear turn of sentiment that occurred in March when Brazilian shares rallied sharply driven by the "hope" that current leadership will change in Brazil during the October elections to a more pro-business friendly candidate similar to the changes made in India.

2014-06-17 Gundlach: A Big Moment for the Economy and the Markets by Robert Huebscher (Article)

The benchmark 10-year Treasury bond is an attractive investment, according to Jeffrey Gundlach, although its yield is likely to stay between 2.2% and 2.8% for the remainder of the year. Despite that narrow range, Gundlach foresees pivots in other parts of the investment landscape.

2014-06-17 Retirement Income Strategies: How to Improve on the 4% Rule by Joe Tomlinson (Article)

In the past few years, the 4% rule has been challenged by those who claim its premise of 4% inflation-adjusted withdrawals is too optimistic under today's market conditions. Others assert that more sophisticated approaches will yield better-than-4% results. I'll evaluate two alternatives - economic utility maximization and required minimum distributions - and also discuss the practical implications for advisors.

2014-06-17 A Simple Explanation for DALBAR's Misleading Results by Michael Edesess, Kwok L. Tsui, Carol Fabbri, and George Peacock (Article)

For a number of years, DALBAR has been publishing a report that purports to show that investors make bad decisions and, as a result, their investments underperform the market by several percentage points. It has captured headlines for years, perpetuating the myth that individual investors invest poorly, and therefore they do much worse than the market average. There's just one thing, the DALBAR result is wrong.

2014-06-17 Stiglitz: Europe's View on Inequality by Marianne Brunet (Article)

When you approach a crowd conversing over coffee at an economics conference, you don't normally expect to hear them giddily saying: "He's absolutely adorable! Adorable, and so sweet." But at a recent economics conference in Toulouse, France, participants were raving about Joseph Stiglitz like he was a movie star.

2014-06-17 Meditate Your Way to Happiness by Daniel Solin (Article)

Here is how I increased my level of happiness in my daily life.

2014-06-17 Seven Tips for Delivering Bad News by Megan Elliot (Article)

You can better communicate bad news to clients by keeping the following seven tips in mind.

2014-06-17 When Delegating Leads to More Stress by Beverly Flaxington (Article)

I have been trying to delegate more of human-resources responsibilities to my operations manager. However, my operations manager has made two poor hires in the last six months. I can't delegate if I can't ensure that things are done well. I'm inclined to take back these responsibilities unless you tell me otherwise.

2014-06-17 The Four Bureaucratic Horsemen of GM's Apocalypse by Mariko Gordon (Article)

Bureaucracy is more than just an annoyance; in the case of auto manufacturing, too much of it can cost lives. Today's article takes a look at GM's recently revealed internal bungling and offers four suggestions for avoiding these same types of errors in the running of your business or team.

2014-06-17 Separating Risk from Reality by Zachary Karabell of Envestnet

Unless the global financial system implodes or panic engulfs the system, investments such as high-yield bonds and emerging market debt may be less risky than many believe.

2014-06-17 Oil Spikes on Iraqi Strife by Chris Maxey, Ryan Davis of Fortigent

Of the many global macroeconomic concerns of the past few years, oil has curiously fallen down the list in terms of major areas of investor focus. After recovering in the wake of the financial crisis, the commodity has generally been range bound between $100 and $120 a barrel. Newfound supply of natural gas in the United States has also eased concern about the domestic economy’s reliance on oil imports from the Middle East.

2014-06-17 Scaling Market Peaks by David Wismer of Flexible Plan Investments

In honor of Father’s Day this past Sunday, I wanted to reminisce on an activity I enjoyed with my father.

2014-06-17 Boko Haram by Kaisa Stucke and Bill O'Grady of Confluence Investment Management

On April 14, the Nigerian terrorist group Boko Haram kidnapped 276 girls from their school in the town of Chibok, Nigeria. Investor interest in African economies has been increasing over recent years, piquing an interest in the continent’s rising economic and demographic power, Nigeria. This week, we will take a look at the country of Nigeria, including its history and economy. We will then describe the evolution of the terrorist group Boko Haram and its strategic goals and leadership. We will conclude with items of importance when investing in Africa, in general, and Nigeria, specifical

2014-06-17 I Love Technology, but I Love LaFawnduh More by William Smead of Smead Capital Management

The first time I saw the movie, Napoleon Dynamite, I walked out of the theater before the final wedding scene. This caused me to miss Napoleon’s brother Kip singing "Always and Forever" to his new bride, LaFawnduh. The key line in the song was, "I love technology, but not as much as you, you see!" Kip found LaFawnduh "in a chat room," which indebted him to technology.

2014-06-17 Housing Starts Stuck At 1 Million by Team of GaveKal Capital

US housing starts for May came in below consensus at 1,001K units vs expectations of 1,036K units. Housing starts are still about 9.5% higher than they were a year ago. Regionally, housing starts are strongest in the Midwest while in the Northeast, starts are actually 5% lower than they were a year ago. Building permits were also below expectations in May (991K vs 1,062K expected). Charts below.

2014-06-17 Long Term Parking by W. Ben Hunt of Salient Partners

Like the Soprano Family in 2002, the problem with the US economy in 2014 is not that there is too much private debt being created, but too little. The danger for US markets is not that there is some private debt bubble about to burst, but that markets have become disconnected from the natural cycle of debt and growth, a cycle which remains decidedly anemic.

2014-06-17 Unimaginable Human Tragedy On The Texas Border by Gary Halbert of Halbert Wealth Management

Thousands of illegal immigrants are flooding across the border into Texas and other border states every day, but two things distinguish this wave from earlier illegal immigration waves.

2014-06-16 Some Gold Indicators to Watch by Ade Odunsi of AdvisorShares

With recent sharp falls in the price volatility of a wide range of assets including gold and the markets’ apparent insensitivity to macroeconomic news, many gold investors have shifted focus to some of the more widely watched gold technical indicators to see if they provide insight into the future direction of the gold price. In this week’s short discussion piece we look at the Gold Forward Offered Rate (GOFO), the US inflation adjusted (real) interest rate and the Gold/S&P500 ratio.

2014-06-16 Will Higher Rates Threaten the UK Housing Market? by Team of GaveKal Capital

Following Mark Carney's warning on mortgage debt and rising interest rates in the UK earlier today, homebuilders and home improvement stocks have (not surprisingly) underperformed.

2014-06-16 Crosscurrents and Fatigue Cause a Slight Slump in Stocks by Robert Doll of Nuveen Asset Management

Favorable monetary policy and improving economic growth have remained steady, but investors appeared to focus on some of the negatives last week. Sentiment seemed to sour due to the rising turmoil in Iraq (and subsequent rise in oil prices), as well as House Majority Leader Eric Cantor’s primary defeat, which served to highlight a more partisan environment before the November elections. For the week, the S&P 500 Index declined 0.6%.

2014-06-16 Are Your Clients Meetings Like Visits to the Dentist? by Dan Richards (Article)

In their desire to give prudent advice, sometimes advisors fail to deliver the positive messages that clients need to stay motivated and on track. Worse yet, some advisors' approaches leave clients feeling that their next visit will be a chore.

2014-06-16 Weekly Market Update by Team of Castleton Partners

The grind toward higher Treasury yields—and June’s bearish momentum in interest rates—persisted through most of last week, only to reverse on Thursday with an escalation in geopolitical concerns, especially Iraq. After reaching a high of 2.70%, 10 year Treasury notes recovered on the selloff in risk assets and closed the week up only 1 basis point, at 2.60%.

2014-06-16 The Fed’s Role Amid a History of Violence by Kristina Hooper of Allianz Global Investors

The stock market has always been susceptible to sudden jolts spurred by unpredictable acts of violence. But the Fed’s been the shock absorber to cushion the blow and to repair fractured sentiment, says Kristina Hooper. Today’s crises are no different.

2014-06-16 Unconstrained Bond Investing in The New Neutral by Mohit Mittal, Saumil Parikh of PIMCO

At our recently concluded Secular Forum, PIMCO investment professionals from around the globe gathered in Newport Beach to discuss and debate the secular outlook for major world economies. With insight from guest speakers and new MBA/PhD hires, PIMCO coined the phrase The New Neutral to define its secular three- to five-year outlook for the world economies. In his most recent Investment Outlook, Bill Gross further elaborated on The New Neutral.

2014-06-16 China No Longer the Low Wage Capital of the World: Our Outlook for Chinese Growth is Below Consensus by Sponsored Content by Loomis Sayles (Article)

The labor dispute at the Yue Yuen factory in Guangdong Province illuminates broader labor issues in China. China is no longer the low-wage paradise it once was, and employees will continue to press for higher wages and better benefits. Rising wages should encourage consumer spending, but there is no quick fix for economic rebalancing. Our outlook for GDP growth is below consensus.

2014-06-16 Formula for Market Extremes by John Hussman of Hussman Funds

Market extremes generally share a common formula. One part reality is blended with one part misguided perception (typically extrapolating recent trends as if they are driven by some reliable and permanent mechanism), and often one part pure delusion (typically in the form of a colorful hallucination with elves, gnomes and dancing mushrooms all singing in harmony that reliable valuation measures no longer matter).

2014-06-14 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The World Cup begins amid a series of financial controversies; Is the honeymoon over for Japan's Abenomics program?; The last word on Thomas Piketty

2014-06-14 Where's Voldo? by Robert Isbitts of Sungarden Investment Research

When volatile markets come around, it is not the actual VIX level that is most important. Understanding of the way the rules of engagement for risk management and return strategies change (and they can change a lot), is the key. The difference between fearing volatile markets and capitalizing on them is, in our opinion, a key element to the long-term success of any investment strategy.

2014-06-14 The Good News In All The Bad Data by Adam Taggart of

We are at the rare moment in history, where probability is unusually high that a large move to the downside will happen in the financial markets in the relatively near future. This gives investors a degree of confidence in future price movement that they rarely enjoy. The importance of building dry powder and developing an actionable investment plan -- for before, during and after the coming price reset -- is of top priority:

2014-06-14 Stealthy, Silent…Sustainable? by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

US stocks should continue to move generally higher although activity may remain sluggish through the summer and the possibility of a correction is elevated as per both seasonal/election cycle tendencies and elevated optimistic sentiment. The U.S. economy should help support the market as signs are increasing that we may be entering the long-waited for self-sustaining expansion. The ECB's actions weren't game changing but are helpful and European equities look attractive, while we believe the worries over a Chinese slowdown are overblown.

2014-06-14 Gold Investors: Let This Cycle Be Your Guide by Frank Holmes of U.S. Global Investors

U.S. Global Investors recently welcomed Doug Peta, an economist from BCA research, to our offices. He presented some interesting research regarding the Fed Funds Rate Cycle, and in turn, what that research could mean for gold. I wanted to share points from his presentation, as well as our own in-house research, to help you understand the positivity we see for the precious metal looking towards 2015.

2014-06-14 Is Opportunity Bubbling in Oil Pricing? by Vadim Zlotnikov of AllianceBernstein

Longer-dated oil futures contracts have been on the rise so far in 2014, and we think there’s a good case to be made that they’ve got further to go. The potential for an upside oil-price surprise may point to investment opportunity.

2014-06-14 ECB Leaves the Door Open for Further Action by David Zahn of Franklin Templeton Investments

he European Central Bank (ECB) delivered a robust package of monetary policy measures on June 5 and promised more to come if needed to help stave off deflation and support the eurozone’s fragile economic recovery. Among the moves announced were interest rate cuts, including a negative interest rate on excess deposits that banks hold with the ECB, and new facilities to support bank lending to small businesses. We asked David Zahn, portfolio manager for the Franklin Global Government Bond Fund, for his thoughts on what these latest measures could mean for investors.

2014-06-14 Who’s Afraid of Low, Low Rates? by James T. Tierney, Jr. of AllianceBernstein

Falling yields on Treasuries are often seen as a signal of a weakening economy that could undermine stocks. We think there are other explanations that don’t threaten the outlook for equities.

2014-06-14 The Age of Transformation by John Mauldin of Mauldin Economics

Today I offer some musings on what I’ve come to think of as the Age of Transformation (which I have been thinking about a lot while in Tuscany). I believe there are multiple and rapidly accelerating changes happening simultaneously (if you can think of 10 years as simultaneously) that are going to transform our social structures, our investment portfolios, and our personal futures. We have had such transformations in the past. The rise of the nation state, the steam engine, electricity, the advent of the social safety net, the personal computer, the internet, and the collapse of communis

2014-06-13 Taking A “FUN” Look At Kimberly-Clark by Team of F.A.S.T. Graphs

Kimberly-Clark is a storied company and often a reasonable investment opportunity based on ordinary metrics. Frequently investors view these few basic metrics and come to an investment decision. With this article we would like to highlight additional fundamental data on this specific company that that might be useful.

2014-06-13 Trading the Last Third of a Move by Scott Minerd of Guggenheim Partners

When bull markets mature, investors fear a coming crisis and today there are plenty of candidates from Europe to China to Thailand. Still, some of the best profits may lie ahead.

2014-06-13 New Faces at the Federal Reserve by Craig Elder of Robert W. Baird

The Federal Open Market Committee (FOMC) is the monetary policymaking body of the Federal Reserve System. This article provides a behind the scenes look at recent changes in the composition of FOMC voters, characterizing them as a dove, focused more on higher employment, or a hawk , concerned more with the central bank’s inflation targets. One of the implications from this analysis is that the Fed will be more reluctant to raise interest rates next year than most people think.

2014-06-13 Debt is No Salvation by Peter Schiff of Euro Pacific Capital

Thus far 2014 has been a fertile year for really stupid economic ideas. But of all the half-baked doozies that have come down the pike (the perils of "lowflation," Thomas Piketty's claims about capitalism creating poverty, and President Obama's "pay as you earn" solution to student debt), an idea hatched last week by CNBC's reliably ridiculous Steve Liesman may in fact take the cake.

2014-06-13 German Defense: Spending Spree? by Team of GaveKal Capital

A Bloomberg article today highlighted the potential need for Germany to invest more in its defenses, in light of recent geopolitical instability. As a percent of GDP, defense spending has been falling since the early 1990's. However, if we look at absolute spending levels, yearly totals have recently matched or even exceeded those reached more than 20 years ago.

2014-06-13 South Africa Strike Boosts Platinum Prices, Opens Opportunity for American Producer by Frank Holmes of U.S. Global Investors

All eyes are on South Africa, where a labor strike, now in its fifth month, has brought a halt to the production of platinum and palladium. As a result, platinum prices have inched up 8.25 percent this year to just under $1,500 an ounce, while palladium prices have surged 19.28 percent to over $850 an ounce, a three-year high.

2014-06-13 ECB Leaves the Door Open for Further Action by David Zahn of Franklin Templeton Investments

The European Central Bank (ECB) delivered a robust package of monetary policy measures on June 5 and promised more to come if needed to help stave off deflation and support the eurozone’s fragile economic recovery. Among the moves announced were interest rate cuts, including a negative interest rate on excess deposits that banks hold with the ECB, and new facilities to support bank lending to small businesses. We asked David Zahn, portfolio manager for the Franklin Global Government Bond Fund, for his thoughts on what these latest measures could mean for investors.

2014-06-13 A Closer Look at Innovative Opportunities by Zachary Shafran of Ivy Investment Management Company

Lately, concerns have been on the rise regarding technology stocks and their growth outlook. We’d like to provide our thoughts on the current market environment, our outlook, and as a result, how the Fund is positioned.

2014-06-13 A Contrarian’s View of Value: Energy by Kevin Holt of Invesco Blog

This is the second in a three-part series on sector opportunities as seen by a contrarian value investor — Senior Portfolio Manager Kevin Holt. The previous post discussed financials.

2014-06-13 When is it Time to Sell: A WWE Case Study by Jay Kaplan of The Royce Funds

As disciplined, contrarian investors, our take on a stock is often at odds with Wall Street's consensus. Portfolio Manager and Principal Jay Kaplan explains why we carefully assess the value of our holdings and why discipline and conviction are paramount to both buy and sell decisions.

2014-06-13 Is the European Economy Turning Japanese by PJ Grzywacz of CMG Capital Management Group

Turning Japanese in today’s macroeconomic environment means that your country is at risk of deflation which can turn into a 20 year battle, like in Japan.

2014-06-13 Is China Still Competitive? by Andy Rothman of Matthews Asia

Investment Strategist Andy Rothman recently moved to San Francisco from Shanghai, and has experienced a bit of sticker shock. This week he reflects upon China's ability to remain competitive. What does a visit to his favorite neighborhood noodle shop in China reveal about the country's macroeconomy?

2014-06-12 Central Banks Chart a Course for Overheating by Scott Minerd of Guggenheim Partners

When bull markets mature, investors fear a coming crisis. Today there are plenty of candidates from Europe to China to Thailand. But bull markets climb a wall of worry and there are reasons now not to expect a looming crisis.

2014-06-12 An Intriguing Six Point Three by Zach Pandl of Columbia Management

The latest jobs report may look pretty bland on the surface, but I can assure you that it will generate plenty of intrigue among close observers of the Fed. After falling sharply in April, the unemployment rate held at 6.3%, in contrast to expectations that it would partially reverse course.

2014-06-12 Midterm Election Update by Andy Friedman of The Washington Update

With many of the state primaries now behind us, I’m writing to update my March white paper on the midterm elections.

2014-06-12 Many Moving Parts by Scott Brown of Raymond James

The U.S. economy contracted in the first quarter, but it appears very unlikely that we’ve entered a recession. Weather disruptions and the late Easter have made it difficult to gauge the underlying trends in the economic data, but a significant second quarter rebound appears to be baked in. Still, taking the first two quarters together, growth in the first half of the year is likely to be disappointing relative to earlier expectations.

2014-06-12 Everybody’s Unhappy?! by Jeffrey Saut of Raymond James

In Last Friday’s Morning Tack I had this to say, “While there are no current major negatives from my indicators, this does indeed feel like the end of a trading move and not the beginning of another huge leg to the upside.” What causes such inflection points is when the folks that have doubted the rally finally can’t stand it any more and they throw in the towel and buy stocks.

2014-06-12 EM Debt Seems Risky by Richard Bernstein of Richard Bernstein Advisors

At RBA, we search for gaps between perception and reality, and this seems to be the case for emerging market debt. Investors have been lured to these securities by their higher yields, yet the underlying economic and currency fundamentals are deteriorating without commensurate widening of spreads.

2014-06-12 A Quarter Century of Emerging-Markets Investing by Mark Mobius of Franklin Templeton Investments

At one time or another, every country could have been classified as “emerging.” Back in the 1800s, the Western part of the United States was called the “new frontier.” Investors purchasing farmland there were likely to consider it a highly speculative venture putting stakes in such a rugged and wild place.

2014-06-12 Digging Into Dividends - Who Actually Pays Dividends by Team of GaveKal Capital

Q: Which sector in the MSCI World Index has the highest percentage of companies paying a dividend? A: No, it's not your "bond proxy" sectors like Telecom or Utilities. No, it's also not coming from the financial sector. The answer,surprisingly, is the Consumer Staples sector.

2014-06-11 The US Economy – The Good, The Bad & The Ugly by Gary Halbert of Halbert Wealth Management

As is true more often than not, there are mixed signals in the economy. There are indeed some “green shoots” emerging that suggest the economy is finally gaining some momentum. Yet there are also continued troubling signs that, while not warning of an impending recession, suggest that we could be stuck in a structural period of continued below-trend growth.

2014-06-11 I'd Choose Emerging Markets, Wouldn't You? by Ryan Larson of Research Affiliates

There’s a lot of negativity about emerging market stocks—so it makes sense for long-term, value-oriented investors to rebalance into the asset class. Here’s why a systematically contrarian strategy like fundamentally weighted indexing might outperform.

2014-06-11 Is Low Volatility Signaling a Market Top? by Mark Ungewitter of Charter Trust Company

We keep hearing that today’s near-record-low volatility is signaling an imminent market top. To test this proposition, we examined implied volatility back to 1986 using the VXO index. (VXO behaves similarly to VIX, with the advantage of a longer track record.)

2014-06-11 Technical Checkup Of MSCI World Regions by Team of GaveKal Capital

There are many ways to measure the intensity of moves in the equity market. One method we use is to measure the net percent of stocks up over a certain time period.

2014-06-11 Disturbing Headlines, Strong Equity Markets: Why the Disconnect? by Russ Koesterich of BlackRock

It’s hard not to see some disconnect between recent disturbing world news headlines and the market’s quiet advance. Russ examines why this disconnect is rational in the short term, but not necessarily in the long term, and gives three rules of thumb for how investors can potentially respond.

2014-06-11 Muni Investors Should Watch Both Ends of the Curve by Guy Davidson of AllianceBernstein

In early 2013, we urged investors to take a hard look at the interest-rate risk in their bond portfolios. If they didn’t do it then, they have a chance to do it now.

2014-06-11 Is Inequality Caused by Capitalism or Statism? by John Browne of Euro Pacific Capital

The French economist Thomas Piketty has achieved worldwide fame by promoting a thesis that capitalism is the cause of growing economic inequality. Unfortunately, he is partially right. However, the important distinction missed by Piketty and all of his supporters is that state capitalism, not free market capitalism, has reigned supreme in recent decades in the world's leading democracies.

2014-06-11 US Regional Banks’ Attractiveness Jumps in June by Erik Kobayashi-Solomon of YCharts, Inc.

Our Sector-level heat map looks much the same as it did last month, save for the fact that the shade of green has deepened for the Utilities and Financial Services sectors—indicating a larger number of companies screening undervalued according to YCharts Value Score.

2014-06-10 Capturing Value Worldwide with Thomas White International by (Article)

At Thomas White, our investing performance goal is straightforward: to outperform our benchmarks in the long-term and especially during market declines. We feel the surest path to accomplish these goals is to become an exceptional research organization. To meet these objectives, our professionals have come to understand corporations, investor behavior and portfolio design better than our peers, as we continue to expand our global research and product capabilities.

2014-06-10 FlexShares GUNR ETF by Shundrawn Thomas (Article)

Advisors have adopted natural resources and commodities to help diversify client portfolios, but there are both short term and longer term trends at work that impact this decision. In this video, we explore how FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR) can be used with client portfolios, and how a more balanced approach to this space through equities is resonating with financial advisors.

2014-06-10 A Test for Small-Cap and Value Stock Investors by Robert Huebscher (Article)

Readers of this publication are well versed in the findings of the 1992 Fama-French paper, which documented the outperformance of small-capitalization and value stocks. But few are aware of these two sentences, which appeared in the conclusion of that paper

2014-06-10 How Hedge Funds Destroy Value by Robert Huebscher (Article)

All you really need to know about hedge fund performance is evident from the fact that Simon Lack could not produce the pie chart below in 2012. The chart shows how hedge-fund returns have been divided among manager fees, fund-of-funds fees and investor profits.

2014-06-10 A Single Word that Improves Results by Dan Richards (Article)

Today's article focuses on just one word that can improve outcomes in conversations with existing and prospective clients, as well as team members and even family members.

2014-06-10 Six Questions for the Future of the Planning Profession by Bob Veres (Article)

A few weeks ago, I asked for your help as we created the scenario learning session for the Insider's Forum conference in September. We're going to map out some possible futures that you can prepare for, using as raw material the crowdsourced thoughts and ideas that you provide to us. Here are six questions that have been raised and addressed about the future in the first round of our exercise.

2014-06-10 How to Increase Your Happiness by Dan Solin (Article)

Many people are unhappy in both their personal lives and their work. If you are an investment advisor always striving for the elusive and ever-changing goal of acquiring more assets under management, I recommend instead focusing on how to increase your level of happiness.

2014-06-10 Survey Best Practices, Part 1: Designing Your Survey by Elizabeth Snyder (Article)

If you are not accustomed to regularly surveying your clients, here are some basic guidelines to consider when it comes to survey design, layout and structure.

2014-06-10 Is it Right to Bash a Previous Firm? by Beverly Flaxington (Article)

My partner and I left our previous firm to start an independent advisory practice. We had issues with its business approaches and even some ethical concerns. Part of me thinks we should let our clients know of the firm's nefarious ways, but part of me thinks that is behind us and we should look forward.

2014-06-10 Five Steps to Creating an Effective Community by Tony DiLeonardi (Article)

You can create intimacy by building purpose and community in your life and in your business, and that intimacy can help you retain lifelong and multigenerational clients. Start by going face-to-face with the most important people in your life.

2014-06-10 A taste of what's going on in Japan by Vincent Musumeci (Article)

Vincent Musumeci, Portfolio Manager of Japanese Equities, provides a taste of what's going on in Japan and comments that it is a very exciting environment. Vincent notes he remains unwaveringly bullish on Japan while companies are delivering very strong earnings - and he sees a notable pickup in buybacks and dividend payouts as companies become more aware of their cost of capital.

2014-06-10 What Should I Look for in Choosing a 529 Plan? by Donald Sorota of Altair Advisers

Enrolling in a 529 college savings plan is one of the shrewdest financial moves that parents or grandparents can make. These plans offer significant federal income tax breaks, some- times state tax benefits as well and a low-maintenance, largely self-controlled way to save for college.

2014-06-10 Center for American Progress (CAP) on Fee Disclosure by Brian Donohue of October Three Consulting

On April 11, 2014 the Center for American Progress (CAP) released a report "Fixing the Drain on Retirement Savings – How Retirement Fees Are Straining the Middle Class and What We Can Do about Them."

2014-06-10 Far Above Cayuga’s Waters by David Wismer of Flexible Plan Investments

Graduation season is in a bit of a hiatus, with most colleges now having completed their commencement ceremonies and high school commencements are in full swing.

2014-06-10 The Crossroad by Kendall Anderson of Anderson Griggs

As summer peeks around the corner, a machine with two wheels is silently calling me, telling me that a new adventure awaits. This machine stirs up memories of past adventures, which builds in me a desire to head out to places unknown. I know that before summer ends I will answer its call, but for now I will just have to relive a few moments from trips past.

2014-06-10 The Orphaned Bull Market by William Smead of Smead Capital Management

Howard Gold is an inquisitive writer for and we think has done us all a great favor in his latest column titled, “Not even a bull market can interest people in stocks.” He points out via the chart below that—despite a huge rebound the last five years in US common stocks—equity holdings as a percentage of global investable assets just climbed to levels only seen at major stock market low points. Relative to the past 50 years, this stock market has been abandoned and orphaned even as it had made participants wealthy.

2014-06-10 The Central Bank Divide: 3 Implications for Investors by Russ Koesterich of BlackRock

Major central banks are no longer moving in lockstep. While the Fed is pulling back, other central banks are maintaining very easy monetary policy. Russ explains three implications this new dynamic has for investors.

2014-06-10 Long-Term Opportunity in Tech Sector Volatility by Matthew Moberg of Franklin Templeton Investments

The technology sector seems to have again demonstrated just how frustrating markets can be. An investor favorite last year, the sector has been volatile in the first part of 2014, leading some to believe a tech bubble could be brewing—or perhaps a slow leak has already begun. Matthew Moberg, portfolio manager for Franklin DynaTech Fund, says he doesn’t pay much attention to semantics or speculation.

2014-06-10 Stocks' Correlation to Real Interest Rates was the Most Significant Factor Driving Returns Last Week by Team of GaveKal Capital

Real interest rates as measured by TIPS yields proved to be the most significant factor driving stock prices last week while other macro factors such as stocks' correlation to the Japanese yen and euro were also important. It is also noteworthy that the beta factor is making its way back to the top of the list after having been insignificant over the last one and three months. Below we show the top ten factors driving returns for each region.

2014-06-10 The American Oil Weapon by Bill O'Grady of Confluence Investment Management

In this report, we will begin with a basic analysis of the oil markets. From there, we will examine Russia's economic dependence on energy and offer a historical analysis of Saudi Arabia's decisions in 1985 and 1997 to retake oil market share and the impact these choices had on the Soviet economy. Using this historical parallel, we will offer an example of how the U.S. could drive down oil prices in a bid to undermine Russia's economy.

2014-06-09 Bright Signs for the Economy and Equity Markets by Bob Doll of Nuveen Asset Management

The macro backdrop last week was positive for the markets. As expected, the ECB cut interest rates, highlighting the favorable global monetary policy backdrop. Closer to home, solid vehicle sales and a good May labor market report gave investors additional reasons to bid up stock prices. The S&P 500 Index advanced 1.4%, marking a third straight week of gains above 1% — the longest such streak since last September. Looking ahead, we believe the combination of an improving world economy, low levels of volatility and easy global monetary policy should continue to provide support for equ

2014-06-09 We Learn From History That We Do Not Learn From History by John P. Hussman of Hussman Funds

Market conditions presently match those that have repeatedly preceded either market crashes or extended losses approaching 50% or more. Such losses have not always occurred immediately, but they have typically been significant enough to wipe out years of prior market gains. Our present views are not built on the forecast that stocks must decline immediately, or that we won’t go through some additional discomfort if the market pushes to a higher peak. Still, a century of history strongly warns that whatever transitory gains the market achieves from present levels will be wiped out in spad

2014-06-09 Why are bond yields and volatility so low? by Carl Tannenbaum and Asha Bangalore of Northern Trust

This year’s mid-point review would not be terribly kind to me or to other forecasters. None of us foresaw a big U.S. economic contraction during the first quarter of the year, although we should have better times ahead (as long as the Polar Vortex doesn’t return). A more vexing surprise, however, has been the steep decline in U.S. Treasury yields and the persistently low market volatility during the year’s first half.

2014-06-09 May Jobs Report: 4 Key Takeaways by Kristina Hooper of Allianz Global Investors

Allianz Global Investors US Investment Strategist Kristina Hooper analyzes the May employment report, including what it means for monetary policy, markets and investors.

2014-06-09 Weekly Market Update by Team of Castleton Partners

Treasury yields rose sharply last week, with intermediate and long date bonds registering the sharpest price declines, as US equities again reached new highs. Friday’s eagerly anticipated May employment report came in line with market expectations, continuing to signal gradual improvement in the labor market. With +217,000 jobs created last month, May marked the first 4-month string of payroll reports over +200,000 since 1999.

2014-06-09 And That's The Week That Was... by Ron Brounes of Brounes & Associates

Let the summer partying begin. With the ECB alerting its Fed counterparts (and investors everywhere) that its policymakers will take whatever measures necessary to aid its economy and combat deflation, stocks again moved to record levels on key indexes and even the small-cappers recovered from the perpetual April slide and turned "in the black" for the year. The manufacturing and labor sectors appears to have put the winter storms behind them and even the consumer has shown signs of thawing out in time for the summer. Vacation anyone?

2014-06-09 Everybody’s Unhappy?! by Jeffrey Saut of Raymond James

If the equity markets don’t experience a sell-off this week, we can probably assume the SPX is in its final upside “blow-off” stage on a trading basis. In such a stage the markets make it seem unbearable to be in too much cash, or worse, totally out of the market. Blow-offs usually end with a parabolic peak and often with a buying climax. If you want to see what a buying climax looks like, go look at the “selling climax” at the March 2009 lows and turn the chart upside down. Longer-term, I continue to hold the belief we are in a secular bull market, but in the sho

2014-06-09 Jobs return to pre-recession peak by Ryan Davis and Brian Payne of Fortigent

Global equity markets cheered the European Central Bank’s (ECB) decision to lower rates and provide further monetary stimulus last week, as the DJIA and S&P 500 gained 1.2% and 1.3%, respectively. As one might imagine, notable outperformance came from Europe’s peripheral countries with Italy (MSCI Italy) and Spain (MSCI Spain) gaining 3.4% and 2.6%, respectively.

2014-06-08 Can Central Planners Revive China’s Economic Miracle? by John Mauldin of Mauldin Economics

We are going to try gamely to finish with China today, having left at least three or four letters worth of copy on the editing floor. There is just so much information and misinformation to cover. I’m going to turn it over to Worth and then follow up with a few final thoughts of my own.

2014-06-07 China Leads the World in Green Energy, Gaming and Gambling Markets by Frank Holmes of U.S. Global Investors

Last month, Xian Liang, co-portfolio manager of our China Region Fund (USCOX), attended the 19th CLSA China Forum in Beijing. There he and hundreds of other global attendees were given the opportunity to meet with representatives from Chinese corporations, some of which U.S. Global owns. Xian also managed to get a sense of how the nation’s recent changes in consumer behavior and governmental policy reforms might affect its investment outlook. Although China remains an emerging market, it has lately taken a number of considerable strides to position itself as one of the world’s most

2014-06-07 Long-Term Opportunity in Tech Sector Volatility by Matthew Moberg of Franklin Templeton Investments

The technology sector seems to have again demonstrated just how frustrating markets can be. An investor favorite last year, the sector has been volatile in the first part of 2014, leading some to believe a tech bubble could be brewing—or perhaps a slow leak has already begun. Matthew Moberg, portfolio manager for Franklin DynaTech Fund, says he doesn’t pay much attention to semantics or speculation. He’s busy looking for companies that he believes have staying power and growth potential beyond temporary trends. And, he says he’s using recent volatility as an opportunity

2014-06-07 Can a Tactical ETF Strategy be used as a Liquid Alternative? by David Garff of Accuvest Global Advisors

Can investors use a tactical allocator instead of an "alternative" strategy to benefit the balanced portfolio of a traditional investor?

2014-06-07 The Modern Portfolio Flat Earth Society by Vitaliy Katsenelson of Investment Management Associates

Math and physics are rooted in equations that spit out precise answers; vagueness there is dangerous — for the right reasons. That is why they are called exact sciences. Investing, despite being taught as an almost exact science, is far from it. It is a craft that falls somewhere between art and science.

2014-06-06 The 4% Non-Solution by Kenneth Rogoff of Project Syndicate

The idea of permanently raising inflation targets to 4%, first proposed by IMF chief economist Olivier Blanchard, has been endorsed by a number of other academics, including, most recently, Paul Krugman. Unfortunately, the problem of ensuring a smooth and convincing transition to a new target is perhaps insurmountable.

2014-06-06 Retail Apocalypse and Negative GDP Point to Unsustainable U.S. Stock Market by Dawn Bennett of Bennett Group Financial Services

Evidence continues to pile up that the next recession has already begun, and at the very least, Americans in the lower and middle income brackets are feeling it the most. The United States is running out of steam and is bogged down by trillions of dollars in debt, increased regulation, and fewer jobs. It’s like we are all trying to swim upstream in the middle of a biblical flood! The United States isn’t coming to an end but it is changing dramatically in front of our eyes.

2014-06-06 Emerging Markets: PR is on the Upswing by Nick Niziolek of Calamos Investments

Since March, the tide has turned, and there has been a strong reversal in both news flows from and equity flows into EMs. Headlines have transitioned from "Currency Crisis" to "Modi Wins," and Russian equities have moved above the levels seen since before the Ukraine crisis began. Moreover, we’ve identified several near-term catalysts that could further support the equity breakout that is underway. Only in EM investing could a military coup be viewed as a potentially beneficial catalyst….

2014-06-06 Ties that Bind by Patricia Huang of Matthews Asia

It's been almost three years since A-di first moved in with my relatives in Taiwan to work as a caretaker for my ailing grandmother. A college graduate from Indonesia with a reserved demeanor and an endearing smile, A-di, or Di Di as my family sometimes calls her, was found through an agency that places migrant workers in jobs abroad. Like her sister, a factory worker in Taiwan, she regularly sends a portion of her roughly US$550 monthly pay back home to her parents in West Java.

2014-06-06 The ECB finally acts and hopes for a good reaction by Carl Tannenbaum and Asha Bangalore of Northern Trust

Many have criticized the European Central Bank (ECB) for preferring words over action in recent months. So credit must be given to ECB President Mario Draghi and his colleagues for enacting a series of measures aimed at shaking the eurozone from its malaise. The question is whether yesterday’s decision will result in more credit given to eurozone borrowers.

2014-06-06 Snow Job by Peter Schiff of Euro Pacific Capital

Economists, investment analysts, and politicians have spent much of 2014 bemoaning the terrible economic effects of the winter of 2014. The cold and snow have been continuously blamed for the lackluster job market, disappointing retail sales, tepid business investment and, most notably, much slower than expected GDP growth. Given how optimistic many of these forecasters had been in the waning months of 2013, when the stock market was surging into record territory and the Fed had finally declared that the economy had outgrown the need for continued Quantitative Easing, the weather was an absolu

2014-06-06 ECRI Recession Watch: Weekly Update by Doug Short of

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 134.9, down from the previous week's adjusted 135.3. The WLI annualized growth indicator (WLIg) fell to 4.8 from 5.3. Last Friday (May 30th), ECRI posted a brief overview of post-recession GDP forecasts from the Fed's Open Market Committee and the less optimistic series from the Congressional Budget Office.

2014-06-06 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 134.9, down from the previous week's adjusted 135.3. The WLI annualized growth indicator (WLIg) fell to 4.8 from 5.3. Last Friday (May 30th), ECRI posted a brief overview of post-recession GDP forecasts from the Fed's Open Market Committee and the less optimistic series from the Congressional Budget Office.

2014-06-06 In T-Ball as in Life by Robert Isbitts of Sungarden Investment Research

I can’t help but notice a great number of similarities between people’s approach to their investment portfolios and the way baseball games are played. This is true, even at the T-ball level with four and five year olds, not major leaguers, running around.

2014-06-06 A Contrarian’s View of Value: Financials by Kevin Holt of Invesco Blog

In the wake of the Great Recession, and significant regulatory changes, investors are concerned that large banks may not be able to generate the type of profits that they have in the past. We don’t disagree with that assessment. However, we do disagree with the current equity valuations of the large banks — we believe the market has priced in a too-pessimistic view of profitability.

2014-06-05 The Investor Screwtape Letters by William Smead of Smead Capital Management

We at Smead Capital Management have been discussing some of the follies common to human nature and what we see as some pervasive trends in the investing world. These conversations got us imagining what C.S. Lewis’s, The Screwtape Letters, might sound like if they were applied to today’s investment environment. The satirical letters are written by an advice-giving bureaucrat in Hell named Screwtape, to his nephew Wormwood, a young demon who is learning how to lead humans astray. Taking some liberty with Lewis’s work, we present what we believe Screwtape might say if he were tr

2014-06-05 Q2 2014 Investment Letter by Sean Butson of DC Capital Management

• The S&P 500 is now more than 5 years into the bull market that started on March 9, 2009 • Historically, buying the S&P 500 at high valuations and low dividend yields has resulted in sub-par investment returns on average • The S&P 500 is currently overvalued based on 7 different metrics, implying that future long-term returns are likely to be disappointing • Overvaluation is not limited to the S&P 500, as a number of recent technology valuations are reminiscent of the late 1990s tech bubble • We believe a bear market within the next few years is likely

2014-06-05 Time (and Money) in a Cellphone by Bill Gross of PIMCO

Our modern age is becoming more virtual than physical, which I find increasingly depressing if only because I’ve failed to keep pace. I don’t even own a cellphone. Still, it doesn’t take a Boomer to observe that the reality outside as opposed to inside a computer or a cellphone should be the preferred experience. Scientists claim we are all just bits of information with billions of 1’s and 0’s, glued together to form a beating heart. Even so, I’m sticking with live chirping as opposed to Angry Birds for now. Virtual reality seems just a tad UNreal to me.

2014-06-05 Is Your Portfolio a House of Cards? by Axel Merk of Merk Investments

Politics and financial markets may both be resting on an increasingly unstable house of cards. The S&P 500 continues to hit new all time highs, while central banks try to enforce low volatility and financial stability and politicians demagogue in their quest for higher office. The one thing politicians throughout the world have in common is that they rarely ever blame themselves. They tend to diffuse responsibility or place blame on groups such as political opponents, the wealthy, or foreigners.

2014-06-05 Acta Non Verba by Scott Minerd of Guggenheim Partners

Now is the time for strong actions rather than words from the European Central Bank, but their actions could send more capital to the United States and push interest rates lower over the summer.

2014-06-05 Interpreting the bond rally from a multi-asset perspective by Jeffrey Knight of Columbia Management

If there’s one thing investors agreed upon at the beginning of this year, it was that bond yields were heading higher. Over the past few weeks, I have read any number of research reports attempting to understand the reasons for this unexpected rally. Several plausible explanations have been offered, including the growing probability of a policy rate cut by the European Central Bank (ECB).

2014-06-05 The Platinum Supply Shock by Peter Schiff of Euro Pacific Precious Metals

Even investors who typically eschew precious metals have been hard-pressed to ignore the platinum industry this year. The longest strike in South African history paired with surging Asian demand is set to push the metal back into a physical deficit in 2014 - and could have repercussions for years to come. While gold remains the most conservative choice for saving, the "industrial precious metal" platinum is a compelling investment for those, like me, who are bullish on global net economic growth.

2014-06-05 Investor sentiment: Looking inside the market’s mood swings by Jeff Hussey of Russell Investments

Jeff Hussey, global CIO, highlights why Russell Investments currently sees investor sentiment in a state of cautious optimism and explains how sentiment plays into Russell’s investing recommendations.

2014-06-04 Why Food Prices Are Soaring, Likely To Continue by Gary D. Halbert of Halbert Wealth Management

IN THIS ISSUE: 1. Consumer Food Prices Are Skyrocketing 2. 10 Fastest-Rising Food Prices at the Supermarket 3. California is in Big Trouble! So Are We All 4. Drought Monitor Chart For Continental US 5. Incurable Disease Threatens Florida Citrus Crop 6. Latin America Coffee Blight Sends Prices Skyward 7. “The Solution to High Prices is High Prices”

2014-06-04 Another kind of “Birdland?” by Jerry Wagner of Flexible Plan Investments

The market bulls have been maintaining their vigil. Stocks have soared over 100% since 2009, but now the bear looms above them.

2014-06-04 Schroders Multi-Asset Insights: What is the forward curve telling us about US Treasury yields? by Matthias Scheiber and Aymeric Forest of Schroder Investment Management

If central bank liquidity provision and the use of forward guidance has been dampening volatility, then its withdrawal over the coming 12 months could result in an increase in volatility. Arguably the recent flattening of the yield curve is a harbinger of this. Given the gradual path of the reduction in liquidity, this process of normalization could be extended. However, with the mean reverting nature of volatility, we believe it is currently cheap and will normalize upwards over the coming months towards its longer term average of 20. This is why we recommend adding actively managed volatilit

2014-06-04 Helping Clients Hedge Market Risk: Four Important Considerations by Roger Masi of Macro Risk Advisors

The S&P 500 was up 32% last year and recently reached a new all-time high. Since the March 2009 lows, the market is up 180%. Despite this impressive rally, both institutional and retail advisors must contemplate how to protect client portfolio wealth as many sources of uncertainty remain. The risk environment has changed over the past several years. Banks can create instability, government debt is no longer seen as risk free, the China growth miracle is in question, and Central Banks are actively influencing the prices of assets. This is not your father’s market.

2014-06-04 Obama Administration's new climate change rules by Andrew H. Friedman of The Washington Update

On Monday, the Obama Administration issued new proposed rules that would require states to reduce CO2 emissions from resident power plants. That evening, I joined CNBC’s Nightly Business report to discuss the likely impact of the regulations on climate change, jobs and the economy, and the upcoming elections.

2014-06-04 Weekly Market Update by James Welch of Castleton Partners

Treasury yields continued to decline to new lows over the last two weeks, with intermediate and long dated maturities reaching levels last seen in June 2013. With the ten year US Treasury note declining nearly twenty basis to 2.48%, all fixed income sectors produced strong monthly returns in May, adding further to impressive 2014 returns. On the economic front, the only release of note last week was the sharp—and surprisingly large—downward revision to first quarter GDP. The second estimate of 1Q GDP showed a decline of 1.0%, down from the previous figure of a 0.1% gain.

2014-06-04 Why should clients seek out investable benchmarks? by Jason M. Laurie of Altair Advisers

Benchmarks are fundamental measuring tools that gauge the relative performance of securities, investment managers and portfolios. They help answer the question, “How are my investments performing?” Yet despite their importance, they often have inherent shortcomings that can make them less than optimal for evaluating performance.

2014-06-04 European challenges and outlook by Matt Lloyd of Advisors Asset Management

The constant debate of leading and lagging indicators is one that spills over to the political components as well. The timing of demographic shifting, recent economic events, geopolitical tectonic shifts taking place globally and neo-creative monetary policy have all been pointing to voter sentiment evolving. We have seen this represented in Europe for some time and the recent European Parliament election saw more than sublime results.

2014-06-03 Emerging Markets: What countries are now attractive? by (Article)

While many emerging market countries are facing headwinds, many developing markets, such as South Korea, China, Taiwan, Poland and Mexico, are posing robust opportunities. See why Tom White feels that throwing these babies out with the bathwater may not be a wise idea.

2014-06-03 What's Wrong with Extreme Inequality? by Michael Edesess (Article)

It is common practice to use a single figure - GDP - as the definitive measure of progress. But does it really measure progress or wellbeing? In a recent book, The Great Escape: Health, Wealth, and the Origins of Inequality, Princeton economist Angus Deaton measures wellbeing on a multidimensional scale. Deaton turns a sharp focus on health, wealth and inequality in the distribution of those amenities. Some wealth inequality is inevitable and helps growth, he contends, but at extreme levels - which the U.S. may be approaching - it becomes counterproductive.

2014-06-03 The Pros and Cons of Target-Date Funds in the Accumulation Phase by Wade Pfau (Article)

Target-date funds are criticized for not being customized or tailored to individual situations. But this is unfair, as they are meant to serve as default investment options for individuals who are otherwise unwilling or unable to put in the effort to obtain a better result. Nonetheless, the debates around TDFs provide an opportunity for advisors to make clear how they can serve their clients.

2014-06-03 The Question that Gets Prospects to Act by Dan Richards (Article)

Today, prospects talk to multiple advisors before making a choice. Here's a simple question that will set you apart from your peers and increase your odds of winning new clients.

2014-06-03 The Sad State of Happiness by Daniel Solin (Article)

I have never met anyone who did not want to be happy. Yet few of us take concrete steps toward that goal.

2014-06-03 Coaching Employees toward More Effective Behaviors by Beverly Flaxington (Article)

One of my advisors is brusque and cuts clients off in mid-sentence sometimes. She doesn't follow my protocols. I am not ready to fire her. What else can I do to get her to model my behavior?

2014-06-03 Why You Have Way Too Much Invested In U.S. Stocks by Meb Faber (Article)

For U.S. investors, how many of your stocks are in the domestic market? Once you account for the fact that the U.S. is one of the more expensive markets around the globe, it could be a good time to rethink your stock allocation.

2014-06-03 The Value of a Secondary Call to Action by Sarah Scorgie (Article)

In today's technological world, email has become the easiest way to connect with potential clients. With Web-based email marketing services, it's easier than ever to communicate with leads - but are your calls to action making the most of your campaigns?

2014-06-03 Slow Ride: Housing’s Recovery Taking a Breather by Liz Ann Sonders of Charles Schwab

Key Points Housing's recovery has stalled courtesy of several headwinds. But it's less a driver of economic growth; and some trends could begin reversing. Long-term bears may be ignoring the (eventual) force of demographics.

2014-06-03 The US Housing Market's Darkening Data by Brian Pretti of

Unlike past housing price cycles, the current environment is being driven not by natural household formation, but by a central bank-fueled investment cycle where institutional and foreign capital are the largest influence on the marginal price. This is unknown territory for homebuyers and certainly unsustainable at today's price levels. Brian Pretti shows how price mean reversion is inevitable; and urges homeowners (both residents and investors) to take steps not be as vulnerable as they were in 2008.

2014-06-03 May 2014 Pension Finance Update by Brian Donohue of October Three Consulting

Pension sponsors treaded water in May, with both assets and liabilities edging up in tandem for both ‘model’ plans we track . Our traditional ‘Plan A’ remains down 5% during 2014, while the more conservative ‘Plan B’ is down 2% on the year.

2014-06-03 Beware of the Theme and a Dream by Brian Demain of Janus Capital Group

Mid-cap equities generally remain attractive, but momentum has driven up stocks tied to several hyper-growth industries. The bubble around these stocks began to pop in March, and we believe limiting exposure to those areas of the market will be critical to maximizing returns going forward.

2014-06-03 Address the triple threat of low yields, higher taxes and rising interest rates by Cynthia Clemson and Thomas Metzold of Eaton Vance

This year’s tax season was a rude awakening for many investors. For high earners especially, the tax rates on investment income have risen substantially. Increased taxes, combined with historically low yields and the prospect of higher interest rates eroding bond values, have a posed a triple threat for investors. But high-yield municipal bonds may offer a way to address these challenges.

2014-06-03 The High Cost of Equal Weighting by Engin Kose and Max Moroz of Research Affiliates

Equal-weight indices have two clear advantages: They are easy to understand, and they generally outperform cap-weight indices over the long term. Their drawbacks are less apparent. They have higher turnover due to rebalancing than other smart beta strategies, and that turnover includes buying and selling lower-liquidity stocks. Our market impact model demonstrates that, as global assets under management increase, implementation costs tend to rise faster in equal-weight than in fundamentally weighted strategies.

2014-06-03 Sticking With Stocks by Russ Koesterich of iShares Blog

Both stocks and bonds have rallied and are looking expensive. BlackRock Global Chief Investment Strategist Russ Koesterich suggests that investors need to look for relative value, which is why we still prefer stocks over bonds.

2014-06-03 Creating a Learning Society by Joseph E. Stiglitz of Project Syndicate

For more than two centuries, innovation has been a critical driver of the global economy, with most of the productivity gains stemming not from major discoveries, but from small, incremental changes. This suggests that we should focus on how societies learn, and what can be done to promote learning – including learning how to learn.

2014-06-03 Seek Secular Staying Power in Global Credit by Mark R. Kiesel of PIMCO

Secular Outlook Series: Mark Kiesel discusses long-term themes that underpin opportunities and risks in global credit markets.

2014-06-02 Market Peaks are a Process by John Hussman of Hussman Funds

Market peaks are a process, not an event or an instant. Investors should be thinking very seriously about the extent of potential market losses over the completion of the present market cycle. It is the wrong question to ask “where else am I going to put my money with short-term interest rates near zero?” The problem with that question is that it carries the implicit assumption that the expected return on stocks is even positive or adequate given the prospective risks.

2014-06-02 June Swoon Ahead? Maybe, But Not Because of Valuations by Russ Koesterich of BlackRock

Given the recent extraordinary performance of most equity markets, many investors are wondering whether the bull market has run its course. Russ explains why valuation alone doesn't signal an imminent correction.

2014-06-02 What Factor Drove The Market In May? by Team of GaveKal Capital

Of the 30 factors that we track, Price to Earnings ratio had the highest correlation to the market in May followed closely correlation to the Euro and 1-month change in sales estimate. For the past year, Price to Book ratio has the highest correlation (0.94).

2014-06-02 Can Japanese Stocks Defy Sluggish Exports? by Katsuaki Ogata of AllianceBernstein

As Japanese equities struggle to make headway this year after an explosive 2013, new questions are being asked about the economy’s direction. From an investor’s perspective, we think the sluggish export trend may be masking a more positive environment for stocks.

2014-06-02 Multi-Asset Investing: Is Now the Time for Emerging Market Equities? by Mihir Worah of PIMCO

Although emerging markets (EM) will continue to grow faster than developed markets (DM), we believe the difference may be lower than what has been seen over the last five years. Higher earnings yields in EM equities offer partial compensation for risks, but careful analysis is warranted to assess the true valuation differential. A modest allocation to EM equities may be warranted based on relative price-to-earnings multiples and our expectation that policy rates will stay lower for longer than markets expect, which makes higher-yielding EM assets more attractive.

2014-06-02 Thai Coup: Business as Usual by Paul Chan, Jalil Rasheed of Invesco Blog

On May 22, Thailand’s military launched its 12th coup after a failed attempt to get the caretaker government and the opposition to resolve a seven-month political stalemate. While the military has seized temporary control, we believe the coup will have limited economic and investment impact.

2014-06-02 Equities and Bonds Diverge Amid Low Volatility by Robert Doll of Nuveen Asset Management

Another week brought another record close for equities. The S&P 500 Index increased 1.2% for the week, notching a new high, but investor attention appeared to be focused elsewhere. Low levels of market volatility, a pickup in M&A activity, a difficult revenue environment for banks and improving housing data all gathered headlines, yet the bond market garnered the most focus.

2014-06-02 Corporate Activity Flourishes by Chris Maxey, Brian Payne of Fortigent

With the backdrop of low interest rates, and sluggish revenue growth, 2014 has been the year that M&A activity finally blossomed. Companies are growing more aggressive in their acquisition tactics, leading to many high profile mergers and numerous opportunities to improve profitability.

2014-05-31 From Constantinople to Istanbul, Turkey Has Never Been Better by Frank Holmes of U.S. Global Investors

Every time he travels to Turkey, portfolio manager of our Emerging Europe Fund (EUROX), Tim Steinle, says the country continues to develop. Although technically classified as an emerging market, one wouldn’t think to label the country as such upon arrival. The population is young and growing, there are improvements to infrastructure everywhere you look, beautiful green parks are more prevalent, and the professional staffs that run many of the shops and businesses are both well organized and thriving.

2014-05-31 The Great Backlash by Nouriel Roubini of Project Syndicate

In the aftermath of the 2008 global financial crisis, policymakers’ success in preventing the Great Recession from turning into Great Depression II held in check demands for protectionist measures. But now the backlash against globalization has arrived, and we know from bitter experience what could come next.

2014-05-31 Looking at the Middle Kingdom with Fresh Eyes by John Mauldin of Mauldin Economics

China has the potential to become a real problem. It seemed to me that almost everyone who addressed the topic was either seriously alarmed at the extent of China’s troubles or merely very worried. Perhaps it was the particular group of speakers we had, but no one was sanguine. If you recall, a few weeks back I introduced my young colleague and protégé Worth Wray to you; and his inaugural Thoughts from the Frontline focused on China, a topic on which he is well-versed, having lived and studied there. Our conversations often center on China and emerging markets (and we tend

2014-05-30 Small Cap Weakness Is Not A Market Death Knell by Doug Ramsey of Leuthold Weeden Capital Management

The celebration of the DJIA’s new record high on April 30th was notable for its absence. Small Cap stocks, in fact, commemorated the event by falling to an 11-month relative strength low, and many technicians point to this divergence as evidence that a dangerous period of “distribution” is now underway. We’re not so sure.

2014-05-30 The Growing Importance of Natural Gas by Skip Aylesworth of Hennessy Funds

The natural gas industry is experiencing a revolution. Fueled by advances in drilling technology, natural gas has become an abundant energy source and is quickly becoming America’s domestic energy solution. In fact, it is believed that we now have a 100-year supply in the U.S. – even with increasing demand.

2014-05-30 The High Cost of Equal Weighting by Max Moroz, Engin Kose of Research Affiliates

Equal-weight indices have two clear advantages: They are easy to understand, and they generally outperform cap-weight indices over the long term. Their drawbacks are less apparent. They have higher turnover due to rebalancing than other smart beta strategies, and that turnover includes buying and selling lower-liquidity stocks. This article summarizes what we have learned about the relative performance of equal-weight indices before and after implementation costs.

2014-05-30 Four Simple Charts To Explain The Move In Bonds This Year by Team of GaveKal Capital

As an old friend used to say, "Price changes create their own news flow." This is a good way to think about all the "stories" that have surfaced lately explaining the unexpected plunge in bond yields this year.

2014-05-30 Global Economic Perspective: May by Franklin Templeton Fixed Income Group® of Franklin Templeton Investments

We believe a substantial improvement in US growth is underway, despite first-quarter 2014 gross domestic product (GDP) growth coming in at an annual rate of -1.0%, well below market expectations.

2014-05-30 Seoul Searching by Michael Han of Matthews Asia

South Korea's Sewol ferry disaster in April has not only been one of the country's most tragic events in recent memory, it is also one that is leaving an indelible mark on Korean society. The incident claimed hundreds of young lives, led to a public outpouring of anger, capital punishment charges and several key resignations, including that of the Prime Minister.

2014-05-30 How Not To Get Soaked When The Bond Bubble Bursts by Steve Blumenthal of CMG Capital Management Group

As I wrote in my latest Forbes article and in my current weekly column On My Radar, most investors are unaware and ill-prepared for the impact that rising interest rates will have on their bond funds and ETF investments. There has been an unprecedented period of Fed participation (manipulation) with six years of near zero-percent interest rate policy and trillions of newly created currency.

2014-05-30 How Tax Savings from a College Savings Plan Could Pay for a Year of College by Tara Thompson Popernik of AllianceBernstein

The option to front-load funding makes a tax-deferred college savings plan is a great way to avoid taxes on the future growth of funds earmarked for higher-education expenses. We project that the taxes avoided over a 10-year savings horizon could pay for a full year of college.

