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

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2014-11-22 Solar Energy Powers Record Silver Demand by Frank Holmes of U.S. Global Investors

Silver demand in the fabrication of solar panels is set to outpace photography, if it hasn’t already done so.

2014-11-22 Rolling Along…For Now by Liz Ann Sonders, Brad Sorensen & Jeffrey Kleintop of Charles Schwab

We remain optimistic that US stocks will likely continue to move higher, but warn against getting overly complacent as a pullback is always a possibility. The US economy is improving, the Fed is erring on the side of dovishness, and both corporate and consumer confidence are growing. The fall in oil should be a net positive for the US and global economy, and we are in a traditionally seasonally positive time of the year for equities. Global economies remain weak, but we are seeing a glimmer of hope from stepped up responses from foreign central banks.

2014-11-22 A Tale of Two Worlds by Doug MacKay and Bill Hoover of Broadleaf Partners

We are in a Tale of Two Worlds. One world’s success is highly dependent on the outlook for oil and other commodities, while the other’s is far less exposed and perhaps even a beneficiary of a more bearish climate. Commodity dependent countries like Russia, Saudi Arabia, China and Australia are hurt by falling oil prices, weak global demand and new sources of supply, while the United States, with a far larger consumer driven economy, experiences an overall net benefit, as perhaps seen in earnings from the likes of Wal-Mart, Best Buy, and Lowe’s in recent days.

2014-11-22 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Mixed fortunes drive the outlook for holiday spending; The Fed and Bank of England are working harder to achieve consensus; The dollar has a long way to strengthen before it impairs U.S. growth

2014-11-22 ECRI Recession Watch: Weekly Update by Doug Short of Doug Short

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.2, up from the previous week's 132.0. The WLI annualized growth indicator (WLIg) is at -2.4, down from -2.9 the previous week. ECRI's latest public statements have focused on Japan. The website now features a November 17th response to the announcement of Japan's Fourth Recession Since 2008.

2014-11-21 Emerging Markets Opportunity Still Emerging by Burt White of LPL Financial

We believe emerging markets (EM) fundamental conditions are set for improvement in 2015, based on our outlooks for economic growth, earnings, and policy. Valuations are compelling and EM may be situated to recapture some of their relative losses from a technical perspective, particularly in Asian markets. However, somewhat mixed fundamental and technical pictures suggest a better opportunity may be forthcoming

2014-11-21 3 Things Worth Thinking About, Including the Message from Commodities by Lance Roberts of Streettalk Live

Following the October swoon, stocks have vaulted to all-time highs. As I discussed previously in "Sentiment Is Off The Charts Bullish," there have only been few occasions where investors have felt so "giddy" about the financial markets. Such periods of exuberance have never ended well for investors as they were deluded by near-term "greed" which blinded them to the building risks.

2014-11-21 If German Yields Break To New Lows, European Cyclicals Will Likely Follow by Team of GaveKal Capital

European cyclicals continue to be the weakest segment of developed global equity markets, and there doesn't appear to be much sign of that changing. We refer to the extremely strong relationship between German 10 year bond yields and the relative performance of European cyclical sectors.

2014-11-21 The Right Fit: Global Bonds and DC Plans by Alison Martier of AllianceBernstein

At a time when US defined contribution plans are seeking to control risk and enhance returns, hedged global bonds can improve outcomes for participants and sponsors. But how do plans incorporate global bonds in core menus and target-date funds?

2014-11-21 The Implications of Easing by Mark Mobius, Michael Hasenstab of Franklin Templeton Investments

Just as the US Federal Reserve (Fed) announced the conclusion of its long-running quantitative easing (QE) program, the Bank of Japan surprised markets by announcing the expansion of its own easing regime. Mark Mobius, Executive Chairman, Templeton Emerging Markets Group, and Michael Hasenstab, Chief Investment Officer, Global Bonds, Franklin Templeton Fixed Income Group®