2014-05-30 Taking Advantage of Pessimism by Scott Minerd of Guggenheim Partners

The world is distracted with fears of the next great calamity, but heading into summer U.S. financial markets are enjoying a remarkably positive environment.

2014-05-30 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 135.4, down from the previous week's 135.1. The WLI annualized growth indicator (WLIg) rose to 5.3 from 5.0. That's the highest since June of last year.

2014-05-30 Real Median Household Income Fell 0.42% in April by Doug Short of Advisor Perspectives (

The Sentier Research monthly median household income data series is now available for April. The nominal median household income was down $84 month-over-month and up only $1,420 year-over-year. Adjusted for inflation, it was down $222% MoM and only $409 YoY. The real numbers equate to a -0.42% MoM decline and a 0.78% YoY increase.

2014-05-30 Thoughts at Age 50 by Rob Isbitts of Sungarden Investment Research

Today, I reach the half-century mark on this earth. I have spent over half of that time working in the investment management business. Over my more than 90,000 hours in the industry of managing money and caring for investors, I have met thousands of people, read a seemingly infinite amount of research and developed more than a few opinions about both investing (in bold) and life.

2014-05-30 Tax-Exempt Securities Confounding the Consensus in 2014 by Michael Smith, Bob Meyer of SMC Fixed Income Management

Rarely do the financial markets provide the double treat of simultaneously rising equity valuations and falling bond yields. Almost midway through the second quarter of 2014, key stock indices reached new all-time highs while global bond yields have retreated to levels not seen in over six months. Something has to give: either stock prices retreat or yields rise. Right? At least this is the popular assumption supported by classic economic rationale for a normal investment environment.

2014-05-30 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Reflections from a fortnight abroad;Last weekend's European elections will make cooperation more difficult

2014-05-29 Is There a UK Housing Bubble???? by Mike Amey of PIMCO

We see the UK experiencing a very traditional monetary cycle involving lower mortgage rates, higher house prices and then – hopefully – higher transactions. The Bank of England can address rising house prices either by raising financing costs via the banking system or by raising interest rates. Markets will watch BoE activity closely. Our expectation is for a gradual and modest interest rate cycle, with low rates in the UK economy for years to come. Housing may be an overvalued asset, but one that is secularly supported by low rates.

2014-05-29 A Stealth Recovery by Pamela Rosenau of HighTower Advisors

In the fall of 2010, I had written that several indicators suggested the U.S. was entering “stealth economic recovery” mode. This “stealth” recovery coupled with low interest rates and changing demographics were going to usher us into “the age of the Dividend Darlings -- companies that pay sizeable, sustainable, and growing dividends.” Investors would not only replace their income exposure to lower yielding bonds, but also focus on growing income in the equity market.

2014-05-29 Piketty's Envy Problem by Peter Schiff of Euro Pacific Capital

There can be little doubt that Thomas Piketty's new book Capital in the 21st Century has struck a nerve globally. In fact, the Piketty phenomenon (the economic equivalent to Beatlemania) has in some ways become a bigger story than the ideas themselves.

2014-05-29 Thailand’s Tensions, and Resilience by Mark Mobius of Franklin Templeton Investments

Thailand’s imposition of martial law on May 20 came after months of protests and threats of violence between two opposing sides—the anti-government group called the People’s Democratic Reform Committee (PDRC), known as the “yellow shirts,” and the pro-government group called the United Front for Democracy against Dictation (UDD), known as the “red shirts.” The PDRC demanded for the government to step down to pave the way for an appointed government.

2014-05-29 The Future’s Still Bright for College Grads by Christopher Thompson of AllianceBernstein

Is college worth it? It’s not an uncommon question these days, especially with soaring college costs, ballooning student debt levels and higher unemployment. But research shows that pursuing a college degree can result in far more than just a diploma.

2014-05-29 CEFs: The Present Featuring Cecilia Gondor by (Article)

The power of the Internet and the quest for income are driving the CEF industry today, says Cecilia Gondor of Thomas J. Herzfeld Advisors.

2014-05-29 China Sets America’s Mental Trap by Stephen Roach of Project Syndicate

It is often said that a crisis should never be wasted: Politicians, policymakers, and regulators should embrace the moment of deep distress and take on the heavy burden of structural repair. China seems to be doing that; America is not.

2014-05-29 Pending Home Sales Can't Blame The Weather For The Latest Miss by Team of GaveKal Capital

Pending home sales rose by only 0.4% in April vs estimates of a 1% month-over-month gain. Pending home sales are down over 9% year-over-year. If you are living in the West or the Northeast than that decline looks great compared to fall they are experiencing in those regions.

2014-05-28 Home Sales Gain: Now Where? by Chris Maxey, Brian Payne of Fortigent

This week is full of economic data with the Case-Shiller Home Price index coming out. Also coming out is data on durable goods orders and consumer confidence. On tap for later in the week is the second estimate of Q1 GDP, pending home sales, and personal income growth.

2014-05-28 Fed Official: We're Sitting On A "Ticking Time Bomb" by Gary Halbert of Halbert Wealth Management

It is very rare for high-ranking Fed officials to issue dire warnings, but that’s exactly what Charles Plosser – the president of the Philadelphia Federal Reserve Bank – did last Tuesday. Mr. Plosser is very concerned about the $2.5 trillion in “excess reserves” that banks have on deposit with the Fed.

2014-05-28 Where’s Molly? by Jerry Wagner of Flexible Plan Investments

It was after midnight. While the sky was clear and the stars were sparkling, there was no moonlight as the moon was new. I walked briskly down the street, but after a long day of sales presentations and meetings, inside I was tired and dragging. On each side of me dark houses loomed. There were no street lights.

2014-05-28 A Deeper look at Corporate CapEx and Stock Buybacks by Team of GaveKal Capital

Yesterday we analyzed aggregate capital spending on tangibles for non-financial constituent companies in the MSCI World Index (90% of global investible market cap). We found that CapEx as a % of sales has been extremely steady over the last nine years, fluctuating in a 0.9% range. In 2013 CapEx as a % of sales, at 7.9%, registered the second highest reading over the 9 year period.

2014-05-28 Value Offers a Cushion: Why Last Year’s Winners Are Now Losers and Vice Versa by Russ of BlackRock

A trend in markets this year has been the poor performance of last year’s stock market winners, and the resilience of some of last year’s losers. Russ takes a look at what’s behind this trend, specifically with retailers and emerging markets.

2014-05-28 Europe’s Ukrainian Lifeline by George Soros of Project Syndicate

Europe’s voters recently expressed their dissatisfaction with the way the EU currently functions, while Ukraine’s people demonstrated their desire for association with the EU. European leaders and citizens should take this opportunity to consider what that means – and how helping Ukraine can also help Europe.

2014-05-27 Career Center by Various (Article)

Find career opportunities for firms that seek to add financial advisors and planners to their staff. Read more to find out how to post opportunities at your firm.

2014-05-27 Emerging Markets: The Fragile Five and Beyond by (Article)

Indonesia, India, Turkey, South Africa, Brazil, as well as Thailand and Russia are the focus topics, as the challenges facing some emerging market countries are discussed against the overall perspective of the natural ebb and flows of the global market.

2014-05-27 Kyle Bass: The Looming Crises in Asia by Robert Huebscher (Article)

For the last several years, nobody has been more outspokenly bearish on Japan than Kyle Bass. In a recent talk, Bass reiterated his doubts about Japan's chances of averting a debt crisis. What's more, he also said China's economy will fall below expectations.

2014-05-27 Lacy Hunt: The Dark Side of Debt by Robert Huebscher (Article)

Lacy Hunt has used econometric research to persuasively demonstrate the statistical relationship between excessive debt and slow economic growth. Although Hunt and I disagree over whether this analysis can be applied to the U.S., our forecasts for growth in the U.S. economy and for the bond markets are remarkably similar.

2014-05-27 Structured Portfolios: Solving the Problems with Indexing by Larry Swedroe (Article)

An overwhelming body of evidence demonstrates that the majority of investors would be better off by adopting indexed investment strategies. A total-stock-market index is fine for many investors. But indexed investors who desire certain types of exposure face a number of problems - which are solved with what I call "structured portfolios."

2014-05-27 Five Steps to Get Out of a Rut by Dan Richards (Article)

Five simple strategies have proven successful in breaking the logjam caused by inertia - and making change happen.

2014-05-27 More AUM May Not Make You Happy by Daniel Solin (Article)

I know a lot of wealthy people. I also know many "successful" investment advisors. One day, while doing research for my Smartest Sales book, I had this epiphany: Most of these people aren't particularly happy. In fact, they are no happier (and perhaps even less so) than many others who have achieved far less financial success.

2014-05-27 Defensive Position Rotation: Achieving Financial Goals with Less Volatility by Dale W. Van Metre, Ph.D., CRPC®, APMASM (Article)

Defensive position rotation is an alternative to MPT. It is a portfolio-construction philosophy that adapts to changing market conditions and can increase risk-adjusted returns over time.

2014-05-27 Selling Tips for Un-Sales-y Advisors by Beverly Flaxington (Article)

Can someone who isn't comfortable being sales-y learn how to be a salesperson?

2014-05-27 Integrating Social Media and Website Reviews into Your Practice by Bob Wilgus (Article)

In March, the SEC released a guidance update on the use of client testimonials and social media. The update provided new rules and clarifications regarding the use of third-party advisor review sites, community or fan pages and links directing clients to social-media pages. Here is the reality advisors must confront to take advantage of the new rules.

2014-05-27 Henderson High Yield Opportunities Fund Update by Kevin Loome (Article)

Kevin Loome, CFA, Head of US Credit reviews the High Yield Opportunities Fund's (HYOAX) first year of performance noting the success of both asset allocation and credit selection. Mr Loome notes that a focus on credit makes the Fund a unique mandate. In markets, many of the companies we have been following have shown an improvement in health as many have had easier access to the refinancing markets and refinanced at a better rate and shortened maturities which improves their liquidity.

2014-05-27 After India’s Election, Execution takes Center Stage for Debt Markets by Jack Deino of Invesco Blog

Financial markets in India have already rallied strongly in anticipation of the overwhelming majority win by incoming Prime Minister Narendra Modi and the Bharatiya Janata Party (BJP). The country’s currency (the Indian rupee) rose 15% from its August peak, while five-year credit default swaps on the State Bank of India (SBI) tightened from a spread of 371 to 207 in the same period.

2014-05-27 Quality Dividend ETFs by Shundrawn Thomas (Article)

FlexShares Quality Dividend ETFs allow investors to seek to meet income needs with exposure to high-quality dividend-paying domestic or international stocks, across three levels of market risk.

2014-05-27 Four Market Risks to Focus on This Summer by Russ Koesterich of BlackRock

What could lead to a more severe market correction? While there’s a long list of things that could go wrong in 2014, Russ lists four market risks to pay attention to this summer.

2014-05-27 Six Principles for Smart Tax Management by Tara Thompson Popernik of AllianceBernstein

It is well known that taxes began to take a bigger bite out of income for the well-off in 2013. Top marginal tax rates rose, and some exemptions and deductions were phased out. What is less well known is that investors spending from their portfolios—even those investors whose tax rates didn’t rise—may be facing higher tax bills, too.

2014-05-27 Economy Begins to Accelerate While Equities Push Higher by Robert Doll of Nuveen Asset Management

U.S. equities finished higher last week as the S&P 500 advanced 1.3%, snapping a two-week losing streak and ending at a new record high. Markets seemed to lack conviction, but the path of least resistance appeared skewed to the upside as momentum for the economic recovery was positive.

2014-05-27 Is Gold Signaling A Move Higher in TIPS? by Team of GaveKal Capital

For the last decade, TIPS yields and gold have had a negative 88% correlation. The logic is simple enough: since gold doesn't generate any income, falling TIPS rates reduce the opportunity cost of holding gold. We can see this play out in the charts below. In early 2008, the peak in gold was accompanied by a trough in TIPS yields, and then later in 2008, the trough in gold was accompanied by a rise in TIPS yields.

2014-05-25 A Bubble in Complacency by John Mauldin of Mauldin Economics

The simple fact is that we are in what I call a Muddle Through Economy. Things aren’t terrible, but they are not great, either. We’ve come through a devastating Great Recession caused by a crisis in the financial sector. It is quite typical for the effects of such a crisis to linger for a decade or more. So compared to where we were at the bottom of the Great Recession, the glass is half-full. But compared to the expectations we have for economic recovery and the resumption of vibrant growth, half-full seems like an exaggeration. And for many people, the glass is simply empty, whil

2014-05-25 Mounting Momentum? by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

Although the stock market remains sluggish, with the potential for a correction elevated, the U.S. economy appears to be improving. There is probably no great rush to get into the stock market at this point, but maintaining a steady investing discipline in the face of what we think is a continuing secular bull market is key. Investors frustrated with the low yield environment should be careful about adding too much risk to a portfolio in search of higher yields.

2014-05-25 Exit Strategy by John Hussman of Hussman Funds

Overly compressed risk premiums are now the largest ticking time bomb in the global financial environment.

2014-05-24 In a Flash, China Looks Strong by Frank Holmes of U.S. Global Investors

If you want to know where the world economy is headed, there is one number that I believe investors should focus on: the HSBC China Manufacturing Purchasing Managers’ Index (PMI). On Thursday, the preliminary flash PMI for May came in at 49.7, beating Bloomberg’s consensus of 48.3.

2014-05-24 “Chasing Tails” How to Play Defense Against a “Market Event” by Robert Isbitts of Sungarden Investment Research

This is about the time in a market cycle (up for stocks, for several years) that it is prudent to talk not about playing defense, but HOW it is being played. That is, proactively and not reactively.

2014-05-24 Trends in Gold Option Volatility by Ade Odunsi of AdvisorShares

Liquidity in gold option trading has risen significantly over the last five years. Using the COMEX 100 ounce gold option contract as a proxy for the market, Year-to-Date Average Daily Volume has risen from approximately 30,000 contracts in May 2009 to 70,000 contracts (~ 217 metric tonnes) in May 2014. This period of growth in option use has coincided with the rapid rise in the gold price after the 2008 credit crisis and perhaps reflected a need from the growing number of gold investors for derivative contracts with which they could manage the risks inherent in their gold exposure.

2014-05-23 Online Upstarts Challenge Chinese Banks by Richard Gao of Matthews Asia

Chinese banks have long operated under a protective environment in which deposit and lending rates have been managed in a rather tight band by the central bank. One advantage of these controls for the banks has been fixed net interest rate margins. But China’s traditional state-owned banks have been pressured recently to try to keep depositors from seeking the higher yield products now offered by online Chinese financing firms.

2014-05-23 See No Evil by Peter Schiff of Euro Pacific Capital

In this week's release of the minutes from its April 29-30 meeting, Federal Reserve policymakers made clear that they see little chance of inflation moving past their 2% target for years to come. In order to make such a bold statement, Fed economists not only had to ignore the current data, but discount the likelihood that their current stimulus will put further upward pressure on prices that are already rising.

2014-05-23 Freddie, Fannie, finis? by Team of Northern Trust

The destruction wrought by the 2008 financial crisis necessitated a good deal of repair. In some areas, that repair is complete; in others, it is well along. But in one spot, it hasn’t really begun. Freddie Mac and Fannie Mae, the giant U.S. mortgage companies, remain in structural limbo more than five years after the American government rescued them. Just as plans to restructure these government-sponsored entities (GSEs) finally began making their way through the U.S. Congress, cross currents arose that greatly complicate the way forward. Some former shareholders are suing to recover so

2014-05-23 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 135.1, down from the previous week's 136.3. The WLI annualized growth indicator (WLIg) rose to 5.0 from 4.9. That's the highest since June of last year.

2014-05-22 Scarce Growth - Can the Tortoises Continue to Outpace the Hares? by Robert McConnaughey of Columbia Management

For some time we have suggested that in a world slowly recovering from the 2008 financial crisis, aggregate global growth would be sub-par and that investors would benefit from seeking scarce growth, so long as that growth did not become wildly overvalued. Recent market action has tested that stance severely.

2014-05-22 The Crimean Conflict Has Affected Commodities Markets, Just Not Where You’d Expect by Nicholas Johnson, Gillian Rutherford of PIMCO

Since the end of February, when the Crimean crisis started to escalate, grain prices have responded to nearly every up and down of the crisis. Wheat is up 21%, and corn is up 10%. We believe investors looking to take a view on the future price of wheat or corn should do so through the options market. In this case, we think being long puts on wheat is an attractive way to implement our short wheat view.

2014-05-22 Why We're Often Bullish When the Market Turns Bearish by Francis Gannon of The Royce Funds

While economic anxiety has hit the market prior to the often bearish summer months, we continue to concentrate on matters less publicized: a shift in equity market leadership in favor of quality driven by rising interest rates.

2014-05-22 China’s Property Problems by Scott Minerd of Guggenheim Partners

Alarm bells are warning of a Chinese property bubble, but Beijing can avoid a crisis by allowing inflation to fix the problem.

2014-05-22 The Percent of Individual Stocks Making New Highs Continues to Contract by Team of GaveKal Capital

It's no secret that we've been concerned about the lack of new highs in individual stocks since at least the beginning of the year. Indeed, we've made note of the divergence between headline stock indices and the number of stocks making new highs here, here, here and here and probably in a few other posts as well.

2014-05-22 Russian Interests by Mark Mobius of Franklin Templeton Investments

Tensions between Russia and Ukraine remain high, and have spilled onto the international stage. The Western world seemed to be caught off guard by Russian President Putin’s reaction to civil unrest in Ukraine, leading to Russia’s annexation of Crimea and spreading into a broader question of regional sovereignty. The situation remains fluid, so it’s difficult to predict just exactly how it might play out. But given escalating conflict in Eastern Ukraine, we do not envision an easy or quick end to the conflict.

2014-05-21 Interest Rates Have To Go Up. The "Bond King" Says No by Gary Halbert of Halbert Wealth Management

The prevailing view on Wall Street and Main Street is that medium and long-term interest rates have to go higher in the months and years ahead. Interest rates have to get back to “normal” at some point, so we’re told. Yet in the last several months, yields on 10-year Treasury notes and 30-year Treasury bonds have fallen rather significantly. What’s up with that?

2014-05-21 Markets’ Federal Reserve Love Story by Mohamed El-Erian of Project Syndicate

For many years market participants have been richly rewarded for falling in love – quickly and decisively – with policy measures adopted by the US Federal Reserve. More recently, however, some have become less comfortable, warning that the codependence is encouraging excessive risk-taking and, in some cases, bubbly valuations.

2014-05-21 Everyday Brands in the Right Hands by Aaron Monroe of Diamond Hill Investments

An ownership mentality, long-term perspective, and disciplined capital allocation are characteristics we look for in all management teams but find in few. Through its commitment to these attributes, Jarden Corp. (JAH) has driven significant outperformance for long-term investors and compiled an attractive portfolio of niche brands that are leaders in their respective markets.

2014-05-21 Are Corporate Balance Sheets Really That Liquid? Debunking the "Cash Mountain" Myth by Team of GaveKal Capital

We frequently read about the "cash mountain" that has piled up on corporate balance sheets since the global financial crisis. In many cases the level of cash is given as evidence that the the non-financial corporate sector is stronger now than ever before.

2014-05-21 Pacific Powers: Australia and Japan by Don Huber of Franklin Templeton Investments

Separated by nearly 4,000 miles of sea, the economies of Australia and Japan are often lumped together under the Asia Pacific (APAC) label. Both of these countries can be considered global powers and powerful GDP generators, but their economies, the challenges they face and their responses to those challenges have been very different. Don Huber, vice president, research analyst and portfolio manager, Franklin Equity Group, looks at how these APAC powers are navigating their unique issues and shares his market outlook for each.

2014-05-21 Despite the “Grand Reversal,” Stick With Stocks by Russ Koesterich of BlackRock

In a reversal of 2013’s performance, stocks are struggling to hold onto gains while bond yields are plunging, leaving many investors asking: “How should I be positioning for the long term?” Russ explains why he still advocates sticking with stocks.

2014-05-21 Start Saving for College Now, or Pay Much More Later by Christopher Thompson of AllianceBernstein

The price tag for attending college 18 years from now is projected to be considerably higher than it is today—up to hundreds of thousands of dollars higher for a four-year degree. But using a tax-favored strategy to save for college can help make the costs of future educational expenses less daunting.

2014-05-21 And That's The Week That Was by Ron Brounes of Brounes & Associates

What goes up must come down (and then go up again). Such was the fickle week in the stock market. After soaring to new highs on the major indexes, investors went into selling mode (profit-taking for the most part?), before jumping back in for the end-of-week bargain shopping.

2014-05-21 An Inefficient Asset Class by Tim Gramatovich of AdvisorShares

The high yield and floating rate loan market are often misunderstood asset classes. Just what is the formal definition of “high yield”? High yield, or its more polite acronym, non-investment grade, is based off of the ratings grids provided by the two major credit rating agencies, Moody’s and Standard & Poor’s. All bonds rated below Baa by Moody’s are considered high yield or non-investment grade.

2014-05-20 Emerging Markets Masterclass by (Article)

In this two-part video, 45-year industry veteran Tom White offers an in-depth review of emerging markets, including those that are currently facing challenges, but also the developing markets that are now presenting attractive opportunities.

2014-05-20 Gundlach: The Bad News for Housing by Robert Huebscher (Article)

Residential housing is in trouble, according to Jeffrey Gundlach. It's not heading for a repeat of the 2008 collapse, but it's equally unlikely that housing growth will provide the needed push for a strong U.S. economic recovery.

2014-05-20 Introducing APViewpoint by Robert Huebscher (Article)

This month marks the seventh anniversary of the founding of Advisor Perspectives - and the release of our new service, APViewpoint.

2014-05-20 Inflation Becomes the Latest Topic du Jour by Chris Maxey, Brian Payne of Fortigent

Long discussed pricing pressure is beginning to show up in various domestic indices, leading some to believe the Fed will pull its foot off the brakes sooner than anticipated. While inflation is stabilizing, there are few signs that it is accelerating materially, leaving plenty of room for the Fed to maneuver. It will be important to keep an eye on prices going forward, though, as any acceleration could alter the investment and economic landscape quickly.

2014-05-20 Will Global Tensions Derail the US Recovery? by Robert Huebscher (Article)

It's not the Fed's monetary policy that investors should fear, but the "geopolitical tapering" undertaken by the Obama administration, contends Niall Ferguson, the Harvard historian. Ian Bremmer, the political scientist and chairman of the Eurasia Group, disagrees - despite some tactical missteps, he said, the current administration has achieved reasonable results.

2014-05-20 Are the Pictures on Your Website Costing You Clients? by Dan Richards (Article)

Why do most advisor websites look similar - often with stiff photos of team members smiling uncomfortably into the camera?

2014-05-20 Understanding the Investment Function in Greater Depth by Tom Brakke (Article)

In late 2010, I published a series of letters to someone who was about to enter the investment industry. In March of this year, they became the foundation for an ebook, Letters to a Young Analyst, which includes advice and resources for aspiring investment professionals. Despite the title, the book is not exclusively for a narrow slice of those professionals.

2014-05-20 Stop Talking and Start Listening! by Daniel Solin (Article)

There is a massive disconnect between our perception of ourselves as effective listeners and reality.

2014-05-20 Creating Error-Free Marketing Materials by Megan Elliot (Article)

Here's how to avoid marketing mistakes that will negatively affect your firm's credibility.

2014-05-20 Managing Meeting Mania by Beverly Flaxington (Article)

When I look at my calendar and try to figure out why I am so unproductive, I realize how much time I spend going from meeting to meeting. Sometimes they don't even have anything to do with my work! Is there a graceful way to say "Thanks, but no thanks" to a meeting invite?

2014-05-20 Emerging Markets Update with Rennie McConnochie by (Article)

Despite recent challenges, the Emerging Markets sector poses a potentially attractive opportunity to long-term CEF investors, says Rennie McConnochie of Aberdeen.

2014-05-20 A Crash Course in Helicopter Investing by Kristina Hooper of Allianz Global Investors

Hovering over daily swings in your portfolio can keep your financial goals from taking flight, writes Kristina Hooper.

2014-05-20 Iran’s Iraq by Bill O'Grady of Confluence Investment Management

The last American combat troops left Iraq in December 2011, marking the end of direct U.S. involvement in a nearly eight-year war. In this report, we will discuss recent developments in Iraq, including elections that were held on April 30. We will analyze Iran’s growing influence in the region and how the Iraq War furthered that influence. As part of this analysis, we will examine how Iran’s growing power and America’s apparent withdrawal is changing the behavior of other nations in the region. As always, we will conclude with market ramifications.

2014-05-20 Bonds Rally, But Stocks Still More Attractive Long Term by Russ Koesterich of BlackRock

Stocks have floundered, while bonds continue to rally. Markets are showing a sharp reversal from 2013, when stocks were up strongly while bonds struggled. We maintain our long-term preference for equities and suggest investors exercise caution before adding to positions in bonds.

2014-05-20 Which Resource Areas Show Signs of Strength? by Frank Holmes of U.S. Global Investors

Global synchronized growth, as measured by the Global Purchasing Managers’ Index (PMI), remained stable or positive for the past 12 months until Japan reversed the momentum in April with a precipitous drop in its PMI. China is contributing modest growth but, fortunately, the U.S. and Europe are rebounding. This lack of consistent global momentum has created a short-term, volatile, hot and cold, stop-and-go sentiment. Global real GDP growth peaked in 2010 at 5.2 percent then slowed for the next three years to 3 percent.

2014-05-20 The Persistent Weakness in Lumber Continues by Team of GaveKal Capital

We watch lumber prices because lumber, being a largely domestically produced and consumed resource, can give a good early indication of changes in domestic economic activity. Lumber prices are also closely correlated to stock prices (the S&P 500 in this case) and so we like to see the two price series following each other.

2014-05-20 A Revised Bond Market Outlook? by Scott Brown of Raymond James

A year ago, as Fed Chairman Bernanke spoke of the possibility of tapering the Fed’s Large-Scale Asset Purchase program (QE3), bond yields moved higher. They’ve been range-bound over the last year, but have more recently dipped to the lower end of that range. What’s driving the bond market?

2014-05-20 Computer Tutor?! by Jeffrey Saut of Raymond James

My friend Jerry Goodman died recently. His nom de plume was Adam Smith, obviously taken from the legendary economist Adam Smith (1723 – 1790). In addition to the book The Money Game, Jerry wrote numerous other books. In his later years, he worked at another friend’s establishment, that being Craig Drill, eponymous captain of the insightful Drill Capital Management.

2014-05-20 Throwing Babies Out With Bathwater by William Smead of Smead Capital Management

Instead of behaving wisely, we think investors have been "throwing babies out with the bath water" this year. We believe speculators have fled out of the Biotech ETFs and have unwittingly sold Amgen (AMGN) between $129 and $109 per share because it is the largest holding of most of these targeted vehicles. From our vantage point, investors have tossed out EBAY (EBAY) in the internet space, Gannett (GCI) in media, Pfizer (PFE) in Pharma and Bank of America (BAC) and JP Morgan (JPM) in the banking sector.

2014-05-19 America The Youthful? Yes, On a Relative Basis by Russ Koesterich of BlackRock

While the United States is aging at a much slower pace than much of the rest of the world, the U.S. population will almost certainly continue to age. As Russ explains, this has three implications for the U.S. economy.

2014-05-19 Sovereigns Look Seductive in Europe’s Periphery by Jorgen Kjaersgaard, John Taylor of AllianceBernstein

Investment-grade bonds issued by nonfinancial firms in Europe’s peripheral countries have had a great run but now look expensive. In our view, government bonds from the likes of Spain and Italy offer better value for investors who want peripheral exposure.

2014-05-19 The Journeys of Sisyphus by John Hussman of Hussman Funds

Investors have again pushed the stone to the top of the mountain.

2014-05-19 Three Questions Investors Need to Ask About Alternatives by Donna Chapman Wilson of Invesco Blog

The world of alternative investments includes a range of hedge fund-like strategies that typically consist of publicly traded equity and fixed income investments, but are unconventionally managed using a variety of exposures (long, short, market neutral) and financial instruments. These strategies have gained acceptance in recent years, and have become more widely available to individual investors through vehicles such as mutual funds. However, questions still remain about the best ways to incorporate them into an asset allocation strategy.

2014-05-19 Forces Shaping the Global Health-Care Industry by Nanette Abuhoff Jacobson of Hartford Funds

The health-care industry is undergoing many changes, from government reforms to groundbreaking drug development. Because I am frequently asked about this industry, I am devoting this month’s commentary to the forces shaping health care today and what those changes mean for investors. In speaking with members of Wellington Management’s experienced Health Care Team, it is clear the three main drivers of this complex, dynamic industry are the aging population in the developed world, the growing middle class in emerging markets (EM), and scientific innovation.

2014-05-19 The Belgian Connection by Peter Schiff of Euro Pacific Capital

One of the biggest questions at the end of 2013 was how the Treasury market would react to the reduction of bond buying that would result from the Federal Reserve’s tapering campaign. If the Fed were to hold course to its stated intentions, its $45 billion monthly purchases of Treasury bonds would be completely wound down by the 4th quarter of 2014.

2014-05-17 Which Resource Areas Show Signs of Strength? by Frank Holmes of U.S. Global Investors

Global synchronized growth, as measured by the Global Purchasing Managers' Index (PMI), remained stable or positive for the past 12 months until Japan reversed the momentum in April with a precipitous drop in its PMI. China is contributing modest growth but, fortunately, the U.S. and Europe are rebounding. This lack of consistent global momentum has created a short-term, volatile, hot and cold, stop-and-go sentiment. Global real GDP growth peaked in 2010 at 5.2 percent then slowed for the next three years to 3 percent. Global growth in 2014 is likely to accelerate, for the first time in four y

2014-05-17 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

China: Two different stories, one conclusion. The jury is still out on long-term U.S. growth. Fond memories of Gary Becker.

2014-05-17 The Best of the Sungarden Blog - On Its First Birthday by Robert Isbitts of Sungarden Investment Research

This week marks the first anniversary of our blog, which you can find at To celebrate, we chose from among the more than 50 blog posts of the past year eight which we believe were the most impactful, based on readership and feedback we have received. We invite you to see what you may have missed or take a fresh look at this tour of Sungarden’s views. The original post date is noted after each title, and you can simply click on a title to go to it.

2014-05-16 Concerned Optimism by Scott Brown of Raymond James

In her congressional testimony, Fed Chair Janet Yellen chose her words carefully. She indicated that if the economic outlook evolves as anticipated (growth picks up, the labor market tightens, and inflation moves toward the Fed’s 2% goal), then the Fed’s asset purchase program (QE3) will likely end in the fourth quarter. However, she refused to be pinned down on when the Fed would begin raising short-term interest rates. Global concerns and the housing sector “will bear close observation.”

2014-05-16 Old Turkey by Jeffrey Saut of Raymond James

I revisit the “Old Turkey” story this morning, which I first read in the classic book Reminiscences of a Stock Operator, about the escapades of Jesse “the boy plunger” Livermore, because of the reference I made to him last week that drew so many questions. The wisdom of “Old Turkey” is as good today as it was when first published in 1923. The problem with most investors today is that they have never experienced the 1923 – 1929, the 1946 – 1964, or the 1982 – 2000 secular “bull markets.”

2014-05-16 Breaking Good by Scott Minerd of Guggenheim Partners

After breaking out of their recent trading range, yields on U.S. Treasuries could now be heading significantly lower and the U.S. economy could enjoy fast economic growth in the coming months.

2014-05-16 Examining the Relationship between Gold and the Commodity Currencies by Ade Odunsi of AdvisorShares

In this week’s commentary we examine the performance of the price of gold expressed in the currencies of the world’s largest gold producing countries. In a number of previous commentaries we have investigated the currency like nature of gold investing.

2014-05-16 Mixed Signals and the Road Less Traveled by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

As the markets flirt with all-time highs and a potential shift in Fed policy, earnings season has not altered the fact that the level of investor uncertainty feels elevated. Throw in the case of a really bad winter, a geopolitical environment that rhymes with events just prior to World War I, and poor trading volumes, and it all suggests that heightened levels of unease remain.

2014-05-16 College Costs 101: What are 529 Plans? by Beyond Bulls and Bears of Franklin Templeton Investments

Tabulating the costs of a college education can be overwhelming for new parents, so overwhelming, in fact, that many choose not to think about it at all, assuming the situation will resolve itself in time. Many parents wind up turning to student loans as the solution to finance a college education, often resulting in a shiny new diploma accompanied by a mountain of debt.

2014-05-16 Can Smart Beta Think? by David Kleinberg of Universal Orbit

The concept of Smart Beta introduced by the principles of Fundamental Indexation (Arnott, Hsu and More 2005) provides for a state of Nirvana, greater performance with less risk. Given the historic price action of equities in the Value and Small Cap asset classes, the extent to which Fundamental indexes are skewed to risk and outperformance relative to its market capitalization weighted CAPM Beta master is mathematical. Similarly, the degree of associated short-term volatility is predictable.

2014-05-16 India: Counting Efficiently by Rahul Gupta of Matthews Asia

India’s massive election process—involving more than 1 million polling stations and 800 million eligible voters—has just drawn to a close. Despite being a poor country with annual GDP per capita on the lower end of Asian economies (at US$1,527), it is home to some of the world’s best IT and generic pharmaceutical companies. Electronic voting is one illustration of the dichotomies that are present in the rapidly changing nation. This week’s Asia Weekly explores the hurdles and the technology used to manage the world’s biggest democratic election exercise.

2014-05-16 Why Should Clients Seek Out Investable Benchmarks? by Jason Laurie of Altair Advisers

Investable benchmarks enable clients to see what their returns would have been had they invested in a passive alternative to any actively managed recommendations. They answer the question, “How are my investments performing?,” with far greater clarity, yet they are still a rarity in the investment world. We believe that is changing.

2014-05-16 And That's The Week That Was by Ron Brounes of Brounes & Associates

Strike up the band! The Dow is now in positive territory for the year AND even set a record close. Who would have thunk that after the dismal January and the pessimism that reigned from the winter? The recovery continued as earnings season offered more surprises and the economic numbers show a country moving beyond the thaw of winter. Now if only China (Europe and Russia) could follow suit.

2014-05-15 Schroders Monthly Markets Review: Overview of Markets in April 2014 by Keith Wade, Azad Zangana, Craig Botham of Schroder Investment Management

Global equities edged higher in April. Some stronger macroeconomic data from developed economies helped to support returns but the ongoing crisis in Ukraine remained a headwind for equities. Developed markets outperformed emerging markets. In the US, a generally firmer tone to macroeconomic data and a broadly encouraging corporate earnings season supported sentiment. Investors were also reassured by comments from Federal Reserve (Fed) Chair Janet Yellen about maintaining low interest rates.

2014-05-15 Five Things Your Credit Manager Shouldn’t Be Doing (But Probably Is) by Christian Stracke of PIMCO

Questionable behavior among credit managers is back, but the good news is that we believe the credit markets still offer plenty of opportunities to potentially generate attractive returns. Smart, rational credit investing that avoids some managers’ naïve reach for yield, and sticks instead to a deep focus on the long-term sustainability of companies’ balance sheets, may still reap rewards.

2014-05-15 Washington Hates Carrots, Loves Sticks by John Browne of Euro Pacific Capital

A widely-held maxim tells us that money tends to flow from where it is treated badly to where it is treated well. This trend has taken center stage in the ongoing battle between U.S. states to attract and retain top employers. In that conflict, high tax states like California have been losing ground to relatively low tax states such as Texas and Florida.

2014-05-15 Fed's Zero Interest Rate Cost Savers A Trillion Dollars by Gary Halbert of Halbert Wealth Management

Get a group of adults together in a social setting and the conversation almost invariably gets around to a discussion about the paltry returns savers have been earning on their money in recent years. Three-month certificates of deposits are averaging only 0.23% nationally; one-year CDs are at only 1% if you can get it; and five-year CDs get you only about 2%. And rates have been at or near these depressed levels for the last four years.

2014-05-15 Inequality Disaster Prevention by Robert Shiller of Project Syndicate

Thomas Piketty’s impressive and much-discussed book Capital in the Twenty-First Century has brought considerable attention to the problem of rising economic inequality. But it is not strong on solutions.

2014-05-15 Microsoft: The Progression of a Maturing Business by Team of F.A.S.T. Graphs

Everyone is keenly aware of the $300+ billion dollar company that is Microsoft (MSFT). From the classic Windows and Office products to the latest Xbox and Skype, the business doesn’t exactly need an introduction. In fact, it’s quite likely that you are using or near a Microsoft product now; we used a couple just to get this article to you. So instead of providing a generic opening, we thought it might be interesting to highlight the company with some numbers.

2014-05-15 Thoughts on Investing in Convertible Securities by Alan Muschott of Franklin Templeton Investments

Changes and potential changes in monetary policy across the globe, along with increased volatility in currency and equity markets, have thrown a spotlight on convertible securities, described by some as offering the “best of both worlds” in terms of stock and bond characteristics. But what are they, how do they work, and how can they play a part in a diversified investment portfolio in today’s market? Alan Muschott, portfolio manager for Franklin Convertible Securities Fund, who has been investing in convertible securities for more than a decade, provides his take.

2014-05-15 Mexico: A Country in Transition by Brad Jensen of AdvisorShares

We have been traveling regularly to and investing on and off in Mexico for over thirty years. We have seen the Peso strengthen and bust a couple of times; government-owned banks privatized and then bust; an ongoing roller-coaster ride in the Bolsa. Through it all, we have been big believers in the long-term prospects for the country, its economy, and financial markets. However, it is clear that a thoughtful process regarding entry and exit points is required.

2014-05-15 Never, Never by Andrew Redleaf of Whitebox Advisors

Imagine a few months from now Mark Zuckerberg calls a press conference to announce his goals for Facebook for the next few years. As the crowd waits with baited breath, he announces three: 1.To have Facebook recognized as the world’s coolest company. 2. To triple the number of Facebook employees, because there are so many cool things to do and because we all have to work together to fight unemployment. 3. To make Facebook employees on average the highest paid in the world, because income inequality is incompatible with FB’s values.

2014-05-14 Worried about the Downside? by Richard Bernstein of Richard Bernstein Advisors

There have been numerous academic studies that suggest investors’ reactions to market risk are not symmetric. Investors consistently react more negatively to losses than positively to gains. At RBA, we incorporate this asymmetry in our sentiment work. Data clearly show that no group of investors is currently willing to take excessive US equity risk. Pension funds, endowments, foundations, hedge funds, individuals, Wall Street strategists, and even corporations themselves remain more fearful of downside risk than they are willing to accentuate upside potential.

2014-05-14 Has Dividend Investing Lost its Luster? by Paul Stocking and Dean Ramos of Columbia Management

With interest rates rising in 2013 and after a number of years of outperformance from high-yield dividend paying equities, investors want to know if dividend investing remains an attractive strategy. With corporate balance sheets looking healthy and dividend payout ratios remaining low by historical standards, we believe dividend growth will continue to be strong. In our view, high-yielding equities will continue to provide strong total returns especially relative to fixed income alternatives.

2014-05-14 New Mortality Table Recommended by Society of Actuaries by Brian Donohue of October Three Consulting

In February the Retirement Plans Experience Committee (RPEC) of the Society of Actuaries released its Exposure Draft RP-2014 Mortality Tables, recommending new mortality tables for the valuation of defined benefit plan liabilities. In this article we review the SOA RP-2014 report, focusing on its consequences for regulatory purposes. We begin with a discussion of the regulatory framework and then proceed to a discussion of the exposure draft and its implications.

2014-05-14 Our Efficient Market Theory by William Smead of Smead Capital Management

In this missive we will explain why we believe the patient benefit at the expense of the impatient and why those who over-think the stock market are incredibly inefficient and move their money to those with less complicated views on finance.

2014-05-14 Should We Worry More About The US Economy Or The International Economy? by Team of GaveKal Capital

The KBW Bank index is an index of 24 commercial banks in the US. It is considered a good proxy of the banking sector. Commercial banks tend to draw most of their profits from the local market, so the performance of the KBW Bank index is a decent proxy for profit expectations of the domestic sectors of the US.

2014-05-14 The Good, the Bad and the Opportunity by Frank Holmes of U.S. Global Investors

The press is demanding the attention of investors more than ever. Whether it was the recent jobs report or last week’s testimony from Janet Yellen, sorting through the market noise is no easy task. Since the world is so interconnected from Facebook to WhatsApp, a spark of news can ignite unfounded fear in an instant. What’s truly significant when it comes to your investments?

2014-05-14 Great Rotation? No, The Reverse by Russ Koesterich of iShares Blog

According to many market watchers, 2014 was supposed to be the year of the so-called Great Rotation out of bonds and into stocks. However, as Russ writes, we’re actually seeing the reverse happen lately, though the case for stocks is still quite strong

2014-05-13 Managing the 'new world' of global markets by Paul O'Connor and Bill McQuaker (Article)

Paul O'Connor and Bill McQuaker, Co-Heads of Multi-Asset at Henderson, discuss the upcoming shift in market characteristics and note that with that change comes risks and opportunities. From an all-asset perspective, they believe this is a world in which they can still make good returns for clients and one where they expect asset performance and geographic performance to become widely dispersed.

2014-05-13 An Investor-Centric Approach by (Article)

Shundrawn Thomas, Global Head of ETFs, speaks with Marie Dzanis, Head of Sales & Servicing for FlexShares ETFs, to discuss FlexShares' investor-centric approach to ETF development, including an overview of the four key solution sets that are the foundation of the dynamic product line.

2014-05-13 Thomas White's 2014 Market Outlook by (Article)

Assessing the prospects in 2014, 45-year industry veteran Thomas S. White offers his view of the challenges and opportunities ahead in the global economic markets.

2014-05-13 Revisiting the Research on SPIAs in Retirement Portfolios by James Shambo, CPA/PFS (Article)

The conclusions drawn by Michael Kitces and Wade Pfau in their paper, The True Impact of Immediate Annuities on Retirement Sustainability, are flawed.

2014-05-13 The Bull Market Isn’t Over. It’s Changing. by Sponsored Content by OppenheimerFunds (Article)

Markets, especially in the developed world, have hit new highs. However, a rising economic tide will no longer lift all boats to the extent it once did. Find out why Chief Economist Jerry Webman believes the winners are likely to be organic revenue generators, efficiency vendors and innovators.

2014-05-13 Bill Sharpe: "Smart beta makes me sick" by Robert Huebscher (Article)

If you rely on "smart beta" strategies to achieve returns that you hope will beat the broad market, then you also need a response to the criticisms posed by Bill Sharpe, the Nobel laureate and Stanford economist. Sharpe uses unassailable logic, in my opinion, to demonstrate why smart-beta strategies must eventually do no better than the market.

2014-05-13 John Hussman: Really Mean Reversion by Robert Huebscher (Article)

In his most recent commentary, GMO’s Jeremy Grantham said value investors are destined to endure pain in a market bubble, especially in its latter stages, as clients scorn them for missed opportunities. John Hussman is surely one such investor - indeed, Grantham’s commentary drew extensively on Hussman’s research. In a recent talk, Hussman explained why he, Grantham and other long-term value-driven investors should be worried, even if equity markets perform well in the short run.

2014-05-13 Why SPIAs are a Good Deal Despite Low Rates by Joe Tomlinson (Article)

SPIAs have been out of favor in the current low-interest-rate environment. But my new research indicates that they still offer especially attractive opportunities for retirees. One of the key reasons is that typical advisor clients will, on average, live longer than the overall population.

2014-05-13 How One Advisor’s Website Lands a New Client a Week by Dan Richards (Article)

Last week an advisor responded to my recent article on building your reputation, The Surprising Number One Driver of New Clients, in which I outlined five strategies for building credibility. In that email and a subsequent conversation, this advisor described how last year his RIA attracted 58 new clients from its website.

2014-05-13 New Research on Making the Best First Impression by Dan Solin (Article)

How long do you think it takes others to form an impression of you?

2014-05-13 The Virtues of Rebalancing by Craig L. Israelsen, Ph.D. (Article)

Does rebalancing improve portfolio performance? Yes - but it takes time for the benefits of rebalancing to be fully manifested, at least in the case of a broadly diversified 12-asset portfolio.

2014-05-13 Venerated Voices Q1 2014 Rankings by Various (Article)

Advisor Perspectives, a leading publisher serving financial advisors and the financial advisory community, has announced its Venerated Voices awards for articles published in the first quarter of 2014. Rankings were issued in three categories: The Top 25 Venerated Voices by Firm, The Top 25 Venerated Voices by Author and The Top 10 Venerated Voices by Commentary.

2014-05-13 When a Colleague Just Isn’t Listening by Beverly Flaxington (Article)

One of our more senior financial advisors struggles with communication. He knows what he wants to say, but he doesn’t convey his ideas in a clear and thoughtful way. He just doesn’t listen well and that’s why his responses are not strong and clear. Is it possible to teach listening skills?

2014-05-13 How to Tame an Aging Bull by Bill Hackney of Eaton Vance

Despite more than five years of strong stock market performance, the evidence suggests that the current bull market could continue for the foreseeable future. That being said, the “easy money” has likely already been made, so investors may want to increase their focus on equity risk management going forward. One way to mitigate the risks attendant with an aging bull market is to evaluate funds and managers based on three key portfolio metrics: active share, beta and downside capture ratio.

2014-05-13 Weekly Market Update by Team of Castleton Partners

With little escalation on the geopolitical front and no compelling data to shift broader economic expectations, interest rate markets were confined to narrow yield ranges in a rather tedious week. With intermediate and long dated Treasury rates failing to extend price gains from the prior week’s payrolls report, we suspect the path of least resistance this week for yields may be a gradual back up.

2014-05-13 Dollar Bulls Drop Their Heads in Frustration by Chris Maxey, Ryan Davis of Fortigent

For some time, strategists have been bullishly positioned on the U.S. Dollar, anticipating a rally that failed to materialize. The arguments were straightforward – the Federal Reserve is exiting its easing cycle, Europe is facing deflationary pressure and likely to ease further, and the economy in the U.S. is on improving footing. Those expectations, while true to some extent, are not translating into gains for the Dollar, leaving many frustrated. The Dollar is suffering from a bad case of dejection and could struggle to see a sustained breakout for some time.

2014-05-13 Is Rising Consumer Credit a Good Thing? by Kristina Hooper of Allianz Global Investors

When gauging whether a rise in consumer credit is a sign of progress or cause for concern, investors should look beyond debt levels to assess who’s taking on more debt and why, as well as the pace of economic activity, writes Kristina Hooper.

2014-05-13 Goldilocks and the Global Economy by Douglas Cote of Voya Investment Management

Macro conditions are lukewarm but positive and largely absent any systemic risk. Momentum stocks have fallen out of favor as the market rotates into names with more attractive valuations. Europe and especially the U.K. have been showing signs of strength despite geopolitical risk with its energy supplier, Russia. The “safety” of sidelined cash exposes investors to what we view as the greatest current risk in the market — upside risk.

2014-05-13 El Niño by Kaisa Stucke, Bill O’Grady of Confluence Investment Management

In our investing process, we look across the spectrum at a multitude of possible events, their probabilities, their effects on markets and weigh them against market prices. Sometimes these discrepancies come from unexpected places. This week we will explore the ramifications of a weather event, El Niño. The soft-commodity markets (grains, sugar, coffee, cocoa and other annual crops) seem to have priced in about a 20% likelihood of an El Niño occurrence this year, while last week the Climate Prediction Center issued a 65% probability for this summer.

2014-05-13 Market Perspective by The CCR Wealth Management Investment Committee of CCR Wealth Management

US equity markets have seen what we would describe as mild volatility over the last few weeks, mostly attributed to geopolitical tensions emanating from the Ukraine-Russia belligerence. For the first quarter, the S&P 500 rose 1.30%, while the Dow Jones Industrial Average and the NASDAQ composite were both down slightly.

2014-05-13 Equity Markets Remain Mixed as Fundamentals Slowly Improve by Robert Doll of Nuveen Asset Management

U.S. equities finished mixed last week as the Dow Jones Industrial Average was the only major index to end in positive territory. The overall macro narrative appears favorable despite the lack of market direction. Scrutiny of beaten-down momentum stocks resurfaced, although broader market spillover remained muted.

2014-05-13 Break Away or Break Down? by Jerry Wagner of Flexible Plan Investments

After multiple weeks of travel, my family threw a trip-postponed birthday party for me Friday night, but it was really just an excuse to have a family get-together. My 92-year-old mom, brother, sister, niece and nephew were there. My wife set up the party of mostly hamburgers, ice cream and cake, with plenty of birthday cards being given.

2014-05-12 "Can You Kick It?" ...and Other Irrelevant Questions by Robert Isbitts of Sungarden Investment Research

This was on my mind recently as CNBC turned 25 years old. That is a significant achievement no matter how you slice it. Since 1989 the biggest business news network around has transformed the way people participate in the markets. Their hosts have become icons, and they have turned some very bright but anonymous portfolio managers and economists into the business world equivalent of rockstars.

2014-05-12 Emerging Markets at Risk by George Bijak of GB Capital Pty Ltd

The massive post-GFC Quantitative Easing (QE) in the USA, EU, and now in Japan has repaired the global banking system’s balance sheet. Debt of various qualities, worth trillions of dollars, was moved from struggling banks to the central banks at book value where it is likely to run out to maturity or rollover.

2014-05-12 Floating-rate Loan Core Value Remains, Despite Headlines by Scott Page, Craig Russ, Christopher Remington of Eaton Vance

In February, we shared with you our perspective on “7 timely questions about today’s floating-rate loan market.” Our views have not changed substantially over the intervening two months and our principal belief remains the same, which we would like to underscore.

2014-05-12 Setting the Record Straight by John Hussman of Hussman Funds

If you think the market is not going to lose a large fraction of its value over the next few years, a century of history thinks you’re wrong.

2014-05-12 Now Is Probably Not The Time To Be Buying Telecom Stocks by Team of GaveKal Capital

Telecom valuations seem to be either in the penthouse (as they are now and as they were in 2005-2007) or in the outhouse (as they were from 2001-2003 and 2008-2010). The charts below show the percent of Telecom stocks that are trading within 25% of their 3-year, 5-year and 7-year max valuation. We look at P/E, P/CF, P/S and P/B on each chart.

2014-05-12 The New Logic of M&A by Joseph Paul of AllianceBernstein

There seems to be a new calculus at work in the recent rash of takeovers, as investors set aside their usual wariness of deals and dealmakers for the promise of growth these combinations may bring. We think it’s a good reason to stick with stocks.

2014-05-12 Extending Our Team to Bangalore India by (Article)

At Thomas White, our investing performance goal is straightforward: to outperform our benchmarks in the long-term and especially during market declines. We feel the surest path to accomplish these goals is to become an exceptional research organization. To meet these objectives, our professionals have come to understand corporations, investor behavior and portfolio design better than our peers, as we continue to expand our global research and product capabilities.

2014-05-12 Energy: An Overlooked Bull Market by Ron Sloan of Invesco Blog

Defensive stocks, such as health care and utilities, have led the market for most of 2014. But we’re starting to see a shift toward cyclical sectors that offer greater exposure to a strengthening economy. In my view, the most overlooked cyclical sector is energy, which has experienced a very strong start this year that’s been under the radar of many investors.

2014-05-11 Are Valuations Really Too High? by John Mauldin of Mauldin Economics

I have done quite a number of media interviews and question-and-answer sessions with audiences in the past few months, and one question keeps coming up: "Are valuations too high?" In this week’s letter we’re going to try to look at the various answers (orthodox and not) one could come up with to answer that basic question, and then we’ll look at market conditions in general.

2014-05-10 The Good, the Bad and the Opportunity by Frank Holmes of U.S. Global Investors

Twice a day, in the morning and at lunch, our investment team sits down together to discuss what’s important and what’s immaterial. This past week, in my opinion, the good outweighed the bad. Much of the economic news was a direct result of government policies, both fiscal and monetary. Here are my findings, which I hope will help you filter through the noise.

2014-05-10 What's the Game Changer for Gold? by Douglas M. Hodge of PIMCO

In the coming days, PIMCO will publish its annual Secular Outlook. A cornerstone of our investment process, it sets the direction for how we will invest our clients’ assets over the coming three to five years. Of course, we revisit our outlook and investment conclusions each year to ensure their continued resonance and efficacy. Similarly, we have a regular strategic business planning process and conduct intermittent reviews. And, like our secular process, we often invite an outside expert or two to spark our thinking and challenge our priors.

2014-05-09 Overview of the Fixed Income Market by Tim Gramatovich of AdvisorShares

“Junk bonds” are often still considered an alternative asset class and remain tremendously confusing to much of the investing public. They are considered by many to be very risky and illiquid. The truth is that the high yield market is a relatively straightforward, well developed and liquid market.

2014-05-09 Sell in May and Go Away? by Russ Koesterich of iShares Blog

An old market adage says to “sell in May and go away.” While now actually may be a good time to trim positions and lower risk, this isn’t because of the calendar month. Russ explains.

2014-05-09 Weak Stock Market Closes Are On the Rise by Team of GaveKal Capital

We've taken note of an increasing number of weak-ish stock market closes and decided to build an indicator to measure the number of weak closes and compare it to stock prices.

2014-05-09 Thoughts on Investing in Convertible Securities by Alan Muschott of Franklin Templeton Investments

Changes and potential changes in monetary policy across the globe, along with increased volatility in currency and equity markets, have thrown a spotlight on convertible securities, described by some as offering the “best of both worlds” in terms of stock and bond characteristics. But what are they, how do they work, and how can they play a part in a diversified investment portfolio in today’s market? Alan Muschott, portfolio manager for Franklin Convertible Securities Fund, who has been investing in convertible securities for more than a decade, provides his take.

2014-05-09 New Dawn for Peripheral Europe? by Darren Williams, Dennis Shen of AllianceBernstein

When Mario Draghi pledged to do “whatever it takes” to save the euro in July 2012, nobody expected things to change so quickly. Peripheral bond markets have since turned around sharply, supporting the European economic recovery. But can the improvements be sustained after countries exit their bailouts?

2014-05-09 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The global recovery remains very uneven, deflation and debt: a very bad mix, a new look at Das Kapital, continued.

2014-05-09 The Job Market, GDP, and the Fed by Scott Brown of Raymond James

The U.S. economy added 1.15 million jobs in April – that’s prior to seasonal adjustment. We normally see large (unadjusted) job gains each spring. This year appears to be stronger than normal, partly reflecting a rebound from a bad winter. Strength in the seasonally adjusted payroll figure is certainly good news, but it may not necessarily be suggestive of a sharper underlying trend in job growth. There is still a very large amount of slack in the job market.

2014-05-09 You Gotta Have Heart by Jeffrey Saut of Raymond James

Secretariat (3-30-70 – 10-4-89) is considered the greatest American racehorse of all time. In 1973 he became the first Triple Crown winner in 25 years, and in the process he set records in all three races that still stand today. In the Kentucky Derby his time was 1:59 2/5, in the Preakness it was 1:53, and in the Belmont Stakes 2:24.

2014-05-09 Fighting History? by Liz Ann Sonders of Charles Schwab

A lot of movement to go nowhere can characterize the major indexes to this point in the year. History suggests we're entering a potentially tough period for stocks, due to both seasonal and midterm election year tendencies.

2014-05-09 The Media's Reporting of the April Unemployment Rate -- A Little Knowledge Can Be Dangerous by Paul Kasriel of Econtrarian, LLC

Economists have “trained” the media to quickly check out what has happened to the labor force when the unemployment rate declines. If the unemployment rate drops and so, too, does the labor force, then the decline in the unemployment rate might not be a signal of a strengthening labor market. Rather, under these circumstances, the decline in the unemployment rate might reflect potential workers becoming discouraged over the lack of employment opportunities and, therefore, dropping out of the labor force.

2014-05-09 Is 2014 the Year to "Buy in May and be Prepared to Stay"? by Kevin Mahn of Hennion & Walsh

One of the long standing adages on Wall Street is that investors would be wise to "Sell in May and Go Away" in most market environments. This adage contends that stock volatility historically is higher during the months of May - October so investors may want to consider exiting the stock market in May, perhaps repositioning to less correlated asset classes, and returning to the stock market in November.

2014-05-08 A Light Unto Cities by Joseph Stiglitz of Project Syndicate

Once notorious for its drug gangs, Medellín, Colombia, now has a well-deserved reputation as one of the most innovative cities in the world. The tale of the city’s transformation holds important lessons for urban areas everywhere.

2014-05-08 In the First 100 Days, Janet Yellen Puts Her Own Imprint on the Fed by Team of Knowledge @ Wharton

Janet Yellen's initial tenure as chairwoman of the Federal Reserve has been fairly smooth, but long-term challenges loom as the Fed considers its ongoing response to a still-stagnant economy.

2014-05-08 Forward into Broad, Sunlit Uplands by Scott Minerd of Guggenheim Partners

It’s topsy turvy season as U.S. interest rates are falling when they should normally be rising and because 2014 might be the year to ignore the age-old advice to sell in May and go away.

2014-05-08 Where Is the Inequality Problem? by Kenneth Rogoff of Project Syndicate

Though Thomas Piketty is right that returns to capital in rich countries have increased in the last few decades, he is too dismissive of the wide-ranging debate among economists concerning the causes. More important, when it comes to reducing inequality between rich and poor countries, capitalism has had an impressive three decades.

2014-05-08 Gold and Portfolio Efficiency by Ade Odunsi of AdvisorShares

In previous commentaries we have discussed the benefits of using a diversified financing currency approach for investing in gold by which we mean using two or more currencies (rather than just the US dollar) to make gold purchases. The example we have used to demonstrate the approach was to construct a time series of the price of gold purchased with an equal weighted basket of dollars, euro, yen and pound.

2014-05-08 Europe, ‘Not Too Hot, Not Too Cold’ Sweet Spot for Credit Investors by Eve Tournier of PIMCO

European economies are improving, yet the region’s low growth and low inflation will keep the central bank engaged. As such, European duration should be safer versus other major developed economies. Given recent European Central Bank comments pointing to a further easing bias, we believe it makes European assets relatively attractive, especially in sectors with deleveraging fundamentals, positive technicals and attractive valuations.

2014-05-08 May 2014 Valuation Heatmaps: The Ongoing Saga of Overvalued Biotechs by Erik Kobayashi-Solomon of YCharts, Inc.

The key investment takeaways from this month’s report are: The sector-level picture in May looks very similar to April's—Utilities are screening as the most undervalued sector and Healthcare as the most overvalued one. Six out of 10 of the largest market capitalization stocks screening as VS10 (most undervalued) are in the Energy sector. However, there is one industry in the Energy sector screening as overvalued, offering the potential for a sector-neutral long-short strategy. The Ongoing Saga of Overvalued Biotech continues. Healthcare remains frothy.

2014-05-08 Middle East/Africa: Regional Economic Review - Q1 2014 by Team of Thomas White International

As the Middle East and Africa region stepped into the New Year, the three regional economies under our coverage did not see any material change in their political or economic situation. Labor problems remained the most immediate concern for South Africa while Egypt unveiled yet another stimulus program to mend an economy that has been struggling amid political uncertainty for three years now.

2014-05-08 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Another stable week for stock prices as deal making, solid earnings and dividend growth offset the conflicting signals on the economy as well as the uncertainties stemming from various global hot spots.

2014-05-08 And That's The Week That Was by Ron Brounes of Brounes & Associates

Yes, spring has officially sprung. After months of hearing that "poor winter weather" excuse, investors seem ready to turn the page (and the calendar) as the 1st quarter GDP is now in the books. With that said, the numbers are expected to be stronger in the coming days and the markets are already reacting accordingly as the Dow Jones even pushed into record territory. Manufacturing and labor have shown signs of thawing out, though housing still lags behind. Earnings season has been better than expected and must of the over-analyses focuses on the outlooks these days.

2014-05-07 Are "Currency Controls" Coming To America On July 1? by Gary Halbert of Halbert Wealth Management

Some very controversial regulations passed way back in 2010 and finalized in 2012 are scheduled to go into effect on July 1 of this year, and most Americans know little or nothing about this new law. Yet the effect of these new regulations could send shockwaves through the financial system worldwide. Basically, the regulations that take effect July 1 will make it very difficult and costly for Americans to hold money or investments outside the US.

2014-05-07 Behavioral Finance and the Bond Market by Jerry Paul, Zach Jonson of ICON Advisers, Inc.

Over the last decade the concept of behavioral finance has received increased recognition in both the academic world and with investors. Modern Portfolio Theory makes three distinct assumptions: investors are rational, markets are efficient, and expected returns are purely a function of risk. In contrast, followers of behavioral finance generally believe investors are less than perfect and subject to many emotional biases. Said differently, behavioral finance differs from traditional finance in that it focuses on how investors actually behave, rather than theorizing how they should behave.

2014-05-07 Does a Perfect Policy Portfolio Exist? by Jeff Knight of Columbia Management

The idea of a policy portfolio, the core strategic asset class weightings for an investment portfolio, has evolved significantly during the course of my career as an asset allocation specialist. From the humble beginnings of standard balanced investing (the good old 60/40), investors have searched for the best neutral asset allocation to serve their goals over the long term.

2014-05-07 Financial Genius is…a Bull Market by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, reviews the events that caused the “great recession” and cautions that although “we already have suffered a serious and global recession and financial crisis,” he still believes “the question is not, ‘Will there be pain?’ but rather, “When will there be pain, and how much of it?”

2014-05-07 First Quarter Letter by Team of Grey Owl Capital Management

The broad equity market displayed a fair amount of volatility during the quarter, but essentially went sideways. This pattern continued through April; 2013’s losers became 2014’s winners and vice versa. In the broadest sense, bonds narrowly beat stocks on the heels of 2013’s thorough drubbing.

2014-05-07 And the Band Played On by Peter Schiff of Euro Pacific Capital

After three months of consistently disappointing jobs numbers, the markets were as keyed up for a good jobs report as a long suffering sailor awaiting shore leave in a tropical port. The just released April jobs report, which claimed that 288,000 jobs were created in the U.S. during the month, provided the apparent good news. But you don't have to go too far beneath the surface to find some troubling trends within the data. Even this minor excavation was too much for the media cheerleaders and Wall Street pitchmen to handle.

2014-05-07 Warning Sign: Number Of 1% Down Days Are Ticking Up And Tracking Taper by Team of GaveKal Capital

One of the many technical data points that we look at is the 6-month moving sum of days where either the index or an individual stock finishes down by 1% or more.

2014-05-07 The Top Five Government Policies I’m Watching This Week by Frank Holmes of U.S. Global Investors

Every morning when I meet with the investment team, we review the news of the previous day, the movements of the markets around the world, and corporate actions that may affect our funds. This is how we keep our ears open in order to manage money that shareholders like you have entrusted us with. We meet again at lunchtime, daily, to share ideas, because something happening in China may affect the U.S. markets, or an energy company might have news that can benefit our domestic funds as well as our resources funds.

2014-05-06 Global Equity Income Update: 2014 Performance and Trends by Alex Crooke, Head of Global Equity Income (Article)

Alex Crooke, Head of Global Equity Income, provides a quarterly update for the Henderson Global Equity Income Fund while noting key attributes to performance and expectations for the second half of the year.

2014-05-06 Ten Ways the Next Generation of Financial Planners Will Change the Profession by Bob Veres (Article)

I have distilled ten key themes that illustrate how the next generation of advisors will change the profession when they take the reins.

2014-05-06 The Book that will Reshape the Study of Economics by Michael Edesess (Article)

It’s incredibly rare to see a work ascend to the status of a classic almost instantaneously following its publication. Such a work is Thomas Piketty’s Capital in the Twenty-First Century. It is almost certain that its impact will last for decades. A century hence, it may be a cornerstone of economic and political debate and discussion, much as those of Adam Smith, John Maynard Keynes and Friedrich Hayek are today.

2014-05-06 Can Investors Profit using Academic Research? by Adam Jared Apt (Article)

Two professors have been conducting a large-scale study to see if the advantages of stock-market anomalies are traded away once they are published in academic papers and therefore become widely known, and if so, how quickly.

2014-05-06 The Six Most Costly Words for Your Business by Dan Richards (Article)

Every advisor knows the most dangerous and expensive words when it comes to investing - "It’s different this time." An email in response to a recent article led me to conclude that there’s six words that are just as costly...

2014-05-06 A Simple Technique to Convert More Prospects into Clients by Dan Solin (Article)

To become great at converting prospects into clients, remember these two words

2014-05-06 Expert Intuition and Investing by John Alberg and Michael Seckler (Article)

There are great investors who are unmoved by unproductive biases and instead exhibit deep expertise, as evidenced by long track records of superior performance. Where does expertise come from? How does an understanding of expertise inform how one should evaluate investment opportunities?

2014-05-06 Networking with Centers-of-Influence by Beverly Flaxington (Article)

I have worked with the same accountant on behalf of one of my clients for years, but the accountant and I have never had a non-client related conversation about our business. How should I approach the accountant to ask for additional business?

2014-05-06 Fighting Financial Advisor Anxiety: Part Two by Sarah Scorgie (Article)

Last month, I discussed how to calm clients’ nerves with educational marketing strategies. Now, I’ll discuss strategies for making your practice more relatable.

2014-05-06 Letters to the Editor by Various (Article)

Readers respond to several articles and commentaries that appeared within the last week.

2014-05-06 Weekly Market Update by Team of Castleton Partners

US Treasury yields declined across the entire maturity spectrum last week, as renewed geopolitical risk more than outweighed a strong employment report. With inflation remaining well below the Fed?s target rate of 2%, long dated Treasury yields continued to decline at a faster rate than shorter dated yields, further flattening the yield curve.

2014-05-06 Optimists and Pessimists Find Fuel in Jobs Data by Kristina Hooper of Allianz Global Investors

Last week?s batch of hot and cold jobs numbers pointed to a conflict that the Fed saw coming months ago, writes Kristina Hooper: The unemployment rate is a flawed metric for gauging the health of the economic recovery.

2014-05-06 The Risk Trilogy by W. Ben Hunt of Salient Partners

Gregg Greenberg at was kind enough the other week to give me a few minutes (2:30 to be exact) in a video interview to enumerate the three biggest risks I saw facing markets today. At first I rolled my eyes at the request and the format. 150 seconds? Really? I mean, have you heard my Alabama drawl? It can take me 150 seconds just to order a cup of coffee.

2014-05-06 The U.S. Economy Reached a Turning Point in April by Robert Doll of Nuveen Asset Management

U.S. equities finished higher last week with the S&P 500 advancing nearly 1.0%. Positive sentiment has been supported by growing traction for the economic recovery, key economic data and corporate commentary. Although the upbeat dynamics were mentioned in the latest FOMC statement, policy normalization expectations have not changed. Another widely discussed tailwind was M&A headlines. Although tensions continue in Ukraine, geopolitical risks were mostly on the back burner.

2014-05-06 Managed Futures: Positive Trends Ahead?? by Vineer Bhansali, Matt Dorsten, Graham Rennison of PIMCO

Trend-following, the primary approach used in managed futures strategies, seeks positive returns by capturing momentum across major asset classes. Despite exceptional performance in the 2008 financial crisis, trend-following strategies were less successful in subsequent years, in part because massive central bank interventions increased market correlations, suppressed volatility and curtailed left-tail events.

2014-05-06 The Indian Elections by Kaisa Stuck, Bill O'Grady of Confluence Investment Management

We are currently in the midst of the largest democratic election process on earth. Almost 815 million Indian citizens are going to the polls to cast their vote in the general elections. This week we will take a look at the Indian political landscape, the current election cycle and how the political system has brought the country to its current condition. We will pay special attention to the expected winner, Modi, with regard to both his political platform and history of governance in his current post. We will conclude by looking at the possible ramifications of his win.

2014-05-06 An Improving Economy, But Lower Rates. Why the Disconnect? by Russ of iShares Blog

Despite economic data showing an improving economy, interest rates remain stuck in a low and narrow range. Russ explains why this is and what it means for investors.

2014-05-06 Albania?s Fertile Grounds for Oil Opportunities by Frank Holmes of U.S. Global Investors

Texas is oil country. The state I now call home leads the nation in oil production and would be one of the top oil-producing nations if it were its own country. But that doesn?t stop us from exploring other promising oil opportunities further afield. I recently traveled to Albania to check out a drill site of Petromanas Energy, a Calgary-based international oil and gas company focused on exploration and production throughout Europe and Australia. We own the junior stock in our Global Resources Fund (PSPFX) and Emerging Europe Fund (EUROX).

2014-05-06 Taking Emotion Out of Taking Risk by Peter Langerman of Franklin Templeton Investments

The straight ?risk-on/risk-off? play where investors flee assets perceived as risky en masse in times of uncertainty seems to be becoming a bit more nuanced this year. As a bottom-up stockpicker, Peter Langerman, takes the short-term emotional response out of the equation as he looks for opportunities for his portfolios where other investors may have jumped ship. Langerman discusses where he?s finding value today, why he thinks the markets are probably ?right where they should be? and why some investors may need to take a few risks to meet their long-term financial goals.

2014-05-06 Labor Markets Bounce Back from Winter Hibernation by Chris Maxey, Brian Payne of Fortigent

In a less than surprising development, U.S. non-farm payrolls grew by 288,000 in April. While some are loathe admitting the positive nature of April’s report, there was plenty to be happy about in the latest release, suggesting the economy continues to move towards a more favorable footing. As always in the post-2008 world, caveats remain and the trend in the months ahead will provide a clearer picture into the pace of recovery.

2014-05-05 Retail, Infrastructure Are Issues to Watch in Colombia and Peru by Jason Trujillo of Invesco Blog

The Invesco Emerging Markets team spent a week traveling through Colombia and Peru, meeting with company management teams, consultants and government officials. During our trip, two themes were prevalent that could have broad implications for local companies and global investors: the relative under-penetration of modern-format retailing throughout Colombia and Peru, and the severe need for infrastructure improvement.

2014-05-05 Economic Capital Market Summary by Gregory Hahn of Winthrop Capital Management

After the Financial Crisis and the resulting Dodd-Frank Act and Affordable Health Care Act, we knew there was no way we would go back to normal, whatever normal really was. Our world changed and we still continue to feel the uncomfortable mutations after the crisis. The management of Citigroup showed another disconnect with regulators as its 2014 capital plan was rejected. After several attempts to launch its healthcare website, the Obama administration announced that over 8 million people had signed up for health care insurance through the government exchange.

2014-05-05 The Impact of Interest Rates on Real Estate Securities by Team of Forward Management

Interest rate risk is one of most pressing topics being discussed among advisors, consultants and investors. As of March 2014, we have been through five and a half years of extraordinarily aggressive monetary policy and outright intervention in the capital markets by the U.S. Federal Reserve.

2014-05-05 Big Pharma's Bitter Pills by Peter Nielsen of Saturna Capital

Price Pressure Becoming Pharmaceutical Industry's Bitter Pill as Breakthrough Drug Therapies Break the Bank

2014-05-05 Cahm Viss Me Eef You Vahn to Live by John Hussman of Hussman Funds

Taking the broad stock market as a whole, and considering all stocks ? not simply the largest of the large caps ? investors are now making the broadest and most leveraged bet on overvalued equities in U.S. history. Conditions somehow do not feel so dangerous because profit margins are cyclically extreme, but I suspect that this only means that investors will be surprised by the depth of the markets losses, as they were in 2000-2002 and 2007-2009. The lessons on this really are freely available all the way back to the South Sea Bubble.

2014-05-05 Indian Investors Express Their Optimism by Mark Mobius of Franklin Templeton Investments

Some 800 million voters in India are heading to the polls this month in an election process that will take several weeks to complete. India?s stock market has recently reflected the optimism investors feel in India. After a stretch of policy logjams and years of unmet potential in India, we?re also optimistic.

2014-05-05 We're Still Not Seeing New Highs in Individual Stocks Despite the World Stock Index at All-time High by Team of GaveKal Capital

The MSCI World Index made a new all-time high last week on yet again a fewer number of stocks making a new 200-day high. In fact, only 7% of stocks in the MSCI World Index made a new 200-day high last Friday.

2014-05-05 Asian Currencies to Stay Calm at Center of EM Storm by Hayden Briscoe of AllianceBernstein

Emerging markets have fallen from favor, but does that mean investors should avoid them entirely? We don?t think so.

2014-05-05 The 5 Commandments of Warren Buffett and Charlie Munger by William Smead of Smead Capital Management

Here you will find our review of the 2014 Berkshire Hathaway Annual Shareholder Meeting. As we consider these men pioneers of long-duration common stock investing, we wanted to share what we believe were the best nuggets of wisdom from the weekend.

2014-05-04 Albania's Fertile Grounds for Oil Opportunities by Frank Holmes of U.S. Global Investors

Texas is oil country. The state I now call home leads the nation in oil production and would be one of the top oil-producing nations if it were its own country. But that doesn?t stop us from exploring other promising oil opportunities further afield. Last week I traveled to Albania to check out a drill site of Petromanas Energy, a Calgary-based international oil and gas company focused on exploration and production throughout Europe and Australia. We own the junior stock in our Global Resources Fund (PSPFX) and Emerging Europe Fund (EUROX).

2014-05-03 How to not get screwed by the bond bubble by Robert Isbitts of Sungarden Investment Research

To paraphrase an old Sean Connery/Roger Moore movie: bonds?high quality bonds. Bond funds, too. Bond funds, particularly those that invest in US Treasuries and other types of bonds at the low end of the risk spectrum, have been popular investments with individual investors for a long time. Since a lot of those bond buyers are generally risk-averse, many of them likely moved cash out of money market funds to buy the bond funds, so there is likely a strong element of ?reaching for yield? occurring there. That is, they were used to earning 6-7% on their Treasury Bonds not very long ago.

2014-05-03 Housing may be returning to a bad neighborhood by Team of Northern Trust

The head of financial stability at the Bank of England recently called rising property prices ?the very brightest [hazard] light on its dashboard.? But he may have a difficult time getting his colleagues who are charged with promoting full employment to agree with him. And if they do, it is far from clear what they might do about the issue. Some favor supervisory curbs; others prefer the more-traditional method of raising rates. The recovery in global real estate has been pronounced. While it beats the alternative, one wonders whether the hard lessons learned in recent corrections have been su

2014-05-03 A Yen for a Mortgage by John Mauldin of Mauldin Economics

For some time I have been saying that I was going to close the mortgage on my new apartment and then hedge it in yen. I promised to tell you the story, including what type of loan I got and how I am doing the hedge. This week I was finally able to pull the trigger. This topic will also let us re-examine why I think the Japanese yen is a screaming short. This is not a big think piece, but I think many of you will find it interesting. It outlines how I put my economic thinking into actual practice, and names names, if you will, of those who helped me do it.

2014-05-02 Looking for Bubbles Part One: A Statistical Approach by Jeremy Grantham of GMO

It is a sensible expectation that reasonable long-term value investors will endure pain in a bubble. It is almost a rule. The pain will be psychological and will come from looking like an old fuddy-duddy? looking as if you have lost your way in the new golden era where some important things, which you have obviously missed, are different this time. For professionals this psychological pain will also come from loss of client respect, which always hurts, and loss of peer group respect, which can be irritating.

2014-05-02 Yellen?s Three Big Questions (and a Few Others) by Scott Brown of Raymond James

Speaking to the Economic Club of New York, Fed Chair Janet Yellen presented an analysis of the monetary policy actions taken to address the Great Recession and offered guidance on what will drive policy decisions going forward. The centerpiece of her talk was about the three big questions that the Fed has to answer. However, there are a number of other debates going on in economics right now that have long-term consequences.

2014-05-02 Throw Deep?! by Jeffrey Saut of Raymond James

Back in the late 1980s a newspaperman visiting the Raiders football training camp in California had just returned from the Jack London Historic Monument. He read a sample of London?s prose to the Raiders? colorful quarterback, Ken ?The Snake? Stabler:

2014-05-02 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Earnings have been supportive and merger activity has skyrocketed these past couple weeks. Stock markets have remained firm as a result despite money coming out of the previous hot sectors of social media (Amazon) & the biotech industry (despite great fundamentals).

2014-05-02 Emerging Markets Outlook - April 2014 by Team of Thomas White International

Emerging market equities as an asset class have been underperforming developed market equities for more than three years, though they continue to maintain the lead over 10-year returns. The divergence in returns between emerging and developed markets widened sharply in 2013, when the prospect of reduced capital inflows heightened investor concerns about slower economic growth in the emerging countries.

2014-05-02 Need for New Midstream Energy Infrastructure Remains Strong by David Chiaro of Eagle Global Advisors

Capital expenditures expected to surpass $640 billion by 2035, says David Chiaro, co-portfolio manager of the Eagle MLP Strategy Fund.

2014-05-02 April 2014 Pension Finance Update by Brian Donohue of October Three Consulting

April was another down month for pension sponsors, marked by declining interest rates and sluggish stock markets. Both ?model? plans we track lost ground last month, with our traditional ?Plan A? losing about 2% and the more conservative ?Plan B? dropping less than 1% during April. For the year, sponsors have now given back roughly one-fourth of 2013's ?bounty? ? Plan A is now down 5% during 2014, and Plan B is down more than 2%.

2014-05-02 Views of the Insane on Diversification by Kendall Anderson of Anderson Griggs

I recently read this quote from Craig L. Israelsen, a Financial Planning contributing writer in Springville, Utah. Granted, I have never met, nor have I had any conversations with Mr. Israelsen, but he seems to be a competent professional. According to his bio, he is an executive in residence in the personal financial planning program in the Woodbury School of Business at Utah Valley University. However, his statement still bothers me a bit, as he is saying that any other investment approach must be insane.

2014-05-02 Down Under: Commodities to Consumption by Tarik Jaleel of Matthews Asia

Ever since China's demand for commodities intensified around 1999, its increased reliance on imported energy and minerals has underpinned Australia's boom in the natural resources industry. Naturally, as China's import growth has recently slowed, materials and energy sector firms in both Australia and New Zealand have grown cautious about their business prospects.

2014-05-01 Attractiveness of Municipal Bonds Should Not Be Overlooked in 2014 by Municipal Insight Committee of Eaton Vance

After a challenging year for the municipal bond (muni) market in 2013, we believe the underlying strength of munis has improved, making the asset class an attractive proposition. In our view, challenges and headwinds will continue in 2014; however, more palatable yields and the relative attractiveness of munis versus other taxable alternatives may help investors limit the volatility and downside witnessed over the past year.

2014-05-01 Old Embers Never Die by Scott Minerd of Guggenheim Partners

The situation in Ukraine could become worse than markets now anticipate as Putin?s best interests might not be what investors expect.

2014-05-01 Europe Part 2: The Smart Beta Portfolio by James Calhoun of AdvisorShares

In our last post we discussed the attractiveness of European equities in aggregate, and assessed the pros and cons of implementing this regional investment theme with a market capitalization weighted ETF (VGK ? Vanguard). It was our conclusion that the most effective way to gain exposure to the expected advance in European equities was through a multi-factor ?smart beta? portfolio.

2014-05-01 A Tepid Cyclical Lift by Tom West of Columbia Management

The S&P 500 Index should grow earnings by about 7% this year, while consensus estimates for the U.S. economy are for 2.5% real growth. One reason for the gap between the two numbers is that the constituent companies of the broad market have a more cyclical tilt than the economy itself, and could be expected to expand faster in a recovery. Fair enough. But are the cyclical drivers like investment and discretionary spending on track to deliver that cyclical boost to earnings? The answer is probably yes, but only if expectations are tempered.

2014-05-01 Small-Cap Valuations: Way Too High or Room to Run? by Adam Peck of Heartland Advisors

Small-cap stocks have been on a tear for several quarters. Conventional wisdom in this situation would be to shift assets away from small-caps, and reallocate them to other asset classes. The concept sounds reasonable, but is it well-grounded in fact? What is the state of small-cap valuations today? These questions merit a closer look.

2014-05-01 The ?Whites of Their Eyes?: The Fed?s Changing Reaction Function by Scott Mather, David Fisher of PIMCO

While the unemployment rate has historically been one of the Federal Reserve?s key measures of spare capacity, and thus inflation risk, those eagerly awaiting each month?s employment report for signals on the Fed?s likely response may be barking up the wrong tree. The central bank still attempts to estimate the natural rate of unemployment, but conflicting signals from the labor market have clearly made the Fed less willing to trust its models. The result: Inflation will be more important than employment in the Fed?s decision-making process.

2014-05-01 The Gold Price is Fixed: So What? by Peter Schiff of Euro Pacific Precious Metals

We can't ignore it anymore - the markets are rigged. The LIBOR scandal broke almost two years ago, and the banks found responsible for manipulating that key index are still dealing with lawsuits. Meanwhile, allegations of gold market manipulation have been simmering for over a decade and grew into an inferno after the spot price dropped dramatically last spring.

2014-04-30 The Debate Debate by Peter Schiff of Euro Pacific Capital

While there is wide agreement that the cost of college education has risen far faster than the incomes of most Americans, there is some debate as to whether the quality of the product has kept pace with the price. Not surprisingly, almost all who argue that it has (college administrators, professors, and populist politicians) are deeply invested either ideologically or financially in the system itself. More objective observers see a bureaucratic, inefficient, and hopelessly out of touch ivory tower that is bleeding the country of its savings, and more tragically, its intellectual acuity.

2014-04-30 The Return of the Renminbi Rant by Stephen Roach of Project Syndicate

China?s currency, the renminbi, has been weakening in recent months, resurrecting familiar US charges of official manipulation and beggar-thy-neighbor mercantilism. But this timeworn charge ? politically inspired and grounded in bad economics ? diverts attention from far more important issues affecting the US-China economic relationship.

2014-04-30 The TCW Advantage: Analysis with Consumer Credit by Harrison Choi, Brian Rosenlund of TCW Asset Management

5 years removed from the depths of the crisis and behind the tailwinds of an incredibly accommodative Federal Reserve, asset prices and of course Non Agency RMBS prices have improved dramatically. When double-digit loss adjusted yields were available most participants in the market did very well if they were able to simply overcome the fear of buying an asset class that was seemingly in freefall. At current prices and significantly lower loss adjusted yields today, however, the margin for error is far lower and many managers without the expertise, infrastructure and experience will underperfor

2014-04-30 De-Risking Pensions in a Time of Tapering by Rene Martel, Markus Aakko of PIMCO

Despite improved funding in corporate defined benefit pension plans, some sponsors concerned about rising rates may be tempted to delay glide path prescriptions to boost fixed income allocations. For these sponsors, a better approach might be to break de-risking into two steps, potentially allowing for significant risk-reduction benefits yet preserving tactical flexibility in timing purchases of long-duration bonds. Any reduction in equity and other return-seeking assets should be implemented in short order to lock in recent market gains. ?

2014-04-30 Dependence On Government Has Become Epidemic by Gary Halbert of Halbert Wealth Management

Did you know that the number of Americans getting benefits from the federal government each month greatly exceeds the number of full-time workers in the economy by a longshot? Sadly, it?s true. Based on the latest Census Bureau data available, there were over 148 million non-veteran Americans who were on some kind of monthly means-tested government benefit programs in 2012, by far the highest number ever. Today, that number is around 167 million by some more recent estimates.

2014-04-30 Achoo! by William Gross of PIMCO

There?s nothing like a good sneeze; maybe a hot shower or an ice cream sandwich, but no ? nothing else even comes close. A sneeze is, to be candid, sort of half erotic, a release of pressure that feels oh so good either before or just after the Achoo! The air, along with 100,000 germs, comes shooting out of your nose faster than a race car at the Indy 500.

2014-04-30 Does Negative GOFO Signal Higher Prices for Gold Financed in Currencies? by Ade Odunsi of AdvisorShares

In recent weeks a number of gold commentators have once again highlighted the strong inverse relationship over the last year between the price of gold in dollar terms and the London Bullion Market Association Gold Forward Offered Rate "GOFO". Since the first week of July 2013 when the price of gold bounced decisively, the GOFO rate has fairly reliably predicted the future direction of the gold price.

2014-04-30 Global Ground Zero in Asia by Nouriel Roubini of Project Syndicate

The most pressing geopolitical issue of our time is not the prospect of conflict between Israel and Iran over nuclear proliferation or rising tensions between Russia and the West over Ukraine. It is the challenge of managing China's rise and ensuring that peace and prosperity prevail in Asia.

2014-04-30 Valuing Legends by Michael Kayes of Willingdon Wealth Management

Some time ago a sportswriter asked legendary quarterback Johnny Unitas what he thought he was worth relative to the enormous salaries being paid to today's best quarterbacks. Unitas said, "Maybe about $750,000." The sportswriter was incredulous and said, " Mr. Unitas, the top quarterbacks today make several million dollars a year." To which Unitas replied, "Well, you have to understand, I'm 75 years old." I love that story. It tells you so much about one of the greatest players in NFL history, but it also serves as a reminder that the process of valuation is far from an exact science.

2014-04-30 Strong Insider Ownership: Do as I Do, Not as I Say by William Smead of Smead Capital Management

At Smead Capital Management, we often get asked if we visit the top management of the companies we research. While we read everything we can and do get exposed to the management of our companies over time, we believe it extends credulity to think that a 15 to 30 minute meeting with a senior executive of one of our firms is going to produce alpha for our clients. And, even if the meetings were useful, is there a single senior manager in the US who would tell us that they have big problems around the bend or that their common stock is immensely over-valued?

2014-04-30 Gaming The System = Lower Rates by Team of GaveKal Capital

Many are shocked to learn that the Fed's payment of 25bps of interest on excess reserves (a clear banking subsidy) is available to foreign banks, and they have parked substantial sums with the Fed. In the chart below we show the total assets of foreign banks with branches in the US, their cash assets and the percent of assets represented by cash assets. Currently, foreign banks represent 51% of the excess reserves on deposit with the Fed.

2014-04-29 Evolving Infrastructure Investing - Broader, Deeper, Global by (Article)

Infrastructure offers an attractive combination of potential inflation hedging, income generation and long-term capital growth. In this video, Northern Trust's Shundrawn Thomas, Global Head of ETFs, outlines the distinctive approach that FlexShares' NFRA ETF takes by starting from the bottom up in identifying companies with infrastructure ownership across traditional and new infrastructure sectors.

2014-04-29 Tempest in a Teapot: Michael Lewis’ Flash Boys Solves a Problem that is Barely There by Laurence B. Siegel (Article)

Michael Lewis is the finest writer in a generation to turn his attention to the practice of finance, but in Flash Boys: A Wall Street Revolt - his account of high-frequency trading and of a likeable trader who found a way to beat it - he is a few steps off base.

2014-04-29 How High Expectations Can Hurt Your Business by Dan Richards (Article)

It’s conventional wisdom that ambitious goals and high expectations go along with success. But a recent conversation with a top-performing advisor and some groundbreaking research show that having expectations that are too high will actually damage your business.

2014-04-29 Why PowerPoint Is a Sales Killer by Dan Solin (Article)

You can find thousands of books and articles about improving your PowerPoint presentations. Ignore all of them and adopt this rule instead: Never use PowerPoint in a one-on-one presentation or a small group setting. Here’s why.

2014-04-29 How to Help Business Clients Unlock Wealth by Bob Veres (Article)

Is there a way to help your business clients diversify their holdings, take some risk off the table and create a side investment portfolio that will sustain them if their business runs into trouble? Is there a way you can help your clients find capital when they need it most?

2014-04-29 Three Strategies for Working with Older Clients - And Preserving the Relationship by David Solie (Article)

Recent statistics confirm the magnitude of the loss: 70% of widows change financial advisors within six months of their husbands’ deaths. Is this an unavoidable reality of being a financial advisor, or are there steps that can be taken to preserve these accounts? In my opinion, many of these losses can be avoided if advisors follow three preservation strategies with their older clients.

2014-04-29 How to Rethink Your Market Niche by Beverly Flaxington (Article)

I work with 30-year-old entrepreneurs, 60-year-old dentists, divorced women and others. If I limit myself, I will leave opportunities on the table all the time. Am I wrong to be diverse in what I do?

2014-04-29 Content Marketing: The Long and Short of It by Meghan Elliot (Article)

While capsulated content - tweets, Facebook posts, 30-second videos and snappy emails - has an important place in your marketing strategy, you have to make room for longer content that educates and informs on more complex issues.

2014-04-29 Six Tricks for Creating Killer Content by Bradd DelMuto (Article)

Most advisors are sharing market data and information, creating presentations, sending emails and solving client issues every day. Don’t let this collection of content wither away. It can be reworked into "content gold" elsewhere.

2014-04-29 Letters to the Editor by Various (Article)

Readers respond to Gary Halbert’s commentary, The Real Obamacare Nightmare is Just Beginning, which was published on April 23.

2014-04-29 Americas: Regional Economic Review - Q1 2014 by Team of Thomas White International

The developed economies in North America continue to see relatively healthier growth prospects this year, while the outlook for the emerging economies in Latin America remains subdued. Trends from both the U.S. and Canada indicate that these economies are recovering from the slowdown at the beginning of the year, caused by adverse weather.

2014-04-29 Weekly Market Update by Team of Castleton Partners

With the crisis in Ukraine escalating, US Treasury yields were able to grind marginally lower last week, despite improving economic data pointing to gradually improving fundamentals. At a yield of 2.67%, 10 year Treasury rates have been confined to a 25 basis point trading range over the last 12 weeks (2.57%- 2.82%), which according to Bloomberg, is the narrowest such range in the last two decades.

2014-04-29 What the Housing Doldrums Mean for Fed Policy by Kristina Hooper of Allianz Global Investors

Economic conditions are gradually improving, but the housing market has lagged. Kristina Hooper highlights what it will take to get housing back on track.

2014-04-29 Where Do Small Caps Stand? by JB Taylor, Jeff Cardon of Wasatch Funds

QE?s effect on stocks has perhaps been most visible since June of 2012. The Russell 2000 is up over 50% since then, mostly driven by lower-quality stocks, which is quite unusual this late in a market cycle. At present, the mood of the market has definitely tilted back to risk-taking in lower-quality, more cyclical stocks. In addition, the valuations of higher-flying software and biotech stocks have been at nosebleed levels. Overall, the fundamentals of small-cap companies don?t really support what we?re seeing in the market.

2014-04-29 The Race for Speed by Dan Royal, Daniel Scherman of Janus Capital Group

Much attention has been given recently to the complexities of U.S. equity market structure, and the potential for predatory high-frequency traders to work within that complex structure in a way that negatively impacts other market participants. There is no question the market structure faces challenges, but there are a number of tools and best practices that asset managers can utilize to mitigate the negative impact of high-frequency trading.

2014-04-29 Will a Rise in Rates See a More Lasting Shift to Quality? by Charlie Dreifus of The Royce Funds

Late March saw signs of a re-emergence and shift back to the kind of quality names that we like. Portfolio Manager and Principal Charlie Dreifus discusses the recent Fed policies and their effects on the market, his outlook on the U.S. and global economy, current valuations, small-cap quality, and more.

2014-04-29 Why Are Hedge Funds Struggling in 2014? by Chris Maxey, Ryan Davis of Fortigent

2014 has been a year marked by shaky equity markets and relatively higher volatility than observed in 2013. With falling equity market correlations and increased stock dispersion, it was presumably a more favorable environment for hedge funds. Unfortunately, that has not been the case as most alternative investment approaches are posting less than stellar results so far this year.

2014-04-29 Putin's Ideologist by Bill O'Grady of Confluence Investment Management

For the past few months, Western leaders have been baffled by Russia?s behavior toward Ukraine and, to a lesser extent, Eastern Europe. To better understand Russia?s actions, we will examine the ideology of Aleksandr Dugin, the man who created the ideology that appears to be behind Putin?s behavior. We will offer a short biography of Dugin, focusing on his intellectual roots and the creation of the Eurasian Concept. Using Dugin?s framework, we will examine Putin?s recent behavior. As usual, we will conclude with market ramifications.

2014-04-29 First Quarter Commentary by John Prichard of Knightsbridge Asset Management

In investing, certain things are viewed as worth paying a lot for, if you "know" you're going to get them. Akin to Socrates, we speculate that it may be wiser to admit that you do not know the future and therefore are unwilling to pay for these positive outcomes, than to falsely believe you can know the future with certainty and are justified in paying a high price...

2014-04-29 Europe: Market Capitalization vs. Smart Beta by James Calhoun of AdvisorShares

A bullish investor consensus for European equities appears to be building. More and more, we are hearing and reading that European equities are attractive and undervalued. It may be the right time for greater exposure to developed international equities, and Europe might be the right place for investors to focus. However, why stop there? Why stop at the regional level?

2014-04-29 Has the Dollar Lost its Safe Haven Status? by Axel Merk of Merk Investments

The greenback isn?t what it used to be. At least for now, when there?s a ?flight? to U.S. Treasuries; historically a sign of ?safe haven? demand; the U.S. dollar has not only not benefited but has increasingly been on the losing end. Is this a temporary sign of special circumstances or has the dollar lost its safe haven appeal? There may be profound implications for investor?s portfolios seeking downside protection.

2014-04-28 Henny Pennies by Tony Crescenzi, Mike Amey, Tadashi Kakuchi, Ben Emons of PIMCO

While the Fed?s qualitative guidance may have increased uncertainties over monetary policy, volatility will likely remain contained by powerful short- and long-run forces related to the economic outlook. In the UK, we should at least respect the risk of a hike late in the first quarter of 2015, earlier than what is currently priced in. In Japan, we believe the BOJ will remain full throttle on its current monetary easing for some time.

2014-04-28 The Devolution of Diversification by Chris Richey of Neosho Capital

We are only some 40 years removed from an era when the typical investment account had 12 or fewer individu-al holdings, and less than 20 years removed from a time when respected stock funds might hold 20-30 stocks and be considered ?fully diversified?. Now we find that the typical active equity portfolio or fund holds between 50-100 individuals stocks and that there are generally three or more such active equity managers for each institutional or high net worth account, all adding up to hundreds of underlying holdings.

2014-04-28 IMF Meetings: China and Ukraine Concern Emerging Market Investors by Banu Asik Elizondo of Invesco Blog

Three recurring themes pertaining to emerging markets became apparent during the recent spring International Monetary Fund (IMF) meetings in Washington, D.C.

2014-04-28 Fed?s Inflation Target Misguided? Good vs. Bad Disinflation by Ken Taubes of Pioneer Investment Management

For more than a year the Federal Reserve Board has cited inflation below its targeted 2% level as one justification for maintaining its extraordinarily accommodative monetary stance. As of February, the core inflation rate was 1.1%, based on the Personal Consumption Expenditure (PCE) inflation series, the Fed?s preferred measure of inflation. But there is good reason to question whether the 2% target justifies current policy.

2014-04-28 Resisting the Sirens by Mark Oelschlager of Oak Associates

There has been an interesting shift in the market over the past several weeks, as high-growth stocks (an area to which we have limited exposure, given our preference for more fairly-valued growth opportunities) have suffered a significant correction after being the darlings of the market since June of last year.

2014-04-28 Equities Awaiting Stronger Growth Before Next Move by Robert Doll of Nuveen Asset Management

U.S. equities finished modestly lower last week with the S&P 500 nearly unchanged. Most of the damage occurred on Friday when escalating tensions surrounding Ukraine weighed on sentiment. Positive dynamics included an improvement in first quarter earnings metrics, a notable pickup in M&A activity and deal speculation. A broader macro narrative reflects better traction for the recovery and gradual policy normalization. With momentum plays under renewed scrutiny, several internet, software and biotech companies sold off despite an expected cushion from solid first quarter results.

2014-04-28 The Search for Yield: How Long Could It Last? by Russ Koesterich of iShares Blog

How long will low rates ? and the accompanying search for yield ? continue? Russ weighs in.

2014-04-28 The Future is Now by John Hussman of Hussman Funds

The Federal Reserve has stomped on the gas pedal for years, inadvertently taking price/earnings ratios at face value, while attending to ?equity risk premium? models that have a demonstrably poor relationship with subsequent market returns. As a result, the Fed has produced what is now the most generalized equity valuation bubble that investors are likely to observe in their lifetimes.

2014-04-27 The Cost of Code Red by John Mauldin of Mauldin Economics

There is reason to believe that there have been major policy mistakes made by central banks - and will be more of them - that will lead to dislocations in the markets - all types of markets. And it’s not just the usual anti-central bank curmudgeon types (among whose number I have been counted, quite justifiably) who are worried. Sources within the central bank community are worried, too, which should give thoughtful observers of the market cause for concern.

2014-04-26 China Holds the Keys to the Gold Market by Frank Holmes of U.S. Global Investors

It’s important to follow the money, or in this case the gold, to see how people around the world react to this rare commodity. Looking forward, stay curious as an investor and you’ll see if China can keep the key to the gold market.

2014-04-25 A Creative Approach to Revitalize South Korea?s Economy by Mark Mobius of Franklin Templeton Investments

South Korea has been an exciting country to follow since Templeton started investing in emerging markets in 1987. The country represents one of the great success stories of the modern age, rising from extreme poverty at the end of the Korean War to become an affluent, democratic and highly technologically advanced country. However, we believe recent years have seen signs that the methods and structures that gave rise to the years of dramatic economic progress have started to lose their effectiveness.

2014-04-25 ?Cautious? Investors: Saying One Thing, Doing Another by Russ Koesterich of iShares Blog

Five years into an equity bull market, investors say they?re still cautious. However, Americans hold as much risk in their financial portfolios as they did during the tech bubble in 2000. Russ explains what?s behind this trend and what it means for investors.

2014-04-25 The Rate at Which Foreigners are Dumping Japanese Stocks is Slowing by Team of GaveKal Capital

Foreigners have been net sellers of Japanese stocks in 2014 but that trend may have seen its climax. Data released today showed that foreigners were actually net buyers of stocks for the week ending April 18th, which marks the second week of net buying out of the last three.

2014-04-25 Slugging It Out in the Equity Arena by John West and Ryan Larson of Research Affiliates

Selling recent losers and buying recent winners is the antithesis of the systematic rebalancing discipline through which smart beta strategies earn long-term excess returns. Indeed, we contend that this procyclical behavior is what pays, over time, for the value added by fundamentally weighted index investing and other smart beta strategies.

2014-04-25 Rhyme or Reason? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Stocks have seen wide swings recently, but year-to-date major indexes are roughly flat. Volatility may persist, but we suggest investors look past the near term and focus on the underlying fundamentals.

2014-04-25 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 134.9, up from last week?s 133.6 (revised from 133.5). The WLI annualized growth indicator (WLIg) rose to 3.3 from last week?s 3.0. Here are some notable developments since ECRI?s public recession call on September 30, 2011: 1) The S&P 500 is up 61.0% at yesterday?s close, although off its record close on April 2nd. 2) the unemployment rate has dropped to 6.7%, and 3) Q4 GDP was revised upward to 2.6%.

2014-04-25 "The 10 Plagues" of Retirement Investing by Robert Isbitts of Sungarden Investment Research

Last Tuesday marked the end of the Passover holiday, in which Jews around the world celebrate the exodus from Egypt in biblical times (see the classic movie ?The Ten Commandments? for a visual version of the story). One highlight of the ?Seder? dinner conducted on the first two nights of the holiday is for all gathered to recount a part of the story known as ?The 10 Plagues.? Biblical references aside, it got me thinking about 10 plagues that today?s retired and retiring investors must grapple with. Here they are, sans the Matzoh Ball soup.

2014-04-25 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The link between money and inflation has clouded, but it hasn?t disappeared

2014-04-25 Developed Asia Pacific: Regional Economic Review ? Q1 2014 by Team of Thomas White International

Developed Asia Pacific economies showed increased resilience as loose monetary policies of the past two years helped create demand, boost employment, and increase output.

2014-04-25 A Strong Balance Sheet by William Smead of Smead Capital Management

In his book, Great by Choice, Jim Collins points out that companies he defines as great have good luck and bad luck just like all the other companies do. The great companies handle difficult circumstances better than good companies and take the most advantage of the breaks they get in business.

2014-04-25 Income Market Insight by Payson Swaffield of Eaton Vance

Fans of NASCAR racing, and most other motorsports, know what it means when the yellow flag is being waved: proceed with caution. For investors in today?s credit markets, we believe that is an appropriate image to keep in mind. After five years of generationally low rates, investors are ?stretching? for yield ? that is, they are scooping up deals at yields that, in our opinion, barely compensate them for the risk.

2014-04-24 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Company

Most of the economic and market trends we've been discussing for the past few years remain in place. Russia's action in the Ukraine/Crimea may have long-term implications, particularly for Europe, but the near-term economic implications are modest. It remains to be seen whether this gets added to our long-term worry list or not.

2014-04-24 Global Economic Outlook by Team of Northern Trust

Advanced economies should dominate the growth picture in 2014, but the jobless rate is likely to show only a small improvement

2014-04-24 Resistance is Futile, for Now by Scott Minerd of Guggenheim Partners

The U.S. ?risk-on? trade is still in place, even as some leveraged credit is showing signs of overheating.

2014-04-24 Sell-Off in Health Care Sector Overlooks Strong Fundamentals by Andy Acker, Ethan Lovell of Janus Capital Group

After a strong run over the last two years, stocks for biotechnology, pharmaceutical and specialty pharmaceutical companies have fallen significantly in recent weeks. While a couple of near-term headwinds surfaced recently, in our opinion much of the sell-off was driven by momentum investors who had indiscriminately bid up stocks for biotechnology and pharmaceutical companies.

2014-04-24 Emerging Asia Pacific: Regional Economic Review - Q1 2014 by Team of Thomas White International

The byword for economic prospects in emerging Asia Pacific economies during the first quarter of 2014 was "optimism". The countries in the region, despite undergoing a torrent of political activity and struggle, pinned their hopes on a revival in global trade. With other avenues of growth such as investment and consumption showing little promise, the emphasis on global trade took on even greater importance.

2014-04-24 How bad is your Tax Day hangover? by Eaton Vance Municipal Insight Committee of Eaton Vance

This tax season many investors in higher tax brackets were rudely awakened to the reality of paying 50% of their income in federal and state taxes. Given the new tax landscape, income municipal bonds may look more appealing than ever.

2014-04-24 Convincing Illusions & Invisible Realities by Gary Stroik of WBI Investments

"Past performance is not indicative of future results." Investors have seen that warning countless times, but do they believe it?

2014-04-24 Apple: Can't Buy My Love by Team of GaveKal Capital

Yesterday Apple announced a whopping $90 billion stock buyback, to be completed by the end of 2015. This means they will be buying roughly $45 billion in stock this year and next. By way of comparison, this is $5-7 billion more than earnings that are expected this year or next. So, Apple will be using over 100% of its earnings to finance stock repurchases

2014-04-24 And That's The Week That Was by Ron Brounes of Brounes & Associates

After a week of panic, investors focused on the positives and went bargain hunting throughout. Thus far, earnings are not as bad as expected; China’s woes could mean new stimulus; labor and manufacturing seem to be in full fledge thaw. Hope the holiday season brings more good news.

2014-04-24 The Flaws and Potential of Asia's SOEs by Sherwood Zhang of Matthews Asia

Asian governments own a large amount of productive assets in the form of state-owned enterprises (SOEs). These firms are typically in strategic industries of national interest, but among the broader investor community they are often viewed negatively, marked by reputations for inefficiency and potential conflicts of interest. This month Asia Insight explores the challenges that face SOEs and possible models that could be positive for business.

2014-04-23 Trading Secrets: Understanding the Boom and the Bust by Tad Rivelle of TCW Asset Management

It isn?t what you earn ? it is what you keep that matters in investing. While systematically underwriting too little risk may mean that you do not earn all that you might, underwriting too much towards the end of a business cycle can be disastrous. With this in mind, it becomes obvious that timing an investment strategy may be the most important single decision an investor needs to get right. But how is one to know where you are in the cycle?

2014-04-23 The Real Obamacare Nightmare is Just Beginning by Gary Halbert of Halbert Wealth Management

Last Thursday, the Obama administration said that a total of eight million Americans had signed up for Obamacare. In a hastily called press event, President Obama spiked the football, took a victory lap around the White House and declared the healthcare law a smashing success ? although they still haven?t told us how many enrollees have actually paid a premium, or how many were simply replacing their policies that were canceled due to Obamacare.

2014-04-23 Gold as a Defensive Asset by Ade Odunsi of AdvisorShares

In our previous commentary ?Gold and the US dollar ? a love hate relationship? we used a normalized time series of the price of gold expressed in US dollars and an index representative of the value of the US dollar on currency markets to show the inherent relationship between the price of gold and the financing currency. As the financing currency strengthens on currency markets, one would expect the price of gold expressed in that currency to fall.

2014-04-23 Positioning Your Portfolio for Rising Rates. by Team of Forward Management

Accelerating outflows from bond funds in 2013 highlight investor nervousness over the prospect of rising interest rates. Investors may want to carefully assess the role of fixed-income investments in their portfolios, particularly in light of other types of income-producing vehicles. Upon careful evaluation of their options, investors can make adjustments suitable to their objectives.

2014-04-23 New Home Sales Plunge In March by Team of GaveKal Capital

New home sales dropped by 14.5% in March and are now down over 13% year-over-year. All four regions are now negative on a year-over-year basis. Meanwhile, median price rose over 11% to a all-time new high of $290K as months' supply spiked to its highest level since October 2011.

2014-04-23 Hasenstab: Separating the Wheat from the Chaff by Michael Hasenstab of Franklin Templeton Investments

Fixed income investors have dealt with a number of headwinds in early 2014, including unrest in Eastern Europe, the prospect of rising interest rates in the United States and fears about slowing growth in China. Michael Hasenstab, executive vice president and CIO, Global Bonds, Franklin Templeton Fixed Income Group®, has been on a global tour to assess conditions in select countries first-hand, looking beyond what the media headlines portray.

2014-04-23 Yellen?s Three Big Questions (and a Few Others) by Scott Brown of Raymond James

Speaking to the Economic Club of New York, Fed Chair Janet Yellen presented an analysis of the monetary policy actions taken to address the Great Recession and offered guidance on what will drive policy decisions going forward. The centerpiece of her talk was about the three big questions that the Fed has to answer. However, there are a number of other debates going on in economics right now that have long-term consequences.

2014-04-23 Poker Mentality?! by Jeffrey Saut of Raymond James

have often stated that the rarest trait on Wall Street is ?patience.? I have also repeatedly reprised Charles Dow?s quote that, ?The successful investor/speculator needs to ignore two out of every three potential money making opportunities.?

2014-04-22 Why Annuities HATE Ken Fisher. And you should too. by John H. Robinson (Article)

Before we commend Ken Fisher for his vitriolic antipathy toward variable annuities, there is one little problem we need to recognize. Fisher’s claims are at odds with a growing body of empirical research published in peer-reviewed academic and professional journals.

2014-04-22 The Surprising Number One Driver of New Clients by Dan Richards (Article)

Among sophisticated clients, referrals aren’t the most important determinant in deciding on an advisor. Here’s what is.

2014-04-22 What SEC Social Media Guidance Means for You by Kristen Luke (Article)

Recently, the SEC published new testimonial and social media guidelines that cleared the way for advisors to use social media review sites like Yelp and Angie’s List. Such sites were previously restricted because they provided content that was generally seen as testimonials. While the new guidance may seem like a big leap forward for financial advisors who use social media, there are still many restrictions, so it is important to understand what you can and cannot do.

2014-04-22 The State of the CFP Board Registered Financial Planning Programs? by Caleb Brown (Article)

Each year I spend several days visiting various Certified Financial Planner Board-registered programs throughout the country to ensure that as an industry, we are continuing to source, screen and integrate the best available talent for the financial planning firms we represent. On the plus side, I found many students are ready and eager to enter the financial-planning world. But there were also ominous signs for the future of our profession.

2014-04-22 The Power of Storytelling by Beverly Flaxington (Article)

I’ve read in the past that you encourage telling stories about clients. There are lots of compliance reasons that deter us from getting too specific when telling a client-based story. In addition, I don’t see how stories are of importance. Can you clarify?

2014-04-22 Letters to the Editor by Various (Article)

Readers respond to three recently published articles, and the authors of those articles respond to those letters.

2014-04-22 Does Rebalancing Reduce Risk? by Michael Edesess (Article)

In a previous article I asked whether rebalancing increases return, as the term "rebalancing bonus" implies. I concluded that it does not. In this article I ask whether it is a tool for reducing risk. The answer depends on whether you believe that the standard deviation of long-term returns is the appropriate measure of risk. This article will show why it often is not.

2014-04-22 Unloved Emerging Markets May Hold Value for Opportunistic Bond Investors by Kathleen Gaffney of Eaton Vance

· Emerging markets have come under pressure over the past year due to the Federal Reserve tapering its asset purchases and increased expectations of higher interest rates in the U.S. · We think investors should consider emerging markets to find opportunities that may provide a yield advantage and diversification away from U.S. interest-rate risk. · A multisector approach that uses bottom-up, fundamental credit analysis may be helpful in finding opportunities in emerging markets.

2014-04-22 Taxes are the Pits, But Not for Everyone It Seems by Chris Maxey, Ryan Davis of Fortigent

A number of Americans breathed a joyful sigh of relief last week after closing the books on their 2013 income taxes. The annual rite of passage rarely elicits excitement when addressed in conversation, and this year was unlikely to be any different. But, the latest tax data suggests the economy is gaining speed, news bound to make even the most hardened filers crack a smile.

2014-04-22 Israel ? Under the Radar by Brad Jensen of AdvisorShares

In recent travels and presentations, I was asked frequently about Israel. How is it that the Israeli market is #2 in our country ranking methodology? It seems as though the country is off the radar screen of most investors, so a quick overview of the market and why it ranks high currently seems to be in order.

2014-04-22 The Democratic Disruption of Finance by Mohamed El-Erian of Project Syndicate

There seems to be no limit to the exciting possibilities that come from combining technical innovations, the Internet, and social media. What is less appreciated is the extent to which the same phenomenon is starting to play out in finance, via a democratization process that could transform the institutional landscape.

2014-04-22 2016 (Part 3, The Election Situation) by Bill O?Grady of Confluence Investment Management

In this final report, we will analyze why we think 2016 may be a pivotal election and examine the potential that it could bring about a coalition change similar to the 1932 and 1980 elections. We will discuss the various methods of addressing the current high level of private sector debt and offer what we believe to be the three highest probability scenarios of how the current problems can be addressed and their impact on the domestic political scene and on America?s superpower role. Unlike our last two reports, we will conclude with market ramifications.

2014-04-22 Hope Is Not A Strategy by Steven Rubenstein of Arrow Partners

With almost 20 years in the third party marketing (3PM) business, we thought we had seen and experienced it all.

2014-04-22 First Stock Market Crash on NYSE Reminds Us What Can Happen At A 25x CAPE by Team of GaveKal Capital

The panic of 1901 was the first crash on the New York Stock Exchange, brought on by a battle for control of the Northern Pacific Railway. June 1901 marked the peak in valuations for 27 years, only to be eclipsed in the months preceding the September 1929 peak in stock prices. Between June 1901 and December 1920, the 10 year real P/E (Shiller CAPE) fell from 25x to 5x.

2014-04-22 Emerging Europe: Regional Economic Review - Q1 2014 by Team of Thomas White International

The International Monetary Fund’s latest assessment of the global economy pointed out that robust economic recovery in developed countries has significantly reduced the risk of a downturn this year. The Washington-based lender said it sees growth in emerging and developing Europe as a whole at 2.4 percent in 2014, which is expected to accelerate to 2.9 percent next year.

2014-04-22 Float Factor with Steve O'Neill by (Article)

Closed-end funds with floating rate senior loans may be attractive to those concerned about a spike in interest rates, says Steve O?Neill of RiverNorth.

2014-04-21 The Economic Cost of Brazil?s Spending Spree by Mark Mobius of Franklin Templeton Investments

Brazil has been on a spending spree during the past few years, which, unfortunately, has failed to generate meaningful growth and has led to negative economic consequences. In addition to the lavish spending in preparation for the FIFA World Cup? this summer and the Olympic Games in 2016, Brazil?s national oil company has been spending billions of dollars on expensive offshore oil exploration, production and energy development.

2014-04-21 Spring Checkup: Five Investment Ideas for Your Portfolio by Russ Koesterich of iShares Blog

As the second quarter of 2014 gets underway, many investors are wondering how they should adjust their portfolios given the events of the first three months of the year. Russ shares five investing opportunities that he and his BlackRock colleagues think are worth considering this spring.

2014-04-21 Cast a Wider Net for Asian Income Stocks by Stuart Rae, Katsuhiko Mano of AllianceBernstein

Equity income has been a hot theme for Asian investors. But safer sectors that typically provide higher dividend yields are expensive. By casting a wider net, we think attractively priced income stocks can still be found in unexpected parts of the markets.

2014-04-21 The Federal Reserve's Two-Legged Stool by John Hussman of Hussman Funds

In viewing the Fed?s mandate as a tradeoff only between inflation and unemployment, Chair Yellen seems to overlook the feature of economic dynamics that has been most punishing for the U.S. economy over the past decade. That feature is repeated malinvestment, yield-seeking speculation, and ultimately financial instability, largely enabled by the Federal Reserve?s own actions.

2014-04-21 North American Energy Sector Fuels Stock Indexes Higher by Team of GaveKal Capital

In North American, the energy sector is the best performing sector so far this quarter. Energy stocks, on average, have outperformed the MSCI World index by almost 5% this month.

2014-04-21 Rising Food Prices May Whet Investors' Appetite for Agriculture by Nick Kalivas of Invesco Blog

Food prices are affected by a wide range of factors - from weather to geopolitics. Today, these factors seem to be pointing toward rising food inflation, and investors want to know where potential opportunities may lie.

2014-04-18 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

After examining much of the latest scholarly research, and conducting in house research on the link between household wealth and spending, we found the wealth effect to be much weaker than the FOMC presumes. In fact, it is difficult to document any consistent impact with most of the research pointing to a spending increase of only one cent per one dollar rise in wealth at best. Some studies even indicate that the wealth effect is only an interesting theory and cannot be observed in practice.

2014-04-18 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

In a currency war, everyone loses. Should monetary policy be coordinated across countries? The International Monetary Fund is at a crossroads.

2014-04-18 Financial Television: Five Things You Need to Know by Rob Isbitts of Sungarden Investment Research

Whether you are new to the retirement investing mindset, you go back to the days of Rukeyser and Kangas, or are somewhere in between, here is my list of things you will often see when watching financial TV ... and how to separate the reality from the hype and sales pitch.

2014-04-17 A Bend in the Road is Not the End of the Road by Scott Minerd of Guggenheim Partners

Turmoil in Ukraine, growth concerns in Japan, and weakness in U.S. equity markets are giving U.S. investors a short-term case of heartburn but none of this should undermine the overall case for optimism.

2014-04-17 Designing Balanced DC Menus: Considering Diversified Fixed Income Choices by Stacy Schaus, Ying Gao of PIMCO

Sponsors of defined contribution plans face a dual challenge: They must present investment options appropriate for plan members and design menus that encourage selection of well-structured portfolios. We believe that actively managed strategies designed to potentially reduce risks, invest globally and enhance yield relative to the index may improve diversification and lower concentration risk in fixed income offerings. Plan sponsors may consider a range of return and risk measures as they evaluate current and prospective fixed income offerings.

2014-04-17 What to Make of the Rebound in Emerging Market Equities by Dara White of Columbia Management

A month ago, much of the news from the emerging markets (EM) was negative. We saw headlines highlighting the liquidity headwinds created by U.S. QE tapering, Russia?s aggressive opportunism in the Ukraine, and China?s imminent hard landing.

2014-04-17 Investors Ignore Frightful Geopolitics by John Browne of Euro Pacific Capital

When the former Soviet Union collapsed almost 25 years ago, most global strategic forecasters assumed that the U.S. would adapt pragmatically to her new status of sole world superpower. Instead she has pursued a variety of misguided nation-building adventures and has largely shrunk from her primary responsibility of neutralizing the ambitions of petty dictators around the world. From this perspective, America's multi-generational expenditures on military personnel and equipment has become more of a stealth economic stimulus program rather than an insurance policy for global stability.

2014-04-17 Two Major Players Graduate from MSCI FM 100 ? Is it Still Worth Tuning into? by Russ Koesterich of iShares Blog

Major changes are coming to the MSCI Frontier Markets 100 Index. Russ K explains the significance and why it reinforces his view that investors should have an allocation to the frontier.

2014-04-17 US Econ Roundup - Initial Claims Improve To 6 1/2 Year Lows and Philly Fed Accelerates by Team of GaveKal Capital

While initial jobless claims were just a bit higher this week than last (304K vs 302K), the widely watched 4-week moving average slid down to 312K which is its lowest level since October 2007. Continuing claims fell to 6-year low as well. Finally, the less looked non-seasonally adjusted initial claims series remains firmly negative on a year-over-year basis. This is important because increases in this series tend to signal higher future levels in the seasonally adjusted series.

2014-04-17 Tick, Tock, Tax Time by Frank Holmes of U.S. Global Investors

In 2014, Americans will pay $3 trillion in federal taxes and $1.5 trillion in state taxes. Believe it or not, according to the Tax Foundation, that means more of your income is being spent on taxes than on food, clothing and housing combined!

2014-04-17 Hasenstab in Ukraine, on Ukraine by Michael Hasenstab of Franklin Templeton

Ukraine is a country both rich with potential and strategically well positioned. While recent events have been very difficult for many, the people of Ukraine have shown their strength. It?s also been heartening to see the proactive support from the international community. Michael Hasenstab, chief investment officer, Global Bonds, Franklin Templeton Fixed Income Group®, shares his view on the long-term potential of this unique country after a recent visit to Kiev.

2014-04-17 Fixed Income Outlook by Team of Osterweis Capital Management

Given that the Fed is likely to complete its asset purchases this year and may raise rates in early 2015, we still feel that Treasuries and investment grade bonds are unattractive. Although yields in the high yield universe are low by historical standards, they still give us a decent cushion against rising rates, especially at the shorter end of the maturity spectrum. Maintaining a shorter duration exposure in high yield and some convertible bonds, as well as a cash reserve, continues to make sense.

2014-04-17 Equity Outlook by Team of Osterweis Capital Management

Short term, we would not be surprised if the market took a breather after its strong gains last year. Additionally we may see volatility related to news coming out of the Middle East and Russia. But longer term, we remain very optimistic on the outlook for U.S. equities. In addition to the reasons we discussed above we believe U.S. equities are very attractive relative to the alternatives. The great bull market in bonds appears to be over. The great decades of emerging market growth appear to be behind us.

2014-04-17 Why Energy is Catching the Market's Eye by Frank Holmes of U.S. Global Investors

Over the last month the energy sector has outperformed the market, and as you can see in the chart below, has done so by 6.5 percent. Year-to-date the sector is beating the S&P 500 Index by over 3 percent. In a spectacularly performing market during 2013, energy lacked some of the incredible performance seen throughout the other sectors, but recently it has turned up, catching the attention of the market yet again.

2014-04-17 U.S. Financials: Investment Theme Update by James Calhoun of AdvisorShares

We reaffirm our recommendation for U.S. Banking and Financial Services as a satellite equity investment. The Federal Reserve’s "Stress Test" reinforces a constructive outlook and conservative risk profile for U.S. Banks. The positive results confirm that U.S. banks have enhanced their ability to withstand macroeconomic challenges by reducing problem assets during the past few years. Equally important, the financial sector appears to be more exposed to a key driver of the broader equity market advance over the last few years: share buyback programs and increasing dividends.

2014-04-17 What's Wrong with PIMCO? by James Bryan of South Texas Money Management

When Federal Reserve Chairman Ben Bernanke first talked about reducing or tapering the Federal Reserve’s asset purchase program back in May of 2013, the market response was dramatic. Investors started fleeing bonds, causing bond prices to drop and bond yields to rise. In a rising interest rate environment, the net asset value (NAV) of fixed income mutual funds falls as rates rise. This often leads to shareholder redemptions (they want out!), forcing these bond mutual fund portfolio managers to sell bonds in an unfavorable market.

2014-04-17 Ukrainian Crisis: Should Investors Avoid the Russian Stock Market? by Philip Lawton and Noah Beck of Research Affiliates

This is neither to treat the profoundly worrisome crisis in Eastern Europe cavalierly nor to advocate profiting, however indirectly, from the distress of Ukraine, a sovereign nation whose people have suffered horribly over the last three-quarters of a century. It is merely to caution international investors that, from a strictly financial perspective, withdrawing assets from Russia might not be the right move.

2014-04-17 High Frequency Trading: Under the Spotlight by Team of Manning & Napier

The growing popularity of HFT is troubling; investors, media outlets, and academics alike are expressing concerns. We applaud any and all efforts that help to shine a light on HFT and its potential threat to the fair and orderly functioning of financial markets. While it remains to be seen if action will be taken against HFT, it is encouraging that ongoing research and dialogue on the subject is catching the broader attention of regulatory bodies that are tasked with preserving the levels of transparency and fairness that all market participants benefit from.

2014-04-17 Pinning Hopes on the 'Chosen One' by Sharat Shroff of Matthews Asia

, I would caution against expectations of a quick fix or a fixation over the short term. As in much of the rest of Asia, India and Indonesia are attempting to tackle their issues and this makes us optimistic for the future. We look forward to an environment of better governance that is critical for both social and economic progress.

2014-04-17 Three Yards and a Cloud of Dust by Sam Stewart of Wasatch Funds

Former Ohio State football coach Woody Hayes was well-known for his conservative offense-often quoted as saying, "There are only three things that can happen when you pass, and two of them are bad." The two bad outcomes are either an incompletion or an interception. Instead, Hayes favored a methodical, grind-it-out approach, running the ball directly into the line: "three yards and a cloud of dust." What Hayes’ style of play may have lacked in pizazz, it more than made up for in results. The U.S. economy today is following a similar offensive playbook, but with less satisfying results.

2014-04-16 Gold Strategy Investor Letter, Q1 2014 by John Hathaway of Tocqueville Asset Management

John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), remarks in his latest quarterly letter that it appears "the precious metals complex has bottomed and is attempting to gain footing following the grueling two-plus year correction that started in August of 2011." Giving credence to gold's utility as an equity hedge, he notes that "the positive returns generated by equity markets over the past two years have represented a substantial barrier for capital to reenter precious metals.

2014-04-16 Put/Call Study: Equity Correction Ahead? by Mark Ungewitter of Charter Trust Company

Equity put/call ratios provide an interesting lens on greed and fear. The chart below presents the S&P 500 since January 2000, flagging 5-day put/call ratios in excess of one standard deviation versus the long-term average of 63%. Readings below 53% have occurred during powerful rallies and near interim tops. Readings above 73% have occurred during fearful sell-offs and near interim bottoms. Fearful readings have occurred at least once annually since 2001 with the latest example in April 2013.

2014-04-16 Uncle Sam Seizes Children's Tax Refunds To Pay Parents' Debts by Gary Halbert of Halbert Wealth Management

This is one of those special weeks when I get to bring you key information that you probably haven?t seen elsewhere. As a speed-reader, I look at a large volume of information every week before deciding what topics to publish on Tuesdays. It was early Saturday evening when I ran across today?s topic which is getting scant coverage in the media, but everyone reading this needs to understand this latest (and possibly illegal) money-grab by our government.

2014-04-16 Every Portfolio Has Faith by William Smead of Smead Capital Management

At Smead Capital Management, we believe that everyone who invests has faith in someone or something. We also believe that who and what you put your faith into is greatly influenced by the time period involved. As we look out into the rest of 2014 and beyond, we would like to consider the kind of faith required by the largest pools of investment dollars in the US. This includes looking at who they are trusting, what they are trusting in, and what time frames they are operating under.

2014-04-16 The Wile E. Coyote Stock Market? by Jeffrey Saut of Raymond James

Last Wednesday, when the D-J Industrials were up some 180 points, I could not shake the feeling that this was the ?Wile E. Coyote stock market.? The visual is when Wile runs off a cliff, but his feet keep moving, until he looks down and realizes there is nothing underneath him. The resulting fall was similar to what happened late last week to the equity markets. Indeed, I really did not understand, or trust, last Wednesday?s Dow Wow for the reasons mentioned in these missives.

2014-04-16 An Uncomfortable Discussion by Scott Brown of Raymond James

Income inequality is a touchy subject. It?s hard to have a polite conversation, but like it or not, we are going to have a discussion this year. I will not take a position here (this is largely a political question). Rather, I will try to illustrate what the data say and to present the different points of view.

2014-04-16 A Classic Barometer by Richard Bernstein of Richard Bernstein Advisors

Investors seem a bit too eager to tout emerging market equities. Much as they did with technology stocks during the early-2000s, investors today are looking for the best re-entry point. Data clearly do not support anymore the notion that emerging markets are a superior growth story, yet investors seem to be ignoring the classic warnings signs for fear of missing out. One such classic warning sign is the slope of the yield curve. Historically, steeper yield curves have been reliable forecasters of stronger overall nominal economic growth and stronger profits growth.

2014-04-16 Echo-Mania at The Fed by Cliff Draughn of Excelsia Investment Advisors

Greetings from a thawed out Savannah! Q1 of 2014 will be remembered for a number of things, but the most prominent were the erratic weather patterns and arctic-blast temperatures that most of the country experienced. I missed writing my Q1 letter for the first time in ten years due to a nasty bout with pneumonia in mid-January. For those of you who have never had pneumonia, I do not recommend it!

2014-04-16 And That's The Week That Was by Ron Brounes of Brounes & Associates

And what a bad week it was. After flirting (and setting) new record highs on both the S&P and Dow, equity investors worried about the upcoming earnings reports and freaked out over the some disturbing news from China. Stocks plunged late in the week with the Nasdaq particularly hard hit, though the other indexes followed suit and gave up all of their prior gains for the year. For the most part, domestic developments remain strong but news on the global front have prompted investors to seek out the safe-haven of treasuries. Over-reaction or new trend?

2014-04-16 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks fell last week upset by the growth sectors of biotechnology and social media stocks. Energy issues and related infrastructure were largely unaffected. It is clear that hedge funds and others have become forced sellers as their macro bets on being long growth areas, but being short the bond market have blown up in their faces. Until this settles down the overall market is likely to continue its correction.

2014-04-15 Equity Market Insight by Thomas Faust, Jr. of Eaton Vance

After a powerful rally in 2013, the first quarter of 2014 saw the bull market demonstrate a measure of resilience in the face of several headwinds. In the latter half of January, stocks fell sharply on emerging-market concerns, with volatility spiking to more "normal" post-financial crisis levels. The market bounced back strongly in February and went on to record a new all-time closing high on March 7. Performance was choppy in the final few weeks of the quarter, as investors digested mixed economic reports, geopolitical issues and the latest U.S. Federal Reserve (Fed) meeting.

2014-04-15 Does Rebalancing Really Pay Off?? by Michael Edesess (Article)

No investment advice is more universally offered than the advice - originally posited by William Bernstein - to rebalance your portfolio. Yet, the evidence that this practice is beneficial is shockingly meager.

2014-04-15 A Conversation with DFA’s David Booth by Robert Huebscher (Article)

It’s possible for an airplane company to manufacture excellent jets that reliably and safely reach their destination, even if some of its engineers design questionable components. Indeed, its products may be among the best ever designed. That’s my impression DFA, which was reinforced after meeting with its co-founder and co-CEO, David Booth.

2014-04-15 The Quality that Defines Star Performers by Dan Richards (Article)

Why do so many advisors work incredibly hard to build their practices, reach a solid level of success - and then plateau? In the last 30 years, I’ve worked with hundreds of those stuck advisors and with a few who reached increasingly higher levels of success. I’ve identified one trait that separates the two groups.

2014-04-15 Beyond Moneyball - Setting the record straight by Justin Kermond (Article)

In The Sabermetric Revolution: Assessing the Growth of Analytics in Baseball, Benjamin Baumer and Andrew Zimbalist attempt to set the record straight. Baumer and Zimbalist contest parts of Michael Lewis’ Moneyball story and broadly address how sophisticated analysis has been used in other sports and why it’s exceedingly difficult for even the most creative and sophisticated approaches to maintain a competitive edge.

2014-04-15 Make Your Website An Asset-Gathering Powerhouse by Dan Solin (Article)

Although e-commerce does not involve personal meetings, the need to establish an emotional connection with your prospective clients remains the same. Achieving this goal requires a change in strategy. Here are some tips.

2014-04-15 A Women’s Viewpoint of Bullying by Beverly Flaxington (Article)

I was once asked by a major periodical to comment on research that showed an inordinate percentage of women who get to senior-level positions in investment firms end up voluntarily leaving to start their own business or to enter new industries. The "brain drain" of women from investment advising has been significant. I thought about this brain drain when I received another letter on the issue of bullying, this time from a woman.

2014-04-15 Global markets: 2nd quarter expectations by Bill McQuaker (Article)

Bill McQuaker, Co-Head of Multi-Asset, takes a look back at first quarter global market developments and notes his expectations on how markets and economies will unfold, with some potential issue resolution, in the second quarter.

2014-04-15 Our Most Read Article from Last Week: Do Small Cap-Value Stocks add Value in Retirement Portfolios? by Joe Tomlinson (Article)

Research going back to Fama and French in the early 1990s has shown that small-value stocks have produced superior returns. Subsequent debate has centered on whether this superior performance will continue and if investors should tilt portfolios to capture those returns. I’ll examine the historical evidence, incorporate it in retirement examples and discuss the future prospects for small-cap value.

2014-04-15 Credit Availability Underpins Recovery in Commercial Real Estate Prices, But Also Poses Risks to CMB by Bryan Tsu of PIMCO

Credit availability, low interest rates, limited new construction and improving economic conditions have contributed to the recovery in commercial real estate (CRE) prices. We expect a strong 2014 in the commercial mortgage-backed securities (CMBS) market, which has been a primary source of CRE credit expansion. Increasingly aggressive loan underwriting is a concern. CMBS investors need to speak with their wallets and push back on either valuations or underwriting standards if recent trends continue.

2014-04-15 Weekly Market Update by Team of Castleton Partners

US Treasury yields registered their largest weekly drop since early February, driven by dovish minutes from the March Federal Reserve Open Market Committee meeting and equity market weakness. With the technology stocks at the epicenter of the equity storm, major indices fell nearly 3% last week. As Q1 earning season begins in earnest this week, equity performance is very much expected to remain in the headlines. Reaching yields last seen in early March, five year notes were the best performer across the Treasury curve, falling 12 basis points on the week to yield 1.58%.

2014-04-15 Approaching a Pause? A Market Review by Rick Vollaro of Pinnacle Advisory Group

First quarter market performance was as whippy and volatile as the weather. Unusually cold temperatures in the U.S. not only froze much of the country’s population, but it also wreaked havoc on the quality of economic data, and kept markets on edge regarding how investors should be positioned. Geopolitical issues also rose from the ashes as various emerging markets had currency issues and Russia showed poor sportsmanship and invaded the Ukraine shortly after the conclusion of the Olympic Games.

2014-04-15 Complacency Makes Volatility Markets a Dangerous Place by Chris Maxey, Ryan Davis of Fortigent

With a dissipation of economic stress in Europe, and a general strengthening of economic conditions in the U.S., equity market volatility has plunged to new lows. Some would argue that market intervention by central banks is acting as an unnatural dampener to market volatility, raising the question as to whether a gradual removal of those policies will cause volatility to resurface. So far, the answer is up for debate, but current positioning suggests many investors are becoming complacent and will be caught off sides if such a scenario emerges.

2014-04-15 Beta Earthquake by Ben Hunt of Salient Partners

One of the things I like to keep my eye on when I’m puzzling out what’s going on in the market are the specific company factors that loosely define concepts like Momentum and Value. I do this because any sort of big market move, like we’ve seen over the past week, is inherently over-determined and over-explained. That is, there are dozens of "reasons" trotted out by the financial media and various experts, ALL of which are probably right to a certain degree.

2014-04-15 What's Next for Emerging Markets? by Nathan Rowader of Forward Management

Emerging markets (EM) have been an enduring growth story, but their recent stretch of underperformance and fears of a global economic slowdown are chilling investors’ enthusiasm. Pulled between opportunity and risk avoidance, many investors have been left uncertain as to what they should do next.

2014-04-15 5 Things You Need to Know About the Selloff by Kristina Hooper of Allianz Global Investors

Kristina Hooper puts the sharp pullback in the stock market in perspective for investors who may be wondering about a correction.

2014-04-15 2016 (Part 2, The Political Situation) by Bill O'Grady of Confluence Investment Management

As we survey the political landscape for 2016, the next presidential election could be historic. In this report, we will examine the domestic political situation using four different archetypes to describe the U.S. political landscape. We will then offer a history of the interaction between these groups and address the likelihood of various policy outcomes based on the relative strengths and weaknesses of the four political groups. Unlike our usual reports, we will not conclude with market ramifications but instead discuss the transition to Part 3 of this analysis.

2014-04-15 Running Backwards to Catch Up by Jerry Wagner of Flexible Plan Investments

Did you ever try to run backwards? I find walking backwards difficult enough. Running in reverse can send you tumbling.

2014-04-14 The Default Outlook by Heather Rupp of AdvisorShares

On April 1st, TXU/Energy Future Holdings skipped their interest payment due that day, immediately triggering a default by some reporting mechanisms. While the company has a 30 day grace period to pay the coupon payment, most expect them to use the grace period to work further on a restructuring and ultimately file for bankruptcy at some point over the next 30 days.

2014-04-14 US Stock Markets Surprisingly Steady - First Quarter Review by David Edwards of Heron Financial

Surprisingly steady! How can we say that? Because compared to the price swings of the last six years, the recent 3.9% decline in US Stocks (from a record set April 2) barely registers relative to the powerful uptrend since mid 2011.

2014-04-14 We?re Shuffling the Cards on Our European Play by Frank Holmes of U.S. Global Investors

Did you know that over the last year the Greek stock market is up roughly 45 percent? The country that many believed would never recover from a six-year recession is now making astounding strides, recently being added to the MSCI Emerging Markets Index at the end of 2013.

2014-04-14 Uncovering Opportunities in Emerging Markets by Mark Kiesel of PIMCO

Emerging markets have underperformed expectations, but the longer-term secular outlook remains constructive for many regions. Highly negative investor sentiment and outflows have sharply reduced prices, significantly improving relative value in emerging markets. We see opportunities in emerging markets in interest rates, sovereign credit and select companies for investors with a longer-term investment horizon. ?

2014-04-14 Economic Insight: Fed Policy Goes Back to the Future by Thomas Luster of Eaton Vance

We fully expected the strength the economy showed in late 2013 to carry over into 2014; however, that simply was not the case. Instead, we saw weaker-than-expected economic data across a wide range of economic indicators. Not surprisingly, interest rates fell modestly during the quarter rather than continuing their trend higher from last year, while U.S. stocks (as measured by the S&P 500) reacted similarly ? barely advancing after a 32% gain in 2013.

2014-04-14 Margins, Multiples, and the Iron Law of Valuation by John Hussman of Hussman Funds

The Iron Law of Valuation is that every security is a claim on an expected stream of future cash flows, and given that expected stream of future cash flows, the current price of the security moves opposite to the expected future return on that security. A corollary to the Iron Law of Valuation is that one can only reliably use a ?price/X? multiple to value stocks if ?X? is a sufficient statistic for the very long-term stream of cash flows that stocks are likely to deliver into the hands of investors for decades to come.

2014-04-14 Why Today?s Environment Favors Active High Yield Strategies by Darren Hughes, Scott Roberts of Invesco Blog

Fixed income investors are looking for ways to prepare their portfolios for rising interest rates. While bond prices generally fall when rates rise, history shows that high yield bonds have typically held up well in rising rate environments.

2014-04-12 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The Federal Reserve’s search for stability. The patterns of world trade are undergoing important changes. Greece issued debt this week: good news or bad news?

2014-04-12 In the End, Time is Everything by Doug MacKay of Broadleaf Partners

While some will claim that valuations are to blame for the large selloff in growth stocks, high growth stocks almost always have premium valuations. In some sectors of the market, we’ve found that it makes more financial sense to pay up for a company of the future than to pay down for one in the past. As Warren Buffet has said, "Price is what you pay, but value is what you get."

2014-04-12 Risk Tolerance: Defining a Misunderstood Term by Rob Isbitts of Sungarden Investment Research

First, let’s be clear: "Risk" is the possibility that you will need money but don’t have it, either because your portfolio’s value plunged, because your investments don’t have near-term liquidity, or both. What freaks investors out in the here-and-now, is VOLATILITY. Yet many traditional approaches to building a portfolio don’t really take this into account, other than a token survey question or two when the client is first starting to invest.

2014-04-12 Proper Perspective by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

Getting caught up in the weeds is easy in this 24-hour news cycle where everyone is looking to make a splash, but successful investing requires staying above the fray. The U.S. economy is growing and equities appear fairly valued, Europe has issues to deal with but has come a long way from the depths, Japan may be working against itself but improvement has been seen, and the threat of a Chinese debacle at this point seems minimal.

2014-04-12 Every Central Bank for Itself by John Mauldin of Millennium Wave Advisors

Whether the FOMC can actually turn the taper into a true exit strategy ultimately depends on how much longer households and businesses must deleverage and how sharply our old-age dependency ratio rises, but markets seem to believe this is the beginning of the end. For now, that’s what matters most. Under Fed Chair Janet Yellen’s leadership, the Fed continues to send a clear message to the rest of the world: Now it really is every central bank for itself.

2014-04-11 Bubble Bursting? Only for Biotech & Internet Stocks by Russ Koesterich of iShares Blog

The recent sluggish performance of U.S. stocks is leading some market watchers to question whether we?re witnessing the bursting of an equity bubble. Russ explains that while U.S. equities overall are not in a bubble, valuations have started to become an issue, particularly for certain segments of the market.

2014-04-11 Equities Appear Attractive in Years Leading Up to Fed Tightening by Kevin Mahn of Hennion & Walsh

Fed Chair Janet Yellen said her expectation for the first increase in the Federal Funds Rate would come approximately six months following the end of the asset purchase program.

2014-04-11 Chinese Checkers with Gold Prices by John Browne of Euro Pacific Capital

For decades many of us in the hard money world have speculated that cloak and dagger activity by large financial interests has played a large role in determining performance in the gold market. The focus of this alleged manipulation is believed to be in the London market, and has been widely referred to as "The London Fix." However those who have blown the whistle have been dismissed as alarmists, gold bugs, conspiracy theorists or worse. But recent revelations should bring us closer to the truth.

2014-04-11 Can You Have Your Cake and Eat It Too? by David Braun, David Holdreith of PIMCO

Many insurers would like to optimize both total return and book yield income, which may be seen as competing and divergent goals. In fact many insurers fall somewhere on the spectrum between these goals or shift their objective based on business and market conditions. While it has long been an accepted practice to track manager performance with regard to total return, tracking book income has been more elusive: PIMCO has an innovative and unique solution to help manager?s track alpha generated by active managers.

2014-04-11 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Co.

Most of the economic and market trends we?ve been discussing for the past few years remain in place. Russia?s action in the Ukraine / Crimea may have long-term implications, particularly for Europe, but the near-term economic implications are modest. It remains to be seen whether this gets added to our long-term worry list or not.

2014-04-11 Gold - Managing the Downside by Ade Odunsi of AdvisorShares

We get a lot of questions regarding the impact on portfolio risk of having an allocation to gold. In particular given the status of gold as a safe haven asset, focus has centered on its performance during periods of extreme market stress ? what is the downside to gold during periods of high risk aversion? The high level answer to this question is that the financing currency used to make the gold purchase matters and as is often the case when discussing portfolio construction, ?you ask a simple question, you get a complex answer?.

2014-04-11 Tax Management - Optimized for Investors by Scott Bartone of O'Shaughnessey Asset management

Academic studies of portfolio management often neglect real world considerations. Turnover is often used to gauge tax management capabilities, but used in isolation turnover can be misleading. Tax lot accounting is integral to maximizing after-tax returns. Tax management must be an integral part of a manager’s buy/sell discipline, and should be applied throughout the year. OSAM’s after-tax results in 2013 are indicative of an effective, integrated tax management process.

2014-04-11 Why China's A-Shares Matter Now by Winnie Chwang of Matthews Asia

Although we often receive questions on mainland China?s A-share equities, which trade on the Shanghai and Shenzhen Stock Exchanges, we currently invest in Chinese equities primarily via Hong Kong-listed companies and also by way of U.S.-listed Chinese firms. China?s domestic A-share market remains largely closed to foreign institutional investors. The only way for foreigners to participate in this market is to enroll in China?s Qualified Foreign Institutional Investor (QFII) program or invest via a manager who has a quota in this program.

2014-04-11 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 134.9, up from last week's 133.6 (revised from 133.5). The WLI annualized growth indicator (WLIg) rose to 3.3 from last week's 3.0.

2014-04-10 The March Employment Report by Scott Brown of Raymond James

Last week began with a speech by Janet Yellen. The Fed Chair was not expected to say much of consequence, but instead, she continued to emphasize the large amount of slack in the labor market and the Fed?s strong commitment to reduce it. The clear implication is that short-term interest rates are not going up anytime soon. This message may have been meant to counter misconceptions taken away from her recent press conference.

2014-04-10 The Russians Are Coming by Jeffrey Saut of Raymond James

The Russians Are Coming, The Russians Are Coming is a 1966 American comedy film directed by Norman Jewison and based on Nathaniel Benchley?s book The Off-Islanders. The movie tells the Cold War story of the comedic chaos that happens when a Soviet submarine runs aground closely offshore a small island town near New England and the crew is forced to come ashore. Last Friday, however, rumors that the ?Russians are coming? swirled down the canyons of Wall Street, causing a late Friday Fade that left the S&P 500 (SPX/1865.09) down an eye-popping 24 points.

2014-04-10 Financial Market Warning Signs by Dawn Bennett of Bennett Group Financial Services

For those that are actually loving the rise in this U.S. financial market this past week, Warren Buffett has so me pretty cheeky advice to share in his annual letter to the Berkshire Hathaway shareholders.

2014-04-10 India: Poised for Change? by Team of Manning & Napier

In the current slow growth environment, India?s economy will likely continue to feel the downward pressure being exerted by high interest rates and a more challenging global liquidity environment that has negatively impacted foreign capital flows into the country. Despite the challenging short-to-intermediate-term outlook, there are a number of internal dynamics, such as favorable demographics, improving labor productivity, and the potential for tremendous growth in domestic consumption, which provide the opportunity for more robust growth in the future.

2014-04-10 Looking at Current Long-Term Growth Plays by Chip Skinner of The Royce Funds

Portfolio Manager and Principal Chip Skinner talks about the market's more volatile behavior in the first quarter, potential growth areas that he finds interesting, ideas in which he has high confidence, and one stock that has recently done well for him.

2014-04-10 Wanting Work Makes a Difference by Scott Minerd of Guggenheim Partners

As the Fed considers the precise timing of tightening monetary policy, a key consideration will be how many Americans want to get back to work. Monetary doves found an olive twig amid the floodwaters last week when the labor force participation rate increased slightly.

2014-04-10 Building Shareholder Value through M&A: Valeant Pharmaceuticals by Brian Fontanella of Diamond Hill Investments

There has been a notable increase in merger and acquisition (M&A) activity in the specialty pharmaceutical industry over the past year. This has been driven by several factors including the relatively low cost of debt and the magnitude of cost savings that can be realized. But recently, tax savings have been an additional driver of deal activity.

2014-04-10 "I Will Gladly Pay You Tuesday for a Hamburger Today" by Robert Mark of Castle Investment Management

In October of 2013, Robert Shiller won the Nobel Prize in economics for his research on spotting market bubbles. Shiller, an economist and professor at Yale University who accurately predicted the housing bubble, is a pioneer of behavioral finance, or the understanding of how psychology causes us to act irrationally with our money.

2014-04-10 Shale Reserves Are No Shell Game by Matt Lloyd of Advisors Asset Management

Since the times of Ancient Greece, ?The Shell Game? has been a confidence trick used to convince bystanders into believing they have a legitimate shot at guessing correctly and doubling their bet. We are currently in one of the more transformational periods of energy consumption, distribution and discovery seen in some time. The technology of extracting once undiscovered pools of energy is reverberating throughout economies and potentially causing tectonic shifting of political structures.

2014-04-10 Investment Success Often Depends On Choosing the Right Investment Horizon by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, reminds investors of the dangers of extrapolation, terming it "one of the worst biases of investing." Complicating matters is Sicart's contention that "possibly the second worst investment bias is our need to believe a good story."

2014-04-10 Assuage Your Fears of Rising Rates with Global Diversification by Julie Salsbery of PIMCO

?Although PIMCO believes interest rates are fairly anchored in the near term, we think investors can position their fixed income portfolios more defensively. Global diversification across developed and emerging markets can offer a defense against rising U.S. rates by reducing the concentration of risks within a portfolio, while also potentially lowering volatility and enhancing returns.

2014-04-10 Why the U.S. Should Export Crude Oil by Tim Guinness, Will Riley, Jonathan Waghorn of Guinness Atkinson Asset Management

The Ukraine-Russia crisis, as well as Russia’s position as a major energy provider, has renewed the discussion on whether the US should export crude oil. A forty year old decree bans U.S. producers from exporting crude oil, and it needs to be repealed. It represents misguided protectionism and is a hangover from the days before the US embraced free trade. We think that exporting crude oil would be an economic benefit to the US, as it incentivises the full development of the US shale resource.

2014-04-10 And That's The Week That Was by Ron Brounes of Brounes & Associates

One quarter down; three to go. After a rough January, stocks rebounded to complete a solid quarter with the Dow Jones the lone main index still "in the red." The new week found decent numbers from manufacturing and labor and investors moved past the "bad weather" excuse, though still took profits from high-flying bio-techs and internet stocks. The late-week selling hindered the overall equity performance.

2014-04-10 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The Fed gave a push to stocks early in the week, but news about Washington DC investigating the so-called High Frequency Traders drove down the momentum stocks which were still suffering from the previous week’s hangover.

2014-04-10 Muni Land with Steven Pikelny by (Article)

Municipal bond closed-end funds currently may present a cost-effective tax-free opportunity, says analyst Steven Pikelny of Morningstar.

2014-04-10 March 2014 Pension Finance Update by Brian Donohue of October Three Consulting

Pension finances deteriorated slightly in March, and both ?model? plans we track ended the first quarter of 2014 in modestly negative territory. Traditional ?Plan A? lost about 1% last month and is now down almost 4% for the year, and ?Plan B? slid less than 1% during March, ending the quarter almost 2% in the red.

2014-04-09 Whatever It Takes 2.0? by Axel Merk of Merk Investments

If you are convincingly irrational the market may expect extreme measures and front run your bluff. It?s in this spirit that ECB President Draghi is threatening the market with another bazooka. We discuss implications for investors.

2014-04-09 Russia and the Baltics by Bill O'Grady of Confluence Investment Management

The Ukrainian crisis and the Crimean annexation have been closely watched by the Baltic countries (Estonia, Latvia and Lithuania). For many, the recent developments are bringing recollections of the start of the Soviet Union. In this week?s report, we will explore the geopolitical atmosphere in the Baltic states after the Russian annexation of the Crimea, focusing on Estonia. We will start with a brief history of the relations between Russia and its Baltic neighbors. We will then take a look at what the local press is reporting, the reports coming out of Russia and the word on the street.

2014-04-09 Management?s History of Shareholder Friendliness by William Smead of Smead Capital Management

Many years ago, United Airlines had the slogan, "Fly the Friendly Skies." At Smead Capital Management, we like to own companies for a long time which are "friendly" to their public shareholders. In this missive, we will define what it means in our eyes to be shareholder friendly and give a company specific example of this friendliness.

2014-04-09 How High-Frequency Trading Benefits Most Investors by Gary Halbert of Halbert Wealth Management

A controversial new book came out in late March that lambastes so-called ?high-frequency trading? on the major stock exchanges and claims that such computerized trading robs retail investors of good executions and profits on their stock orders. The book, ?Flash Boys: A Wall Street Revolt,? was written by former bond salesman turned author, Michael Lewis, who appeared on CBS? 60 Minutes on March 30. Since then, his book has stirred up quite the controversy among stock market investors.

2014-04-09 Reasons To Remain Optimistic In 2014 by Sandra Martin of Martin Investment Management

The equity markets have taken a respite in 2014 after returning more than 32% in 2013. Margin expansion has been the largest influence on profit growth and should continue with present low inflation expectations. We believe that mergers and share buybacks may continue to increase shareholder value for large capitalization stocks.

2014-04-09 Take an Active Approach to Selecting Your Active Manager by Robert McConnaughey of Columbia Management

For some time, we have written about the challenges active equity managers face from a market with unusually high cross-correlations. We have also stated our belief that the correlation pendulum would swing back to more normal levels (at least) as the aftershocks of the 2008 financial crisis abated, with a corresponding benefit to active managers. That swing is well under way and a growing number of commentators have begun to echo our observation.

2014-04-09 Master Limited Partnerships by Greg Reid and the Salient MLP Team of Salient Partners

Master Limited Partnerships (?MLPs?) are a unique asset class in the investment landscape. Historically, MLPs have been primarily owned by high net worth and retail investors due in part to the tax complexities. However, MLPs have started gaining traction over the past few years among institutional investors as they seek alternative sources of yield in our present low-yield world.

2014-04-09 Dare to be Great II by Howard Marks of Oaktree Capital

In September 2006, I wrote a memo entitled Dare to Be Great, with suggestions on how institutional investors might approach the goal of achieving superior investment results. I’ve had some additional thoughts on the matter since then, meaning it’s time to return to it. Since fewer people were reading my memos in those days, I’m going to start off repeating a bit of its content and go on from there.

2014-04-08 Fixed Income Perspectives: Implications of a Hawkish Fed by Phil Apel and James McAlevey (Article)

Phil Apel and James McAlevey, portfolio managers of the Henderson Unconstrained Bond Fund, explaining that interest rates are poised to move higher and credit appears likely to outperform government securities in 2014.

2014-04-08 Do Small Cap-Value Stocks add Value in Retirement Portfolios? by Joe Tomlinson (Article)

Research going back to Fama and French in the early 1990s has shown that small-value stocks have produced superior returns. Subsequent debate has centered on whether this superior performance will continue and if investors should tilt portfolios to capture those returns. I’ll examine the historical evidence, incorporate it in retirement examples and discuss the future prospects for small-cap value.

2014-04-08 Do Commodities Belong in Your Allocation? by Geoff Considine (Article)

For much of the last several years, poor performance from commodities has hurt investors’ portfolios, a result of depressed interest rates, low inflation and slow economic growth. Any diversification value they provided was masked by strong equity-market performance. My analysis shows that only a small allocation to commodities is justified, and advisors can obtain most of the same benefits with REITs or individual TIPS.

2014-04-08 How to Avoid the Coming Crunch on Advisor Compensation by Dan Richards (Article)

Here are the two key ways that life will look very different for financial advisors in 10 years: a change in the structure of advisor practices and downward pressure on compensation.

2014-04-08 The Secret to Selling to Women by Dan Solin (Article)

If you want to achieve success as a financial advisor, master the art of selling to women.

2014-04-08 Why I Sold - Part 6: Ensuring a Successful Transition by Jim Whiddon (Article)

Whether you are moving forward with a merger or are still debating whether to do so, you must consider what will happen after you blend with another firm. Here are the three most important elements to keep in mind.

2014-04-08 Greatness is Overrated by Justin Locke (Article)

I have no objection to greatness per se, but let’s think about the practical uses - and potential negative effects - of this word.

2014-04-08 How to Get Chatty Clients off the Phone by Beverly Flaxington (Article)

My clients are very happy - I know because they call me with every little question and I respond. Some just call to talk about Obamacare or the market trends. It’s not that I don’t enjoy the conversations, but it gets very difficult to plan my day with this much chatting.

2014-04-08 Adding Direct Mail Advertising to Your Marketing Mix by Elizabeth Snyder (Article)

Advisors rarely generate the positive activity necessary to make direct mail worthwhile and cost effective. But they have an opportunity to capitalize on direct mail as a marketing strategy, especially since it offers advantages over electronic marketing (such as email): Direct mail reaches people directly in their homes and provides physical documents that recipients can save and refer to later.

2014-04-08 Obamacare by Andy Friedman of The Washington Update

Last Monday marked the deadline for new sign-ups under Obamacare. On Tuesday, I appeared on CNBC to discuss the future of Obamacare and the effect it is likely have on the mid-term elections.

2014-04-08 Overcoming Fear and Loathing in Lost Wages by Kristina Hooper of Allianz Global Investors

Personal income, not job growth, may have drawn the ire of investors as stocks sold off on Friday. But look for the market to rebound on continued economic progress and soothing remarks from the Fed, writes Kristina Hooper.

2014-04-08 Labor Markets Looking for a Spring Blossom by Chris Maxey, Ryan Davis of Fortigent

With an unusually harsh winter finally ending, economists were excited to see if labor markets would rebound in March. By many accounts, they were left wanting for more, but the underlying theme in the March report was consistent, steady job growth.

2014-04-08 On Cruise Control by Richard Michaud of New Frontier Advisors

The first quarter was a relatively calm start to the year. The Dow was down 0.7%, the S&P up 1.3%, and the NASDAQ up 0.5%. International equities were nearly flat as well with the MSCI ACWI ex US down 0.1%. European equities were up 1.5% and Pacific equities were moderately negative, with the MSCI Pacific down 3.3% for the quarter. Emerging market equity indices were down 0.8% for the quarter, with China down 6.7%.

2014-04-08 Asset Allocation Implications of a Flattening Treasury Yield Curve by Martin Pring of Pring Turner Capital Group

The Treasury yield curve has started to flatten in recent weeks. Based on historical relationships, this process is likely to have important implications for investors because it signals that the business cycle has moved to a more self-reliant and less Fed dependent state.

2014-04-08 Avoiding Losers Is as Important as Picking Winners in High Yield Markets Today by Andrew Jessop, Hozef Arif of PIMCO

Although high yield bonds span a broad range of sectors, industries and individual credits, their yields today tend to fall within an increasingly narrow range. Narrow dispersion means portfolio decisions that target outperformance should now be guided by avoiding deteriorating credits as much as by selecting the most attractive rising stars. Strategies for picking the rising stars can extend to CCC rated credits where agency ratings lag the improvement in the underlying credit profile.

2014-04-08 Moving Forward With the Normalization of Yields by Scott Mather, Michael Story of PIMCO

One response to yield normalization is to consider retaining core bonds and diversifying the specific risk factor of concern, in this case duration. In the past, global bonds have captured most of the upside but avoided a significant amount of the downside relative to domestic-only bonds. Generating capital gains from bonds in a rising yield environment requires defining concretely what yield normalization means ? where yields are going and when they will get there ? and setting these expectations against forward market pricing, country by country.

2014-04-08 A Surplus of Controversy by Kenneth Rogoff of Project Syndicate

When the US Treasury recently added its voice to critics of Germany?s chronic trade surplus, it underscored the deep disagreement over what, if anything, should be done about it. It is a highly contentious debate, often informed more by ideology than facts.

2014-04-08 Cementing Europe?s Recovery by Mohamed El-Erian of Project Syndicate

Europe?s renewed sense of hope and confidence, however encouraging, is not yet sufficient to produce appreciable gains for current and future generations. A few things need to happen over the next several weeks and months if Europe is to minimize the risk of another prolonged period of under-performance and financial risk.

2014-04-08 Predatory Trading ? Just How Big an Issue is High-Speed Trading? by Matt Waldner of Columbia Management

High-frequency trading (HFT) is a topic institutional investors and traders have been battling for years. A new book titled Flash Boys by author Michael Lewis of Moneyball fame, investigations out of U.S. regulators and a 60 Minutes spot on a recently developed exchange, IEX, brought this topic from Wall Street to Main Street. In this article, we?ll take a walk around the issue, educate our investors, and hopefully, quell any concerns.

2014-04-08 Our Five Year Forecast Beginning February 20, 2014 by Kendall Anderson of Anderson Griggs

Late last month I took on the role of judge, not in a court of law, but in a university competition, the CFA Institute Research Challenge Southern Classic. My task was to choose one of fourteen teams from South Carolina, Georgia and Alabama universities to go on to represent their region in the Americas Regional bracket of the CFA Institute Research Challenge. The challenge gives university students from around the globe an opportunity to gain real-world experience as they assume the role of a research analyst

2014-04-08 Is This an Andy Hardy Kind of Market? by Jerry Wagner of Flexible Plan Investments

With Mickey Rooney?s death over the weekend (at age 93, after accumulating show business credits spanning 10 decades), I got to thinking about the Andy Hardy movie series that propelled Mickey at the ripe old age of 16 into stardom. In the 50?s the TV screen was awash with black and white classics of the 30?s and 40?s. Like the Great Depression generation, many of the baby boomers binged on Andy Hardy movies long before Walking Dead, Breaking Bad or House of Cards.

2014-04-07 First Quarter of 2014 Brings Many Reversals, Regressions to the Mean by Ron Surz of PPCA

Unlike 2013, diversification worked in the first quarter of 2014. As revealed in our 2013 market commentary, U.S. stocks dominated with a 33% return while diversifying assets like commodities lost 10%. As shown in the graph on the right, diversification into real estate and commodities was handsomely rewarded in the first quarter.

2014-04-07 The Other Side of the Mountain by John Hussman of Hussman Funds

Having witnessed the glorious advancing portion of the uncompleted market cycle since 2009, investors might, perhaps, want to consider how this cycle might end. After long diagonal advances to overvalued speculative peaks, the other side of the mountain is typically not a permanently high plateau.

2014-04-07 The Doubt of Appearances by Dimitri Balatsos of Tesseract Partners

Households have made significant progress mending their balance sheet in the post-crisis period. Assets have been boosted on the back of higher home values and stock prices, while liabilities have been trimmed, mostly mortgages, thanks in large part to widespread home foreclosures.

2014-04-07 Examining Companies Through the Lens of ESG by Mark Mobius of Franklin Templeton

No matter where we invest, there?s always some sort of risk. This includes not only geopolitical or macroeconomic factors in a given country, but also issues that are unique to a specific sector or individual security. As bottom-up stock pickers, my team and I must assess the potential risks and returns related to each and every company we invest in. One area that warrants closer examination is environmental, social, and governance (ESG) risks and opportunities, which can play a big role in our stock selection and valuation process.

2014-04-07 Back-to-Back 1% Down Days? by Team of GaveKal Capital

Beginning the year, there had only been five 1% down days over the previous six months. With Friday's decline, the total has edged up to nine 1% down days over the previous six months. If the SP500 were to closes at its current level (1846), this would be the tenth 1% down day in the last six months.

2014-04-05 Investing for Retirement: The Defined Contribution Challenge by Ben Inker and Martin Tarlie of GMO

Target date funds are rapidly becoming the workhorse for DC plans. These funds have grown substantially in recent years, partly as a result of automatic enrollment made possible by the Pension Protection Act of 2006. By and large, current target date funds resemble the old investment advisor adage that stock weight should be about 110 minus a person’s age. While this satisfies the common-sense intuition that, all things being equal, weight in stocks should go down as a person ages, there are a number of problems with this approach. In this paper we focus on two in particular.

2014-04-05 The Lions in the Grass, Revisited by John Mauldin of Millennium Wave Advisors

Today we explore a few things we can see and then try to foresee a few things that are not quite so obvious. The simple premise is that it is not the lions we can see lounging in plain view that are the most insidious threat, but rather that in trying to avoid those we may stumble upon lions hidden in the grass.

2014-04-04 Bob by Bill Gross of PIMCO

PIMCO recommends overweighting credit and to a lesser extent volatility and curve. Underweight duration. Although credit spreads are tight, they are not as compressed as interest rates, which are now in the process of normalization. While PIMCO agrees with Janet Yellen that such normalization will be a long time coming (the 12th of Never?), probabilities suggest that as the Fed completes its Taper, the 5?30 year bonds that it has been buying will have to be sold at higher yields to entice the private sector back in.

2014-04-04 Putin and the Naughty Chair by Robert Stimpson of Oak Associates

On the surface, the first quarter of 2014 appears to be decent. The S&P 500 eked out a gain of 1.8% in the first three months of the year, despite heightened geopolitical tensions, a changing of the guard at the Federal Reserve, and frigid weather hampering economic growth. Accounts managed by Oak Associates have topped the S&P 500 year-to-date. That being said, signs of internal weakness are present in US equities.

2014-04-04 Meet "Lowflation": Deflation's Scary Pal by Peter Schiff of Euro Pacific Capital

In recent years a good part of the monetary debate has become a simple war of words, with much of the conflict focused on the definition for the word "inflation." The latest front in this campaign came this week when Bloomberg News unveiled a brand new word: "lowflation" which it defines as a situation where prices are rising, but not fast enough to offer the economic benefits that are apparently delivered by higher inflation. Although the article was printed on April Fool's Day, sadly I do not believe it was meant as a joke.

2014-04-04 Warning Signs in Leveraged Credit? by Elizabeth (Beth) MacLean of PIMCO

· Though leveraged credit markets are less levered than they were pre-crisis, signs of more lenient, issuer-friendly terms are prompting regulators (including the Fed) and investors to voice concerns. · Regulators have tightened lending guidelines, but strong demand versus supply means the market is able to find ways around such guidance. · Detailed bottom-up credit analysis with an emphasis on long-term fundamentals and loss avoidance remains crucial to investing in leveraged credit today.

2014-04-04 Pakistan?Reputation and Reality by Taizo Ishida of Matthews Asia

I have been spending an increasing amount of time in ?frontier? Asian countries, exploring such fascinating locales as Mongolia and Myanmar. But only recently did I make my first trip to Pakistan. It is a country that has long piqued my interest and was a last, unexplored frontier for me. Through the years, we have debated the issues of safety and law and order there. For many in the West, the mention of Pakistan instills some fears, and many governments continue to warn their citizens to defer all non-essential travel to the country.

2014-04-04 Why Chinese Stocks May Still Make Sense Over the Long Run by Russ Koesterich of iShares Blog

Many investors have been concerned about the Chinese market lately and are asking Russ whether they should abandon Chinese stocks. Russ explains why his answer is still no, at least for the long term.

2014-04-04 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.6, unchanged last week (which was revised from 133.5). The WLI annualized growth indicator (WLIg) rose to 3.0 from last week?s 2.9. Here are some notable developments since ECRI?s public recession call on September 30, 2011: 1) The S&P 500 is up 61.9% at yesterday?s close, fractionally off its record close on April 2nd. 2) the unemployment rate has dropped to 6.7%, and 3) Q4 GDP was revised upward to 2.6%.

2014-04-04 What's Abuzz About Gold? by Frank Holmes of U.S. Global Investors

If we continue to see these large movements of the physical metal, especially from the West to the East, it would appear to be only a matter of time until these supply-and-demand factors lift the gold price.

2014-04-04 Do You Think You Can Be Effective in Market Forecasting? by Robert Isbitts of Sungarden Investment Research

It is important to understand that no one can predict the future with certainty. Investors should take so-called expert forecasts with a grain of salt. Effective portfolio management is not about forecasting the future and then clinging to that forecast. It?s about continuously evaluating information and market conditions and then making adjustments when necessary to pursue the ultimate goal. To paraphrase long time market watcher Steve Leuthold, ?Predictions are for show, our decisions within the portfolio are for dough.?

2014-04-04 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

For the European Central Bank, actions will speak louder than words. US hiring is back on track. The debate over unemployment and wage pressure.

2014-04-04 Avoiding Complacency by Heather Rupp of AdvisorShares

Active managers don’t have a mandate to hold any certain securities, thus they can pick and choose as to what they feel offers the best return level for a given risk profile. The high yield bond market still offers plenty of what we view as very attractive opportunities in credits that we see as solid companies at yields about 300 basis points or more above the yield level on this bond.

2014-04-04 A New Machine: Is a Capital Spending Cycle Imminent? by Liz Ann Sonders of Charles Schwab

Activist investors have helped highlight companies’ bias toward stock buybacks/dividends vs. longer-term capital investments. Preconditions for a pickup in capital spending appear to be lining up. The technology and industrial sectors are likely the biggest beneficiaries.

2014-04-04 Income Is Always a Good Idea by Jack Tierney of Invesco Blog

Most of the 2014 forecasts were positive on stocks, albeit at a lower return after such a strong year in 2013, and negative on bonds. However, January was a down month for stocks and a very strong month for bonds, February saw stocks rebound and bonds range-bound, and March thus far has stocks down more than up and bonds still range-bound. With apologies for altering the famous quote attributed to Audrey Hepburn in Sabrina, "Paris is always a good idea," I would say that "income is always a good idea."

2014-04-03 Chuck Royce on 1Q14: Despite Minor Pullback, Market Still Shows Strength by Chuck Royce of The Royce Funds

Despite the market's subdued first-quarter performance, annualized total returns for the major indexes remained in double-digit territory for the one-, three-, and five-year periods ended March 31, 2014. President, Director of Investments, and Portfolio Manager Chuck Royce offers his thoughts on the market's behavior during the first quarter and why he thinks investors can expect a major correction within the next twelve months.

2014-04-03 Foolish Investment Ideas by Axel Merk of Merk Investments

With April Fools? Day behind us, it?s time to get serious about investing. Don?t be fooled by this week?s non-farm payroll report; nor by the assertion that the U.S. may have the cleanest of the dirty shirts. And certainly don?t be fooled into thinking the market has your interests in mind?

2014-04-03 Fiduciary vs. Suitability Standards-Your Need to Know the Difference by H. William Wolfson of American Financial Advisors

Beth Banker, a successful business woman, has been having ongoing neck and back issues. She decided to access web based information as to obtain self treatment options. Upon her reading, she realized that her condition, although appearing musculoskeletal in nature may be more involved with underlying pathologies. Although her intent was to heal herself, in reality she became more concerned and stressed as to the amount of research and data that existed?which she didn?t understand.

2014-04-03 The Stealth Rally: Gold Under the Radar by Peter Schiff of Euro Pacific Precious Metals

So far, 2014 has been a paradoxical year for gold. Many investors aren't even aware that it has rallied almost 8%. On the rare occasion that the financial media mentions the yellow metal, it is only in the context of comparing the recent rise to last year's decline.

2014-04-03 Plans are Nothing; Planning is Everything by Scott Minerd of Guggenheim Partners

U.S. investors are largely convinced that the Fed will raise interest rates in the middle of 2015 but sluggish inflation could push that eventuality back into 2016.

2014-04-03 Q2 fixed income outlook ? Hitting for the cycle by Gene Tannuzzo of Columbia Management

By the middle of this year, the economic expansion in the U.S. will officially turn five years old. By comparison, the average of all business cycle expansions tracked by the National Bureau of Economic Research dating back to the mid-1800s is about three and half years. But like many five year olds, this cycle hardly seems mature. In particular, we have taken notice of three key elements of the business cycle that have distinct implications for bond investing today.

2014-04-03 VIX Exchange Traded Products...Growth and Risk Impact by Daniel Kirsch of Macro Risk Advisors

The growth of ETFs has been nothing short of tremendous. What started as a product designed to provide investors with broad equity or sector exposure in the US, the ETF landscape now includes a myriad of geographies (Europe, Asia) and asset classes (FX, rates, credit, commodities). Research consultancy firm EFTGI estimates that there are almost 5,000 ETFs globally with total AUM in excess of $2 trillion.

2014-04-03 Yellen?s Labor Market Dashboard by Scott Brown of Raymond James

In her years as a Federal Reserve official (governor, district bank president, and vice chair), Janet Yellen expressed a greater concern about job conditions than her peers. As expected, that emphasis has continued into her tenure as Fed chair.

2014-04-03 Being There by Jeffrey Saut of Raymond James

Spring has sprung, yet many market pundits are worried about the softening economic reports, causing me to remember the book ?Being There? by author Jerzy Kosinski.

2014-04-03 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Last week saw a correction in many of the high-flying groups, but overall another quiet week with investors unsure of the economic outlook.

2014-04-03 ProVise Bullets by Team of ProVise Management Group

During the Great Recession, America laid off two million factory workers and factory output fell 20 percent. Before the Great Recession, of course, manufacturing jobs were headed overseas. As we have slowly emerged from the Great Recession, it’s a little surprising to some that manufacturing has led the way, outpacing overall GDP growth. This year it looks like manufacturing could add 3.5 percent in growth. Is this just a replacement of jobs that were lost during the Great Recession?

2014-04-03 And That's The Quarter That Was by Ron Brounes of Brounes & Associates

After a nightmare than was January, the quarter actually turned out pretty well (except in the Ukraine).

2014-04-02 Gain International Exposure with Small-Caps by David Nadel of The Royce Funds

Portfolio Manager and Director of International Research David Nadel discusses our attraction to international small-caps, how our investment approach translates into the international small-cap universe, how we try to avoid value traps, the effect monetary policy has had on our approach and performance, and more.

2014-04-02 Available at a Low Price in Relation to Intrinsic Value by William Smead of Smead Capital Management

At Smead Capital Management, valuation matters dearly. We believe all the academic studies from Fama-French, Bauman-Conover-Miller and Francis Nicholson, show that cheap stocks as measured by price-to-book value (P/B), price-to-earnings (P/E) or price-to-dividends outperform more expensive stocks. We especially love Nicholson?s 25-year study because it shows that the 100 cheapest stocks that make up the lowest P/E quintile see their outperformance expand the longer you hold them. Cheapness is the gift that keeps on giving.

2014-04-02 Consumer Confidence Up, But Concerns Remain by Gary Halbert of Halbert Wealth Management

The Conference Board reported last week that its Consumer Confidence Index jumped to 82.3 in March (up from 78.3), the highest reading since January 2008, just as the recession was beginning. But the two underlying components of the Index provided two different perspectives, as we will discuss today.

2014-04-02 The Treasury Yield Curve Starts its Tightening Process by Martin Pring of AdvisorShares

Martin is the Investment Strategist to the AdvisorShares Pring Turner Business Cycle ETF (DBIZ)?and since 1984, he has published the ?Intermarket Review,? a monthly global market report revered among analysts and market technicians. Here, Martin shares his latest technical analysis.

2014-04-02 Reforming China?s State-Market Balance by Joseph Stiglitz of Project Syndicate

Many of China?s problems today stem from too much market and too little government. Or, to put it another way, while the government is clearly doing some things that it should not, it is also not doing some things that it should.

2014-04-02 Foolish Investment Ideas by Axel Merk of Merk Investments

With April Fools? Day behind us, it?s time to get serious about investing. Don?t be fooled by this week?s non-farm payroll report; nor by the assertion that the U.S. may have the cleanest of the dirty shirts. And certainly don?t be fooled into thinking the market has your interests in mind?

2014-04-02 A Fixer-Upper? by Team of GaveKal Capital

As noted yesterday, March was not an exceptionally positive month for European equities.

2014-04-02 4 Areas Revved Up for a Resources Boom by Brian Hicks of U.S. Global Investors

Commodity returns vary wildly, as experienced resource investors can attest and our popular periodic table illustrates. This inherent volatility can spell opportunity for the nimble investor who can look past the mainstream headlines to identify hot spots. Our global resources expert, Brian Hicks, CFA, identified four we believe are revved up for a resources boom.

2014-04-02 Tax Reform: Camp Fires Up the Debate by Milton Ezrati of Lord Abbett

Chances for passage of the congressman's overhaul of the U.S. tax code are slim, but provisions of the bill could point the way to future reform.

2014-04-02 A Year of Reversals Amid a Search for Value by Russ Koesterich of iShares Blog

Stocks have traded in a relatively narrow range for the past two weeks, but beneath the surface, some of last year?s winners are shaping up to be this year?s losers. Russ explains the shifts he?s seeing and what they mean for investors.

2014-04-01 First Quarter Review: Choppy Global Markets by Paul O\'Connor (Article)

Paul O'Connor, Co-Head of Multi-Asset, comments on the recent global market behavior and notes that so far it has been quite choppy. Paul and his team believe the rest of the year and most notably Q2 will behave similarly with fairly modest returns and higher volatility than in the past few years. However, Paul notes that from a multi-asset perspective, this type of environment also presents opportunities.

2014-04-01 Milliman Managed Risk Strategy-A Closer Look by (Article)

The Milliman Managed Risk Strategy is an intelligent institutional quality risk management strategy that seeks to stabilize volatility around a target level, capture growth in up markets and defend against losses during major market declines. The strategy has been in place since 1998, and is used in a variety of funds and investment products in an attempt to help investors weather market turbulence and improve the overall likelihood of meeting retirement income goals.

2014-04-01 The FlexShares Approach: Flexible Indexing by (Article)

Shundrawn Thomas, Global Head of ETFs, discusses the ideas behind FlexShares' flexible indexing approach, including how it starts not with a benchmark, but with an investment strategy and how this can benefit investors.

2014-04-01 How to Avoid Hidden Costs in Your Bond Allocations by Bob Veres (Article)

The supposedly safe move to shorten bond maturities in anticipation of rate increases has been very costly over the last three years - and there’s no reason to expect the next three will be any different. Here’s a way to quantify those costs and position your portfolios in a way that makes money in a variety of interest-rate scenarios.

2014-04-01 The Alpha Strike Zone by Michael Finke (Article)

Investors have known about mutual-fund style boxes for a long time, but few understand their purpose. Should an advisor identify the best fund in each of the boxes? Should they attempt to capture equal exposure to all styles?

2014-04-01 How to Tell What Your Prospect Is Thinking by Dan Solin (Article)

I am fascinated by the sophisticated technology used in political debates. Consultants pay focus groups to instantaneously record their reactions as the candidates discuss different issues. How valuable would it be if I such an insight into the thinking of someone listening to me? If I knew my audience’s reactions, I could adjust my presentation accordingly. That goal is now within your grasp.

2014-04-01 More on Bullying - Because it is Everywhere! by Beverly Flaxington (Article)

I received a response to last week’s column, in which I gave advice to someone who was being bullied, that pointed out some areas in which I missed the mark. The writer said I did not address taking a "direct approach" to dealing with the bully.

2014-04-01 Fighting Financial Advisor Anxiety by Sarah Scorgie (Article)

Here’s how to help prospective clients educate themselves before walking into a meeting with you.

2014-04-01 Why I Sold - Part 5: Overcoming the Psychological Resistance to Merging by Jim Whiddon (Article)

Before I made the difficult decision to merge my RIA with a larger partner, I took one last look at the pros and cons. Despite all the positive aspects my research turned up, I hesitated over some lingering issues that were important to resolve. And while the bottom line was compelling, many of my concerns had to do with the psychological effects of the move, both for me and for my clients.

2014-04-01 More Ticking Time Bombs that Threaten Your Business by Dan Richards (Article)

Last week I discussed four inevitable changes in how Americans invest. This week and next, I’ll focus on four aspects of advisory practices that are unsustainable. These four issues will cause significant changes in the next 10 years - or perhaps sooner.

2014-04-01 Have You Looked at India Lately? by Eric Stein, Patrick Campbell of Eaton Vance

In our judgment, it?s time to remove India from the ranks of the so-called ?Fragile Five?* emerging-market countries. We believe the strong investment case to be made for India today underscores the importance of taking a country-by-country approach to emerging-market investing.

2014-04-01 U.S. Growth Offers a Tailwind for the Region by Mohit Mittal, Ed Devlin, Lupin Rahman of PIMCO

PIMCO expects growth in the U.S. to improve due to a reduction in fiscal drag, although the Federal Reserve?s tapering and slowing growth in China are risks. While higher U.S. growth should offer a boost to exporters, Canada will likely face headwinds from a housing correction and drop in consumption. Latin America has fared relatively well amid the recent volatility in emerging markets, but differentiation across credits and markets continues to increase.

2014-04-01 A Look at First Quarter Market Performance by Chris Maxey, Ryan Davis of Fortigent

As the first quarter draws to a close, equity markets appear poised to finish in positive territory despite a somewhat tumultuous news environment. As noted by Bloomberg, save for a sharply negative Monday period, the S&P 500 will close out a fifth consecutive quarter in positive territory for the first time since 2007.

2014-04-01 Equities Sag as Macro Backdrop Quiets Down by Robert Doll of Nuveen Asset Management

Last week U.S. equities struggled for direction as the S&P 500 declined 0.4%. Small cap stocks were hit harder, and macro and geopolitical issues seemed to be on the back burner. Overall, emerging markets rallied, value and contrarian plays outperformed and Japanese stocks bounced.

2014-04-01 The Changing Face of Global Risk by Nouriel Roubini of Project Syndicate

The world?s economic, financial, and geopolitical risks are shifting. But, as in the run-up to the global financial crisis in 2008, investors seem unable to estimate, price, and hedge tail risks properly.

2014-04-01 Signs of Life?? by Adam Bowe, Robert Mead of PIMCO

As mining investment in Australia tapers, improvements in other sectors of the economy recently have allayed some concerns of a collapse in domestic demand. We share the cautious optimism but stop well short of expecting higher policy rates this year. Australian bond yields remain highly correlated to global developed market bond yields, and without a near-term domestic catalyst to cause that correlation to break, Australia?s yields are more likely to gradually rise, particularly in the longer end of the yield curve, which isn?t supported by anchored policy rates. ?

2014-04-01 2016 (Part 1, The Economic Issue) by Bill O'Grady of Confluence Investment Management

In this report, we are tackling the geopolitical impact of the 2016 elections. Given the size of the topic, it will be discussed over a three-part series. As we survey the political landscape for 2016, the next presidential election could be historic. In our opinion, the last three presidents have been unable to create a consistent foreign policy that reflects America?s role as the unipolar superpower. We will begin by examining the economic challenges the next president will face, with a broad analysis of the issues of inequality and economic growth.

2014-04-01 Investing is Hard by David Wismer of Flexible Plan Investments

Or better put, successful investing is hard. So says author, speaker, and CIO Robert Seawright of Madison Avenue Securities in a recent series of ?Investment Belief? columns on his award-winning blog, Above the Market.

2014-04-01 Why Key Long-Term Trends Matter to Stock Pickers by Virginie Maisonneuve of PIMCO

The combination of demographic changes, climate change and the ongoing shift in emerging markets over the next 30 years will have long-term consequences for supply and demand factors and business sustainability for many companies. The impact of these long-term trends must not be underestimated. It is crucial for equity investors to not only be attuned to them, but also to understand how companies are adapting to the shifts in the global corporate operating environment. ?

2014-04-01 Fundamental Tango by Scotty George of Alexander Capital

The economy and financial markets are forever sending out mixed, parallel, or confusing messages. Inflation or stagflation? Buy now, or take your profits? Proceed slowly, or go home? At this moment, the signals are hardly synchronized.

2014-03-31 European Rally Has Legs by Nick Kalivas of Invesco Blog

Since hitting a low on June 1, 2012, the MSCI Europe Index has rallied 64.73%. In our view, there?s room for European equity markets to advance further, supported by strong fundamentals, positive flows and a steady uptrend from the June 2012 low.

2014-03-31 Labor Market Clues for Bond Investors by Christopher Molumphy of Franklin Templeton

When the US Federal Reserve (Fed) began tapering early this year, the general assumption was that investors would flee en masse from fixed income investments. Certainly, there has been some volatility in Treasury yields, most recently after Fed Chair Janet Yellen suggested interest rates could start to rise around six months after tapering ends ? which would be somewhat sooner than many were expecting.

2014-03-31 Raising the Minimum Wage: Cure or Curse? by Russ Koesterich of iShares Blog

There?s been a lot of talk lately about raising the minimum wage, both on the federal and local level. Russ and an investment strategist on his team weigh in on what higher minimum wages could mean for the economy and for investors.

2014-03-31 Shifting Policy at the Fed: Good for Long-Term Growth, Bad for Cyclical Bubbles by John Hussman of Hussman Funds

The Fed is wisely and palpably moving away from the idea that more QE is automatically better for the economy, and has started to correctly question the effectiveness of QE, as well as its potential to worsen economic risks rather than remove them.

2014-03-31 March Was A Tough Month for MSCI Europe by Team of GaveKal Capital

The only sector in MSCI Europe with positive performance for the month of March is Utilities, while Health Care stocks took quite a beating.

2014-03-31 Will Jobs Benefit From a Spring Thaw? by Kristina Hooper of Allianz Global Investors

The upcoming jobs report, a bellwether for the health of the US economy, could reveal that the harsh winter has created a coiled spring in the labor market, writes Kristina Hooper.

2014-03-29 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Using energy as a pawn may work to Russia’s disadvantage in the long run. China’s 2014 economic outlook is hazy. Lessons from the 2014 stress test.

2014-03-29 Are You Being Advised or Sold To? by Rob Isbitts of Sungarden Investment Research

Independent advisors come in all shapes and sizes the ones who ’get it’ treat the client as a teammate, not an opponent, and see their role as being the client’s advocate, representative, and interpreter, within an increasingly complex investment world. Shortcuts and overkill by Wall Street firms increase the chance of the client’s later feeling fooled, and feeling like a fool. Independent firms will continue to be the winners in that battle for the client’s affections because they are far less likely to allow that to happen.

2014-03-29 When Inequality Isn't by John Mauldin of Millennium Wave Advisors

We’ve discovered so far that income inequality is a fact; however, income mobility has remained roughly the same over the last 40 years. That is, a person’s chances of rising from a lower stratum of wealth distribution to a higher stratum is approximately the same as it was in 1975.

2014-03-28 Johnson Controls: Back To Consistency? by Team of F.A.S.T. Graphs

Johnson Controls (JCI) traces its roots back to an interesting bit of history. One hundred and thirty-one years ago, Warren Johnson was a professor in Whitewater, Wisconsin. It was here that he invented and installed the first electric tele-thermoscope ? known today as the thermostat ? in his classrooms. The invention served a dual purpose: it kept his students more comfortable and put an end to the hourly interruptions from the janitor checking the rooms? temperature. Of course we can?t confirm this, but it would be our guess that Professor Warren was a regular student favorite.

2014-03-28 Americas: Regional Economic Review 4Q 2013 by Team of Thomas White International

The outlook for the developed economies in North America remains healthy while the emerging economies of Latin America continue to face headwinds. Though recent data from the U.S. and Canada have indicated moderation in economic activity, most of the slowdown was likely caused by adverse weather conditions in the region.

2014-03-28 Fed on Target to Raise Interest Rates in the Spring of 2015 by Kevin Mahn of Hennion & Walsh

Last Wednesday, Janet Yellen presided over a press conference as the new Chairman of the Federal Reserve (Fed) following the conclusion of the Federal Open Market Committee’s (FOMC’s) two day meeting and their release of the official FOMC statement. Markets hung on every word and some confusion was created afterwards as Yellen offered a more transparent look at the Fed’s timeline for raising interest rates.

2014-03-28 The End of Chinese Central Planning by Stephen Roach of Project Syndicate

Since Deng Xiaoping?s reforms of the early 1980?s, senior Chinese policymakers have paid less and less attention to central planners? numerical growth targets. Now they are close to taking the final step in the long journey to a market-based economy, by adopting a flexible framework in which GDP growth currently does not come first.

2014-03-28 ?Mind the Gap?: Adapting to a Post-Crisis World in Transition by Virginie Maisonneuve of PIMCO

??Barring any sharp deterioration in global geopolitical risk, the medium term outlook for equities is quite positive in an environment where we see subdued growth and inflation amid healing economies. From a markets standpoint, valuations are not very expensive ? they?re not cheap, but they?re not expensive versus historical standards for the market overall.

2014-03-28 What Investors Should Know About Fed Forward Guidance by Zach Pandl of Columbia Management

Last week, at Janet Yellen?s first meeting as Fed Chair, the FOMC revised its forward guidance for the funds rate, dropping its reference to 6.5% unemployment and instead stressing the committee?s qualitative assessment of the economy. The change was a symbolically important step, but did not alter the broader outlook for policy rates, in our view.

2014-03-28 Why International Now? by David Garff of AdvisorShares

One of the ongoing challenges that advisors face is determining what percentage of their clients assets should be allocated to international equities. The magnitude of this decision is often amplified when the United States has years of persistent out/under performance. US clients will inherently gauge the success of their portfolio based on the S&P 500, or similar index. The challenge for advisors is explaining why a more diversified exposure to global equities is meaningful in the long-run, despite recent years of outlandish performance.

2014-03-28 Asia's E-Commerce Trends by Jerry Shih of Matthews Asia

On a recent research trip, I went to Beijing, Hong Kong, Tokyo and Melbourne and spoke with Internet companies in industries as diverse as automotives, travel and real estate. I also met with several e-commerce companies with varying Internet penetration rates. As growth rates for new Internet users across parts of Asia level off, comparing these firms offered me an interesting glimpse into the potential opportunities and challenges facing the region's newer Internet firms.

2014-03-28 Long-Term Equity Performance Coming Up Short by Kristen Hendrickson of Leuthold Weeden Capital Management

With the bull?s fifth birthday upon us, it seems U.S. equity markets are back on track. While recent memory is bright, investors who bought in 10, 15, and even 20 years ago may not be as apt to break out the balloons and bubbly. The Annual Compound Return (ACR) for the past 15 years (4.53%) is in the FIRST decile of a distribution of 15-year returns since 1926. The longer-term ACRs are a reminder that even a five year bull market can?t undo the damage inflicted by a double bear market decade.

2014-03-28 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.5, up from 133.0 last week (a revision from 132.9). The WLI annualized growth indicator (WLIg) at one decimal place rose to 2.9 from last week's 2.3.

2014-03-28 Lacking Conviction by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Investors seem to lack conviction, what will potentially push them to one side or the other.

2014-03-28 Hotchkis & Wiley: Frequently Asked Questions by Team of Hotchkis & Wiley

In Hotchkis & Wiley's 2014 1Q Newsletter, Ray Kennedy, Mark Hudoff, and the rest of Hotchkis & Wiley's high yield team examines the high yield market and attempt to answer the questions it they get asked most frequently, or ones they believe to be particularly relevant in the current market environment.

2014-03-28 Four Areas Revved Up for a Resources Boom by Frank Holmes of U.S. Global Investors

Commodity returns vary wildly, as experienced resource investors can attest and our popular periodic table illustrates. This inherent volatility can spell opportunity for the nimble investor who can look past the mainstream headlines to identify hot spots. Our global resources expert, Brian Hicks, CFA, identified four we believe are revved up for a resources boom.

2014-03-27 What Has Been Fueling the Rise of Gold in 2014? by Kevin Mahn of Hennion & Walsh

Gold declined approximately 28% for the year of 2013, its worst annual performance since 1981 according toUSA Today. At that time, the downturn ended Gold’s own bull market run of 12 consecutive years as investors jumped on the back of this current bull market by piling into stock funds in 2013 and largely exiting bond funds.

2014-03-27 Plant a Tree Today, Sit in the Shade Tomorrow by Scott Minerd of Guggenheim Partners

The Federal Reserve?s desire to be predictable should lead to an incremental path for the coming tightening cycle and that suggests increasing exposure to floating-rate instruments.

2014-03-27 A Sustainable Recovery?? by Mike Amey of PIMCO

Early signs indicate that the long awaited increase in business investment is underway. In turn, that bodes well for real income growth and the sustainability of the economic recovery. Given the improved economic prospects and the change in rhetoric at the Bank of England, the central bank could well be an early adopter of tighter monetary policy. We expect the BoE to hike rates ahead of the US Federal Reserve. While we beli?eve the British pound has already reflected the BoE?s guidance for official rates to rise by mid-2015, the bond market has yet to fully reflect the new environment. ?

2014-03-27 The Media?s Incomplete Coverage of the Active/Passive Debate by Roger Nusbaum of AdvisorShares

Barron?s revisited the debate between active and passive portfolio management with it?s conclusion revealed in the article?s title; Go Active for Bonds, but Index Your Stocks. This is an important issue for market participants to explore and the revisit every so often.

2014-03-27 US Economic Round-Up - Pending Home Sales Decline Again by Team of GaveKal Capital

Quite a bit of US data was released this morning. The major releases were GDP 3rd revision, Corporate Profits, Initial Jobless Claims, & Pending Home Sales. Let's take a quick look at each.

2014-03-27 Real Estate Alpha Hides in Smaller Neighborhoods by Eric Franco of AllianceBernstein

After a spectacular five-year run, global real estate stocks look headed for a period of more normal returns. We think winning in this space will require a more discriminating eye?and venturing into the often neglected nooks and crannies of the smaller-cap real estate world.

2014-03-26 And That's The Week That Was by Ron Brounes of Brounes & Associates

Well, apparently Janet Yellen has her own style, her own personality, her own mixed message. Just as Fed watchers had to get used to Bernanke in the aftermath of maestro Greenspan (does that name still apply after the financial crisis?), investors will need a few meeting to figure out the new Fed Chair. An early rebound was followed by a selloff which was followed by a rebound which was followed by a late-week selloff. Nicely done, Ms. Yellen (though Russia played a role as well).

2014-03-26 Hangman: The ETF Revolution by Cole Smead of Smead Capital Management

Financial innovation in the investment business is, in our opinion, sometimes just smoke and mirrors. The recent movie The Incredible Burt Wonderstone illuminates what this smoke and mirror façade can produce.

2014-03-26 Looming Retirement Crisis ? Boomers In Big Trouble! by Gary Halbert of Halbert Wealth Management

Let?s face it, we all know this country is facing a retirement crisis. The first of the Baby Boomers turned 65 and started retiring in 2011. The number of Boomers retiring each year will rise rapidly over the next decade or more. Before the end of this decade, Boomers will be turning age 65 at the rate of 8,000 per day.

2014-03-26 Striking a Balance: Risks and Opportunities in Emerging Market Debt? by Francesc Balcells, Anton Dombrovsky of PIMCO

?We believe the risk of a full crisis in emerging markets is greatly diminished as the initial conditions of such economies nowadays are quite different. Although there are vulnerable credits out there, the mark-to-market volatility in the financially strong emerging market economies can present advantages as longer-term fundamentals reassert themselves. By monitoring key triggers and employing a differentiated investment approach, investors may be able to take advantage of attractive valuations in emerging market debt. ?

2014-03-26 Understanding Gold Cost of Carry in Various Currencies by Ade Odunsi of AdvisorShares

Under normal market conditions, the term structure for the price of gold for delivery at increasing maturities (the term structure) exhibits an upward sloping curve. In futures market terminology the term structure is said to be in contango and implies that the price of gold for spot delivery is lower than the price of gold for future delivery.

2014-03-26 Europe is a Land of Opportunity in 2014 by Kevin Mahn of Hennion & Walsh

While we are forecasting a high, single-digit gain for the S&P 500 index over the course of 2014 at this time, we do still contend that U.S. stock market returns will likely be outpaced in 2014 by certain International ? Developed Country stock market returns (notably Europe) as regions such as the Eurozone continue to emerge from their own recession.

2014-03-26 Yellen Speaks, Do the Financial Markets Listen? by Scott Brown of Raymond James

No surprise, the Federal Open Market Committee tapered the monthly rate of asset purchases by another $10 billion and altered the language in its forward guidance on the federal funds rate. In its policy statement, the FOMC indicated that ?it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends.?

2014-03-26 Picture This by Jeffrey Saut of Raymond James

Picture this: you?re an investor starting out in the 1940s after World War II came to an end. Your own experience in the contemporary history of the stock market would've taught you that bonds were the safer, and superior, asset allocation over the long-term.

2014-03-26 Unleashing Africa?s Potential by Michael Hasenstab of Franklin Templeton

Many investors who have never traveled in Africa probably have preconceived ideas about it, perhaps as a land of safaris and political strife, rich in coveted natural resources that have failed to bring widespread wealth and development to the continent. Many also might not realize how diverse the landscape, the economies and the people are on the continent, which boasts more than 1,000 languages spoken in more than 50 countries and climates ranging from hot deserts and tropical rainforests to frozen glaciers.

2014-03-26 Durable Goods Orders: The Disconnect Continues by Team of GaveKal Capital

This morning durable goods orders were released, and while the headline index exhibited a good bounce from January, the rest of the report was more mixed.

2014-03-26 Housing Booming, Busting and Muddling Along by John Burns of John Burns Real Estate Consulting

Housing is local again! Our consultants and clients see vastly different housing markets all across the country. I categorize them into three groups (booming, busting, and muddling) in this article and provide anecdotes from our team members---- but it is really more complicated than that.

2014-03-25 Discovering International Opportunities by Stephen Peak (Article)

Stephen Peak discusses recent geopolitical factors impacting markets and notes opportunities still exist in international equities.

2014-03-25 Milliman Managed Risk Strategy by (Article)

With two significant stock market corrections in the past decade and turbulent times facing the world economy, many investment advisors are under a great deal of pressure to bring risk management solutions to their clients. This video focuses on the Milliman Financial Risk Management and its effort in solving the retirement income problem in America.

2014-03-25 The Takeaways from the Latest Fama-French Research by Michael Edesess (Article)

The latest Fama-French research expands their three-factor model with the addition of two new factors: profitability and investment. My question is whether this work provides any information that can be of practical value to advisors or investors. After careful evaluation of their paper, I conclude that the answer is no.

2014-03-25 How to Confront the End of the Bond Bull Market by Laurence B. Siegel (Article)

What does the title of Simon Lack’s latest book, Bonds Are Not Forever, mean? It’s a question that Lack clarifies and then answers - by proposing a creative way to construct portfolios that have many of the beneficial characteristics of bonds but without much downside interest-rate exposure.

2014-03-25 Four Inevitable Changes that Threaten Your Business by Dan Richards (Article)

If you step back and look at the status quo in the advisory business and ask yourself what things simply don’t make sense and are unsustainable as a result, you will come up with a surprisingly long list. Today’s article focuses on inevitable changes in the investing environment.

2014-03-25 Why I Sold - Part 4 by Jim Whiddon (Article)

The months I spent considering whether to sell my successful independent RIA were difficult personally and professionally. But once my decision was made, it felt good to focus on the positive aspects of a merger that would benefit my staff and my clients.

2014-03-25 Rethinking your Newsletter by Megan Elliot (Article)

Newsletters, once a cornerstone of advisor marketing, now look a bit old-fashioned. Compared to Facebook, Twitter, videos, blogging and other flashier marketing strategies, many simple newsletters look boring and dated. But newsletters can still have a place in your marketing repertoire, provided you approach them in the right way.

2014-03-25 Yes, Even Advisors Get Bullied! by Beverly Flaxington (Article)

I am a financial advisor who is being bullied in my office. I cannot sleep, have constant anxiety and feel like I am working under war-like conditions. I have tried everything to shore up my confidence, but I can’t stop the onslaught of vitriol that comes at me every day.

2014-03-25 Our Most Read Article from Last Week: Gundlach - Rates Will Remain Low in 2014 by Robert Huebscher (Article)

Slowing economic growth, low inflation and a lack of motivated sellers will keep interest rates depressed, at least for the rest of this year, according to Jeffrey Gundlach. But investors should prepare for an eventual rise in rates, he said, because he is skeptical of the Federal Reserve’s ability to successfully exit from QE.

2014-03-25 Low Rates for a Long Time & Preparing for the Eventual Rise by Sponsored Content from OppenheimerFunds (Article)

Interest rates, in a slow growth and only modest inflation world, are likely to remain low for the foreseeable future. Still, the fears of rising rates persist. We believe these fears may be overstated, and this Q&A covers our views on generating income in a low rate world and protecting portfolios in the event of an unexpected rise in rates.

2014-03-25 Janet Yellen Enters the Picture by Chris Maxey, Ryan Davis of Fortigent

After bursting onto the scene earlier this year, Janet Yellen held her first official FOMC meeting last week. Rather than upset the apple cart, she held a largely status quo stance, but several comments raised more than a few questions.

2014-03-25 Will Putin Stop with the Crimea? by Bill O'Grady of Confluence Investment Management

Now that the Crimean referendum has passed in favor of annexation, what will Putin do next? In other words, will he stop with the Crimea? In this report, we will look at the post-Cold War situation from Putin?s perspective. From this viewpoint, we will examine Putin?s likely next steps and how this will affect the U.S. and the rest of the developed world. As always, we will conclude with market ramifications.

2014-03-25 Int'l Mega Banks Still Ticking Time Bombs by Steve Rumsey of Optimus Advisory Group

During the past five years, following the worst financial crisis since The Great Depression, the financial media has been talking about the deleveraging process happening worldwide. We've all heard the stories of how banks to consumers to corporations have deleveraged and continue to do so. It's as if all the global financial bailouts were all orchestrated just to buy us enough time so that we could get our financial houses in order. Then, miraculously, after someone blows the "all clear" alarm we can all go back to living our normal lives once again.

2014-03-25 A Slip and Fall? by Jerry Wagner of Flexible Plan Investments

Despite last week?s vernal equinox, signaling the first day of spring on Thursday, another arctic blast is hitting the Midwest yet again this week, and cabin fever has become an epidemic. So many of my friends and family are singing the same refrain; ?When will this winter be over??

2014-03-25 Stocks: "Aging Bull" Could Still Pack a Punch by Milton Ezrati of Lord Abbett

Bearish market observers fret that earnings growth will falter and that current equity valuations are unsustainable. Their worries are misplaced.

2014-03-25 Higher Rates on the Horizon? Three Implications by Russ Koesterich of iShares Blog

Investors were temporarily taken aback last week by the prospect of an earlier-than-expected rate hike. While it?s not yet clear yet whether the market interpreted the Fed correctly, Russ explains that the possibility of higher rates has three implications for investors.

2014-03-25 US Housing Round-Up by Team of GaveKal Capital

We had three US housing related economic releases today: FHFA House Price Index, S&P Case-Shiller, and new home sales. The two price series both slightly beat consensus while new home sales came in exactly at consensus.

2014-03-25 Five Things You Should Know About Housing Reform Legislation by Michael Canter, Matthew Bass of AllianceBernstein

A recent US Senate bill calls for a restructuring of the government?s role in housing finance, including winding down Fannie Mae and Freddie Mac. Here are five takeaways from the current proposal.

2014-03-24 March Flash Update by Clyde Kendzierski of Financial Solutions Group

At the end of February, the market as measured by the S&P 500 moved slightly above the year-end levels. Subsequently, a brief calming of the tensions surrounding the events in the Ukraine (time will tell) generated a relief rally that extended a bit further resulting in new record highs exactly 5 years after the financial crisis lows of March 2009.

2014-03-24 Market Outlook by Scotty George of Alexander Capital

For those of us that have been around for awhile, we have come to recognize that each Federal Reserve Board Chairman has had a unique way of speaking and a unique personality. Remember the "Volcker Rules"? How about "Greenspan-speak"? Well, last week we had a chance to take a measure of the person, and her language, who currently presides over monetary policy, Fed Chair Janet Yellen. And while a snapshot is not necessarily a truism of the embodiment of the whole, there were a few takeaways, not the least of which was the market's (once again) overreaction to what was being said.

2014-03-24 Four Reasons Businesses Could Begin Spending Again Soon by Russ Koesterich of iShares Blog

Despite record profits and exceptionally high corporate cash levels, capital spending by U.S. businesses remains subdued. Russ explains why this could change this year as well as what a pickup in capital spending would mean for investors.

2014-03-24 Michael Cirami on Ukraine: It May Just Be Spring Training for Putin?s Hardball Tactics by Michael Cirami of Eaton Vance

Earlier this month, Michael Cirami, co-director of Eaton Vance?s Global Income Group, offered his views on the immediate crisis surrounding the seizure of Crimea by Russian and pro-Russian troops, having been in Kiev just two weeks prior. In this Viewpoint, he adds some perspective to how events have unfolded since and how they may going forward in the wake of that event.

2014-03-24 Stocks Rise as Economic Backdrop Slowly Improves by Bob Doll of Nuveen Asset Management

U.S. equities finished higher last week, with the S&P 500 increasing 1.4%. Ukraine seemed to be receding in investors? minds. Despite the volatility and sharp increase in bond yields on Wednesday, the hawkish takeaways from the FOMC meeting were not a lingering overhang.

2014-03-24 Only One Industry Is Green In March by Team of GaveKal Capital

March has been relatively rough month for equities so far. Of the 24 industries that we track, 23 are negative! The only industry that is currently positive MTD is the Semiconductor & Semiconductor Equipment industry.

2014-03-24 Fed-Induced Speculation Does Not Create Wealth by John Hussman of Hussman Funds

Fed-induced speculation does not create wealth. It only changes the profile of returns over time. It redistributes wealth away from investors who are enticed to buy at rich valuations and hold the bag, and redistributes wealth toward the handful of investors both fortunate and wise enough to sell at rich valuations and wait for better opportunities.

2014-03-24 Is the Fed Supporting the Equity Markets? by Tom Riegert of Hatteras Funds

The Federal Reserve?s unprecedented increase in reserves purchased through its quantitative easing programs has paralleled the performance of the equity markets to a startling degree. Has the Fed?s program been supporting the equity markets? We examine the strong correlation between the Fed?s balance sheet and the performance of the S&P 500 since end-2008, and ponder the effects the Fed?s long-awaited tapering will have on market volatility. Investors facing the uncertainty ahead could well find alternative investments a welcome addition to their portfolio.

2014-03-24 Market Had Its Way With Yellen?s Words by Kristina Hooper of Allianz Global Investors

Fed Chair Janet Yellen got a taste for how sensitive investors are to her public remarks last week, but the kneejerk response was probably an overreaction, writes Kristina Hooper.

2014-03-24 Market Update by Team of Castleton Partners

Last week?s meeting of the Federal Open Market Committee (FOMC) produced a more hawkish tone than anticipated, driving interest rates higher and flattening the yield curve in the process. Between the Fed?s summary of economic projections and Chairwoman Janet Yellen?s remarks following the meeting, the FOMC suggested a shorter timeframe for rate hikes than the market had expected.

2014-03-22 Debt and Taxes by Peter Schiff of Euro Pacific Capital

It seems that the majority opinion on Wall Street and Washington is that we have entered an era of good fortune made possible by the benevolent hand of the Federal Reserve. Ben Bernanke and now Janet Yellen have apparently removed all the economic rough edges that would normally draw blood. As a result of this monetary "baby-proofing," a strong economy is no longer considered necessary for rising stock and real estate prices.

2014-03-22 China's Minsky Moment? by John Mauldin of Millennium Wave Advisors

In speeches and presentations since the end of last year, I have been saying that I think the biggest macro problem in the world today is China. China has run up a huge debt, and the payments are coming due. They seem to be proactive, but will it be enough? How much risk do they pose for the global system?

2014-03-22 We See Opportunities in Commodities by Bob Greer, Ronit M. Walny, Klaus Thuerbach of PIMCO

Fundamentals and some recent data suggest that challenging trends for commodity investing may be coming to an end. Commodities may increase their role as an important and unique source of returns, diversification and protection from unanticipated inflation. As commodity sectors are each dominated by unique factors, we see even more opportunities to add value through active management.

2014-03-22 The Two-Minute Portfolio Manager by Rob Isbitts of Sungarden Investment Research

It’s a short attention span world, and while we often wax poetic about investment topics we feel passionate about, today we will summarize our world markets view in less than the time it takes to heat up the dinner your family ate two hours ago (a scenario most familiar to this writer).

2014-03-22 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The Federal Reserve’s updated guidance takes a page from its past. Wage trends will guide the timing of tightening. Chinese banking reformers should be careful what they wish for.

2014-03-22 What Makes a Slam-Dunk Portfolio? by Frank Holmes of U.S. Global Investors

As a native Canadian, hockey is in my blood, but after moving to Texas, the icy arenas changed to basketball courts, as the sole major league sports team in the city is the San Antonio Spurs.

2014-03-21 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.9, down from 133.6 last week (a revision from 133.8). The WLI annualized growth indicator (WLIg) at one decimal place rose to 2.3 from last week's 2.1 (a revision from 2.3).

2014-03-21 We See Opportunities in Commodities by Bob Greer, Ronit Walny, Klaus Thuerbach of PIMCO

Fundamentals and some recent data suggest that challenging trends for commodity investing may be coming to an end. Commodities may increase their role as an important and unique source of returns, diversification and protection from unanticipated inflation. As commodity sectors are each dominated by unique factors, we see even more opportunities to add value through active management.

2014-03-21 Emerging Markets: Four Reasons for Caution, Not Abstinence by Russ Koesterich of iShares Blog

In the space of three years, emerging markets have gone from a key strategic asset class to persona non grata. But while Russ shares investors? concerns on the near-term outlook for EM assets, he doesn?t agree that EM stocks should be completely shunned.

2014-03-21 Debt and Taxes by Peter Schiff of Euro Pacific Capital

The red flags contained in the national and global headlines that have come out thus far in 2014 should have spooked investors and economic forecasters. Instead the markets have barely noticed. It seems that the majority opinion on Wall Street and Washington is that we have entered an era of good fortune made possible by the benevolent hand of the Federal Reserve. Ben Bernanke and now Janet Yellen have apparently removed all the economic rough edges that would normally draw blood.

2014-03-21 World Industrial Production Finished 2013 At An All-Time High by Team of GaveKal Capital

The CPB Netherlands Bureau for Economic Policy Analysis publishes a monthly report called "World Trade Monitor". This report tries to quantify the seemingly unquantifiable; world industrial production and world trade volume and prices. Either later today or early next week the CPB should come out with the first statistics for 2014. Today, however, we are going to take a look at world industrial production for 2013.

2014-03-21 Climbing a Wall of Worry? by Norm Boersma of Franklin Templeton

One of the main questions our clients have been asking us lately revolves around worries of how strong equity markets have been over the last five years. During that period, we?ve seen markets bottoming out in February ? March 2009 and basically recovering since then.2 Given the performance of the market since the trough, it?s not surprising that people are a bit concerned right now, and the market has been quite volatile in early 2014.

2014-03-21 China's Evolving Health Care Landscape by Hayley Chan of Matthews Asia

China has begun a long-term transformation of its health care industry. Much of this industry is still fragmented and in the early stages of consolidation. China?s top 10 pharmaceutical companies, for example, account for a combined market share of approximately 20% versus more than 60% in the U.S.

2014-03-21 A Second Leg to Our Economic Outlook by Will Nasgovitz of Heartland Advisors

In our heavily consumer?driven economy, it can be easy to overlook the importance of corporate capital spending. We?ve seen a number of data points suggesting such expenditures are due for an uptick.

2014-03-21 When Will it be Time to Get Back to EM? by David Garff of AdvisorShares

Global investors have been experiencing an ongoing drag on returns to the extent they have had exposure to Emerging Market (EM) equities. It is difficult to abandon the asset class given historical performance, relative economic growth, current valuation discounts, and portfolio management tenets regarding diversification. But the fact that the U.S. has been such a strong performer, along with its size and prominence in the press, creates questions about why any non-U.S. stocks should even be in the portfolio.

2014-03-21 Non Agency RMBS: The TCW Advantage by Brian Rosenlund of TCW Asset Management

The Non Agency RMBS asset class is still ripe with alpha generating opportunities and attractive loss adjusted yields. Nonetheless, the return prospects have come down versus what we have witnessed over the last few years. Yields are lower and spreads are tighter. However, the fundamental trends continue to improve, which should lead to stronger cash flows and total returns for the non-agency market overall.

2014-03-21 Michael Kitces on Safe Withdrawal Rates by (Article)

How to make a nest egg last? For clients in or near retirement, advisors need to customize and monitor strategies for safe withdrawal rates, says Michael Kitces of Pinnacle Advisory Group.

2014-03-21 The Global Economy?s Tale Risks by Robert Shiller of Project Syndicate

Fluctuations in the world?s economies are largely due to the stories we hear and tell about them. In Japan, "Abenomics" has created a powerful narrative of positive change, whereas the stories being told in other advanced countries are far scarier.

2014-03-21 Choice Challenge with Michael Kitces by (Article)

Before choosing a closed-end fund for your portfolio, be sure to understand what role it will play, says Michael Kitces of Pinnacle Advisory Group.

2014-03-21 Retirement Savings: How Much Is Enough? Part 2: Good News Not Good Enough by Jon Vogler of Invesco Blog

This second blog in a two-part series about retirement readiness discusses whether 401(k)s and Social Security can adequately meet retirement income needs. Part 1 looked at the rule-of-thumb numbers cited as guidelines for income replacement in retirement.

2014-03-20 Market Update with Mike Taggart by (Article)

Covered call and municipal bond funds may present opportunities in the CEF market, says Mike Taggart of Nuveen Investments.

2014-03-20 Exploration & Production: An Evolving Business Model by Suken Patel of Diamond Hill Investments

The successful development of shale crude oil and gas has led to one of the most rapid and unexpected increases in production in the history of the energy sector. This remarkable turn of events is in complete contrast to the previous popular belief that the country was running out of both resources.

2014-03-20 The Song Remains the Same by Scott Minerd of Guggenheim Partners

The noisy journey from winter to spring in the United States may mask the underlying strength in the U.S. economy. The risk-on environment should remain intact, despite international tensions.

2014-03-20 Assessing the Liquidity of Futures Backed Gold ETFs by Ade Odunsi of AdvisorShares

Most gold ETFs that use futures to gain gold exposure will use the COMEX 100 ounce gold futures contract which is generally regarded as the most liquid gold futures contract in the world. The Commodity Exchange (COMEX) is a commodity exchange owned by the Chicago Mercantile Exchange (CME). As part of its gold exchange the COMEX offers warehousing for its members.

2014-03-20 Foreign Investors Dump Japanese Stocks by Largest Amount on Record by Team of GaveKal Capital

For the week ending March 14th, foreign investors in Japanese stocks were net sellers by the largest single-week amount since weekly records began in 2001.

2014-03-19 A Preference for Discomfort by Chris Brightman of Research Affiliates

Is the stock market inefficient or do investors have varying preferences? How does behavior affect wealth accumulation? Unpopular choices can result in improved outcomes....

2014-03-19 What if Grantham is Right? by Roger Nusbaum of AdvisorShares

There were two articles recently both exploring the same possible outcome; that investor returns from capital markets could be much lower in the coming years. No matter what markets end up doing, advisory clients and do-it-yourselfers still have financial plans that likely require some amount of growth over time in order to have a chance of succeeding without something, such as desired lifestyle or working longer than hoped for, having to give.

2014-03-19 Utilities And Health Care: This Year's Odd Couple by Team of GaveKal Capital

Quick name the two best performing sectors YTD in the MSCI World...

2014-03-19 Pockets of Opportunity in Europe, Emerging Markets by Lisa Myers of Franklin Templeton

Maintaining the right mix or balance of assets in a portfolio to achieve a desired goal can be a challenge, particularly when the markets are constantly shifting. As portfolio manager for Templeton Global Balanced Fund, Lisa Myers, executive vice president, Templeton Global Equity Group, regularly faces that task.

2014-03-19 Feelin? the Fire, Investors are Hot for Gold by Frank Holmes of U.S. Global Investors

Gold seems to be sparking more attention these days, as investors have seen the precious metal steadily rise from its December low of around $1,200, to a new high of $1,350 just three months later.

2014-03-19 Is the Fed's Monetary Mojo Working at Last? by Milton Ezrati of Lord Abbett

It just might be. Data suggest that the central bank?s massive liquidity boost may be starting to flow into the broader economy.

2014-03-19 What Rising Turmoil in Ukraine Would Mean for Stocks by Russ Koesterich of iShares Blog

How vulnerable might stocks be if turmoil in Ukraine escalates? Russ weighs in and notes which two market segments would be particularly vulnerable.

2014-03-19 Retire with Power?Purchasing Power by Richard Davies of AllianceBernstein

Retirement planning isn?t just long-term investing, it?s long-term spending, too. How can retirees help insulate the nest eggs they?ve accumulated from the corrosive long-term effects of inflation?

2014-03-19 The Fed Policy Outlook by Scott Brown of Raymond James

Much of the recent economic data have been distorted by adverse weather, which makes it difficult to gauge the underlying strength. However, while economic activity appears to have slowed in early 2014, the longer-term outlook hasn?t changed. Growth should pick up.

2014-03-19 A Kid?s Market? by Jeffrey Saut of Raymond James

The Great Winfield goes on to say, in Adam Smith?s classic book from 1967, ?The strength of my kids is that they?re too young to remember anything bad, and they are making so much money they feel invincible.? He rented kids with the idea that one day the music will stop (it partially did in 1969-1970 and completely did in 1973-1974) and all of them will be broke but one.

2014-03-19 Objects in the Rear View Mirror May Appear Closer Than They Are: A Look Back at the 1990s by Liz Ann Sonders of Charles Schwab

Human nature tells us to look back to help divine the future. Today's environment looks strikingly similar to the mid-1990s, which has pros and cons.

2014-03-19 If They Will Lend, Someone Will Spend (on Something) by Paul Kasriel of Econtrarian, LLC

Upon awakening from my winter hibernation way up here in beautiful northeastern Wisconsin, I have noticed that bank asset managers have been anything but hibernating. Rather, they have been quite busy expanding their loans and securities.

2014-03-18 Gundlach - Rates Will Remain Low in 2014 by Robert Huebscher (Article)

Slowing economic growth, low inflation and a lack of motivated sellers will keep interest rates depressed, at least for the rest of this year, according to Jeffrey Gundlach. But investors should prepare for an eventual rise in rates, he said, because he is skeptical of the Federal Reserve’s ability to successfully exit from QE.

2014-03-18 How Reverse Mortgages Improve Sustainable Withdrawal Rates by Joe Tomlinson (Article)

Standby reverse mortgages (SRMs) have been viewed as a product only to be utilized late in life, after other retirement funds have been depleted. But new research shows that SRMs are a useful tool during retirement to increase sustainable withdrawal rates. I’ll describe how the SRM works and highlight key findings from the research.

2014-03-18 The Four Questions Every Prospect Wants Answered by Dan Richards (Article)

What’s the best way to introduce yourself when meeting with a prospect for the first time?

2014-03-18 The Misconceptions About Selling that Impede Success by Dan Solin (Article)

RIAs who generate meaningful assets under management can significantly increase their earnings. Every RIA appreciates this. Many believe superior knowledge and expertise is key to capturing more business, but they often overlook other factors. There are also some misconceptions about selling that actually impede success. Here are some examples.

2014-03-18 How to Help Clients Prepare for End-of-Life Decisions by Emir Phillips (Article)

End-of-life decisions should be addressed by all financial planners. People are dying more from chronic illnesses, and deaths are increasingly occurring in institutions, where individuals and their families may incur significant expenses. Those costs could be substantially mitigated with proper advance-directive planning initiated and guided by a caring financial planner.

2014-03-18 Should You Say "No" to a Prospect? by Beverly Flaxington (Article)

We are unsure of the best follow-up approach for prospects who don’t seem ready to move their money to our firm after five meetings. Do we give up? Do we keep following up on the assumption that they would not go to that many meetings unless they are interested in eventually working with us?

2014-03-18 What’s Dogging Your Portfolio? by Mariko Gordon (Article)

My recent, unplanned for, doggie adoption got me thinking of the parallels between dogs in our homes and dogs in our portfolios. My article highlights the similarities along with one critical difference.

2014-03-18 Letter to the Editor by Various (Article)

A reader responds to Bob Veres’ article, Crashing Through the Insurance Industry’s Wall of Silence, which appeared last week.

2014-03-18 Active Share. Toward a Stock Picker’s Market? by Sponsored Content from ClearBridge Investments (Article)

Explore five groups of mutual funds-from stock pickers to moderately active to the closet indexers. Which categories produced the best risk-adjusted return 1990-2009? The more different the portfolio from its benchmarks, the greater the range of possible outcomes. Consider a tool like active share.

2014-03-18 Welcome to Human Finance by (Article)

Are you a financial advisor who values relationships as much as returns?
At TD Ameritrade, we work with humans, not just numbers. It?s something we like to call Human Finance. Get to know us and discover what makes us different from other custodians.

2014-03-18 Even Keel Investments by (Article)

We believe a sea-change is taking place in the retirement savings industry. A fresh perspective. One that values a smoother investment experience and a longer portfolio life.

2014-03-18 Japan?s Rising Opportunity by Neil Hennessy, Masakazu Takeda of Hennessy Funds

After WWII, the Japanese economy began what is sometimes referred to as the ?Economic Miracle?, a three-decade long period of growth and prosperity. Japanese firms and their management teams were studied around the world as the model of efficiency and an example for all companies and leaders to strive for. In 1989, a bubble in real estate fueled by speculators burst, and the Japanese markets crashed. Since then, the Japanese economy has been in a virtual standstill with more than two decades of stagnant growth and a deflationary environment.

2014-03-18 What's So Great About Private Equity? by Robert Kleinschmidt of Tocqueville Asset Management

In his latest piece, Robert Kleinschmidt, CEO and CIO of Tocqueville Asset Management, looks at how private equity has gained cachet among investors over the last few decades. He discusses the tendency of the investing public to view it as a "new" asset class, but notes many of its limitations can be seen as reasons the public equity markets were created.

2014-03-18 Can the Fed Fend Off the Ides of March? by Kristina Hooper of Allianz Global Investors

Mid-March hasn?t been associated with much good luck in Europe historically. And with Ukraine mired in conflict, this year?s no different. But investors should resist the urge to react to geopolitical uncertainty and expect steady guidance from the Fed.

2014-03-18 Currency Markets Heat Back Up, and Will Likely Remain that Way by Chris Maxey, Ryan Davis of Fortigent

Long dormant after the financial crisis, foreign exchange markets are beginning to heat up, offering ample trading opportunity for asset managers. The U.S. dollar was widely viewed as being the best long trading opportunity for 2014, but so far, that has not played out, with activity in the Euro, Chinese Yuan, and other currencies impeding dollar strength.

2014-03-18 Market Update by Team of Castleton Partners

With military tensions rising over the Ukraine saga and geopolitical posturing dominating the headlines, Treasury rates rallied across the yield curve last week, with 10 year yields falling 13 basis points to 2.66%. Though Cold War-era rhetoric remains high, there are indications that the threat of military action is becoming less likely. As such, we suspect markets will become more comfortable with the situation and expect it to become less of a focus. Nonetheless, we concede that headline risk remains and the primary influence on the Treasury market this week may well be external.

2014-03-18 The Paradox of Self-Determination by Bill O'Grady of Confluence Investment Management

Lost in the discussion surrounding the referendum in the Crimea is the ?legal? process. Simply put, how does part of an established nation decide to secede? Are there established protocols? In this report, we will offer a short history of the self-determination issue. With this background, we will discuss President Wilson?s inclusion of self-determination in his peace plan and examine how the U.N. has dealt with this issue. From there, we will analyze how self-determination was used during the Cold War and how those practices have continued after 1990. We conclude with market ramifications.

2014-03-18 Where's the Plane? by Jerry Wagner of Flexible Plan Investments

In another example of life duplicating the media, it seems like most people here and abroad have been consumed by watching a real life episode of Lost for the last week. The question of what happened to Malaysia Airlines Flight 370 has quickly soared to the opening spot on all of the network news shows, much as Lost and its Oceanic Airlines Flight 815 climbed quickly to the top of the ratings. At CNN it appears that the network of late can report on nothing else!

2014-03-18 Fishing for Gold? by Axel Merk of Merk Investments

If interest rates are supposed to be on the rise, why has the price of gold gone up so much this year? Is it merely because it is bouncing back after a sharp decline in 2013? We have a closer look at the link between gold and interest rates to gauge how investors may want to approach the bait provided by the Fed.

2014-03-18 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks were buffeted last week on the outcome in Ukraine (well founded), growing concern that the world does not know what happened to that missing Malaysian airliner, and of course, the ever-present worries about the global economy - especially in light of renewed concern over China, both its economy and its banking system.

2014-03-18 Global Economic Overview - February 2014 by Team of Thomas White International

Pessimism over the sustainability of global growth this year has subsided as it is now widely acknowledged that softer data from some of the developed countries in recent months were influenced by the severe winter weather.

2014-03-18 ProVise Bullets by Team of ProVise Management Group

On average, how much taxable income must you have to pay six figures of income taxes? In order to pay exactly $100,000 in federal income taxes, your 2013 taxable income must equal $376,047 on a married filing jointly basis. Twenty years ago, it took $312,363 to pay that much in taxes. In 2011, the top 10% of US taxpayers paid 68.3% of all federal income tax while in 1980 the top 10% paid 49.3%. It is estimated that for the tax year 2013 the government will receive approximately $3 trillion. (Sources: Tax Foundation; White House; Internal Revenue Service)

2014-03-18 Understanding The "Millennial Generation" by Gary Halbert of Halbert Wealth Management

As the father of two adult children who were born in the early 1990s, I have a particularly keen interest in the ?Millennial Generation? ? those 80 million or so people born in the US between 1980 and 2002, the largest generation ever ? and who will be running the country before too long.

2014-03-17 Restoring the "Virtuous Cycle" of Economic Growth by John Hussman of Hussman Funds

The so-called ?dual mandate? of the Federal Reserve does not ask the Fed to manage short-run or even cyclical fluctuations in the economy. Instead ? whether one believes that the goals of that mandate are achievable or not ? it asks the Fed to ?maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.?

2014-03-17 Frontier Markets Find Footing by Mark Mobius of Franklin Templeton

Frontier markets remain in focus for the Templeton Emerging Markets Group in 2014, and my team and I have spent the early part of the year exploring potential investment opportunities in a number of them.

2014-03-17 Retirement Savings: How Much Is Enough? Part 1: 70%, More or Less? by Jon Vogler of Invesco Blog

This first blog of a two-part series about retirement readiness looks at the rule-of-thumb numbers cited as guidelines for income replacement in retirement. Part 2 will discuss how adequately 401(k)s and Social Security will meet those target numbers.

2014-03-17 Market Outlook by Scotty George of Alexander Capital

What's another 200 point down day (Dow) when you're having fun? The violent and excessive overreactions of the week prior were added to by Asia and Europe on Thursday/Friday past, just for good measure.

2014-03-17 Emerging Markets Equity Commentary - February 2014 by Team of Thomas White International

After a weak start to the year, emerging market equity prices recovered in February as concerns about slower than expected global expansion and a further decline in Chinese economic growth subsided.

2014-03-17 And That's The Week That Was by Ron Brounes of Brounes & Associates

Remember when tiny Greece was a market mover? Well, now it’s tiny Crimea. With the growing global tensions and concerns about Crimea’s secession from the Ukraine to Russia, investors chose to take a week off (for the most part) and take some equity profits, while moving back into the safe haven of treasuries. With little news on the domestic economic calendar, investors looked abroad and didn’t care much for what they saw in China. (Still, the yuan must be better than the ruble these days.)

2014-03-17 Stocks Weighed Down by Ukraine, China and U.S. Economy by Robert Doll of Nuveen Asset Management

U.S. equities came under pressure last week as the S&P 500 declined almost 2.0%. Blame was primarily placed on the crisis in Ukraine and the growth slowdown and tight credit environment in China. Safe haven investments such as U.S. Treasuries and gold outperformed. Stocks may have already discounted the weather distortions on early 2014 data, and an overhang is expected to linger into first quarter earnings season. Cautiousness surfaced for investments that support the recovery, including banks and homebuilders.

2014-03-17 Recalibrating the Retirement Clock: Should 75 Be the New 65? by Nick Kaiser of Saturna Capital

Retirement sounds pretty sweet, doesn't it? Exotic holidays. Finally writing that novel. Never having to rely on an alarm clock to wake up early. Being your own boss. Retirement goals are as varied as people themselves.

2014-03-17 Frontier Markets: Weighing the Risks by Nathan Rowader of Forward Investing

Why would investors even think about investing in fledgling, so-called frontier economies half a world away? The quick answer is that some of the best-performing stock markets in the world can be found in places like Kenya, Bulgaria and Argentina. Annual equity returns topped 40% in all three countries in 2013 while a number of other frontier markets (FMs), including Romania, Serbia and Nigeria, experienced annual returns ranging from 25% to 35%. Although past performance is not a guarantee of future results, investors in search of portfolio growth and diversification are taking note.

2014-03-16 Inequality and Opportunity by John Mauldin of Millennium Wave Advisors

Today we will continue our thinking about income inequality, and I will respond to some of your letters, as they make good launching points for further discussion of the topic.

2014-03-16 Introduction to Milliman Financial Risk Management by (Article)

Investors nearing or in retirement face a slow-growing economy, low yields, and the looming threat of inflation, making it difficult to meet both income and risk management needs. Investing heavily in equities may expose this group of investors to untimely amounts of risk, while allocating to fixed income assets may not adequately fulfill income needs. Today, the risk management techniques used by many of the world's largest financial institutions to weather global market crises can now be accessed by financial advisors and their clients.

2014-03-15 Newsletter by Harold Evensky of Evensky & Katz

Harold Evensky's quarterly letter to his readers.

2014-03-15 Follow the Money to Asia's Tech Hub by Frank Holmes of U.S. Global Investors

China’s slower economic data points and a surplus in copper and iron ore drove many commodities lower this week, while gold rose. In the short term, until the copper and iron ore surplus is liquidated, or absorbed at a slower pace, the base metals market will likely be sloppy. As the second-largest economy in the world and a huge driver of commodities demand, it’s not surprising China provoked such a significant response from world markets. Interestingly, most of the media thought it was geopolitical fears from Ukraine that chopped up the market and lifted gold.

2014-03-15 Heating Up and Thawing Out by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

Concerns over growth and geopolitical issues have largely been set aside by investors in the United States, but complacency can be dangerous and another pullback in the near term could unfold if history holds. Investors should keep longer term goals in mind and remember that trying to time the market is an extremely difficult task. The weather is turning and economic data will be watched to see if recent softness was temporary or something more serious. We lean toward the former, but a retrenchment in bond yields would cause some concern about the potential for something more than weather.

2014-03-15 Like Houdini, the Markets Escape Again and Again by Stephen C. Sexauer of Allianz Global Investors

Like the great escape artist Harry Houdini, the markets have repeatedly escaped a series of potential catastrophes. Central banks around the world have coordinated policy making these escapes possible, but the end result is another trap from which we need to escape - seemingly permanent low interest rates for savers ("financial repression"), slow growth, and high asset prices. Financial repression is better than an outright debt deflation, but it causes its own problems. The outlook is for low returns.

2014-03-14 A Matter of Odds: Not Everything That?s Supposed to Work, Works All the Time by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, explores the worth of quantitative analysis versus fundamental, and examines forecasts, consensus, and valuation as three ways of looking at the market for investment.

2014-03-14 Deflationary Pressure and Tight Credit Facilities Weigh on Eurozone Recovery? by Andrew Balls of PIMCO

The eurozone is enjoying a broadly balanced resurgence in economic output and domestic demand. Deflation risk is real, and the European Central Bank?s asymmetric attitude toward its inflation target could contribute to a decline in inflation expectations. In the current climate, we continue to favour select regional credit exposure and look to generate attractive returns across European credit and asset-backed securities.

2014-03-14 Municipal Time-of-Trade Disclosure & Suitability by Gregg Bienstock of Lumesis

SEC Approves New Rule Codifying Principle-Based Rule and Interpretive Notices; SEC Approves Incorporation of Requirements in Suitability Determination.

2014-03-14 Assessing the Impact of Financing Currency on Gold Price Performance by Ade Odunsi of AdvisorShares

In our weekly commentary we follow up our discussion from last week with a brief overview of the impact on performance of diversifying the financing currencies used to make gold purchases. We also compare "Gold/Basket" performance versus gold financed with a number of different, single currencies. For the purposes of this analysis we define the Gold Basket as a gold financed with an equally weighted basket of four currencies, the dollar, euro, yen and pound; the portfolio is also assumed to be rebalanced weekly.

2014-03-14 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.8, up fractionally from 133.5 last week. The WLI annualized growth indicator (WLIg) at one decimal place rose to 2.3 from last week's 1.8.

2014-03-14 An Exhaustive Debate by Colin Dishington of Matthews Asia

Australia, which is among the largest polluters per capita in the developed world, is exploring ways to reduce its greenhouse gas emissions and has set a target for reducing emissions at 5% below 2000 levels by 2020. One of its current initiatives, the carbon pricing mechanism often referred to as the carbon tax requires polluters to pay an amount proportional to the carbon dioxide equivalent emitted during a given year.

2014-03-14 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Global trade negotiations have stalled; This is a delicate time for Chinese finance; Where will Europe’s growth come from?

2014-03-14 Dangerous Assumptions for Retirees by Rob Isbitts of Sungarden Investment Research

One of the main difficulties with MPT, is that by focusing on historical data to calculate asset allocation, it completely ignores extreme risk (2007-2008).

2014-03-13 Consider paying a premium for municipal bonds: Focus on yield to worst rather than a municipal bond' by Eaton Vance Municipal Insight Committee of Eaton Vance

The price of a premium municipal bond should not be the sole determinant of value; Yield to worst is a meaningful metric to help determine the value and risk of a premium municipal bond; In rising rate environments, higher cash flows from a premium municipal bond may help to protect purchasing power.

2014-03-13 Investment Portfolios Need Someone to Take Fiduciary Responsibility by William Wolfson of American Financial Advisors

There is a protocol to follow after a new patient enters your office. Staff is expected to meet, greet, welcome and have a patient fill out forms. This allows the Doctor of Chiropractic (D.C.) to ascertain demographics, responsibility of payment, the patient?s primary complaint and reason for visiting the office. Similar to that of a Doctor of Chiropractic who cares for a patient and follows the oath to do no harm, a Certified Financial Planner (CFP), parallels the doctor?s fiduciary responsibility.

2014-03-13 Waiting for Winter?s End by Pamela Rosenau of HighTower Advisors

Undoubtedly, the long cold winter season has many yearning for more pleasant weather. Despite a strengthening economy, the economic data over the past few months appears to have been weighed down by the snow and ice. Come springtime, I believe the data will reflect an economy that is in bloom.

2014-03-13 Emerging Markets: Will Ukraine fallout become contagious? by Jeff Hussey of Russell Investments

Jeff Hussey, global CIO, outlines Russell Investments? views on the conflict in Ukraine and how it might impact the markets.

2014-03-13 PIMCO Cyclical Outlook: A Steady Passage in 2014? by Saumil Parikh of PIMCO

PIMCO's baseline expectation is for 2.5% to 3% real growth in the U.S., thanks to trends toward growth and spending in the consumer, corporate and public sectors. In the eurozone, our baseline expectation of 1% to 1.5% real growth calls for a broad-based cyclical improvement in domestic demand amid steady external demand. We anticipate Japan will be the only major developed economy experiencing a slowdown this year, down to 0.5% to 1%, and we expect China's growth will continue slowing as well, with growth in the range of 6.5% to 7.5%.

2014-03-13 The New Face of Failure by Liam Molloy, Charlie Mas of Galway Investment Strategy

A strong year in the domestic stock market - like we saw in 2013 - can create overconfidence in investors, which, in turn, leads them to make a number of predictable errors in judgment.

2014-03-13 A Closer Look at Japanese Yen Depreciation and its Impact on Growth and Equities by of Manning & Napier

Weakness in the Japanese economy has given investors reason for concern. Recently released data showed that GDP grew just 0.2% quarter-over-quarter (qoq) during the last three months of 2013. This worked out to be a qoq annualized rate of merely 0.7%, and marked the second consecutive quarter of weaker growth relative to the preceding periods. Growth in the country has softened despite significant monetary and fiscal stimulus, and it is especially concerning considering that an impending tax increase (April 2014) has pulled some consumption forward.

2014-03-13 Fail to Prepare, Prepare to Fail by Scott Minerd of Guggenheim Partners

Five years into the U.S. bull market this remains a ?risk on? environment, but with monetary tightening on the horizon now is a time to become more cautious and start thinking about what comes next.

2014-03-13 Beware of Earnings Gimmicks by Jason Wang of Columbia Management

Since the global financial crisis, economic recovery worldwide has been slow. Over the last three years, annual gross domestic product (GDP) growth in the U.S. was limited to 2.1%, significantly below its long-term average of 3.3%. In this low growth environment, for a majority of companies, churning out high earnings-per-share (EPS) growth rates, either through top-line growth or margin expansion, has become increasingly more difficult.

2014-03-12 The Bull Market Turns Five by Doug Ramsey of Leuthold Weeden Capital Management

The post-2009 stock market upswing now qualifies as only the sixth cyclical bull market since 1900 to last five years or more. Life expectancies at such an advanced age are limited; only three of the previous five-year-old bulls lived to see a sixth birthday. Many media and market pundits seem to believe a rising age somehow leads to rising life expectancy. The consensus opinion that a new secular bull market has begun is much more confident today than at the bull?s first, second, third or fourth birthdays.

2014-03-12 Housing: An Oft Forgotten Pivot Point by Matt Lloyd of Advisors Asset Management

Today we got the newly released data on the state of the economy in the form of the Fed Flow of Funds. We have often cited it as a way of corroborating certain trends and potential reversal of trends when warranted.

2014-03-12 Reflections on Ukraine by Bill O'Grady of Confluence Investment Management

Over the past five weeks there have been a number of significant events that have occurred in Ukraine. A president has fled, a revolutionary government is forming and Russia has taken de facto control over the Crimea. The events themselves are momentous but the broader effects are significant as well. In this report, we will offer three reflections?Putin?s Gambit, The U.S. Adrift and A Dangerous New World. Although any of these could be a topic in themselves, we will shorten these issues to offer a single journey through the current crisis. As always, we will conclude with market ramifications

2014-03-12 The Importance of Beta Management by Richard Bernstein of Richard Bernstein Advisors

Morningstar recently released ?Mind the Gap-2014? which demonstrated that investors are generally very poor beta managers. The Morningstar data showed that investors? performance lagged that of their funds by about 250 basis points per year for the past ten years because of poor beta management, i.e., investors tend to be very poor allocators of capital.

2014-03-12 High and Sustainable Profitability by William Smead of Smead Capital Management

To understand our third criteria for selecting stocks, you need to imagine athletes who have found the fountain of youth. Consider this: Robinson Cano has been one of the most consistently successful baseball players over the last ten years, and the Seattle Mariners just signed Cano to a 10-year contract for $240 million. Companies, however, don't have ten to twenty-year careers, because the average company in the S&P 500 Index lasts 50 years.

2014-03-12 The Goldilocks Conundrum: A Market Review by Rick Vollaro of Pinnacle Advisory Group

When we decided to ride the central bank liquidity wave in 2013, we knew there was a chance the market could have a pretty good year, but like most investors we were pleasantly surprised with the gains that the U.S. stock market delivered. Including dividends, the S&P 500 Index soared by 32%, well in excess of what even the most optimistic prognosticators envisioned at the start of the year.

2014-03-12 U.S. Household Net Worth Hits New Record High by Gary Halbert of Halbert Wealth Management

The Federal Reserve announced last Thursday that US household net worth reached a new record high by the end of last year ? at $80.7 trillion. The Fed said the new record was made possible largely due to vaulting stock prices, increased home values and Americans paying off more of their debts.

2014-03-12 IPOs: Hot Again by Roger Nusbaum of AdvisorShares

Last week the Wall Street Journal gave a rundown of what has been a very hot IPO market. The Journal reported that there were 42 listings in the first two months of 2014 compared to 20 from the same timeframe in 2013 and keep in mind 2013 was a very good year for IPOs.

2014-03-11 Global Fixed Income Update by Phil Apel and James McAlevey (Article)

Phil Apel and James McAlevey discuss slower year-to-date economic data, strong credit market performance, volatility in Emerging Markets debt and a general outlook in currency. James McAlevey believes that data from the US has broadly been affected by unusually poor weather across the US and treasury yields have been weak as investors reset their expectations for either Fed easing or QE withdrawal over the course of the year. In general they remain very lightly weighted to US treasuries and interest rate movement sensitive bonds, positive on credit.

2014-03-11 Have Researchers Uncovered Buffett’s Secret? by Robert Huebscher (Article)

Researchers from AQR Capital Management, a Connecticut-based asset manager, claim they have uncovered the source of Warren Buffett’s alpha. They believe Buffett-like performance can be achieved by constructing a portfolio with exposure to certain "factors." But their theory hinges on a crucial assumption, which, as I will show, is highly tenuous.

2014-03-11 Crashing Through the Insurance Industry’s Wall of Silence by Bob Veres (Article)

A cash-value insurance policy is essentially a mutual fund investment account that pays annual term-insurance premiums on behalf of the policyholder each year, so theoretically you should be able to get the same disclosure on the funds and on yearly payment for life insurance protection, the way you do on any of the term insurance websites. Here’s how you can do that for your clients.

2014-03-11 How to Connect with a $3 Million Prospect by Dan Richards (Article)

At some point, most advisors have succeeded in scheduling a meeting with a large prospect, often after a lot of time and effort. When you only have 30 minutes, how do you maximize the chances of a positive outcome?

2014-03-11 Why I Sold - Part 3 by Jim Whiddon (Article)

When I decided to sell my small wealth-advisory practice, my due diligence focused on the internal threats and weaknesses I faced. But I took an equally hard look at external threats - industry-wide issues that all firms, regardless of size or stature, will face in the coming years.

2014-03-11 My Secret to AUM Growth by Dan Solin (Article)

I thought a comprehensive understanding of investing would be enough to grow my advisory practice. I’ve written a number of books on investing, so I considered myself an expert in the profession. But after reflecting on my less than stellar success closing sales leads, I found a deeper - and more scientific - approach to converting prospects into clients that yielded far better results.

2014-03-11 Cutting Caveats from Your Financial Communications by Wendy Cook (Article)

When sharing important but complicated financial concepts such as investment strategy, fiduciary duty and compensation structure, how do you decide what to leave in and what to omit? How much information is too much information when speaking with clients?

2014-03-11 Sales Tips to Increase Close Rates by Beverly Flaxington (Article)

The problem we are having is closing. For every five prospects that come through the door, we only close the deal with one.

2014-03-11 Why You Should Stop Asking For Referrals by Elizabeth Snyder (Article)

I hear it all the time: ’I ask my clients and centers-of-influence (COIs) to think of me if they know anyone who many benefit from my services, yet I never receive any referrals. What am I doing wrong?’ What should you do if you find yourself in this position?

2014-03-11 Letter to the Editor by Various (Article)

A reader responds to the commentary, The 5-Year Itch, by Robert Isbitts of Sungarden Research, which was posted on March 3.

2014-03-11 How Can You Find an Expert Whose Decisions You Can Trust? by Jerry Wagner of Flexible Plan Investments

Recently a family member visited the doctor to determine if she needed her gall bladder removed. Since she?d been having some pain, we assumed the answer would be ?yes.? But, of course, we wanted an expert opinion, so we went to a surgeon that has done more than 6,000 removals.

2014-03-11 Making Green from Gold, Palladium and Pollution by Frank Holmes of U.S. Global Investors

Gold is coming back with a vengeance, experiencing a clear recovery and grabbing the attention of market cynics. Analysts from Noruma Securities even upgraded its outlook for gold, expecting bullion to climb over the next three years, according to Barron?s.

2014-03-11 U.S. Economy: The Mild Kingdom by Milton Ezrati of Lord Abbett

"Animal spirits" remain caged as business spending lags. What will it take to unleash them?

2014-03-11 Thirsty for Income? Try Dividend Growth by Frank Caruso of AllianceBernstein

Chasing yield has become a challenging mission for investors in recent years. As yields collapsed in fixed income, investors flocked to bond-like substitutes such as high dividend-yielding stocks. Now that these stocks have become a bit pricey, we think companies with strong dividend-growth potential offer a better way to source equity income.

2014-03-11 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Markets waited all week for the jobs report for February. After its release the data continued to be mixed at best.

2014-03-11 Michael Cirami on the Ukraine Crisis by Michael Cirami of Eaton Vance

Investors tend to ignore events that do not demand immediate attention. Unfortunately, this approach is no longer an option following the recent events taking place in Ukraine. Michael Cirami, co-director of Eaton Vance?s Global Income Group, was in Kiev the week before President Yanukovych was ousted. In the following interview, he shares his views on the crisis in this emerging market and its implications for investors.

2014-03-10 Market Outlook by Scotty George of Alexander Capital

The irascible, and sometimes irrational, actions of the major indices this year should confirm for all observers that there's something at work in the financial markets that goes way beyond "traditional" fundamental analysis and good stock picking.

2014-03-10 M&A: A New Rx for Specialty Pharma by Janus Equity Team of Janus Capital Group

Merger and acquisition (M&A) activity is heating up among specialty pharmaceutical companies and potentially creating a once-in-a-generation investment opportunity in an industry that is quickly consolidating.

2014-03-10 Positive Payroll Report Offsets Geopolitical Concerns by Bob Doll of Nuveen Asset Management

U.S. equities increased 1.1% last week after somewhat volatile trading due to heightened tension in Ukraine. Although the crisis dominated headlines, the market relegated the major geopolitical issue to the back burner. The broader macro narrative did not change, as concerns about dampened growth momentum continued to be pacified by the distortion from adverse weather.

2014-03-10 Happy Birthday, Bull Market by Russ Koesterich of BlackRock

March 10, 2014, could be considered the fifth birthday of the current equity bull market. Investors looked beyond mixed economic data and turmoil in the Ukraine to push stocks to further gains last week. Stocks still remain a more attractive option relative to traditional bonds and cash.

2014-03-10 Earning Estimates Plunging Around The World by of GaveKal Capital

Earnings estimates (and sales estimates to an extent) have taken a beating over the past three months. On average, EPS growth estimates are down 5.3% for the next fiscal year during this time. Not a single industry group out of the 24 MSCI classifications have seen their earning estimates rise and only four industries have seen their sales growth estimate increase.

2014-03-10 It Is Informed Optimism To Wait For The Rain by John Hussman of Hussman Funds

Regardless of very short-term market direction, it is urgent for investors to understand where the equity markets are positioned in the context of the full market cycle.

2014-03-10 Four Reasons to Consider Emerging Markets for the Long Term by Borge Endresen of Invesco Blog

Emerging markets are at that peculiar place where everyone likes them over the long term, but very few like them in the short term. Many well-publicized headwinds from 2013 remain going into 2014, accompanied by election uncertainty in Brazil, India, Indonesia, South Africa and Turkey. And political uncertainty keeps surfacing in such places as Thailand, Turkey and the Ukraine.

2014-03-10 With Fed in Charge, 5-Year Bull Run Poised to Continue by Kristina Hooper of Allianz Global Investors

The Federal Reserve?s loose monetary policy and gradual improvement in the economy are two big reasons the stock market can keep moving higher, says Kristina Hooper. Will it be reflected in this week?s consumer sentiment and spending data?

2014-03-10 Tech Bubble 2.0? by Chris Maxey, Ryan Davis of Fortigent

The $19 billion acquisition of WhatsApp by Facebook in late February put an exclamation point on several high profile takeovers in the technology space in recent months. Sizeable deals such as Google?s $3 billion acquisition of Nest and Facebook?s $3 billion offer for SnapChat have fueled the idea that an indiscriminate buying spree in the technology space a la 1999 could set up financial markets for another valuation bubble.

2014-03-10 How Much Slack Is in the U.S. Economy? The Inflation Jury Should Decide by Jeremie Banet of PIMCO

The unemployment rate may not be a reliable indicator of output slack in the U.S. economy. We?ll know (with a lag) if the economy has reached the end of the cyclical downturn when inflation picks up. The Fed will have to choose between risking a hawkish mistake or being behind the curve, waiting to see inflation actually increase. We expect it will choose the latter.

2014-03-09 The Innovation Enigma by Joseph Stiglitz of Project Syndicate

Around the world, there is enormous enthusiasm for the type of technological innovation symbolized by Silicon Valley, with many attempting to replicate the ingenuity that they regard as America’s true comparative advantage. But there is a puzzle: it is difficult to detect the benefits of this innovation in GDP statistics.

2014-03-09 The Problem with Keynesianism by John Mauldin of Millennium Wave Advisors

Keynes himself would appreciate the irony that he has become the defunct economist under whose influence the academic and bureaucratic classes now toil, slaves to what has become as much a religious belief system as it is an economic theory. Men and women who display an appropriate amount of skepticism on all manner of other topics indiscriminately funnel a wide assortment of facts and data through the filter of Keynesianism without ever questioning its basic assumptions. And then some of them go on to prescribe government policies that have profound effects upon the citizens of their nations.

2014-03-07 Cold War: Thoughts on Ukraine Based on a Month Spent in Latvia by Doug MacKay of Broadleaf Partners

I have been intensely more interested in the situation developing in Ukraine over the past few months than those that circled Greece, a country of similar size, or Libya and the Arab Spring a few years ago. For the most part, I've taken geopolitical flare-ups in stride in terms of their potential impact to the stock market and the economy. In general, this approach has been the right one.

2014-03-07 ECB Officials' Inflation Forecasts by of GaveKal Capital

The ECB announced that interest rates would be maintained at current levels earlier today, citing staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 1.0% in 2014, 1.3% in 2015, and 1.5% in 2016. Though few economists predicted a rate cut, there were rumors that Europe's central bank might discontinue the sterlization of bond purchases under its Securities Markets Program (SMP)-- an action consistent with the adoption of a more accomodative and active policy.

2014-03-07 Ukraine at Crossroads by Mark Mobius of Franklin Templeton

In February, the winter Olympic Games brought athletes from around the world together in Russia, but in Ukraine, Russia's neighbor to the southwest, the story has been one of division. Violent clashes between pro-EU (European Union) protesters and government forces in the past few months have focused the eyes of the world on the former-Soviet state after (now former) President Yanukovych had refused to sign an Association Pact forging closer ties to the EU and decided instead to accept funding from Russia.

2014-03-07 Remember that Key Market Fundamental: Stock Prices Follow Earnings by Gene Goldman of Cetera Financial Group

The stock market has enjoyed a very solid run over the past five years. Unfortunately, over the last few weeks, potential market headwinds have made their appearance, shaking investor confidence.

2014-03-07 Do Spring Showers Bring Stock Gains? Don?t Count on it by Russ Koesterich of iShares Blog

Some investors looking for a catalyst to move stocks higher in coming months have pointed to the calendar, expecting that markets tend to do better in the spring. Russ gives three reasons why he cautions investors against putting too much faith in the influence of the seasons.

2014-03-07 Inflation Blues: Is it Time to Start Worrying? by Liz Ann Sonders of Charles Schwab

Inflation was revised higher in the latest GDP revision; while an increase in the minimum wage could push it higher still. But we remain sanguine about inflation risk as long as velocity and wage growth remain low. The key to watch near-term is bank lending, which is starting to accelerate sharply; signaling the possible return of "animal spirits."

2014-03-07 Tensions between Russia and Ukraine Worry Investors by Gene Goldman of Cetera Financial Group

Over the weekend, tensions escalated between Russia and Ukraine as Russian forces invaded and took complete operational control of the Crimean peninsula.

2014-03-07 Weather or Not? by Peter Schiff of Euro Pacific Capital

Everyone agrees that the winter just now winding down (hopefully) has been brutal for most Americans. And while it's easy to conclude that the Polar Vortex has been responsible for an excess of school shutdowns and ice related traffic snarls, it's much harder to conclude that the it's responsible for the economic vortex that appears to have swallowed the American economy over the past three months.

2014-03-07 Exchange-Traded Fun! by Robert Isbitts of Sungarden Investment Research

This week, we take a lighthearted look at Exchange-Traded Funds. ETFs are mutual funds that trade on a stock exchange. ETFs are rapidly taking a bite out of the business long dominated by traditional "open end" mutual funds - the investment in a basket of securities with a common characteristic, such as industry, company size, geographic region, etc.

2014-03-07 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The fight over Ukraine is an unwelcome source of uncertainty; Hiring in the U.S. improves in February; American businesses have lots of cash to invest.

2014-03-07 Making Green from Gold, Palladium and Pollution by Frank Holmes of U.S. Global Investors

Gold is coming back with a vengeance, experiencing a clear recovery and grabbing the attention of market cynics. Analysts from Noruma Securities even upgraded its outlook for gold, expecting bullion to climb over the next three years, according to Barron's.

2014-03-07 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 135.5, up from 131.8 last week. The WLI annualized growth indicator (WLIg) at one decimal place rose to 1.8 from last week's 1.7.

2014-03-06 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

February ended up being a strong month for stocks despite the growing perception of a slow economic start to the year 2014.

2014-03-06 Volatility Returns as Crisis in Ukraine Creates Uncertainty by Kevin Mahn of Hennion & Walsh

Most investors have most likely never even heard of Ukraine prior to the last two weeks. Now the future of Ukraine and potential repercussions on other countries in the region appear to be at the forefront of investor minds across the globe. Overall, Ukraine is a relatively small country in Eastern Europe with a population of about 46 million people that borders the likes of Russia, Belarus, Poland, Slovakia, Hungary, Romania and Moldova.

2014-03-06 Emerging Markets: Distinguishing Opportunities by of Manning & Napier

The recent sell-off in emerging market currencies and equities is part of a broader move that has seen the asset class heavily underperform developed markets since mid-2012. Part of the underperformance can be attributed to disappointing economic performance, as actual growth in the emerging markets (EMs) has come in much lower than broader consensus expectations.

2014-03-06 Watch and Wait by David Wismer of Flexible Plan Investments

Vladimir Putin?s and Russia?s military action in the Crimea, formally a part of the Ukraine, made it hard to focus on much else Monday. Aside from the obvious and important humanitarian concerns, the military threat carries immense global risk and potentially significant economic consequences.

2014-03-06 The Briefest Flight to Safety by Scott Minerd of Guggenheim Partners

Tensions in Ukraine and tapering speculation seem unlikely to derail rising U.S. equity markets and the positive outlook for U.S. credit.

2014-03-06 Risk Parity ? No Free Lunch by Lisa Goldberg of Aperio Group

2013 was tough for risk parity. Many of the most popular funds such as Bridgewater, Salient and AQR were flat or down even as investors in the S&P 500 enjoyed a return of almost 30%. A brief look at what happened.

2014-03-06 Money Managers Aren't Paid to Forecast; They're Paid to Adapt by Chris Puplava of PFS Group

It seems we can't go a week without someone predicting the end of the world and stirring up everyone's fears of a market meltdown. These apocalyptic warnings are becoming routine and the sad thing is that it does cause the squeamish individual investor to run for the hills and liquidate their investment portfolio.

2014-03-06 Evolution of SRI Leads Investors to a Sustainable Future by Chat Reynders of AdvisorShares

It?s no secret that positive screening as an investment strategy is becoming increasingly popular as advisors seek ways to identify substantive investment opportunities. The practice focuses investors on the elements of a company that can make a positive impact both on the bottom line and on society, pointing to socially progressive companies that generate returns.

2014-03-06 The Dollar's Long Term Decline by Axel Merk of Merk Investments

The cleanest of the dirty shirts doesn?t necessarily preserve your purchasing power. Sure, the U.S. dollar has beaten the Russian Ruble and some others of late, but when it comes to real competition, the U.S. dollar has taken a back seat. The U.S. dollar?s long-term decline may be firmly in place and investors may want to buckle up to get ready for the ride.

2014-03-06 Gold Scams Revisited by Peter Schiff of Euro Pacific Precious Metals

Before Bear Stearns and Lehman collapsed, the market for physical gold was limited to a relatively small group of investors who understood the havoc inflation was wreaking on our savings and the US markets. As the financial crisis took hold, a flood of new and inexperienced buyers entered the market, creating an opportunity for unscrupulous metals dealers to swindle their way to massive profits. This is what drove me to launch my very own gold dealer, Euro Pacific Precious Metals, to provide a safe alternative for those who were taking my advice to diversify into sound money.

2014-03-06 Pharma and Biotech This Year's Big Winners by of GaveKal Capital

Year-to-date, the pharmaceutical and biotech industry group is leading all other industry groups in the MSCI World index, up 11.21% on average.

2014-03-05 The US Economy - Back To The Slow Lane Again by Gary Halbert of Halbert Wealth Management

Late last year, President Obama predicted that 2014 would see ?breakout growth? in the US economy. His optimism was not completely unwarranted since the economy grew by a healthy 4.1% (annual rate) in the 3Q of last year, driven largely by an unexpected surge in inventory rebuilding. Then in late January, the Commerce Department reported that the economy grew by a better than expected 3.2% in the 4Q.

2014-03-05 "Purer" Gold Exposure for the Long Term Investor by Ade Odunsi of AdvisorShares

This week we dive into a discussion on the impact of diversifying the financing currencies used to purchase gold. At a high level the primary objective of wanting to diversify financing currencies is to gain a ?purer? form of exposure to gold by using a number of different currencies (rather than a single currency) to make gold purchases. For example an investor could decide to use a combination of euro, yen, pounds and dollars to make a purchase.

2014-03-05 Asset Allocation: The Conundrum of 2014 by Jeffrey Knight of Columbia Management

In 2013, both the S&P 500 Index and the yield on 10-year Treasury bonds finished the year at their highest levels of the calendar year. So ended a year when equity markets dominated the return landscape, while bonds and numerous other assets struggled. The environment apparently changed, though, with the turning of the calendar to 2014. In the New Year, bonds have performed quite well, with yields on 10-year Treasuries, as an example, falling from 3.03% to 2.67% so far this year. Stocks meanwhile, have been volatile, yet stand close to unchanged on a year to date basis.

2014-03-05 2014: A Transition Year - Back to Fundamentals by Lorenzo Pagani of PIMCO

The past several years have seen multiple regime changes in financial markets in Europe, each dominated by different factors and requiring a distinct approach to fixed income investing. As spreads tighten to pre-2008 levels, it is now time to ask whether a shift in investment style is due. Macroeconomic developments and inflation expectations are likely to be key determining factors in whether 2014 will be a good year for European bond investors.

2014-03-05 A Tough Spring Ahead for Stocks? by Russ Koesterich of iShares Blog

Despite last week's disappointing economic data, stocks rallied to record highs. Russ explains what's behind this disconnect and why stocks may be vulnerable come the spring.

2014-03-05 The Renminbi's New Normal by Teresa Kong of Matthews Asia

The gyrations in Chinese money markets in the last few weeks have caused much alarm in the financial press. The moves in these markets are not only inline, but healthy for an economy looking to increase the role of the market in allocating resources. Those who believe these moves indicate financial stress, or draw parallels between the recent volatility and that which preceded the subprime crisis in the U.S., might be looking through the wrong end of the telescope.

2014-03-05 What Is the Fed Thinking? by Milton Ezrati of Lord Abbett

The central bank's decision to taper, despite its earlier caution on the economy, has puzzled many observers. New research from the Fed's own staff may provide some clues to its current mindset.

2014-03-05 Active or Passive? Multi-asset Investing Can Turn Both Valves by Jeff Hussey of Russell Investments

Investors, whether institutional or individual, face a common challenge: how to get the return they need, at an appropriate risk level, and at a fee they can afford.

2014-03-05 What Areas of the Market Will Remain in the Limelight? by Frank Holmes of U.S. Global Investors

The current bull market has been five years in the making. Since the bottom on March 9, 2009, the S&P 500 Index has grown an incredible 174 percent. With this spectacular performance, investors are asking if U.S. companies will stay in the limelight or if it is time to draw the curtain on equities. While I was in Los Angeles at a leadership event for CEOs from around the world, I asked John Derrick, CFA, director of research, to shed some light on the subject.

2014-03-05 A Tough Spring Ahead for Stocks? by Russ Koesterich of iShares Blog

Despite last week’s disappointing economic data, stocks rallied to record highs. Russ explains what’s behind this disconnect and why stocks may be vulnerable come the spring.

2014-03-05 The Renminbi's New Normal by Teresa Kong of Matthews Asia

The gyrations in Chinese money markets in the last few weeks have caused much alarm in the financial press. The moves in these markets are not only inline, but healthy for an economy looking to increase the role of the market in allocating resources. Those who believe these moves indicate financial stress, or draw parallels between the recent volatility and that which preceded the subprime crisis in the U.S., might be looking through the wrong end of the telescope.

2014-03-04 Equity Discounts with Steve O'Neill by (Article)

Discounts persist for equity-based closed-end funds, providing potential opportunity to "bullish" investors, says Steve O'Neill of RiverNorth Capital Management.

2014-03-04 David Rosenberg: No U.S. Recession in Sight by Robert Huebscher (Article)

Following a lackluster recovery that began in June 2009, many fear the U.S. is due for another recession, given that the average post-war economic expansion lasted five years. But we’re only in the "fourth or fifth inning of the business cycle," according to David Rosenberg, who predicts growth in consumer and capital spending - and positive returns for U.S. equities.

2014-03-04 Does International Diversification Improve Safe Withdrawal Rates? by Wade Pfau (Article)

Safe withdrawal rate (SWR) studies have been based on a few asset classes and rarely incorporated international diversification. This is problematic, as an SWR depends on portfolio return and volatility, and broader diversification can extend the efficient frontier toward better retirement outcomes. To determine the benefits of international diversification, I looked at the relative performance of withdrawal rates in 20 developed-market countries.

2014-03-04 The Hour That Drives Your Day by Dan Richards (Article)

What’s the one hour that defines your productivity for the balance of the day?

2014-03-04 Why I Sold - Part 2 by Jim Whiddon (Article)

When considering whether to sell my firm in 2012, I embarked on a six-month war-game exercise to decide whether to join forces with a similarly positioned ally within our industry. With the help of my team, I performed a detailed analysis of how well-prepared the firm was for the challenges facing it. Several key threats emerged.

2014-03-04 How to Market to Clients’ Kids by Sarah Scorgie (Article)

Building relationships with the next generation can help ensure the long-term success of your practice.

2014-03-04 Overcoming Bad Performance by Beverly Flaxington (Article)

Our investment strategy did not fare well last year and we lost ground to competitors. We’re on the defensive with clients, which makes it hard to have any growth discussions. We have corrected our approach and are on track for much better performance for 2014. Any tips to get our clients to believe in us and stay with us until the turnaround?

2014-03-04 The RIA Succession Paradox: It’s About the Brand by Joe Anthony (Article)

RIAs rise to success based on their abilities to attract talent, build referral networks, see emerging trends and cater to a market. In their prime earning years - say 45 to 55 - they are the central force in their own success. And there lies the paradox. A younger, more dynamic generation is better suited for running your firm.

2014-03-04 Letter to the Editor by Various (Article)

A reader responds to Jason Hsu and Vitali Kalesnik’s commentary, Measuring the ’Skill’ of Index Portfolios, which was published on February 28.

2014-03-04 Our Thoughts on Warren Buffett's Thoughts by William Smead of Smead Capital Management

The Berkshire Hathaway 2013 Annual Shareholder Letter came out on Saturday the 1st of March, 2014. Mr. Buffett was in rare form and we'd like to share some of his key thoughts which speak directly to what we do at Smead Capital Management.

2014-03-04 Market Update by of Castleton Partners

With the Ukrainian situation very much in focus, Treasury rates moved mostly lower last week. The yield curve exhibited a flattening bias, as longer dated maturities registered the biggest declines. For the week, 10 year treasury yields closed at 2.65%, a drop of eight basis points from the prior week, while two year yields were unchanged at 0.32%. As Gross Domestic Product (GDP) was revised lower to 2.5% from 3.2%, we also learned last week that the economy expanded at a slower pace in the fourth quarter of 2013 than previously estimated, giving the expansion less momentum heading into 2014.

2014-03-04 Turmoil in Venezuela by Bill O'Grady of Confluence Investment Management

Venezuelan President Hugo Chavez died about a year ago. In the year since his passing, elections were held and Chavez's handpicked successor, Nicolas Maduro, won in what turned out to be an unexpectedly tight race. Since the elections, the Venezuelan economy and society have struggled. In this report, we will examine the underlying structure of Venezuela's political system and the divisions that exist. We will compare and contrast how Chavez was able to manage these divisions and how Maduro is struggling to replicate his success. As always, we will conclude with potential market ramifications.

2014-03-04 The Second Coming by William Gross of PIMCO

Almost permanently affixed on the whiteboard of PIMCO's Investment Committee boardroom is a series of concentric circles, resembling the rings of a giant redwood, although in this case exhibiting an expanding continuum of asset classes with the safest in the center and the riskiest on the outer circles. Safest in the core are Treasury bills and overnight repo, which then turn outwards towards riskier notes and bonds, and then again into credit space with corporate, high yield, commodities and equities amongst others on the extremities.

2014-03-04 Malthus, Marx, and Modern Growth by Kenneth Rogoff of Project Syndicate

The promise that each generation will be better off than the last is a fundamental tenet of modern society. But will future generations, particularly in advanced economies, realize such expectations?

2014-03-04 A Century of Policy Mistakes by Niels Jensen of Absolute Return Partners

A century ago Argentina ranked as one of the wealthiest countries in world. Today it is a shadow of its former self. A long string of policy errors explain the long slide from riches to rags. Europe, like Argentina 100 years ago, is facing enormous challenges - as well as potential pitfalls - and the management of those challenges will define the welfare path for many years to come. Unfortunately, the early signs are not good. Our political leaders, afraid to face public condemnation, have so far chosen to ignore them.

2014-03-04 What the Jobs Report Will Tell Us-And What It Won't by Kristina Hooper of Allianz Global Investors

Kristina Hooper puts the soon-to-be-released February employment report in context, including what it means for Fed policy, consumer confidence and stocks.

2014-03-04 A Consumer Releveraging Renaissance? by Chris Maxey, Ryan Davis of Fortigent

After a long period of deleveraging, there are appearances that consumers are entering a stage of releveraging. The devil is always in the details, though, and this releveraging cycle is likely to play out vastly different than those of previous expansions.

2014-03-04 Time for Nat Gas Stocks to Come in From the Cold? by Bradford Evans of Heartland Advisors

The prices of natural gas stocks haven’t risen in concert with this winter’s higher commodity prices. Here’s a look at why that might change.

2014-03-03 Ukraine: Geopolitical Risk Rising For Global Markets by Francesc Balcells of PIMCO

Following Russia?s military intervention in Crimea, the situation in Ukraine remains extremely fluid. The outcome will determine to a large extent the systemic nature of the crisis and its impact on global markets, not just Europe. Russia stands to lose the most if this conflict should escalate into a full-fledged military confrontation, given the country?s financial, economic and reputational stakes.

2014-03-03 Chinese Banking: ?Red Alert? by Mark Ungewitter of Charter Trust Company

Has China averted a financial crisis? Not according to behavioral evidence.

2014-03-03 Do Foreign Profits Explain Elevated Profit Margins? No. by John Hussman of Hussman Funds

Foreign profits as a share of GNP have been contracting since 2007, are only about two-tenths of a percent above the 2009 low, and therefore do not have any material role in the surge in overall profit margins we?ve observed in recent years. The surge can be fully explained by mirror image deficits in household and government saving - a relationship that can be demonstrated across decades of historical evidence.

2014-03-03 Casting a Wide Asset Net in a Volatile Sea by Ed Perks of Franklin Templeton

It?s fair to say that investors will likely never be fully comfortable with market volatility. But actively managing the inevitable bumps that accompany equity investments, even in bull markets, can help make the ride a little less harrowing, according to Ed Perks, executive vice president and director of Portfolio Management, Franklin Equity Group®. He explains how understanding the fundamental dynamics behind market selloffs is key to uncovering potential opportunities in the face of a rough market ride.

2014-03-03 Six Easy Pieces: Fundamentals of Asset Allocation Explained by Patrick Rudden of AllianceBernstein

Figuring out the best split for your assets often seems daunting. But it doesn?t have to be. This template can help you get started.

2014-03-03 Blame it on the Weather? Not so Fast by Russ Koesterich of iShares Blog

How much is the weather to blame for recent soft U.S. economic data? While the weather is certainly responsible for some, or perhaps even most, of the recent slowdown, it?s not the whole story, writes Russ.

2014-03-03 The Long Road Back by Scott Brown of Raymond James

Five years ago, the economy appeared to be in freefall. Monetary policy and fiscal stimulus helped to halt the downslide, but a full economic recovery was still expected to take years. This wasn?t your father?s recession that we went through; it was your grandfather?s depression. We have made progress, but we still has very long way to go.

2014-03-03 I?m Confused by Jeffrey Saut of Raymond James

In one of last week?s Morning Tacks I used this email from one of our financial advisors: ?Hey Jeff, about a month ago I emailed you asking if the ~1750 low on the S&P 500 was a good buying opportunity. You emailed back saying ? ?No, not yet? ? and ever since in your remarks you claim not yet. So now that we are well above that level, clients are asking why didn?t we get in ... what?s your recommendation??

2014-03-03 Market Outlook by Scotty George of Alexander Capital

Whereas the "micro" details of ascribing corporate valuations are litigated every day through securities' trading on global bourses, there is very little "macro" disagreement that we are at a critical global inflection where recovery and purchasing power either expand or remain less than satisfactory. If it doesn't happen now, after all the intervention, debate, austerity and fiscal changes, it is not likely to take root at all.

2014-03-03 Equities Rise Despite Mixed Fundamental News by Bob Doll of Nuveen Asset Management

U.S. equities increased 1.3% last week as the S&P surpassed the key 1850 level and pushed to new record highs. One favorable dynamic of the rally was the upside leadership from retail stocks, as earnings were largely ahead of expectations. Fed Chair Janet Yellen suggested concern about softerthan-expected spending in a number of recent data releases, but the bar for adjusting the tapering process has not been lowered.

2014-03-03 Bond Aid: Positive Outlook for High Yield in 2014 by Darren Hughes, Scott Roberts of Invesco Blog

While most fixed income asset classes tied to interest rates saw negative returns during 2013, high yield bonds returned more than 8%, according to the JP Morgan Domestic High Yield Index. While we anticipate slightly lower returns in 2014, it looks to be a positive year for high yield markets.

2014-03-03 Stanford Wonk Argues In Favor Of Levered Equity Funds by Roger Nusbaum of AdvisorShares

A long-time reader sent a link to an article from Forbes titled Leverage Your Way To A Richer Retirement. The article considered research done by Jason Scott at Financial Engines which looked at completely revamping the 4% rule (the 4% rule pertains to the optimal withdrawal rate for a retiree take from their portfolio without exhausting their funds).

2014-03-03 The 5-Year Itch by Robert Isbitts of Sungarden Investment Research

The financial media is filled with historical comparisons to past periods. Despite the fact that all mutual fund companies and financial advisors are obligated to warn that past performance is no guarantee of future results, it is human nature to look for clues as to when history may repeat itself. As the famous quote goes, those who ignore history are doomed to repeat it. What prompted this week's blog, is the most uncanny, shocking and truly creepy numerical coincidence I have seen in some time...or perhaps ever.

2014-03-01 Wallets Wide Shut by Mohamed El Erian of Project Syndicate

With profitability at or near record levels, cash holdings by the corporate sector in Europe and the US have reached an all-time high - and are earning very little at today’s near-zero interest rates. But, for at least six reasons, firms are not investing in capacity and creating the jobs that these economies need.

2014-03-01 Black Swans and Endogenous Uncertainty by John Mauldin of Millennium Wave Advisors

John is in Florida and feeling a bit under the weather, so this week we’re bringing back one of his most popular letters, from December 2007. In the letter he discusses the work of Professor Graciela Chichilnisky of Columbia University, one of whose key insights is that the greater the number of connections within an economic network, the more the system is at risk. Given the current macroeconomic environment, it is important to remind ourselves of how complacent we were back in 2007 and how it all fell apart so quickly, just as John outlined in this rather prescient piece.

2014-02-28 Is an Avalanche Waiting to Hit the U.S. Stock Market? (The Slippery Slope of Stupidity) by Dawn Bennett of Bennett Group Financial Services

The U.S. economy as we know it is headed for a huge correction. The only questions remaining are when will it start and what will be the trigger that starts the cascade? Financial and economic implosion is always a slow and stealthy process that grows over time behind the scenes.

2014-02-28 Measuring the "Skill" of Index Portfolios by Jason Hsu, Vitali Kalesnik of Research Affiliates

Investors devote huge resources to deciding whether a manager is skillful. When it comes to passive investing, they appear to lose their critical faculties.

2014-02-28 China?s Growth Puzzle by Stephen Roach of Project Syndicate

Though China?s economy is now slowing, the significance of this is not well understood. The downturn has nothing to do with problems in other emerging economies; in fact, it is a welcome development.

2014-02-28 The Stock Market's Shaky Foundation by Chris Martenson of Whitney Peak

Martenson explains the headwinds that make the long-term case for lower valuations than we've seen in previous decades. But more urgently, he lays out the litany of short-term triggers likely to result in a vicious correction in stock prices this year. In fact, for the first time in years, he believes the time to actively short equities is arriving.

2014-02-28 Emerging-Market Risk and Reward by Nouriel Roubini of Project Syndicate

Industrialization, urbanization, and the rise of a middle-class consumer society were supposed to boost emerging-market countries' long-term economic and sociopolitical stability. But in many countries recently wracked by political unrest, it is the urban middle classes that have been manning the barricades.

2014-02-28 Looking Beyond Politics in Thailand by Mark Mobius of Franklin Templeton

Throughout its history, Thailand has been subject to periods of political instability that have at times given cause for concern among investors. In the past few months, investor sentiment has reflected the political uncertainty, putting Thailand in the news.

2014-02-28 Drug Retail On A Roll by of GaveKal Capital

While the MSCI World consumer staples sector is not the source of scorching growth, there are some decent growth opportunities. Let's start by calibrating the drug retail industry within the consumer staples sector.

2014-02-28 Korea's Changing Consumer Patterns by Michael Han of Matthews Asia

Following a recent research trip to Korea, I was able to spend some time there with my family. Three consecutive weeks away afforded me the opportunity to observe changes in spending patterns among Korean consumers as well as the improving competitiveness of the country?s service industries.

2014-02-28 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.8, down from 123.3 last week. The WLI annualized growth indicator (WLIg) at one decimal place slipped to 1.7 from last week's 2.5 .

2014-02-28 Emerging Markets Equity Commentary: January 2014 by Team of Thomas White International

Emerging market equity prices corrected in January as investors worried about slower growth in China as well as political and economic turbulence in some the frontier economies such as Argentina and the Ukraine. Markets were also unnerved by the unexpectedly large interest rate hike in Turkey, which failed to prop up the currency.

2014-02-28 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The sensitivity of emerging markets complicates the Fed?s exit plans; Raising the minimum wage is not the only way to aid low-income workers; Brazil?s economy is faltering as the World Cup approaches.

2014-02-28 Hide and Seek by Herbert Abramson, Randall Abramson of Trapeze Asset Management

Hide and seek. A game investors played as children but should not forget these days. Currently, investors need to hide safely to protect from some unfavourable developments in an environment that could hurt them.

2014-02-28 What Areas of the Market Will Remain in the Limelight? by Frank Holmes of U.S. Global Investors

The current bull market has been five years in the making. Since the bottom on March 9, 2009, the S&P 500 Index has grown an incredible 174 percent. With this spectacular performance, investors are asking if U.S. companies will stay in the limelight or if it is time to draw the curtain on equities.

2014-02-28 Bounce Back by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

US stocks have bounced and the market’s still attractive and in the midst of a secular bull market. But there are likely to be bumps along the way; notably given that this is a midterm election year; which are known for first-half pullbacks. A diversified portfolio is important and both European and Chinese stocks appear to have upside, while Japan continues to frustrate with a two-steps forward, two-steps back sort of approach. And a final reminder not to replace fixed income assets with equities in search of higher income without recognizing the risk profile of a portfolio has changed.

2014-02-27 Trading Secrets: The Godot Recovery by Tad Rivelle of TCW Asset Management

With this recovery, prosperity has always been just around the corner. It wasn?t supposed to be this way. True, the massive fiscal and edgy new monetary measures enacted in the wake of the 2008 crisis kept the economy?s heart beating. The Fed deftly executed its role of lender as last resort, and for this we should all be grateful. What has become steadily less clear is why, five years after the crisis, the Fed remains committed to its zero rate policy. Are artificially low rates truly the secret sauce that takes a weak recovery and makes it strong?

2014-02-27 Big Wheel Keep on Turning by Scott Minerd of Guggenheim Partners

Economic uncertainty from this winter soft patch will linger for months, but strong housing fundamentals should underpin a strengthening U.S. economy while low inflation augers well for stock prices.

2014-02-27 Gut Check: The Outlook on Fixed Income by Colin Lundgren of Columbia Management

With nearly two months of the year behind us, we thought now would be a good time to see how the fixed-income market is faring in 2014 and assess our outlook. We asked our investment team five questions to help capture our view on the market today.

2014-02-27 Meanwhile, Across the Channel... by of GaveKal Capital

As we saw yesterday, Germany's Q4 GDP release was neither surprising nor very exciting. A similar look at today's release of output in the U.K. reveals a more constructive picture.

2014-02-27 Corporate Credit Charting its Own Course by Eric Takaha of Franklin Templeton

At the start of the year, equity investors were fretting about possible emerging-market contagion, while bond investors were fretting about fallout from US Federal Reserve tapering. Meanwhile, the corporate credit market seemed to be charting its own course. Eric Takaha, director of the Corporate & High Yield Group and senior vice president, Franklin Templeton Fixed Income Group®, takes a look at the corporate credit/high-yield market and explains why he currently sees supportive fundamentals.

2014-02-27 The Important Role of Country Funds in a Diversified Portfolio by Roger Nusbaum of AdvisorShares

As most investors know, foreign equity markets have had a rough time of things performance-wise for the last couple of years relative to domestic equity markets. While Quantitative Easing may or may not be to blame, after years of generally outperforming the US in the previous decade the new decade has been a different story.

2014-02-26 Is It Time for the Fed to ?Level? With Markets? by Richard Clarida of PIMCO

If unemployment continues to diminish and quantitative easing tapers to its expected conclusion, the Federal Reserve will likely feel compelled ? if not by consensus, then by markets ? to refine the forward guidance that it provides to the public today. With inflation running below 2%, the Fed may consider a price level target, together with more holistic measures of the state of the labor market, as a replacement for the unemployment threshold in offering guidance on the future pace of policy normalization.

2014-02-26 What Columbus Missed: Royce Rediscovers India by David Nadel of The Royce Funds

In 1492, Italian explorer Christopher Columbus set sail to discover India. He missed his mark, however, landing in America instead. The rest, as they say, is history-with the exception that more than 500 years later India is still worthy of discovery for many Western investors.

2014-02-26 Market Perspective by CCR Wealth Management Investment Committee of CCR Wealth Management

It cost $0.32 to mail a letter, unemployment was 4.9%, O.J. Simpson was found liable in a civil suit, Hong Kong was returned to Chinese rule, Timothy McVeigh was sentenced to Death, Green Bay defeated the Patriots in the Super Bowl, Titanic came crashing into movie theatres, and Dolly, the first genetically engineered lamb was unveiled to the public; the year was 1997.

2014-02-26 Supply and Demand in the Balance by John Burns of John Burns Real Estate

We look at the housing demand/supply balance two ways.

2014-02-26 A CAPE Crusader by James Montier of GMO

In a new white paper today, James Montier of GMO's asset allocation team reviews a range of valuation measures to assess current U.S. equity market valuations. He concludes: "We continue to believe that the weight of valuation evidence suggests the S&P 500 is significantly overvalued at its current levels."

2014-02-26 EM and the Fragile Five: Separating the Wheat from the Chaff by Blaise Antin, David Loevinger, Anisha Ambardar of TCW Asset Management

The shift in capital flows triggered by former Fed Chairman Ben Bernanke’s tapering remarks in May 2013 set off a cascade of market events that continues to this day. His comments also birthed a cottage industry of emerging market doomsayers, who now predict regularly: 1) the end of growth in emerging markets (EM), given that it was, in their view, all a mirage fueled by carry and leverage; and 2) a wave of defaults of the kind last seen in the 1990s that threaten to bring down not only emerging but developed markets as well.

2014-02-26 Gaps, Not Growth by Zach Pandl of Columbia Management

Monetary policy is primarily about "gaps" not growth: the Fed is trying to reduce spare capacity in the economy, not bring about a rapid expansion per se.

2014-02-26 The Differences Between Gold Financed vs Gold Hedged Transaction by Ade Odunsi of AdvisorShares

Following on from our previous discussion piece on commodity fund taxation, this week we discuss the differences between a gold position financed in a (given) currency versus a gold position hedged into a currency. Broadly speaking the objective of a "currency financed" transaction is to give an investor the flexibility to choose the currency with which gold purchases are made.

2014-02-26 U.S. Housing: Investors Reach for Higher-Hanging Fruit by Joshua Anderson, Emmanuel Sharef, Grover Burthey of PIMCO

PIMCO expects house prices to transition to steady secular growth, with nominal price increases of 5%?10% cumulatively over two years. An environment of reduced volatility and steady gradual growth may result in tightening risk premia and spreads as the market begins to price in this new dynamic. Over the coming years, we will focus on whether the underbuilding of single-family homes is ultimately resolved through housing starts, rental growth or continued price appreciation.

2014-02-26 Weather-Beaten by Scott Brown of Raymond James

Harsh winter weather often shows through in the economic data. Large seasonal adjustment can magnify that impact. Snowstorms happen every year, of course ? the key is whether they are worse than usual. This year, bad weather has been relatively widespread, affecting many areas of the country and much of the economic data for December, January, and February. None of the bad weather has had a significant impact on the longer-term outlook and investors have begun to take the economic news with an appropriate grain of salt.

2014-02-26 The White Hurricane by Jeffrey Saut of Raymond James

'Unseasonably mild and clearing' was the weather forecast going into the Ides of March back in the year of 1888. And it was true, as temperatures hovered in the 40s and 50s along the East Coast. However, torrential rains began falling, and on March 12th, the rain changed to heavy snow, temperatures plunged, and sustained winds of more than 50 miles per hour blew.

2014-02-25 Five Technology Trends that are Reshaping the Industry by Bob Veres (Article)

Recently, I spent a couple of days at the annual T3 conference - the financial planning profession’s version of the Consumer Electronics Show. The conference brings together tech vendors offering planning software, CRM, portfolio tracking, rebalancing and trading, outsourcing, hosting and screening. Here are five trends that will help all of us put the new technology into perspective.

2014-02-25 Why I Sold by Jim Whiddon (Article)

In 2012 at age 52, after almost three decades in financial services, I decided to sell my Dallas -based independent registered investment advisor (RIA), JWA Financial. Why would I trade in the peak earning years of my career after I successfully positioned my firm to take it to the next level? In a series of articles, I’ll explore a multi-faceted topic weighing on the minds of many advisors - succession planning.

2014-02-25 Understanding the CAPE Debate: The History of 24 or More by Keith C. Goddard, CFA, Channing S. Smith, CFA, and Monty L. Butts (Article)

At its recent level near 25, the cyclically adjusted price-to-earnings ratio (CAPE) of the U.S. stock market suggests that stocks are very richly priced or that there is something wrong with the CAPE. Debate about these two explanations intensifies each time the ratio ticks higher. This article offers objective data to help readers decide for themselves.

2014-02-25 Why Our Firm Uses DFA Funds by Dougal Williams, CFA (Article)

Research shows that 80% of active fund managers underperform their benchmarks. Index funds virtually eliminate this risk of underperformance. DFA, however, has engineered an even better mutual fund. This article explains key tenets of DFA’s approach and why our firm chose it over both active and index mutual funds.

2014-02-25 The Stereotypes to Avoid When Marketing to Women by Kristen Luke (Article)

Many financial advisors don’t have marketing materials that appropriately address today’s affluent female market. To make a genuine connection with women, choose images for your marketing materials that show you understand who they really are.

2014-02-25 Why Bother with a Target Market? by Beverly Flaxington (Article)

What is the purpose of a target market? I find the concept limiting. We work well with young professionals in their 40s and retirees in their 70s. We have clients that are couples, families and successful singles. I am hesitant to limit our approach to a certain group.

2014-02-25 Henderson launches ?Henderson Global Dividend Index? by Alex Crooke (Article)

Alex Crooke, Head of Global Equity Income, discusses the launch of the Henderson Global Dividend Index ? a quarterly report analyzing dividend trends from around the world. Alex notes how the first edition shows how corporates have come back to health since the recession and highlights the benefits of global investing and stock selection.

2014-02-25 More on Building a $250 Million Practice by Dan Richards (Article)

In last week’s column, I outlined four steps a rookie advisor needs to take to build a $250 million practice within 10 years. Here are five additional steps to hit that goal.

2014-02-25 Weekly Market Update by of Castleton Partners

Interest rates were relatively range-bound last week, despite a string of disappointing economic releases. With severe weather across the country having an outsized impact on the economy of late, market participants have been treating the weak data with a high degree of skepticism. We suspect there is further room for data to disappoint relative to expectations, believing a clear reading on the state of the economy cannot be determined until the spring.

2014-02-25 Time to Worry About Europe Again? by Chris Maxey, Ryan Davis of Fortigent

The European sovereign debt crisis has all but faded from investors? minds since ECB President Mario Draghi?s famous pronouncement on July 26, 2012 that he would do ?whatever it takes? to save the monetary union. Since that time, equity markets in Europe rallied sharply as accumulated risk aversion fell away.

2014-02-25 Mid-Quarter Update: Good Start to 2014 for Many Categories of CEF Marketplace; Still Compelling Valu by Jeff Margolin of First Trust Advisors

Many categories of closed-end funds (CEFs) are off to a good start to the year. Investors took advantage of the big discounts to net asset value (NAV) and attractive yields available in the secondary market which helped push the average CEF up 2.57% the first 6 weeks of the year as measured by the First Trust Closed-End Fund Composite Total Return Price Index (UPCEFT) as of 2/14/14.

2014-02-25 Prepayments and Value in the Non-Agency Market by Harrison Choi, Brian Rosenlund of TCW Asset Management

Non-agency mortgage bond investors look to voluntary prepayment projections as an essential component of assessing future cash flows and returns. Voluntary prepayments are the annualized percentage of the mortgage pool that leaves the pool each month due to refinancing or paying off a mortgage without a loss. Without equity in the home, it is nearly impossible for a non-agency borrower to refinance the mortgage and the sale of a home would generate a loss through a short sale or foreclosure.

2014-02-25 U.S. Economy: Curb Your Enthusiasm by Milton Ezrati of Lord Abbett

Amid optimistic projections of an acceleration in growth, the factors that have restrained GDP remain firmly in place.

2014-02-25 The Return of Japan by Bill O'Grady of Confluence Investment Management

Two weeks ago, we discussed Germany?s apparent early steps to return to regional power status. In this week?s report, we will examine Japan?s steady evolution to regional power status.

2014-02-25 How to Profit from the Yellen Fed by Axel Merk of Merk Funds

Janet Yellen might have the most powerful job in the world, as the Federal Reserve (Fed) she now chairs controls what may be the world?s most powerful printing press. We take a closer look at what her reign might mean for investors? portfolios.

2014-02-25 Alternative Energy Brief by Edward Guinness of Guinness Atkinson Asset Management

This month we provide our Outlook for the Alternative Energy sector in 2014.

2014-02-25 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

A quiet four days for stocks last week. Between the holiday, school vacations and winter weather; there just were not many catalysts for the stock marker.

2014-02-25 Strong Competitive Advantage by William Smead of Smead Capital Management

Rarely has anything been said about business which is more brilliant. Or at least that?s our take on a quip from one of my favorite movies, O Brother Where Art Thou. In the movie, a music producer showed up at the radio station where the The Soggy Bottom Boys recorded their single, ?Man of Constant Sorrow,? which had become an overnight smash hit. He announced to the blind man running the station, ?We?ve got to find those boys and sign them to a contract before the competition does!? The blind man leans back and says, ?O, yes, we got to beat that competition.?

2014-02-25 Flirting With Deflation by Andrew Bosomworth of PIMCO

Over the medium term, we see downside risks to both growth and inflation in the eurozone, unlike the ECB?s more balanced view. However, even if eurozone inflation sinks close to 1% in 2014?2015, as PIMCO forecasts, this in itself probably would not be low enough for the ECB to consider further easing. A lack of further policy action may undermine the ECB?s credibility to anchor longer-term inflation more closely to 2%.

2014-02-25 Smoother Sailing in Washington? by Libby Cantrill of PIMCO

With the debt ceiling increase out of the way, we should expect many fewer fiscal fights ? and less policy uncertainty and potential market disruptions ? emanating from Washington in 2014. We also expect Washington to do less harm from an economic growth perspective. We estimate that fiscal drag in 2014 will be about 0.4% of GDP. As we enter an election cycle, we expect Congress will do very little that is constructive for the economy in the year ahead ? meaning that tax reform and an immigration overhaul will likely have to wait.

2014-02-24 Secular Bull Or Bear? by Doug Ramsey of Leuthold Weeden Capital Management

At the January highs, the S&P 500 had gained almost 175% in just 58 months, while secondary stocks and equal-weighted market measures have gained considerably more. If it?s already over (and we don?t think it is), this cyclical bull will go down as a memorable one. But is this move the first leg of a new secular bull market? ? We think the next cyclical bear market will drive the market to levels low enough that debate will rage over the true date of the secular bear market low: was it 2009, or 201X?

2014-02-24 Market Outlook by Scotty George of Alexander Capital

In the four and one-half year market recovery since the "Great Recession" there has been a remarkable transformation in the construction and analysis of corporate earnings. This is something that gives me pause for concern.

2014-02-24 Another Disappointing US Housing Data Release by of GaveKal Capital

Existing home sales fell by -5.1% month-over-month in January. Existing home sales have now declined five of the past six months are now down on a year-over-year basis (5.13%).

2014-02-24 Corporate Credit Charting its Own Course by Eric Takaha of Franklin Templeton

At the start of the year, equity investors were fretting about possible emerging-market contagion, while bond investors were fretting about fallout from US Federal Reserve tapering. Meanwhile, the corporate credit market seemed to be charting its own course. Eric Takaha, director of the Corporate & High Yield Group and senior vice president, Franklin Templeton Fixed Income Group®, takes a look at the corporate credit/high-yield market and explains why he currently sees supportive fundamentals.

2014-02-24 Wallflower Value Stocks Are Ready to Dance by Chris Marx of AllianceBernstein

Global equities are notching new highs, valuations are elevated and talk of market bubbles is increasingly common. Yet, by our measure, the potential for outperformance in value stocks has rarely been better. How can that be?

2014-02-24 Three Reasons Frontier & EM Equities Are Not Created Equal by Russ Koesterich of iShares Blog

With all the turmoil in emerging markets recently, some investors may be especially wary of investing in so-called frontier markets. Russ explains why frontier and emerging markets are separate asset classes, each deserving of a strategic allocation.

2014-02-24 Confusing Crosscurrents Result in Trendless Market by Bob Doll of Nuveen Asset Management

U.S. equities finished mixed after the shortened holiday week.1 The broad market narrative did not change, as additional disappointing economic data was largely attributed to the impact of adverse weather. Comfort that the recovery may be gaining traction was evidenced through Fed discussions and the January FOMC minutes, with consensus expectations for tapering to continue at a measured pace. Some renewed concerns about a growth slowdown in China surfaced but had little impact.

2014-02-24 Leading Indicators Offer a Window into Europe?s Recovery by Matthew Dennis of Invesco Blog

We?re seeing signs that the recovery in Europe is progressing. I wanted to take a moment to highlight some of the positives, uncertainties and opportunities that we believe investors should consider about the region.

2014-02-23 The Worst Ten-Letter Word by John Mauldin of Mauldin Economics

A new word is achieving ubiquity. The word has always been with us and at times has been a beacon to attract the friends of liberty and opportunity. But now I?m afraid it is beginning to be used as a justification for social and economic policies that will limit the expansion of both liberty and opportunity. The word? Inequality.

2014-02-22 Sameness by Robert Isbitts of Sungarden Investment Research

The start of each year is full of market predictions from investment strategists. I tend not to get too caught up in that (it is one of the benefits of being an independent firm ? no one is compelling us to provide one!). Not wanting to get lost in the sea of 2014 market predictions, we now take a look back at the seven-week mark of the year?when many of these predictions are already out of the news cycle.

2014-02-22 Going for the Gold by Frank Holmes of U.S. Global Investors

Everyone wants the gold. Around the world, athletes train for years to compete for a gold medal. In Hong Kong and China, the Love Trade seeks gold coins, bars and jewelry.

2014-02-21 This Common Misconception about China May Be Hurting Your Portfolio by Frank Holmes of U.S. Global Investors

China is making headlines again, only this time the news attempts to dispel a common myth about the Asian giant.

2014-02-21 Investing in an M&A Boom by James Tierney, Jr. of Alliance Bernstein

Equity markets got off to a rough start in 2014, but a resurgence of corporate dealmaking has given investors reason to cheer. With executives? confidence increasing, and companies sitting on a mountain of cash, we think that the stage has been set for a sustained recovery of US takeover activity.

2014-02-21 The Big Four Economic Indicators: Real Retail Sales by Doug Short of Advisor Perspectives (

With yesterday's release of the January Consumer Price Index, we can now calculate Real Retail Sales for the underlying sales data released on February 13th. Nominal Retail Sales had fallen 0.4% month-over-month, the second month of contraction, and are up only 0.3% year-over-year. When we adjust for inflation, January sales were down 0.6% MoM. The YoY change was a fractional 0.1% growth. Real sales are down 0.9% from their all-time high in November.

2014-02-21 Mid-Quarter Update: Good Start to 2014 for Many Categories of CEF Marketplace by Jeff Margolin of First Trust Advisors

Many categories of closed-end funds (CEFs) are off to a good start to the year. Investors took advantage of the big discounts to net asset value (NAV) and attractive yields available in the secondary market which helped push the average CEF up 2.57% the first 6 weeks of the year as measured by the First Trust Closed-End Fund Composite Total Return Price Index (UPCEFT) as of 2/14/14.

2014-02-21 Is the U.S. Economy Under the Weather? by Carl Tannenbaum of Northern Trust

Is the U.S. economy under the weather?; Japan is faltering a bit as year two of Abenomics begins; Bitcoin has generated a lot of attention, some of it unwanted

2014-02-20 Meeting an Economic Need by William Smead of Smead Capital Management

At heart, Smead Capital Management is a stock picking organization. On top of our bottoms-up stock picking discipline, we are driven by our belief and respect for the laws of economics. One example of this is the subject of demographics. As long-duration investors, we want to understand where the aging process is taking demand in major product categories and how it will shape spending and production in the US. In other words, what economic needs will grow at the margin and who out there among companies that fit our other seven criteria can meet that marginal demand.

2014-02-20 American Industrial Renaissance Revisited by Richard Bernstein of Richard Bernstein Advisors

We first wrote about The "American Industrial Renaissance" in 2012, and it remains one of our favorite investment themes. We continue to implement this theme through small US-centric industrial companies and small financial institutions that lend to public and private industrial firms. It remains unlikely that the United States will be the manufacturing powerhouse that it was during the 1950s and 1960s, but many factors are suggesting that the US industrial sector will continue to gain market share.

2014-02-20 The Next Phase of Housing's Recovery: Which Five Investments Should You Own Today? by Mark Kiesel of PIMCO

PIMCO has significant top-down and bottom-up expertise dedicated to understanding the U.S. housing market cycle. In 2006, we warned U.S. housing prices were significantly overvalued, which led to our defensive positioning heading into the recession. In 2011, we turned bullish on real estate and added investments such as non-agency mortgage-backed securities, banks and homebuilders that we felt would benefit from an eventual recovery in housing prices.

2014-02-20 Bond Investors Need Not Feel Powerless by Jeff Hussey of Russell Investments

Jeff Hussey, global CIO, explains the strategies investors should be pursuing when considering fixed income investments in their portfolios and how additional yield cushion while opening a door to additional security selection returns from active management.

2014-02-20 Value Creation through Share Repurchases: Juniper Networks by Rick Snowdon of Diamond Hill Investments

An activist investor, Elliott Management, recently acquired a 6% stake in Juniper Networks, Inc. (JNPR), one of our holdings, and published a presentation proposing that management take certain actions including the initiation of an accelerated share repurchase program. Management teams, investors, and market observers talk a lot about creating value through share repurchases; the JNPR situation provides a good opportunity to discuss the extent to which, and the mechanism by which, this is the case.

2014-02-20 Peer Group Analytics and Valuation, an Abstraction by David Kleinberg of Universal Orbit

Peer group analytics and valuation are essential components when assessing the optimal risk-return equation. As opposed to an efficient frontier populated with the regressed correlated expected future returns of conventional securities or asset classes perhaps one determined by business segment operations is more advantageous.

2014-02-20 The State of International Small-Cap by Francis Gannon of The Royce Funds

While some argue that domestic small-cap leadership in 2013 was a result of its heavy exposure to companies that tend to generate most of their income domestically, others contest that this greater focus on the U.S. may mean missing out on the benefits of faster-growing foreign economies. We, on the other hand, choose to focus our attentions on individual companies, particularly those in more cyclical areas of the market that are more closely tied to the global economy.

2014-02-20 Lack Of Slack - Why Aggregate Unemployment May Be Masking Wage And Inflation Pressures by Anthony Wile of J.P. Morgan Funds

A historically large number of long-term unemployed, representing 36% of joblessness, have kept the unemployment rate elevated which could be distorting the traditional tradeoff between inflation and unemployment dynamics.

2014-02-20 And That's The Week That Was by Ron Brounes of Brounes & Associates

We’re back, baby. (Well, at least, for a week.) Janet Yellen made her case to become the most revered Fed Chair (anyone even remember Maestro Greenspan?) by merely reiterating Dr. B’s prior remarks about the economy and the bond buying program. Investors felt the love this Valentine’s week as they shook off the past negativity and took the Dow to its best daily showing and back above the 16k level. Can Cupid (and Yellen) continue to work his (her) magic after Prez day and beyond?

2014-02-20 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks soared last week as economic reports showed the global economy was weaker than originally estimated in the last quarter of 2013 and has lost further momentum in 2014. This has acted to support bond prices and lower interest rates. Thus, stocks as an asset class continue to do well.

2014-02-20 International Equity Commentary: January 2014 by Team of Thomas White International

International equity markets have started the year on a difficult note, as concerns about the robustness of economic growth in the U.S., Japan and Europe have made investors more cautious. Though the U.S. economy expanded at a faster than expected pace during the last quarter of 2013, recent data reports from the labor market have not been as healthy.

2014-02-20 Stocks for 2014: Fairly Valued Dividend Growth Stocks with an Emphasis on Dividends - Part 4 by Chuck Carnevale of F.A.S.T. Graphs

I am a firm believer that common stock portfolios should be custom-designed to meet each unique individual’s goals, objectives and risk tolerances. With that said, I believe it logically follows that in order to create a successful portfolio, the individual investor must first conduct some serious introspection to be sure that they truly "know thyself." Therefore, I believe the first, and perhaps most critical step, towards designing a successful equity portfolio is to ask your-self, and honestly answer several important questions.

2014-02-20 Thanks Washington, But the Recovery Remains Soft by Russ Koesterich of iShares Blog

While two events in Washington last week supported stocks and other risky assets, they overshadowed the release of some relatively disappointing economic numbers providing more evidence of still soft U.S. economic growth.

2014-02-20 Nothing Burns Like the Cold by Scott Minerd of Guggenheim Partners

The U.S. economy has stalled amid a winter freeze but the Federal Reserve is unlikely to act because warmer weather should bring a rebound, leading to higher U.S. stock prices and tighter credit spreads.

2014-02-20 February Flash Update by Clyde Kendzierski of Financial Solutions Group

It's too early to mean much, but so far out 2014 forecast is falling nicely into place. The market highs on Dec 31st have held, bonds are outperforming stocks, gold is outperforming both stocks and bonds, while gold mining shares are soaring! The anticipated volatility in emerging markets and Japan as well as the wild card of the Chinese economy continue to unfold, while bad weather has postponed the evidence of strong 2014 US growth.

2014-02-20 Stocks for 2014: High Yield and Fairly Valued Dividend Stocks for High Current Income ? Part 5 by Chuck Carnevale of F.A.S.T. Graphs

Retired investors seeking high income to live off of during retirement, face greater challenges today than almost ever before. The days of high yields available from bonds and other fixed income vehicles are long gone. Consequently, generating an adequate level of current income on retirement portfolios is difficult to say the least. This is especially tricky for those investors with a low tolerance for risk.

2014-02-20 The Fed: Yellen's Tapering Tightrope by Milton Ezrati of Lord Abbett

In reducing quantitative easing, the Federal Reserve chairwoman faces a big challenge: preventing asset bubbles at home without pressuring developing economies.

2014-02-20 Emerging Markets Equity Commentary: January 2014 by Team of Thomas White International

Emerging market equity prices corrected in January as investors worried about slower growth in China as well as political and economic turbulence in some the frontier economies such as Argentina and the Ukraine. Markets were also unnerved by the unexpectedly large interest rate hike in Turkey, which failed to prop up the currency.

2014-02-20 Abenomics is Failing on Multiple Fronts by of GaveKal Capital

With each passing month it is becoming more clear that Abenomics is, at least so far, failing to meet one of its critical goals, which is to stimulate exports and bring the country back to a trade surplus. Indeed, the latest trade statistics revealed the largest single month trade deficit ever.

2014-02-20 Preparing for the Unexpected with Commodity Futures ETFs by Ryan Issakainen of First Trust Advisors

Three straight years of negative returns for broad commodity benchmark indices, such as the Dow Jones-UBS Commodity Total Return Index, have led some investment advisors (and their clients) to begin questioning the rationale for including commodity futures ETFs1 in their asset allocation models. Relatively tame inflation expectations seem to support these doubts, as commodities are often thought of as a hedge against inflation.

2014-02-20 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.2, unchanged from last week. The WLI annualized growth indicator (WLIg) at one decimal place slipped to 2.5 from last week's 3.2 (a downward revision from 3.3).

2014-02-20 WhatsApp With That? by Peter Schiff of Euro Pacific Capital

Two pieces of business news announced this week provide a convenient frame through which to view our dysfunctional and distorted economy. The first (which has attracted tremendous attention), is Facebook's blockbuster $19 billion acquisition of instant messaging provider WhatsApp. The second (which few have noticed) is the horrific earnings report issued by Texas-based retail chain Conn's. While these two developments don't seem to have much in common, together they shed some very unflattering light on where we stand economically.

2014-02-20 Where the Frontier Lies by Robert Harvey of Matthews Asia

My last research trip to Asia included eight flights and nearly 50 grueling hours in the air. During this time, I had the opportunity to ponder a question I am frequently asked, ?How do you define a frontier market??

2014-02-19 Checking in on Earnings by Chris Maxey, Ryan Davis of Fortigent

Earnings season is nearing its finale, and the latest results show plenty of reason to be bullish, but the longer-term trend remains an outstanding question for markets.

2014-02-19 US Savings Rate Falling Again - Here Comes "MyRA" by Gary Halbert of Halbert Wealth Management

Today we weave together several different topics that are all connected in one way or another. We begin with the US savings rate which is trending lower once again. From 1975 to 2007, the savings rate fell to an all-time low of 2.4%. While it jumped up briefly after the 2008 financial crisis, it is now moving lower yet again.

2014-02-19 Help Your Clients Make a Bigger Impact With Their Investments in 2014 by Jorge Newbery of American Homeowner Preservation

Investing with the hope of gaining a good return is a given. But today’s investors are looking for returns that go beyond dollars and cents. Between 2010 and 2012, sustainable and responsible investing (SRI) grew more than 22 percent, reaching $3.74 trillion in total managed assets. To put that number into perspective, think of it this way: more than one dollar of every nine dollars under professional management in the United States is invested according to SRI strategies.

2014-02-19 The U.S. an Oasis in a Global Sea of Problems by Charlie Dreifus of The Royce Funds

Despite the ongoing political and economic uncertainty in the emerging markets and a slow start for stocks in 2014, Portfolio Manager and Principal Charlie Dreifus believes the U.S. economy is in good shape going forward.

2014-02-19 Investors at the Car Wash? by Jerry Wagner of Flexible Plan Investments

It?s been a rough winter, but here in Detroit (and I suspect in your town, too, if it?s been hit by the near constant winter storms this year) you can be assured of one thing ? when the snow stops and the clouds part and sunshine floods the sparkling, newly fallen snow in the fields, while the streets, in contrast, get grayer, then black as soot as the traffic returns ? then, I will bet you, the lines will grow long at your neighborhood carwash.

2014-02-19 Interest Rate Outlook - "Old Normal" by Jerry Paul, Zach Jonson of ICON Advisers, Inc.

Contrary to a popular belief that interest rates are destined to rise significantly, at ICON we believe we may be re-entering the "old normal" where the U.S. Treasury 10-year yield remains between 2%-4% for an extended period of time. As can be seen in the following chart of interest rates since 1871, with a few exceptions this is where interest rates traded prior to the mid-1960s. From this perspective, the late 1970s appear to be unusual and the decline of the last 32 years is simply a return to normal, where rates can remain for many years in a setting of slower growth and low inflation.

2014-02-19 If You Can?t Retire at 30 Then How About 38? by Roger Nusbaum of AdvisorShares

A couple of weeks ago we looked at an article from MarketWatch about a couple, now 39, who ?retired? when they were 30. They live frugally, one way or another accumulated a pretty decent nest egg in their 20?s and took the time to become financially literate.

2014-02-19 Investor Refresher (An Intersection of Investing and Firefighting) by Roger Nusbaum of AdvisorShares

Anyone who has read my blog for any length of time may recall my active involvement with the local volunteer fire department where I live in Northern Arizona. Occasionally my work in the investment industry intersects with some aspect of firefighting and one such intersection just occurred last week.

2014-02-18 Global Equity Income Update by Job Curtis (Article)

Job Curtis discusses recent market turbulence, the positioning of the Global Equity Income Fund and the outlook for dividends. Three main reasons for market turbulence include US tapering, capital outflows from emerging markets and fears of deflation in Europe. That said, European companies and many European economies remain strong. We see value outside the US from a dividend yield perspective so the Global Equity Income Fund is more oriented towards overseas markets, including Europe, Asia Pacific and the UK.

2014-02-18 CAPE Crusaders: The Shiller-Siegel Shootout at the Q Group Corral by Laurence B. Siegel (Article)

Jeremy Siegel and Robert Shiller are close friends, but they have starkly divergent positions on how the CAPE ratio should be calculated and what that means for equity valuations. This article reports on their differing views and draws some conclusions about the market’s prospects.

2014-02-18 Why Emerging Market Fears are Overblown by Robert Huebscher (Article)

Conditions in the emerging markets bear little resemblance to those in 1997 leading up to the Asian crisis, according to Simon Derrick, a leading market strategist with BNY Mellon. In this interview, he also explains why the euro is overvalued and picks the winners and losers in today’s currency wars.

2014-02-18 Understanding the Controversy over Dividend-Based Investing by Geoff Considine (Article)

Should investors favor dividend-paying stocks over non-payers? A long-held investment tenet contends that they should. But in a controversy that has pitted two highly respected investment firms - New York-based Tweedy Browne and Texas-based Dimensional Fund Advisors (DFA) - against one another, advisors are being asked to reexamine this issue.

2014-02-18 The Questions to Ask about Unconstrained Bond Funds by Brian Koble (Article)

Unconstrained bond funds have sparked unbridled enthusiasm among investors, with more than $55 billion pouring into these funds in 2013. They are the second most popular type of mutual fund in America. Yet many of these funds are unproven. Investors should proceed cautiously with these funds.

2014-02-18 Five Tips for Telling Your Marketing Story by Megan Elliott (Article)

A great story makes your firm stand out. Many financial advisors struggle with storytelling, which can seem vague or touchy-feely, especially if they’re more comfortable focusing on the technical side of wealth management. But telling great stories is easier than it seems. Here are five tips to you get started.

2014-02-18 Blackjack, Cycling and the Power of the One Percent by Mariko Gordon (Article)

A recent visit to the Las Vegas blackjack tables, together with insights gained from the success of the British National Cycling team, explain the investment-related benefits of small improvements compounded over time.

2014-02-18 Puerto Rico's Double-Downgrade by Michael Taylor of Columbia Management

On February 4, Standard & Poor’s lowered its long-term credit rating on the Commonwealth of Puerto Rico’s (PR) general obligation (GO) debt making it the first rating agency to downgrade the Commonwealth to below investment-grade levels. Just three days later, Moody’s cut its GO rating by two notches to ’Ba2’; ratings that are capped by or linked to the Commonwealth’s GO rating were also downgraded two notches, with the exception of the Puerto Rico Aqueduct and Sewer Authority (PRASA) Revenue Bonds.

2014-02-18 Tips for an Effective Study Group by Beverly Flaxington (Article)

I have been talking with a couple of advisor friends about developing an informal discussion group. We would share ideas and updates, but not secrets about the inner workings of our firms. Do you have any advice to make our sessions meaningful and practical?

2014-02-18 Letters to the Editor by Various (Article)

A reader responds to Joe Tomlinson’s article, Providing Better Social Security Advice for Clients, which appeared last week, and readers respond to Gary Halbert’s commentary, Why Quantitative Easing Didn’t Work, which appeared on February 12.

2014-02-18 Building a $250 Million Practice from Scratch by Dan Richards (Article)

We can learn from rookie advisors who, despite all the obstacles, are building large practices from scratch. To achieve a peak level of success entering the financial advisory space today, you have to get a lot of things right. I’ll cover four foundational decisions today and wrap up with some others in next week’s column.

2014-02-18 From Micro-Caps to Mid-Caps, a Comprehensive Approach to Smaller Companies by Team of The Royce Funds

As the small-cap asset class has grown in size, those companies just beyond the periphery of small-cap have become somewhat orphaned.

2014-02-18 Market Outlook by Scotty George of Alexander Capital

The new thinking amongst market analysts is that one must respond to every news flash, every short-term nuance, any variable that creates a daily ripple in prices or attitude, or risk having your portfolio drift in obscurity and underperformance. The new "keeping up with the Jones’" demands that we stay tuned to business news programming 24/7 to see if we’re conforming to expectations.

2014-02-18 Are US Housing Prices About To Drop? by Team of GaveKal Capital

This morning the NAHB Housing Market Index showed a large 10-point drop in January. This is, in fact, the largest decline on record for the Housing Market Index.

2014-02-18 A Time for Optimism in Europe? by Philippe Brugere-Trelat of Franklin Templeton

Volatile markets and an uneven recovery may appear to justify a cautious outlook for investing in Europe right now, while in the US the specter of higher interest rates might also be signaling a challenging market environment ahead. Philippe Brugere-Trelat believes the investment case for European equities favors a more optimistic outlook and despite a bumpy start to the year for equities globally, he still sees the market as rife with potential opportunities for selective investors, particularly undervalued segments of the market. One place where he thinks caution is likely warranted? Japan.

2014-02-18 Stocks for 2014: Growth and Income For Total Return - Part 3 by Chuck Carnevale of F.A.S.T. Graphs

When investing in common stocks, there is no one strategy that fits all investors. Some investors are focused on investing for income, some for capital appreciation and others for various combinations of both. Additionally, there is the issue of risk tolerance. Some investors are willing and capable of assuming greater risk if they believe it will lead to greater returns, while others are more risk adverse. These are just but a few of the many variations that apply to the individual investor’s own unique goals and characteristics.

2014-02-18 Why Confidence Remains Low (Hint: Blame Washington) by Russ Koesterich of iShares Blog

While U.S. economic fundamentals have improved over the past year, U.S. businesses and consumers both continue to exercise caution, holding back on spending and new investment. Russ explains what’s partly behind this puzzling dilemma.

2014-02-18 After a Rocky 2013, What's in Store for Asia This Year? by Brent Bates of Invesco Blog

Overall, 2013 wasn’t the best year for Asian markets, however there are several trends emerging that we believe will be good for the region this year.

2014-02-18 Equity Markets: How Much Energy Does the Bull Have Left? by Kurt Feuerman of AllianceBernstein

After another big year for stocks in 2013, many investors are questioning how much longer the bull market can run before it collapses from exhaustion. This doubt has intensified with the early 2014 selloff. However, based on what we see, it’s not time to worry about the market’s stamina yet.

2014-02-18 Congress Raises the Debt Limit: Is This the End of the Budget Battles? by Andy Friedman of The Washington Update

Last week Congress - faced with an impending snow storm and a desire to get home for the Presidents Day holiday - hastily passed legislation permitting the federal government to continue to borrow funds through March 15, 2015. Coupled with the agreement reached last December to fund the government through September 30, 2015, this action eliminates the prospects of additional fiscal showdowns for at least the remainder of 2014.

2014-02-18 Global Growth Expectations Push Stocks Forward Despite Weather by Bob Doll of Nuveen Asset Management

U.S. equities finished sharply higher last week with the S&P 500 increasing 2.3% and all major U.S. averages up more than 2%.1 The rapid market recovery from the January pullback is a bigger surprise than the pullback that preceded it.

2014-02-18 Muni Time of Trade Disclosure - Why a New Rule and Why the Delay? by Gregg Bienstock of Lumesis

The objective of the rule is simple: protect the retail investor. And, when it comes to the municipal market, the rule already exists. So why is Proposed Rule G-47 pending approval by the SEC, and how will it differ from the existing rule? Why is this well-intentioned and, as some believe, needed Rule the subject of an SEC Order that has delayed its implementation?

2014-02-18 Topping Patterns and the Proper Cause for Optimism by John Hussman of Hussman Funds

We would dismiss classic topping patterns we observe here if the recent market peak did not feature the "full catastrophe" of textbook speculative features, particularly the same syndrome of extreme overvalued, overbought, overbullish, rising yield conditions observed (prior to the past year) only at major market peaks in 2007, 2000, 1987, 1972, and 1929. Meanwhile, we remain encouraged. Those who follow a historically informed, value-conscious, and risk-managed investment discipline should be among the most optimistic investors in the financial markets.

2014-02-15 The Economic Singularity by John Mauldin of Millennium Wave Advisors

Today, let’s think about central banks and liquidity traps and see if we agree that central bankers are driving the car from the back seat based upon a fundamentally flawed theory of how the world works. That theory helped produce the wreck that was the Great Recession and will have its fingerprints all over the next one.

2014-02-14 Why Confidence Remains Low (Hint: Blame Washington) by Russ Koesterich of iSharesBlog

Despite some signs that economic fundamentals are improving - including an improving labor market and rising home prices - U.S. businesses and consumers continue to exercise caution, holding back on spending and new investment. What’s behind this puzzling dilemma? As I write in my new Market Perspectives paper, "The Price of Politics," uncertainty over public policy is partly to blame.

2014-02-14 What Harvard Can Teach Us About Portfolio Management by Roger Nusbaum of AdvisorShares

The takeaway for advisors is the need to make sure clients truly understand their time horizons and that their portfolios are being navigated toward their time horizon versus responding to short term events like a Green Mountain Coffee (NASDAQ:GMCR) popping 30% on a deal with Coca Cola (NYSE:KO) or a stretch of poor returns for emerging markets.

2014-02-14 Does a Down January Dog the Rest of the Year? Probably by Peter Nielsen of Saturna Capital

The bottom line for investors is that a negative January tends to herald lower (though not necessarily negative) returns for the subsequent 11 months.

2014-02-14 Turkey, Doves, Hawks and Owls by Robert Horrocks of Matthews Asia

The current market sentiment is something of an albatross around Asian economic and market performance. Whilst it is never safe to assume the currency speculators have gone away, the region’s economies have put in enough hard work over the previous decades to earn some goodwill.

2014-02-14 PepsiCo Dividend: Refreshing The Investor World by Team of Fast Graphs

PepsiCo is presently trading in line with its historical valuations and might be offering a reasonable - albeit not necessarily screaming - opportunity moving forward. However, as always, we recommend that the reader conduct his or her own thorough due diligence.

2014-02-14 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.2, unchanged from last week. The WLI annualized growth indicator (WLIg) at one decimal place slipped to 3.3 from last week’s 4.2. Last weekend, ECRI posted a new publicly available commentary on the company’s website: Failure to Launch. The brief text concludes with this remark: It is now quite clear that the economy is decelerating, not accelerating, with growth in ECRI’s Weekly Coincident Index ... falling rapidly.

2014-02-14 Arresting Disinflation Will Require Taking up the Slack by Carl Tannenbaum of Northern Trust

Arresting disinflation will require taking up the slack. Estimates of the U.S. output gap remain substantial. The U.S. achieves budget peace but still faces long-term fiscal challenges.

2014-02-14 Many Reasons for Rates to Rise by Robert Isbitts of Sungarden Investment Research

There are a number of scenarios and events that could cause rates to rise in the next several years. Increasing economic growth in the United States would mean that the Federal Reserve no longer needs to keep market interest rates artificially low. Central banks around the world have been buying debt to spur economic activity, with mixed result at best. When there is no longer a need to purchase more debt, the massive, coordinated demand for that debt will fall. And when that happens... uh-oh.

2014-02-14 Weather Related? by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

The recent slowdown in economic data appears to be largely weather related and we believe decent growth will reassert itself. Stocks have bounced after a weak start to the year, but the threat of a further pullback remains, although our longer-term optimism has not been dented. Likewise, we believe Europe offers some attractive investment opportunities but we’re in a wait-and-see mode with Japan. Finally, we don’t see EM turmoil becoming overly contagious, but we are watching that situation closely.

2014-02-14 These Gold Charts Will Make Your Heart Beat Faster by Frank Holmes of U.S. Global Investors

So while gold may correct over the next several months as the metal enters its seasonally weak period of the year, this looks promising for gold investors.

2014-02-13 Bad News is Good News Again by Scott Minerd of Guggenheim Partners

Extremely cold weather in the United States, a sell-off in equities and in emerging markets, and large swings in fund flows combined for a volatile start to the year. But none of this will derail the ongoing U.S. economic expansion, and investors should take advantage of this temporary weakness.

2014-02-13 Admit it: You were wondering, why hold bonds? by Jeff Hussey of Russell Investments

Jeff Hussey, global CIO, highlights the importance of holding fixed income investments within portfolios, even at a time when we are seeing exceptionally low and likely rising interest rates.

2014-02-13 Rich Man, Poor Man! by Jeff Saut of Raymond James

Last week was a pretty wild week starting out with Monday?s 90% Downside Day where 90% of total Up/Down Volume, and total Up/Down Points traded, were recorded on the downside (read: negative), leaving the S&P 500 (SPX/1797.02) down ~41 points. It was the second 90% Downside Day in the past two weeks with the first occurring on January 24th, which broke the SPX below its first support zone of 1808 ? 1813, thus now that level becomes an overhead resistance level.

2014-02-13 A Time for Optimism in Europe? by Philippe Brugere-Trelat of Franklin Templeton

Volatile markets and an uneven recovery may appear to justify a cautious outlook for investing in Europe right now, while in the US the specter of higher interest rates might also be signaling a challenging market environment ahead. The investment case for European equities favors a more optimistic outlook and despite a bumpy start to the year for equities globally, he still sees the market as rife with potential opportunities for selective investors, particularly undervalued segments of the market. One place where caution is likely warranted? Japan.

2014-02-13 A Centennial to Celebrate - The Federal Reserve Looks Forward to Its Next 100 Years by Carl Tannenbaum of Northern Trust

The Fed’s centennial arrives at an interesting juncture. Never in its history has the American central bank been so deeply involved in economic management, and rarely has it attracted such controversy. The recent transition in Fed leadership marks the end of a significant era. In some ways, this makes it a perfect time to contemplate what the Fed was, what it has become and what it should be during its second century. The results of this review will be valuable to central banks the world over.

2014-02-13 Equity Markets: How Much Energy Does the Bull Have Left? by Kurt Feuerman of Alliance Bernstein

After another big year for stocks in 2013, many investors are questioning how much longer the bull market can run before it collapses from exhaustion. This doubt has intensified with the early 2014 selloff. However, based on what we see, it’s not time to worry about the market’s stamina yet.

2014-02-12 Was the labor report positive, or negative, anyone? by Chris Maxey and Ryan Davis  of Fortigent

Stocks were modestly positive last week following three straight weeks of negative performance. Markets crawled back following an ugly Monday in which the S&P 500 suffered its worst loss in more than seven months. For the week, the S&P rose 0.9% while the Dow Jones Industrial Average added 0.7%.

2014-02-12 Harvard?s Endowment: Wise or Foolish? by William Smead of Smead Capital Management

Warren Buffett says, "What the wise man does in the beginning, the fool does in the end." In a Barron's feature over the weekend, writer Andrew Bary dug into the portfolio of Harvard's Endowment through an interview with their CIO, Jane Mendillo. After all, who could possibly be wiser than what many would argue is the most respected undergraduate and graduate university in the world? Using a combination of Bary?s article and our perspective, this missive will seek to determine whether the Harvard Endowment is wise or foolish.

2014-02-12 The Expanding Leveraged Loan Market by Heather Rupp of AdvisorShares

At the end of the day, a loan investor may be left with a security that has a low starting yield, little left in the way of capital gains potential, and with coupon income that is not at all increasing even if rates were to rise. While there are some selective opportunities for value in the loan space, broadly speaking we see high yield bonds as a more attractive market in the current environment.

2014-02-12 Grey Owl Capital?s Third Quarter Letter by of Grey Owl Capital Management

2013 was a banner year for the US stock market. Despite equities? meager fourteen-year record of accomplishment, investors, broadly speaking, are limited to short-term memory. Last year?s performance was enough to generate significant enthusiasm for stocks. We continue to believe, the current environment warrants a more balanced approach.

2014-02-12 Why Quantitative Easing Didn?t Work by Gary D. Halbert of Halbert Wealth Management

IN THIS ISSUE: 1. Why Fed?s Quantitative Easing (QE) Didn?t Work 2. Velocity of Money Plunged During Financial Crisis 3. Should Bernanke & Company Have Done More? 4. QE Was a Huge, Dangerous Experiment That Failed 5. Fed Begins to ?Taper? QE Purchases in January 6. Conclusions ? What Happens Next?

2014-02-12 Coasting? by Jerry Wagner of Flexible Plan Investments

This year in the stock market I feel that most investors (and commentators) are focusing on walking the daily, hourly and, perhaps, even second to second ups and downs of the major market indexes. They?re measuring their progress each day, like using the foot-long ruler to measure a coastline. As with most things in life, with the stock market it is often better to get a broader perspective ? see the forest not just the trees. When you do that, it?s apparent that last week was a probable turning point, or at least a notable one.

2014-02-11 Providing Better Social Security Advice for Clients by Joe Tomlinson (Article)

Delayed claiming of Social Security benefits makes overwhelming sense, as do strategies that coordinate claiming by couples. But such strategies are unpopular, despite numerous consumer-finance articles highlighting their advantages. Advisors can add significant value for clients by explaining the benefits of these strategies.

2014-02-11 Are Returns of Intermediate Bond Funds Persistent? by Michael Edesess (Article)

In the search for skillful managers, the most valued characteristic is persistence -- the ability of a manager to achieve superior returns consistently over time. Finding such managers is critical for fixed-income allocations, since the theoretical basis for indexing is weaker than it is for equities. Our study found, however, that persistence is elusive among a large sample of taxable bond funds.

2014-02-11 Three Ways to Make Your Message Resonate by Dan Richards (Article)

Except for the most analytical of clients, effective communication does not mean more facts, figures or statistics. Instead, there are three core approaches to make your message resonate.

2014-02-11 Why Are There Timeless Lessons That Do Not Get Arbitraged Away? by John Alberg and Michael Seckler (Article)

Strategies in which an investor buys shares in good companies mired in high pessimism (and therefore offered at low prices) bubble their way to the top in terms of persistent, long-term performance. By adhering to these types of contrarian or value-oriented strategies, investors can perform consistently and remarkably well across long periods. No other strategy even comes close. How could it be that the strong performance of contrarian-style strategies persists over time?

2014-02-11 The 2013 Commentary Scorecard by Jill Mislinski (Article)

Let’s look at what prominent forecasters said in January 2013 about how the markets and economy would perform last year.

2014-02-11 Dealing with Bad PR by Beverly Flaxington (Article)

One of our advisors quit under difficult circumstances. He talked to some local reporters afterward, and now we look like a terrible place to work. His actions have damaged our reputation. We did not do anything wrong. This advisor was a misfit from the start. What can we do to minimize the ongoing problems his departure is causing us?

2014-02-11 Triple Witching Hour Proves Benign by Kristina Hooper of Allianz Global Investors

Markets yawned their way past two big reports and one key deadline last week, but investors are still fleeing stock funds overall. It?s a strange brew that signals continued volatility ahead, says US Investment Strategist Kristina Hooper.

2014-02-11 Equities Markets Start 2014 in Deep Freeze by Douglas Coté of ING Investement Management

By slowly normalizing policy, the Fed is passing the responsibility of pricing risk back to the markets, resulting in higher volatility. The health of the emerging markets is vital to global growth, as developing countries have doubled their contribution to global GDP over the past decade to nearly 40%. S&P 500 corporations derive half their revenue from overseas; support from global consumerism and manufacturing is on track to continue. Broad global diversification across equity and fixed income markets is the best way to protect against volatility.

2014-02-11 Obama Spins Subsidies Both Ways by Peter Schiff of Euro Pacific Capital

In our current age of spin and counter-spin, there is no contortion too great for a politician to attempt. On occasion, however, the threads of one story become entangled with another in a manner that should deeply embarrass, if the media were sharp enough to catch it. This happened last week in response to the Congressional Budget Office's (CBO) bombshell report on how Obamacare incentives could reduce the size of the labor force by more than two million workers by 2017.

2014-02-11 Obama Spins Subsidies Both Ways by Peter Schiff of Euro Pacific Capital

In our current age of spin and counter-spin, there is no contortion too great for a politician to attempt. On occasion, however, the threads of one story become entangled with another in a manner that should deeply embarrass, if the media were sharp enough to catch it. This happened last week in response to the Congressional Budget Office's (CBO) bombshell report on how Obamacare incentives could reduce the size of the labor force by more than two million workers by 2017.

2014-02-11 Leveraged Finance Outlook: Riding the Low Default Wave by Andrew R. Jessop, Elizabeth (Beth) MacLean of PIMCO

Following strong performance in 2013, we expect low (1%-3%) defaults in leveraged finance markets this year. Issuance should remain healthy, and continued slow but steady growth in the U.S. economy should offer further stability to these companies. However, careful credit selection and monitoring of sector trends remain imperative. Investors with low tolerance for volatility and more interest rate sensitivity may emphasize loans, while investors with greater risk tolerance and a more benign outlook for rates may look to high yield.

2014-02-11 Monthly Letter to Our Clients & Friends by Kendall J. Anderson of Anderson Griggs

Although the rest of America may need a manufacturing revival, mutual fund manufacturing is not in need of help, as the business has been growing continuously for three decades. Because of the sheer number of funds and the amount of investment dollars they control, there is a very high probability that we are buying new positions and selling existing positions to one or more mutual fund companies.

2014-02-11 Commodity Fund Taxation by Ade Odunsi of AdvisorShares

As markets, investment products and the manner in which clients access information have all evolved, advisors are answering more and more questions about how to invest in commodities which means advisors have to learn about the various taxation structures of the many different types of commodity exchange traded products.

2014-02-11 Focus on Income: The Illiquidity Premium: Opportunities for Investing in Credit Today by Jack Rivkin of Altegris

At a time when many investors are seeking income for their portfolios, traditional sources of fixed income - principally government bonds and high-grade corporate bonds - look less than compelling. Yields are low and there is an increasing risk that interest rates will rise, which would cause the value of existing bonds to fall.

2014-02-11 ?Hot? Money?s Fast Exit Cools Emerging Markets by of Knowledge @ Wharton

Capital flight from emerging markets has been accelerating in recent weeks ($6 billion alone in the week ending February 5). Turkey is the poster child, but the exodus is also happening in India, Indonesia, Brazil, South Africa and others ? mostly from equity markets. This ?hot money? is moving out over concerns that asset bubbles have built up, and that emerging market economic growth is now slowing. The slowdown is partly a result of tighter money in the wake of the Fed?s tapering plans and a decelerating economy in China, many believe. To better understand the risks to the global financial

2014-02-10 Bond Investing in a Rising Rate Environment by Kathleen Gaffney of Eaton Vance

After a transitional year like 2013, when a multidecade declining rate environment moved to a rising rate environment, we think it is important for investors to consider a multisector approach to finding value in the bond market. Finding bonds that can appreciate in price regardless of the interest-rate environment is what a multisector strategy generally seeks to accomplish.

2014-02-10 Emerging Markets Equity Commentary - December 2013 by Team of Thomas White International

Emerging market equity prices saw a modest correction for the second successive month in December, as investors remained cautious about the outlook for some of the emerging economies. Select countries such as Thailand in Asia and Turkey in Europe continue to face difficult political environments, with large demonstrations against the governments. Their currencies have reacted negatively to the latest developments, making investors fearful of a repeat of the volatile market movements seen during the third quarter of 2013.

2014-02-10 Exciting times in Japanese equity market by Vincent Musumeci (Article)

Vincent Musumeci explains that for Japan and the Japanese equity market, 2013 can be characterized as a year of excitement driven by profound changes in macro policy. As we head into 2014 and beyond we are now seeing the market environment, for the first time in a long time, developing a more robust and sustainable healthy domestic growth. In summary, Vincent notes the encouraging backdrop and the exciting policy changes that took place are essentially starting to deliver results.

2014-02-10 Double Trouble by John Hussman of Hussman Funds

On the basis of a broad range of valuation measures that are tightly (nearly 90%) correlated with actual subsequent S&P 500 total returns over the following decade, we estimate that stock prices are about double the level that would generate historically adequate long-term returns.

2014-02-10 What Would a Stronger Dollar Mean for Global Markets? by Borge Endresen, Brent Bates of Invesco

As the world watches the progress of the US Federal Reserve’s tapering program, and anticipates the strengthening of the US dollar, We’re often asked how this affects our view of international markets and risk. The short answer is that it doesn’t. We’re long-term, bottom-up stock pickers , so we;re primarily concerned with currency impacts on a company-by-company basis. However, there are some broad trends that are worth noting.

2014-02-10 Growth and Policy Uncertainty Cause Choppy Markets by Bob Doll of Nuveen Asset Management

U.S. equities closed with modest gains last week, as the S&P 500 overcame Monday?s decline, the largest one-day percentage loss since June 2013. The weaker-than-expected ISM manufacturing and vehicle sales data drive the sell-off on Monday, exacerbating the focus on slowing momentum for the U.S. recovery. The impact of adverse weather complicates the picture. Also, although January non-farm payroll missed expectations, there were more upbeat indications for the household survey.

2014-02-10 Market Outlook by Scotty C. George of Alexander Capital

Despite the inverted gyrations of the stock market during the past three weeks, my market overview continues to be moderately bullish, of course with specific reservations about investors’ unbridled carryover of unrealistic expectations borne out of last year’s performance.

2014-02-10 Two Reasons for Value to Outperform in 2014 by Will Nasgovitz of Heartland Advisors

We’ve seen the longest period of growth outperformance since 1932, but the two catalysts could cause value to return to favor. First, tapering by the Fed should allow interest rates to normalize and thereby benefit the Financials sector. Second, there’s potential for a correction in the Consumer Discretionary sector, which appears overvalued: The group’s P/E is above the historical average and performance has tracked upward despite flat earnings revisions.

2014-02-10 Volatility Should Persist, But Stick With Stocks by Russ Koesterich of iSharesBlog

Volatility rose last week and is now close to its long-term average. Economic data has softened, but we do not believe the Federal Reserve will change course. Investors may want to consider adding to equity positions during periods of weakness

2014-02-10 What Would a Stronger Dollar Mean for Global Markets? by Borge Endresen, Brent Bates of Invesco

As the world watches the progress of the US Federal Reserve’s (Fed’s) tapering program, and anticipates the strengthening of the US dollar, we’re often asked how this affects our view of the international market and risk. The short answer is that it doesn’t. We’re long-term, bottom-up stock pickers, so we’re primarily concerned with currency impacts on a company-by-company basis. However, there are some broad trends that are worth noting.

2014-02-09 A Most Dangerous Era by John Mauldin of Millennium Wave Advisors

This week we were confronted with a rather troubling appendix in the Congressional Budget Office (CBO) analysis of the Affordable Care Act, which suggests that the act will have a rather profound impact on employment patterns.

2014-02-09 Global Economic Overview - December 2013 by Team of Thomas White International

The global economic outlook has turned brighter as several major economies are improving. Both business and consumer sentiment have become healthier across most regions, as the policy uncertainties that plagued several countries last year have faded. The U.S. economy is expected to accelerate further in 2014, while Europe and Japan are also likely to see faster growth.

2014-02-08 ROC View with John Cole Scott by (Article)

Return of capital (ROC) may be a concern if it?s ?destructive.? John Cole Scott of CEF Advisors shares a view on ROC supported by recent research.

2014-02-08 Why Majority of IFAs Struggle to Scale-Up Their Practice by Rajat Dhar of Cogent Advisory

With SEBI, the regulatory body coming up with wealth service guidelines for IFAs, it is evident that only those having larger scale of operations can adapt swiftly to the changing regulations and market conditions. But, large number of IFAs in India are finding it hard to scale up. This commentary outlines the generic reasons as to what stops IFAs to scale up their practices.

2014-02-08 International Equity Commentary - December 2013 by Team of Thomas White International

International equity prices saw marginal gains in December as investors weighed the improved global economic outlook against the reduction in monetary stimulus from the U.S. Federal Reserve. Economic trends have become more positive across most regions, helped by the improving business environment and consumer sentiment in the U.S. as well as in Europe. Japan continues to see stronger export gains as demand revives in its major markets and the cheaper yen remain supportive.

2014-02-07 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Long-term unemployment needs to be addressed more intensively. January’s jobs data was very much a mixed bag. Janet Yellen’s testimony will include thoughts on joblessness.

2014-02-07 What's the Game Changer for Gold? by Frank Holmes of U.S. Global Investors

What will break gold of its losing streak? Will inflation, which is a lagging indicator, be stronger than expected? In one of my most popular posts last year, I said that based on the jobs market, the limited housing recovery and regulations slowing down the flow of money, the Fed would have no choice but to start tapering and raising rates very gradually to keep stimulating the economy.

2014-02-07 Knockout Punch for the Stock Markets? by Robert Isbitts of Sungarden Investment Research

Boxers are tough. So are secular bear markets. Whether or not we have been in one since back in 2000 (we say yes) is a subject of constant debate in the investment advisory industry. What is more important to investors today is whether past market behavior tells us anything important about the current environment? We think the answer is yes - human behavior repeats itself over and over again.

2014-02-07 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.2, down from last week’s downward revision from 133.7. The WLI annualized growth indicator (WLIg) at one decimal place slipped to 4.2 from last week’s 4.3.

2014-02-07 Over-Stimulated, Over-Priced by Neeraj Chaudhary of Euro Pacific Capital

At the end of 2013 Wall Street appeared to be convinced that the markets were enjoying the best of all possible worlds. In an interview with CNBC on Dec. 31 famed finance professor Jeremy Siegel stated that stocks would build on the great gains of 2013 with an additional 27% increase this year. So far 2014 hasn’t gone according to script. In contrast to the prevailing optimism I maintain a high degree of skepticism regarding the current rally in U.S. stocks. But opinions are cheap. To back up my gut feeling, here are six very diverse indicators that suggest U.S. stocks are overvalued.

2014-02-07 Emerging Europe: Regional Economic Review - 4Q 2013 by Team of Thomas White International

The club of emerging European economies expanded, as Morgan Stanley Capital International (MSCI) moved Greece from developed to the status of an emerging economy. The majority of the countries covered in this review, including the new entrant, had something to look up to in the New Year.

2014-02-07 And That's The Week That Was by Ron Brounes of Brounes & Associates

How do you follow up some 30%-ish annual index gains in 2013...with major losses in January? Sadly, that’s what investors experienced as the Dow plunged over 5% to start the month, the worst January since 2009. Those who say "as January goes, so goes the market" are not among the most popular these days. Earnings have been lackluster at best; emerging markets are in panic mode; Bernanke is moving out to pasture; investors still have quite a few profits they can take from last year. Then again, 11 months is plenty of time to "right the ship."

2014-02-07 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Fears over emerging markets, a tightening Federal Reserve Board and a loss in momentum in the economy have combined to create a sloppy market for stocks, while the bond market continues to confound the pundits and enjoy a solid start to the New Year.

2014-02-07 Two Questions for Japan Inc. by Kara Yoon of Matthews Asia

During my last research trip in November, we visited mostly consumer-facing companies in Japan where we took the opportunity to pose two key questions to the management teams we met. The first was-"Are you planning to increase prices for products or services after Japan’s consumption tax hike (scheduled for April)?" And secondly: "Will you raise employee wages?"

2014-02-07 Investment Principles and Habits: Contrarian Value Investing in a Liquidity-Driven Environment by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at how recent market performance, having been both driven down by and buoyed by liquidity, should cause asset managers to re-examine their investment principles. Though he cautions that the possibility exists that the recent market drivers might be an aberration, "stubborn aberrations are worth paying attention to."

2014-02-07 Global Inflation: A Mixed Picture by Monty Guild of Guild Investment Management

Many investors and global macro economists have been on vigil for a ramp up in global inflation spurred by immense central bank QE and other forms monetary stimulus. All of the money printing from around the globe has helped keep the financial system functioning, and it continues to help weak developed economies get back on firmer growth footing.

2014-02-07 2013 Year-End Investment Commentary by Team of Litman Gregory

We find ourselves with a more sanguine big-picture view, at least over the nearer term, than we have had in some time. U.S. and global economic fundamentals gradually improved over the past year across a number of dimensions, and seem poised for continued improvement or at least stability in 2014. However, as we look ahead, the longer-term risks related to excessive global debt, subpar growth, and unprecedented government policy that we have worried about since the aftermath of the 2008 financial crisis still remain largely unresolved.

2014-02-07 Dark Gold: Shedding Light on a Mysterious Market by Peter Schiff of Euro Pacific Precious Metals

Gold is the simplest of financial assets - you either own it or you don’t. Yet, at the same time, gold is also among the most private of assets. Once an individual locks his or her safe, that gold effectively disappears from the market at large. Unlike bank deposits or stocks, there is no way to tally the total amount of gold held by individual investors.

2014-02-07 American Bandstand by Ben Hunt of Salient Partners

Clark didn’t poll America to determine their taste in music. He told them their taste in music...not directly, but by creating common knowledge - ideas that a crowd believes that the crowd believes. It’s certainly the most potent force in the social world of markets, and every Central Banker today is playing the Common Knowledge Game just as hard as Dick Clark ever did.

2014-02-06 Divesting When Discomfited by Ben Inker of GMO

Ben Inker explains why, "for our asset allocation portfolios we generally try to trade slowly." He notes, "The slightly odd fact is that moving slowly on value-driven decisions has simply made more money historically than moving immediately would have."

2014-02-06 Year-End Odds and Ends by Jeremy Grantham of GMO

In a new quarterly letter to GMO’s institutional clients, chief investment strategist Jeremy Grantham offers "Year-End Odds and Ends": Fossil Fuels: Is Tesla a Tease or a Triumph?, Fracking and Yet More Technical Stuff on Fracking, Update on Metals, Fertilizers, and Food, Problems in Forecasting Short-term Prices for Resources, Another Look at U.S. GDP Growth, Investment Lessons Learned: Mistakes Made Over 47 Years

2014-02-06 How Did the Emerging Markets Get Into This Mess? by Andres Garcia-Amaya of J.P. Morgan Funds

A number of central banks around the world tightened monetary policy during the week of January 27, but the rationale for their policy decisions varied significantly. In the U.S., the Federal Reserve continued its "tapering" of quantitative easing (QE) to reflect the strong economic growth prospects, while Turkey, India and South Africa tightened policy in an attempt to prevent an exodus of foreign capital from their countries.

2014-02-06 Will China Overtake the U.S. as World Leader and Reserve Currency? by Dawn Bennett of Bennett Group Financial Services

Will China Overtake the US as World Leader and Reserve Currency? This has not happened yet, but it may not be far down the road if the US does not get its fiscal house in order. The United States has been the biggest national economy since 1871, but more than half of Americans have slapped an expiration date on its global reign.

2014-02-06 Emerging Market Woes abd Fed Tapering Equals Stocks Plunge by Gary Halbert of Halbert Wealth Management

January saw US stocks record their first losing month since last August. After reaching new record highs at the end of December, the Dow Jones shed almost 1,000 points in the last half of the month and the decline continues. Analysts attributed the sell-off in large part due to troubling news from several emerging nations, in particular to the so-called "Fragile Five" - Turkey, India, Brazil, Indonesia and South Africa.

2014-02-06 So Cruel: Pullback Could Become Correction by Liz Ann Sonders of Charles Schwab

For now, the EM tail is wagging the dog, but the US remains the world’s big dog and should ultimately get through the latest turmoil. "January Barometer" has sent mixed signals for the remainder of the year historically. More technical and sentiment recovery is likely needed before a market recovery is likely.

2014-02-06 Health Care Holds Promise by Team of Janus Capital Group

Last year was a strong year for health care investing, as the sector was a top performer in a number of indices. Even after such a strong run, we believe the sector will continue to provide a shot in the arm for equity portfolios.

2014-02-06 EM Misery and US Large-Cap Euphoria by William Smead of Smead Capital Management

Many investors are wondering why emerging stock market misery currently equates to weakness in the US stock market as represented by the Dow Jones Industrial Average and the S&P 500 indexes (large-cap). Long time followers of our writing at Smead Capital Management are aware that we have been making the argument this would happen since 2010 and we are happy to review our thesis.

2014-02-06 Beyond the Mall: Why Consumers Matter by Ted Baszler of Heartland Advisors

The bottom line is, more people are working now than were a few years ago, pumping income into the economy. At the same time that employment and real wages have been staging a moderate comeback, the housing market has continued to hold firm, and equity markets have posted impressive returns. Record-high levels of personal net worth have prompted more discretionary spending. Periods of greater spending also are associated with higher levels of equity ownership, which can push P/Es higher.

2014-02-06 Technology Leaders and Laggards by Paul Meeks of Saturna Capital

The technology sector includes several industries, such as semiconductors and semiconductor capital equipment, software and services, and technology hardware and equipment.

2014-02-06 An Opportunity to Buy by Scott Minerd of Guggenheim Partners

We will likely look back on the current turbulence in financial markets as a healthy correction, and an encouraging sign that policymakers are allowing markets to self-correct in a way not seen since before 2008.

2014-02-06 Stagnation by Design by Joseph Stiglitz of Project Syndicate

The difficulties that many rich countries now face are not the result of the inexorable laws of economics, to which people simply must adjust, as they would to a natural disaster. On the contrary, the decline in most households’ income over the past three decades, particularly in the US, is the result of flawed policies.

2014-02-06 How Fragile are Emerging Markets? by Kenneth Rogoff of Project Syndicate

Emerging-market equities and exchange rates are again under severe downward pressure, but are the underlying economies really as fragile as global traders seem to fear? The short answer, for a few, is probably "yes," but, for most, "not quite yet."

2014-02-05 Emerging Market Turmoil Creates January Decline by Bob Doll of Nuveen Asset Management

U.S. equities finished lower last week, as the S&P 500 ended January with the first monthly loss since August 2013 and the largest monthly decline since May 2012. A global retreat from risk has been sparked by unrest around the world, sell-offs in emerging markets led by a 20% decline in the Argentine peso, weaker than expected economic reports from China, U.S. economic growth concerns in light of frigid temperatures and anxiety over Fed tapering.

2014-02-05 2014 Market Outlook by Kevin Mahn of Hennion & Walsh

Some Bumps along the Road of Global Recovery

2014-02-05 The Fed's Forced Feeding Will End Badly by Dawn Bennett of Bennett Group Financial Services

This financial market reminds me of when we were kids sitting at the dinner table and the one thing almost all of us heard back in the 1970s was "that plate better be clean by the time I get back or else." This left us with images of torture that would follow the "or else."

2014-02-05 Chicago Housing Outlook an A Plus after Falling 91% by John Burns of John Burns Real Estate Consulting

Watch out for a housing renaissance in the Chicago metro area. The region massively overcorrected in this last downturn and just recently joined the recovery. New home revenue fell 91% from 2005 to 2010, and most private builders went out of business.

2014-02-05 This Just In: The Secular Bear Market May Be About to Resume. by Martin Pring of Pring Turner Capital Group

In our 2012 book, Investing in the Second Lost Decade we laid out the case for the secular bear market in equities lasting at least through the end of the decade. Since then prices of most averages have moved to all-time highs. It’s time to throw in the towel on the secular bear market for stocks...right?

2014-02-05 New Maestro, Seasoned Band by Tony Crescenzi of PIMCO

The process by which the Fed carries out its duties is institutionalized, firmly rooted and unlikely to change - no matter who is at the helm. The core personal consumption expenditures (PCE) price index will be one of Janet Yellen’s most important guiding lights for future Fed policy.

2014-02-05 Emerald Economic Commentary by Team of Emerald Allocation Strategies

As Yogi Berra once said, "You got to be careful if you don’t know where you’re going, because you might not get there." As we look back on 2013 and look ahead to 2014,we want to share our thoughts on the road traveled and more importantly, the possible road ahead.

2014-02-05 A Decline in January Draws Attention to Portfolio Protection by Roger Nusbaum of AdvisorShares

January was a bumpy month for domestic equities as the S&P 500 declined by 3.5%. Perhaps the decline was influenced by the even larger decline in emerging markets, an earnings season that was viewed by some as disappointing or for no reason at all (markets don’t always have a reason for what they do).

2014-02-05 The Importance of Taking a Long-Term Perspective by Jeffrey Knight of Columbia Management

For asset allocation decisions, we find great value in maintaining a long-term outlook for major asset classes. Twice a year, in fact, we conduct an extensive update of our five-year return forecasts for several asset classes. The purpose of this exercise is two-fold. First, taking a longer term perspective helps us to set strategic asset allocations and design portfolios for diverse investment goals.

2014-02-05 Most 'Medieval' by William Gross of PIMCO

Unlike today, when most believe that animals were put on this Earth for humanity’s pleasure or utility, most people in the Middle Ages believed that God granted free will to Adam, Eve and all of His creatures. Animals were responsible in some strange way for their own actions and therefore should be held accountable for them.

2014-02-04 Discount Appeal with Mike Taggart by (Article)

Wide discounts in the CEF market may be attractive to current and prospective investors, says Mike Taggart of Nuveen Investments.

2014-02-04 Do-It-Yourself Practice Valuations by Bob Veres (Article)

More firms are looking to grow through acquisition. Indeed, this pathway to growth has been incredibly vibrant in the last 12 months. But the biggest impediment has been unrealistic expectations and valuations. Here is a tool that addresses these valuation challenges - and it comes at exactly the right time for the profession.

2014-02-04 The Albatross of MPT Thinking by Michael Edesess (Article)

The January/February issue of the Financial Analysts Journal includes an article titled "My Top 10 Peeves" by Clifford Asness, who was trained in modern portfolio theory (MPT) and its underlying assumptions. Many of Asness’ peeves are directed at people who depart from the MPT worldview. In discussing his peeves, I will offer counter-arguments and explain why I think the MPT perspective is flawed.

2014-02-04 James Montier - What Worries Me Right Now by Robert Huebscher (Article)

GMO’s investment strategist James Montier discusses why corporate profits will revert to the mean, what investors should know about the controversy over CAPE valuations, and the one issue that is the "preeminent occupation" of his mind right now.

2014-02-04 China’s Problems are America’s Opportunity by Justin Kermond (Article)

Fear not Federal Reserve tapering, lackluster U.S. earnings, oncoming deflation or markets heading into bubble territory, says Francois Trahan. Our economic and market growth will be fueled by structural changes driven by rebalancing in China. Don’t be surprised to see a repeat of 2013’s U.S. equity market performance, according to Trahan, who offered a script for countering clients’ unfounded fears over what might go wrong.

2014-02-04 The Actions that Lead to Top Performance by Dan Richards (Article)

In my 30 years of experience dealing with successful advisors, I’ve seen as many paths to success as there are successful advisors. And for those advisors with a well-established practice, that’s actually a good thing - if there was a simple formula for success, the barriers to entry for new advisors would go way down and the flood of successful competitors would put downward pressure on pricing and compensation. Despite the lack of a universal route to success, I have found that successful advisors engage in nine key activities.

2014-02-04 The Hidden Risks of Bank-Loan Funds by David Schawel (Article)

Bank loans, also referred to as floating-rate funds, are viewed by many investors as providing a modest source of income while generally free of interest-rate risk. Unfortunately, this narrative is wrong, and their surge in popularity has created an extremely poor risk-reward outlook for holders.

2014-02-04 Stocks Will Stop Falling Soon by Keith C. Goddard (Article)

Recent volatility in the stock market will not evolve into a serious decline, because credit spreads in the bond market remain low and stable.

2014-02-04 A New Boss Who Undervalues the Firm’s Story by Beverly Flaxington (Article)

My boss was recently hired. She has been successful on the asset-management side of the business but not in wealth management. Her entire focus is on the investment process and the investment philosophy. Our clients hire us - and stay - because of an overall relationship. I am beginning to think she does not understand wealth management, so she stays away from talking about anything other than investments. Is there a way I can teach her how to value all of what we do?

2014-02-04 Want to Achieve Marketing Success? Assign Responsibility by Kristen Luke (Article)

Develop a marketing strategy that works for you and your business. Once you find a strategy that works, implement it consistently. But with numerous other responsibilities and distractions, many financial advisors stumble when it comes to implementing their marketing plans. As a result, they do not see the results they anticipated.

2014-02-04 Letters to the Editor by Various (Article)

A reader responds to Stephanie Kelton’s article, Code Red or Red Herring? Mauldin and Tepper’s Code Red Reviewed , and a reader responds to Justin Kermond’s article, Harvard’s Post-Crisis Endowment Strategy, both of which appeared last week.

2014-02-04 Volatility Prompts a More Cautious View Toward Emerging Markets by Russ Koesterich of BlackRock Investment Management

The market selloff continued last week, and emerging markets stocks are looking more uncertain in the short term. With U.S. wages under pressure, consumer-related stocks remain an unattractive option. The Federal Reserve’s tapering program is starting to remove a pillar of support for stocks.

2014-02-04 Groundhog Day for Investors by Kristina Hooper of Allianz Global Investors

As investors, we’re hard-wired to bow to our emotions, which cause us to repeat the same mistakes over and over. But one tough month for stocks shouldn’t scare us away, says Kristina Hooper. Here are four tips for investors following the January selloff.

2014-02-04 Weekly Market Update by James Welch of Castleton Partners

Taking direction from a sharp sell-off in risk assets across the globe-especially in emerging market economies, Treasury yields continued their month long decline last week.

2014-02-04 Investors Should Focus on Wages, Not Jobs by Chris Maxey, Ryan Davis of Fortigent

This Friday investors receive the first official labor market report of 2014. Following a highly disappointing jobs figure in December, many market participants hope to see a rebound - particularly one that will help justify the Fed’s decision last week to continue tapering its asset purchases.

2014-02-04 Crisis in Ukraine by Bill O'Grady of Confluence Investment Management

Since November, Ukraine has experienced widespread civil unrest. In late November, Ukrainian President Yanukovych decided not to join an EU-sponsored trade pact. This led to protests from Ukrainians who desired closer relations with Europe. In this report, we will begin by discussing the geopolitics of the nations involved, examining how nations have adjusted their policies over time to changing conditions. We will analyze the risks to the region from current unrest, including a look at the impact on emerging markets. As always, we will conclude with potential market ramifications.

2014-02-04 Bear Markets: Different Ingredients, Same Market Behaviors by Roger Nusbaum of AdvisorShares

While it is logical that markets are complex, the reality is that the level of complexity changes over time. The level of complexity started to increase last year when now former Fed Chairman Ben Bernanke first introduced the idea of what has come to be called tapering.

2014-02-04 It Looks Messy Even From a Distance... by Jerry Wagner of Flexible Plan Investments

I’m traveling outside the country but I am never far from the latest financial market update. I saw today’s market move and with the sluggish start to the New Year in stocks, I thought I’d drop you all a line with my thoughts.

2014-02-04 Short-Term Trends Can Have Long-Term Consequences by Dawn Bennett of Bennett Group Financial Services

There are short-term trends that can have implications for the long-term investor’s investment portfolios. The first trend and outcome for 2014 is Americans are earning less and have less money to spend.

2014-02-04 Challenging the Consensus by Niels Jensen of Absolute Return Partners

Investors are overwhelmingly bearish on bonds going into 2014. In this month’s Absolute Return Letter we challenge that view and look at various reasons why the bond market may surprise most people and deliver a positive return this year.

2014-02-03 10 Steps Forward, 1 Step Back! Comments on January Stock Market by David Edwards of Heron Financial Group

US stocks as measured by the S&P 500 delivered a phenomenal 32.4% return in 2013. That was the 6th best year for US stocks since 1940. In January, US stocks fell 3.5%. We don’t watch business news anymore, but judging from an increased volume of phone calls from clients, we presume that CNBC, Fox Business, CNN and MSNBC have categorized this modest decline as "an apocalypse." Our "dashboard" shows return numbers for US and International stock markets, commodities, currencies and bond yields. A lot of red YTD 2014, but all green at the end of 2013.

2014-02-03 Gold Momentum Study by Mark Ungewitter of Charter Trust Company

The Coppock curve is a price momentum indicator designed by Edwin Coppock in the 1960’s to detect major equity bottoms while minimizing the risk of subsequent reversal. I recently applied this indicator to gold bullion, a beaten-up market which has fallen nearly 40% from its peak in August 2011.

2014-02-03 Market Outlook by Scotty George of Alexander Capital

Despite the inverted gyrations of the stock market during the past three weeks, my market overview continues to be moderately bullish, of course with specific reservations about investors’ unbridled carryover of unrealistic expectations borne out of last year’s performance.

2014-02-03 A Happier Ending for IMF Reform? by Mohamed El-Erian of Project Syndicate

Despite an elegant solution that involved no new commitments of resources, the US Congress last month refused to take up a long-delayed funding proposal for the IMF. But there is also a silver lining here, because disappointment can be turned into renewed opportunity.

2014-02-03 NY Fed Models Forecasting Excess Returns Through 2018 by John Bougearel of Structural Logic CTA

The NY Federal Reserve has an equity research department. Their research department determined in 2013 that "stocks are cheap" and that investors should enjoy "excess high returns" in an abnormally low or negative real interest rate environment for the next five years through 2018. Before reviewing potential mean reversions, implications from the Year of the Horse, & George Lindsay’s bearish Three Peaks and Domed House model, let’s attempt to quantify the NY Fed models. How high the Dow Jones might climb if it is to enjoy "excess high returns" through 2018.

2014-02-03 Dr. Copper: Prognosis Negative by Team of GaveKal Capital

Dr. Copper, aptly named for the metal’s ability to gauge the strength of the global economy, is not giving the most upbeat prognosis at the moment. In fact, with today’s weakness the intermediate term trendline is being tested. A decisive breach of this important trendline would likely lead to a testing of the low made last June and would probably be accompanied by rising concerns of deflation and slow global growth.

2014-02-03 A Secular Bull Market? by Juliet Ellis of Invesco Blog

Five years from now, I believe we will look back and see that 2014 was part of the early stages of a multi-year secular bull market for US equities, characterized by rising stock prices with only short, intervening market corrections.

2014-02-03 Pushing Luck by John Hussman of Hussman Funds

Speculators have been luckier than they may realize, and are now pushing their luck. Quantitative easing has distorted not only financial markets, but financial memory. The awakening is not likely to be gentle.

2014-02-03 Stocks for 2014: Fairly Valued Dividend Growth Stocks with an Emphasis on Dividends - Part 4 by Chuck Carnevale of F.A.S.T. Graphs

I am a firm believer that common stock portfolios should be custom-designed to meet each unique individual’s goals, objectives and risk tolerances. With that said, I believe it logically follows that in order to create a successful portfolio, the individual investor must first conduct some serious introspection to be sure that they truly "know thyself." Therefore, I believe the first, and perhaps most critical step, towards designing a successful equity portfolio is to ask your-self, and honestly answer several important questions.

2014-02-03 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (

Here is a new update of a popular market valuation method using the most recent Standard & Poor’s "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1824.35. The ratios in parentheses use the monthly close of 1782.59. For the earnings, see the table below created from Standard & Poor’s latest earnings spreadsheet.

2014-02-01 Central Banker Throwdown by John Mauldin of Millennium Wave Advisors

The Federal Reserve is signaling that it is going to end quantitative easing at some point in the future; therefore, investors are trying to find the exits before the end actually comes.

2014-01-31 A Surprising Gift for Chinese New Year by Sherwood Zhang of Matthews Asia

Beijing-based China Credit Trust Company, a firm that operates as a non-banking financial institution in China, announced this week it reached an agreement to restructure a risky high-yield product that had earlier ignited worries over the health of China’s trust industry. Just in time for the Lunar New Year, investors in the troubled trust may receive a big (metaphorical) red envelope-a monetary gift traditionally given during Chinese New Year or other special occasions-or at least avoid a financial hit.

2014-01-31 Thrift, Thrift, Burning Bright by Christine Hurtsellers, Matt Toms of ING Investment Management

Does the title sound familiar? Think feral instead of frugal, and William Blake’s "Tyger, Tyger, burning bright" may start to flicker between the synapses of memory and an English lit class you once soldiered through. But even if you haven’t read "The Tyger", its theme is aptly captured in the opening line and its image of a big flaming kitty cat. Essentially, Blake saw reality in duality: To appreciate the ferocious feline in all its glory is to come face to face with the same force that created "The Lamb", another entry in the poet’s Songs of Innocence and of Experience.

2014-01-31 A Toast- To the Decade by Rick Lear of Sloan Wealth Management

This is the most common question the members of the Sloan Wealth Management (SWM) Portfolio Management Team fielded this holiday season. This common quandary is in the context of the (2010, 2011, 2012 and now 2013) bull-run in the stock market, but we can’t help but visualize the numerous parallels to an actual party. If you have read our previous year-end letters you know we were among the first to arrive at the party and have no plans of leaving any time soon - as this decade remains enticing.

2014-01-31 Not All Emerging Markets Are Created Equal by Robert McConnaughey of Columbia Management

Emerging markets (EM) is a term given to a universe of countries that is extremely diverse across a wide number of variables including geography, levels of industrialization and political systems. Despite this diversity, emerging markets are often discussed as if they are a homogenous block, particularly in the context of broad asset allocation decision making. We think that’s a mistake. Instead, we see opportunity from applying a more bottom-up approach to country, industry and security selection amidst growing dispersion in outcomes across the emerging world.

2014-01-31 Do Portfolio Diversifiers Belong in Client Portfolios? by Roger Nusbaum of AdvisorShares

The big idea is that the stock market goes up more often than not but when it does go down it scares the hell out of clients. During these large declines some advisors will use tools like gold, hedge fund replicators, absolute return, market neutral, funds that sell short or any other products that tend to not look like the stock market to try to spare clients from the full effect of the decline.

2014-01-31 The Trouble with Emerging Markets by Nouriel Roubini of Project Syndicate

The financial turmoil that hit emerging-market economies in the spring of last year, following the Federal Reserve’s "taper tantrum" over its quantitative-easing policy, has returned with a vengeance. But the immediate trigger for these pressures should not be confused with deeper causes: Many emerging markets are in real trouble.

2014-01-31 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.8, unchanged at one decimal place from last week’s downward revision from 133.9. The WLI annualized growth indicator (WLIg) at one decimal place rose to 4.3, up from last week’s 4.2.

2014-01-31 The Big Four Economic Indicators: Real Personal Income Less Transfer Payments by Doug Short of Advisor Perspectives (

The December month-over-month Real Personal Income less Transfer Payments came in at a disappointing -0.21% (-0.2% rounded to one decimal). The year-over-year change is -2.47% (rounded to -2.5%). However, the YoY metric is radically skewed by the December 2012 end-of-year tax-planning strategy whereby income was captured in 2012 to avoided expected tax increases.

2014-01-31 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

China’s shadow banking products are coming under the spotlight. Emerging markets: Be sure to differentiate. The fixed income sector’s surprising strength.

2014-01-31 Buy What You Know? Not So Fast by Russ Koesterich of iSharesBlog

Buy what you know. It’s an old admonition, and on the surface a sensible one. Focusing your investments on those companies that you’re most familiar with should help mitigate the risk of a bad investment choice. Unfortunately, like a lot of conventional wisdom, it’s wrong. Concentrating your portfolio to local investments, while comforting, is a mistake for two reasons.

2014-01-31 ProVise Bullets by Ray Ferrara of ProVise Management Group

This month, we sing happy birthday to Apple. It was 30 years ago that Apple introduced its first Mac computer. What was novel then is commonplace today and far less clunky. For those old enough to remember what that boxy looking thing was like, it’s hard to believe how far we’ve come. Carl Icahn bought another $500 million more shares of Apple stock, bringing his total investment to $3.6 billion. As an activist shareholder he is trying to force Apple to buy up to $500 million in a stock buyback program.

2014-01-31 High Yield: The Perfect Storm That Wasn't by Gershon Distenfeld of Alliance Bernstein

Investors should not focus on how rising rates may affect high yield. Instead, they should take a more thoughtful approach. This means they should not expect double-digit returns, nor should they reach for yield by buying triple-C bonds. At this point in the credit cycle, when concerns begin to develop disproportionally in lower-rated credits, investors are not getting compensated for taking this type of risk. Instead, investors should accept that single-digit returns are a realistic expectation in 2014. And in a relatively low-rate environment, we don’t think that’s a bad thing.

2014-01-31 The Super Bowl of Investing by Robert Isbitts of Sungarden Investment Research

Here is our list of official National Football League penalties - as applied to investors. Don’t get penalized, think your way through today’s environment, or find a money management specialist who can.

2014-01-31 Value-Hunting in the US by Cindy Sweeting of Franklin Templeton

With key stock indices in the US closing the year near historical highs and many pundits predicting stronger growth rates both in the US and globally going into 2014, one would think bargains would be hard to find this year. January’s volatility, however, proved just how unpredictable markets can be. The recent market gyrations may be somewhat painful for many investors in the short-term, but the silver lining is that corrections can serve up buying opportunities, particularly for long-term, value-oriented investors.

2014-01-31 The New Watchword-Deflation? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Equity markets have been shaky to start the year but we don’t believe it’s time to abandon ship. The fundamentals in the United States continue to look appealing and the recent pullback has helped to correct some sentiment and valuation concerns. We are watching the fight against deflation carefully in Europe and Japan, and believe both countries may need to do more via monetary policy stimulus. Meanwhile, some emerging economies are dealing with inflation, but we don’t believe the recent problems will morph into a widespread crisis at this point.

2014-01-30 Quarterly Review and Outlook - Fourth Quarter 2013 by Van Hoisington, Lacy Hunt of Hoisington Investment Management

In The Theory of Interest, Irving Fisher, who Nobel Laureate Milton Friedman called America’s greatest economist, created the Fisher equation, which states the nominal bond yield is equal to the real yield plus expected inflation. It serves as the pillar of macroeconomics and as the foundational relationship of the bond market. It has been reconfirmed many times by scholarly examination and by the sheer force of historical experience. Examining periods of both low and high inflation offers insight into how each variable in the Fisher equation affects the outcome.

2014-01-30 FOMC Sticks With the Tapering Plan by Team of Northern Trust

The Federal Open Market Committee (FOMC) at the conclusion of its meeting today announced a further $10 billion reduction in its monthly rate of asset purchases. The increment was similar in size and composition to the first tapering step taken in December.

2014-01-30 A Healthy Correction in Emerging Markets by Scott Minerd of Guggenheim Partners

It has been a hard start to the year, especially for emerging markets, but the latest dislocation is a healthy part of the cycle and the risk-on trade remains intact.

2014-01-30 Breakthrough by Colleen Denzler of Janus Capital Group

The funny thing about crises is that we tend to feel as if they occur suddenly, on one day. For me, that day was when Lehman Brothers filed for bankruptcy protection on September 15, 2008. I remember looking at my Bloomberg screen and thinking I was witnessing the end of the financial markets.

2014-01-30 US Pending Home Sales Falls Off A Cliff In December by Team of GaveKal Capital

Pending Home Sales Index fell by 8.7% month-over-month compared to expectations of only a -0.5% decline. Pending home sales have now dropped every month since making a four year high in May.

2014-01-30 High Yield in 2014: Where Can You Look for Upside in a 'Medium Yield' Market? by Andrew Jessop, Hozef Arif of PIMCO

Default rates and credit losses in high yield markets remain below their long-term averages, and we believe default rates will remain low in 2014 and 2015 as well. Investors should consider positioning for better convexity via exposure to sectors with favorable industry dynamics and positive event risk from M&A or equity offerings, potential upside from price recovery in high quality bonds trading below par and exposure to select new supply from former investment grade companies.

2014-01-30 The Equity "Game" by Heather Rupp of AdvisorShares

We have seen the cracks begin to emerge in the equity story over the past week. Earnings are beginning to come in and so far have been a disappointment. The retail sector is showing signs that Q4 was weaker than originally expected, with store cuts announced by, Sears, J.C. Penney, and Macy’s and job cuts at Target. Emerging markets have been roiled this week, with Argentina shifting policy, likely devaluing their currency, and other currencies plunging.

2014-01-30 Getting Comfortable With Volatility by Mark Mobius of Franklin Templeton

Over the past few weeks, we’ve seen significant volatility in the markets, which has spooked some investors, but is also something we have become accustomed to. Markets generally (not only emerging markets) have become much more volatile during the last 20 years as a result of massive flows of money from not only institutional investors and long-only mutual funds but also hedge funds and high-frequency trading. We see such selloffs as potential opportunities to pick up bargains in select stocks if, in fact, the prices move low enough to draw our interest.

2014-01-30 The Path to Becoming an Emerging Market by Henry D'Auria, Morgan Harting of AllianceBernstein

Why have some equity markets in the developing world flourished more than others? It’s a pivotal question for investors hoping to stake an early claim to the potential emerging-market (EM) success stories of the next decade.

2014-01-29 Watching the Polar Bear by Jerry Wagner of Flexible Plan Investments

With temperatures hovering around zero and wind chills in the negative teens, I can’t think of any better label for Friday’s stock market sell off than a "polar bear". Here in Michigan at the Detroit Zoo, one of the nation’s finest, we have a rather unique polar bear exhibit. Visitors to the zoo can actually walk through tunnels interspersed throughout the polar bear environment created in the exhibit. At one point you are underneath the big furry creatures as they swim about. It is a beautiful sight.

2014-01-29 Do China Insider Transactions Lie? by William Smead of Smead Capital Management

In our business, we like to say that insider transactions never lie. For this reason, one of our eight criteria for selecting common stocks is strong insider ownership, preferably with recent purchases. Additionally, as contrarians, we want to make our original purchases in a business at a time when most investors are scared to buy for one reason or another. When we see officers, directors and substantial existing shareholders of a business buying at prices which are temporarily depressed, we raise our confidence in the long-term future of a business.

2014-01-29 2014 Oil Outlook: How Slick Is the Oil Slope by Greg Sharenow of PIMCO

While the supply outlook tilts the balances toward bearish in 2014, an improving global economy is a positive for oil demand and a support for prices. With roll yields positively contributing to returns, investors ultimately could be paid to hold a security that hedges both global event risk and any resulting shock to inflation. Growth in shale oil has been a powerful moderating force for prices by both filling an important gap in global supply and demand and by anchoring the back end of the futures curve.

2014-01-29 How the Pioneer of Hydraulic Fracturing changed the MLP Landscape by David Chiaro of Eagle Global Advisors

A banner year for MLPs and the future looks bright.

2014-01-29 All Things in Moderation, Including Housing by Ed Devlin of PIMCO

In our view, the cooling housing market and other domestic factors will keep Canadian growth at a modest 1.75%-2.25% in 2014, despite a boost from higher U.S. growth. While we expect a correction in Canada’s housing market to begin this year, the macroeconomic environment and the availability of mortgage credit suggest a housing crash is unlikely. In this environment, we think the Canadian dollar should remain attractive, 10-year bonds should offer the potential for gains, and provincial bonds will likely outperform federal government and corporate bonds.

2014-01-29 How to Retire at 30! by Roger Nusbaum of AdvisorShares

MarketWatch had a very thought provoking post about a couple in Colorado who retired when they turned 30 (they are 39 now). In 2011 they took their story to the blogosphere with the very popular blog Mr. Money Moustache.

2014-01-29 Fed Responsible for EM Crisis? by Axel Merk of Merk Investments

From the bully pulpits in Sao Paulo to the blogosphere in cyberspace, the Fed is blamed for the turmoil in Emerging Markets (EM). That’s a bit like blaming McDonald’s for obesity. Blaming others won’t fix the problems in EM economies, it won’t fix investors’ portfolios and it is an unlikely way to lose weight. Investors and policy makers need to wake up and realize that they are in charge of their own destiny. Let us explain.

2014-01-29 The Future in Focus: Trade Could Aid an Aging America by Milton Ezrati of Lord Abbett

Goods and services sourced from overseas could help the United States alleviate the effects of future labor shortages - if lawmakers can resist protectionist impulses.

2014-01-29 A Few Concerns by Scott Brown of Raymond James

We’ve begun 2014 with widespread expectations that economic growth will pick up. Growth last year was restrained by tighter fiscal policy. With that out of the way and the housing sector recovering, the pace of expansion is poised to improve. However, there are a number of concerns. Weak growth in real wages may limit consumer spending, which accounts for 70% of Gross Domestic Product. Long-term interest rates could rise too rapidly, choking off the recovery in the housing sector. A continued low trend in inflation, a major concern for some Fed officials, could weaken growth.

2014-01-29 Bear Raid? by Jeffrey Saut of Raymond James

I should have guessed that something was wrong when I checked into the Langham Hotel last Thursday only to be told by the valet, "There is a bear on the loose in the neighborhood so watch out." At first I didn’t believe him, but when I turned the TV on there it was, and as the cameras rolled the news anchor said, "Pasadena police and wildlife officials are warning residents to be on alert for a black bear after it was spotted wandering through backyards. The animal appears to be moving from home to home."

2014-01-29 Middle East/Africa: Regional Economic Review - 4Q 2013 by Team of Thomas White International

The International Monetary Fund (IMF) anticipates weak growth in the Middle East and North Africa (MENA) region mainly due to heightened political instability. What’s more, after years of healthy performance, growth in the oil exporting nations is expected to lose pace due to lower international demand and local oil supply disruptions. Given that these countries are witnessing a population boom, the IMF emphasized the need for economic diversification by the oil exporters and job creation in private non-oil sectors.

2014-01-28 Global fixed income outlook for 2014 by Phil Apel (Article)

Phil Apel, Head of Fixed Income, gives a brief review of the key themes that influenced bond markets in 2013 and an outlook for the environment in 2014. He notes that corporate credit is behaving responsibly to refinance and get into a good position financially. In contrast government bonds have suffered as the economy has recovered the market has begun to price in the fact we may see a normalization in the foreseeable period and have seen forward interest rates move up to the lower level of normal band.

2014-01-28 Code Red or Red Herring? Mauldin and Tepper’s Code Red Reviewed by Stephanie Kelton (Article)

If you aren’t already unnerved by what Bernanke & Co. have been doing for the last five years - things like quantitative easing (QE), a zero-interest policy (ZIRP) and large-scale asset purchases (LSAPs) - then reading John Mauldin and Jonathan Tepper’s latest, Code Red, may leave you seeing red. It’s a maddening tale of the harm that has already befallen savers as well as a warning about the longer-term damage that may be in store for all of us down the road.

2014-01-28 Looking Back at the Advisory Profession 20 Years from Now by Bob Veres (Article)

I’ve powered up my time-travel hardware to take a clear look at the year 2034. I’ve received budgetary approval to make a long-distance phone call into the future, and conduct a real interview with a successful advisor in that time period. Yes, it was expensive. But nothing is too good for our readers.

2014-01-28 The Three Drivers of Exceptional Success by Dan Richards (Article)

Any suggestion that there’s only one path to success is fatally flawed. As I look back at my 30 years working with extremely successful advisors, what strikes me is the variation in the approaches taken by advisors. That said, there are three categories of behavior that extremely successful advisors share.

2014-01-28 Harvard’s Post-Crisis Endowment Strategy by Justin Kermond (Article)

Jane Mendillo took the helm as CEO and president of Harvard Management Company (HMC) in 2008, after the endowment suffered a devastating $10 billion loss, which depleted its worth by more than 27%. Under her leadership, HMC has emerged from the crisis with innovative changes in its policies and processes regarding asset allocation and risk management of alternative assets.

2014-01-28 When the Boss Makes Bad Decisions by Beverly Flaxington (Article)

Our founder and current president is a control freak. No decisions can be made without his blessing. The problem is that he is semi-retired. He can be gone for two weeks out of the month sometimes. The business still has to run and we have to make decisions, but the last person who made an executive decision in Joe’s absence was fired. Is there a way we could conduct an intervention?

2014-01-28 How to Identify the Ideal Female Client by Kristan Wojnar (Article)

Advisors are overwhelmed with data demonstrating the opportunity of working with the female market. Most advisors understand the opportunity, but they lack the tools to use the data effectively.

2014-01-28 What Makes a Valid Benchmark? by Christophe Gauthron (Article)

Single-index benchmarks are widely used but seldom appropriate, because they don’t reflect the investment’s nature and purpose. The advisor or his client who uses these benchmarks will incorrectly assess performance. As an alternative, blended benchmarks provide an appropriate reference for manager selection and performance attribution.

2014-01-28 Letters to the Editor by Various (Article)

A reader responds to Marianne Brunet’s article, Are Small Businesses the Engine of Job Growth?, which appeared last week, and a reader responds to Robert Huebscher’s article, The Verdict on Unconstrained Bond Funds, which was published on January 14.

2014-01-28 2013 - A Strong Year for ETFs by Ryan Issakainen of First Trust Advisors

US-listed ETF1 net inflows totaled $185.5 billion in 2013, setting a new record. While the largest percentage of net inflows remained concentrated among a relatively small group of the 1521 US-listed ETFs, investors broadened their horizons more in 2013 than in previous years, as 312 ETFs had net inflows exceeding $100 million.

2014-01-28 Emerging Market Issues Weigh on U.S. Equities by Bob Doll of Nuveen Asset Management

U.S. equities finished lower last week as the S&P 500 declined 2.6% and suffered the largest weekly pullback since June of 2012. U.S. stocks are down approximately 3.0% both year to date and from all-time highs. In 2014, lack of direction in the market has been a focus, and the waning influence of macroeconomic news caused a notable shift late last week.

2014-01-28 Commodities In 2014: Supply Remains A Concern by Doug Ramsey of Leuthold Weeden Capital Management

If a reacceleration of EM demand for raw materials were imminent, one would think the MSCI BRIC Index would be the first to sniff it out. Yet that index remains among the poorest performing market composites in the world. Still, commodity demand will eventually right itself. Our worry is supply. Capital spending levels remain elevated, and are far above the levels seen just over a decade ago-on the eve of China’s great commercial and residential construction boom. Commodity producers didn’t anticipate that boom, which is precisely why it was so powerful.

2014-01-28 Financial Resolutions for a New Year by Gary Stroik of WBI Investments

It’s the start of a new year; the traditional time for self-examination, reflection, and a new list of resolutions intended to help us work on those aspects of our lives we feel could use some improvement.

2014-01-28 Bitcoin, QE, and Disintermediated Currency by Chris Richey of Neosho Capital

Though it may be financial sacrilege to link the emergence of Bitcoin, the $10 billion online currency, with the Federal Reserve’s 300x larger $3 trillion QE program, we believe the two have more in common than their 2008 birthdates. In fact, we think each represents a further extension in our human understanding, use, and possibly abuse of "currency", the lifeblood of our modern societies. Both Bitcoin and QE continue a process that began some 3000 years ago with the invention of coinage in the Greek Isles and, later, the invention of paper money in China.

2014-01-28 Expect Higher Volatility to Persist by Russ Koesterich of BlackRock Investment Management

Last week’s selloff can be attributed to EM turmoil, stretched valuations and mediocre earnings. Volatility is likely to move higher to levels closer to long-term averages. We suggest investors adopt overweight positions in European and Japanese stocks.

2014-01-28 Surviving Austerity by Andrew Schiff of Euro Pacific Capital

With the Standard & Poor’s 500 Index having posted a 30% gain, it’s easy to assume that U.S. stocks easily led the world in 2013. (There is more on what is behind this rally in the latest version of the Euro Pacific Capital Newsletter). But as it turns out, the stimulus-loving U.S. markets had plenty of company. Surprisingly, this includes countries supposedly saddled by the scourge of austerity.

2014-01-28 An Active Management Turning Point? by Chris Maxey, Ryan Davis of Fortigent

Active managers faced a difficult road in recent years, leading to many questions about the efficacy of active versus passive investment management. There are signs that the tide is once again changing in favor of active managers and the road ahead could offer happier times.

2014-01-28 The TTIP and the TPP by Bill O'Grady of Confluence Investment Management

The Transatlantic Trade and Investment Partnership (TTIP) is a trade and investment treaty being negotiated between the European Union (EU) and the U.S. The Trans-Pacific Partnership (TPP) is a similar pact between the U.S. and various Pacific Rim nations. We will examine overall details of each, focusing on how they’re different from traditional trade agreements. From there, we will present an analysis of the controversy surrounding the proposals, followed by a look at the geopolitical aims and likelihood that these treaties will be enacted. We conclude with potential market ramificatio

2014-01-28 Winter Quarterly Commentary by John Prichard of Knightsbridge Asset Management

John Kenneth Galbraith was a force in the fields of politics and economics. He wrote into his 90s, with many of his 48 books covering economic history, a subject we find to be the oft forgotten friend of investors. His work made it clear that economics is not a hard science which can be reduced to simple trustworthy mathematical equations. Galbraith constantly challenged the "conventional wisdom", and in fact pioneered the term. Galbraith came to dismiss the then, and still now, common notion that individuals and markets always act rationally...

2014-01-28 Demystifying Gold Prices by Nicholas Johnson of PIMCO

What is it about gold prices? Many people seem to believe they are impossible to predict, or even understand. At her Senate confirmation hearing in November, Janet Yellen said, "I don’t think anybody has a very good model of what makes gold prices go up or down." Ben Bernanke also said last year that "nobody really understands gold prices, and I don’t pretend to understand them either." While many factors influence the price of gold, PIMCO believes there is one that can explain the majority of changes in gold prices over the past several years: changes in real yields.

2014-01-28 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

My caution last week unfolded into a market sell off related to both disappointing earnings and concern over emerging markets affecting the foreign exchange markets.

2014-01-27 Closed End Fund Review - Fourth Quarter 2013 by Jeff Margolin of First Trust Advisors

2013 was a mixed year for the closed-end fund (CEF) structure. While the Morningstar universe of 176 equity CEFs were up on average 12.13% on a share price total return basis and clearly benefited from the global rise in equity prices, the Morningstar universe of 387 fixed-income CEFs was lower by an average of 8.56% on a share price total return basis.

2014-01-27 Broadleaf's 2014 Investment Playbook by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

Most sell side firms publish their outlook for the economy and stock market at the end of December and in early January. As a buy side firm, we really aren’t under any expectation to share our outlook for the coming year and, as funny as it might sound, some of our clients don’t even care to know what we think, only that we handle what they hired us to do, which is to outperform the market indices over a full market cycle and help them attain their financial goals over time.

2014-01-27 Increasing Concerns and Systemic Instability by John Hussman of Hussman Funds

The potential collapse of a now-complete log-periodic bubble is best considered something of a physics experiment, and it’s not what drives our investment stance. Still, the backdrop of steep overvaluation, extreme bullish sentiment, record margin debt, and international dislocations could hardly provide a more fitting context for a disruptive completion to the present market cycle.

2014-01-27 Hasenstab: Standing One's Ground by Michael Hasenstab of Franklin Templeton

When the masses are against you, it’s hard to stand your ground. Going against the crowd is familiar turf for Michael Hasenstab, who manages Templeton Global Bond Fund and co-manages Templeton Global Balanced Fund, and certainly knows the virtue of patience. He has staunchly defended his investment theses over the years, tuning out the naysayers and market noise time and again.

2014-01-27 What Does It Take to Be in the Top 1 Percent? Not As Much As You Think by Frank Holmes of U.S. Global Investors

When you think of the top 1 percent of all income earners in American households, how much do you think this group rakes in? Millions? Tens of millions? What about the top 10 percent or even top 20 percent?

2014-01-27 Market Outlook by Scotty George of Alexander Capital

Despite projections that interest rates might enter a secular upswing if the economy continues to improve, the inescapable fact is that bonds, and other fixed-income securities, are not the place for investors to generate yield, stocks are. The way to improve upon dwindling dividend and interest investment objectives is to build a portfolio of high yield equities, and to protect against downside market volatility with select stop-loss support.

2014-01-27 America's False Dawn by Stephen Roach of Project Syndicate

Financial markets and the so-called Davos consensus are in broad agreement that something close to a classic cyclical revival in the US economy may finally be at hand. But, while the celebration may seem warranted at first glance, the champagne should be kept on ice.

2014-01-27 Rummaging for Yield - The Case of the Insurance Investor by Eugene Dimitriou of PIMCO

Since the height of the global financial crisis in 2008, insurance companies have faced three key challenges: First, insurance companies urgently needed to address new critical risk management issues as banking sector and peripheral sovereign credit risks significantly increased in Europe. Second, the prospects of longer-term low yields forced insurers to identify alternative sources of meaningful yield. And third, insurance companies needed to prepare for pan-European insurance regulation Solvency II.

2014-01-27 Commodities: Is the Bear Market Near Its End? by Scott Wolle of Invesco Blog

On the surface, 2014 looks to be a tough year for commodities, as multi-year projects increase the flow of supplies to market even as demand has turned tepid, especially in emerging markets. However, a deeper look at the history of this asset class suggests that the outlook for commodities might turn around sooner than many expect.

2014-01-25 Why the Recent Lift in Junior Miners Will Likely Continue by Frank Holmes of U.S. Global Investors

Junior venture companies in Canada are finally seeing a significant lift. In early January, the S&P/TSX Venture Composite Index rose above the 200-day moving average for the first time in three years. The index is also very close to experiencing a golden cross, which is when the shorter-term 50-day moving average crosses above the 200-day moving average. Historically, traders see this cross as extremely bullish.

2014-01-25 A Grim Intermediate Outlook for High-Quality Bond Returns by Robert Isbitts of Sungarden Investment Research

Rates have been steadily falling since the 1980s. A simple "reversion to the mean" in which rates rise toward their long-term average (the average 10 year U.S. Treasury rate since 1926 according to data sourced from the St. Louis Federal Reserve’s website) would mean that rates would rise to about 5%. That’s almost a 2% increase from where we are right now. We suspect that would be more than enough to spur a dramatic change in investors’ attitudes toward bond investing, and to increase interest in viable alternative strategies for retirement income.

2014-01-25 Five Things To Ponder: Valuations, Triggers & Inequality by Lance Roberts of Streettalk Live

I was thinking about valuations, profits and what could cause a real correction in the markets. That is the premise behind today’s "Things To Ponder" for your weekend homework.

2014-01-25 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

So while the Fed was the first to implement nontraditional monetary strategies, the BoE may be the first to unwind them. And it may be the first to test the power of macroprudential policy. The results might make for an interesting export back across the Atlantic.

2014-01-25 Investing by Duration by Heather Rupp of AdvisorShares

Lower duration bonds would not eliminate the interest rate impact, just lessen it. We see this as a good strategy broadly speaking if you are talking the high yield asset class versus the investment grade asset class, with the high yield market naturally having a much lower duration. However, we believe this strategy is lacking when it is used to parse out the high yield space itself, investing in only the lower duration names within the high yield category.

2014-01-25 At Davos, Inequality and Africa in Focus by Scott Minerd of Guggenheim Partners

The focus at Davos has shifted to two new topics: growing income inequality as a risk to economic growth and social stability and the emergence of Africa as an economic force. Neither of these is a big surprise as neither is new. But the fact that these are the primary focus this year tells us that these topics will likely become more prominent in 2014.

2014-01-25 Wealth Services at Banks Come Under Central Bank's Scanner by Rajat Dhar of Cogent Advisory

RBI, the central bank of India, made critical observations of way in which wealth services were being practised at banks. Also, the clear note was made with respect to the rising cases of misselling at banks. This market commentary covers the draft guidelines issued by RBi and tries to uncover the reason for the same and the way forward for the clients. This has been the first time ever that separate guidelines have come for banks and independent financial advisors or advisory firms in India; and this article covers the wealth services being offered by banks in India.

2014-01-25 Forecast 2014: The CAPEs of Hope by John Mauldin of Millennium Wave Advisors

As we will see in the pages ahead, buy-and-hold investors are clearly sailing in dangerous waters, where the strong, cold current of deleveraging converges with the warm, fast rush of quantitative easing. Not only does this clash of forces create the potential for epic storms and fateful accidents, it dramatically increases the chances for sudden loss as rogue waves crash unwary investment vehicles against the underwater demographic reef!

2014-01-24 Fundamentals Suggest Yen Could Strengthen in 2014 by Team of GaveKal Capital

We’ve noted on several occasions over the past few weeks the fact that trader positioning and sentiment towards the yen is pushing the most extreme negative levels in a decade.

2014-01-24 How the Safe Havens Stack Up by Russ Koesterich of iShares Blog

For investors who are worried about a correction, Russ provides a look at which traditional safe-haven assets tend to perform best during times of uncertainty.

2014-01-24 Stocks for 2014: Growth and Income For Total Return Part 3 by Chuck Carnevale of F.A.S.T. Graphs

When investing in common stocks, there is no one strategy that fits all investors. Some investors are focused on investing for income, some for capital appreciation and others for various combinations of both. Additionally, there is the issue of risk tolerance. Some investors are willing and capable of assuming greater risk if they believe it will lead to greater returns, while others are more risk adverse. These are just but a few of the many variations that apply to the individual investor’s own unique goals and characteristics.

2014-01-24 India's Rising Aspirations by Sudarshan Murthy of Matthews Asia

India’s newly formed Aam Aadmi Party (AAP) had a spectacular debut in recent state elections. Its leader became the chief minister of the state of Delhi. The election results seemed to indicate a fundamental change-voters now perceive politicians not as "rulers," but as professionals with a limited mandate to serve. The AAP ran on an anti-corruption agenda, and Delhi’s new chief minister seems to "walk the walk." He uses public transport to commute to work, a refreshing change from the typical politician in India who is usually seen riding in a convoy of vehicles.

2014-01-24 United Arab Emirates: An Emerging Market Melting Pot by Mark Mobius of Franklin Templeton

The investable Middle East/North Africa region known as "MENA" encompasses 11 diverse countries, extending from Oman to Morocco, and also includes Bahrain, Egypt, Jordan, Kuwait, Lebanon, Qatar, Saudi Arabia, Tunisia and the United Arab Emirates (UAE). I recently had the pleasure of returning to Dubai, the largest city in the UAE, a truly striking and cosmopolitan city with a diverse population from around the world.

2014-01-24 The Policy View From Washington by Scott Brown of Raymond James

Lawmakers put the finishing touches on the budget bill, which will remove most of the fiscal policy uncertainty for the next two years. That’s helpful for the economy and the financial markets, although the debt ceiling remains a possible trouble spot. Federal Reserve officials seem intent on continuing the tapering of asset purchases, but economic and financial market developments will dictate the pace.

2014-01-24 The Week by Jeffrey Saut of Raymond James

Arguably, the best magazine of recent times has been The Week, a publication that embraces magazine journalism in its most functional style. The Week is written in one-hundred synopses culled, for the most part, from other news organizations from around the world on all topics. If I had but one publication to read in order to stay informed on just about everything, it would be The Week. In this morning’s missive, however, I am referring to "the week" I experienced last week in South Florida.

2014-01-24 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.9, down from last week’s 134.3. The WLI annualized growth indicator (WLIg) to one decimal place rose to 4.2, up from last week’s 3.5.

2014-01-23 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The year 2014 is off to an uncertain start. Earnings reports are not doing that well (see Best Buy, Citigroup & all retailers etc.), and bond prices have rallied so far in 2014 despite the fears of tapering which were expressed as last year ended.

2014-01-23 EPV: Establishing Predictive Value (i.e., Demand Characteristics) by David Kleinberg of Universal Orbit

EPV: Establishing Predictive Value (i.e., Demand Characteristics) is designed as a complement to quantitative portfolio strategies and fundamental research. Continuing the thread from EPV:RO, tested is the premise of structural bias in performance benchmarks as determined by third party data vendors with implied effects on peer group analytics and valuation.

2014-01-23 What's Your 2014 Market View? by Robert Horrocks of Matthews Asia

U.S. monetary policy seems likely to continue occupying center stage as people fret about interest rates. Last year was a somewhat instructive year for monetary policy theory in that it seemed to show that policies can be effective even when interest rates have no further room to be lowered. Can the nominal GDP in the U.S. grow at faster rates in 2014, and what would that mean for Asia? This month Matthews Asia’s Chief Investment Officer, Robert Horrocks, offers his insights into how reforms planned for China could be a key factor to change and what could lie ahead for the region overall

2014-01-23 Economic Growth is Likely to Improve in 2014 by Derek Hamilton of Ivy Investment Management Company

We believe a global economic upturn is likely in 2014, although the overall growth rate will remain sluggish. We think developed countries will show the largest improvement, which in turn will help support growth rates in emerging markets.

2014-01-23 Dreman and Lorde: We Will Never Be Royals by Bill Smead of Smead Capital Management

In his 1980 book, Contrarian Investment Strategy, David Dreman opens with an analogy comparing the stock market to a casino with two distinct sides. The "red" room has lots of action and an occasional player striking it rich quickly. In effect, you become royal. Unfortunately, most of the players leave without the money with which they entered, because the house has the odds stacked heavily in its favor.

2014-01-23 Can Equities Continue Their Rise? Equity Investment Outlook: January 2014 by Matt Berler, John Osterweis of Osterweis Capital Management

2013 marked the fifth year of recovery following the near-death experience of the 2008 global financial system meltdown. From a low of 677 in 2009, the S&P 500 Index (S&P 500) finished 2013 at 1,848, delivering a stunning 203% total return from the low. Over the same period, the total return for the Dow Jones Industrial Average was 188%. The tech-heavy and arguably more speculative NASDAQ logged a 249% total return. These very large equity returns reflect both a strong recovery in corporate profits and a dramatic clean-up of our financial system.

2014-01-23 Tacking Through the Banking Headwinds by John Loesch of Diamond Hill Investments

Pick up nearly any financial publication these days and it is bound to have one, if not several, stories about the headwinds facing the banking industry.

2014-01-23 Be Selective by Jim Goff, Adam Schor of Janus Capital Group

After broad rally, focus shifts to individual company growth prospects.

2014-01-23 A Problem with the Numbers - Unemployment and the Fed's Timetable by Anthony Wile of J.P. Morgan Funds

Given a potentially inaccurate assessment of labor force participation, the Federal Reserve may be missing the mark on their current economic projections, which increases the potential for policy error going forward. Assuming the natural rate of unemployment is at the low end of Fed projections, the Fed can lower forward guidance thresholds without spurring an acceleration in inflation.

2014-01-23 Ordem e Progresso by Michael Gomez of PIMCO

Amid stagnant growth and high inflation in 2013, Brazil’s equity market was one of the worst performers, the real was a chronic underperformer and the corporate sector struggled. Brazil needs to anchor economic policy around a stringent and credible primary surplus target rather than run the current mix of loose fiscal policy, subsidized public credit and ever tighter monetary policy. Valuations are attractive, but unless an effective policy mix is restored, the outlook for order in Brazil’s financial markets is less certain.

2014-01-23 Market Update with Maury Fertig of Relative Value Partners by (Article)

Fixed income CEFs may be attractive in 2014, especially those with intermediate duration holdings, says Maury Fertig of Relative Value Partners.

2014-01-22 In the Spirit of Martin Luther King: Reflections on Income Inequality by Doug Short of Advisor Perspectives (

Last night my wife and I were looking for something to stream on Netflix, and I remembered that The Butler was available on Red Box (which has a vending machine about a 90-second walk from our residence).

2014-01-22 AdvisorShares Active ETF Market Share Update - Week Ending 1/10/14 by AdvisorShares Research of AdvisorShares

The active ETF market continued its upward trend with combined net assets exceeding $15 billion. The total number of active ETFs rose to 75 with the launch of the AdvisorShares Sage Core Reserves ETF last week. The High Yield category had the highest weekly increase in net assets - approximately $68 million - with AdvisorShares Peritus High Yield ETF leading the way. Net assets in the Global Bond category gained over $35 million with RiverFront Strategic Income Fund and PIMCO Total Return ETF as the largest contributors.

2014-01-22 Crosscurrents Buffet Markets by Bob Doll of Nuveen Asset Management

U.S. equity performance was mixed last week, as the S&P 500 recovered from Monday’s sell-off that was the largest one-day decline since early November. Economic data was mostly in line or slightly better than expected, following the disappointing December unemployment report. Corporate earnings drove much of the price action. Bank earnings were fairly well received but did not always translate to good performance since the stocks ran up earlier. Negative guidance trends remain an overhang, particularly for retail.

2014-01-22 Market Outlook by Scotty George of Alexander Capital

One of the most common themes we hear from political pundits and market observers these days is about either the demise or rise of the middle class, an amorphous, non-homogeneous group of people not quite rich but also not too poor. This class is often cited as the reason either to be for or against legislation, fiscal policy, social norms, or the price of a gallon of gasoline at the pump!

2014-01-22 Digger's Dream by Michael Kayes of Willingdon Wealth Management

Does America still have the audacity to dream big? Why is this so important?

2014-01-22 Commodities Remain a Source of Frustration by Chris Maxey, Ryan Davis of Fortigent

The environment following the global financial crisis has been a challenging one for asset allocators, as long held relationships shifted and traditional idioms were turned on their head. As we detailed last week in "The Diversification Obituary," investors have seen little work in their portfolios other than US stocks, while supposed diversifiers have offered little more than muted beta and unusually high correlations.

2014-01-22 4 Simple Truths About US Consumers by Kristina Hooper of Allianz Global Investors

The December employment report called into question the momentum of the jobs recovery, which has clear implications for consumers. While further clarity on jobs is needed, here are some key observations that help frame the consumer-sentiment discussion.

2014-01-22 Market Share: The Next Secular Investment Theme by Richard Bernstein of Richard Bernstein Advisors

It is well known that corporate profit margins are at record highs. US margings, developed market margings, and even emerging market margins are generally either at or close to record highs. A myopic focus on profit margins may miss an important investment consideration. Whereas most investors remain fearful of margin compression, we prefer to search for an investment theme that could emerge if margins do indeed compress. Accordingly, our investment focus has shifted toward themes based on companies who might gain market share.

2014-01-22 What to Expect in 2014 (And Beyond) by Jack Rivkin of Altegris

Each year, I take Alfred Lord Tennyson’s advice and "ring out the old, ring in the new" by creating a list of expectations about the markets. My list involves events that the average investor thinks have only a one-in-three-chance of happening, but which I believe have more than a 50% chance of occurring. If this approach sounds familiar, it should. It’s modeled after Byron Wien’s annual list of "surprises." Like his, my expectations are designed to provoke thought and discussion.

2014-01-22 The Virtualization of Everything by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at the motivations of participants in capital markets, and how with the advent of synthetic investments and complicated derivatives products, he is concerned that "the stock market has lost its close link to the "real" economy and has become more of a gigantic casino."

2014-01-21 Chuck Royce on 4Q13: Abnormally High Returns Reinforce Our Absolute Bias by Sponsored Content from The Royce Funds (Article)

Chuck Royce offers his thoughts on a market that’s behaved far from normally. At Royce, we are sticking with what we believe works best-finding quality small-caps at what we think are attractively inexpensive valuations that have the ability to generate strong long-term returns.

2014-01-21 Gundlach’s Forecast for 2014 by Robert Huebscher (Article)

In his 30-year career as a fixed-income manager, Jeffrey Gundlach has never seen a forecast as solidified across every asset class as is the consensus for 2014. Investors expect stocks to outperform bonds, gold to be a "loser," commodity prices to head lower, domestic markets to outperform non-U.S. markets and the dollar to be strong, according to Gundlach. But many of those views are wrong, he believes.

2014-01-21 Albert Edwards and Dylan Grice: Bearish Forecasts from Two Top Strategists by Robert Huebscher (Article)

It’s been nearly 18 years since Albert Edwards forecast an "ice age" in which bonds would outperform equities. He’s been right until just recently, when cumulative returns on the two classes converged. But Edwards insists that his thesis is still accurate - deflation will be the force to propel bonds over stocks, he says. Dylan Grice, meanwhile, warns that the markets operate on an unstable equilibrium that could devolve into apocalyptic conditions.

2014-01-21 Are Small Businesses the Engine of Job Growth? by Marianne Brunet (Article)

What do George W. Bush, Bill Clinton, Ronald Reagan and Barack Obama have in common (besides a conviction that the camera loves them)? They have all promoted the notion that small businesses are the engine of America’s economic growth. But new research shows that the role of small businesses has been overstated.

2014-01-21 New Research: The Unexpected Variable that Leads to Referrals by Dan Richards (Article)

Few topics get as much attention as the best way to increase referrals. Some of ideas I’ve heard including coaching clients to better understand and communicate your value, becoming the safe choice in a targeted niche and "create raving fans" by delivering an outstanding client experience. Depending on what you read and who you believe, each of these is the key to increased referrals. None of these are what truly drives referrals.

2014-01-21 Venerated Voices by Various (Article)

Advisor Perspectives announced its Venerated Voices awards for articles published in 2013. Rankings were issued in three categories: The Top 25 Venerated Voices by Firm, The Top 25 Venerated Voices by Author and The Top 10 Venerated Voices by Commentary.

2014-01-21 Young Talent That Comes -- And Goes by Beverly Flaxington (Article)

We have struggled to find young talent to hire and groom for our firm. It seems everyone under 30 works somewhere for three years and then moves on to the next thing. One guy we hired had four serious jobs on his resume and hadn’t turned 30 yet. If we can’t get someone young to stay with us longer term, I am not going to introduce them to all of my clients.

2014-01-21 Will 2014 Be the Year Canned Content Dies? by Joe Anthony (Article)

Adoption of social media will reach a tipping point in 2014, with the overwhelming majority of your clients and prospects ignoring the newsletters, direct-mail pieces, conference calls and seminars that worked in the past.

2014-01-21 Letter to the Editor by Various (Article)

A reader responds to Howard Mark’s commentary, Getting Lucky, which was published on January 16.

2014-01-21 Upstream Companies Set to Benefit if US Allows Oil Exports by Juan Hartsfield of Invesco Blog

US crude oil production is booming, and controversy over possibly exporting some of this abundance has quickly heated up in early 2014. Most recently, Alaska’s Lisa Murkowski, the top-ranking Republican on the Senate Energy Committee, spoke out on Jan. 7 in favor of easing US restrictions on oil exports, which were largely enacted in the 1970s when domestic energy was scarce and lines at the gasoline pump were long. The topic of crude exports is polarizing politically and, given the recent lack of collaboration in Washington, it’s poised to be a recurring headline for some time.

2014-01-21 Superstition Ain't the Way by John Hussman of Hussman Funds

When you believe in things that you don’t understand, then you suffer.

2014-01-21 Take Me to Your Leader by Kerry Pechter of Retirement Income Journal

The retirement ind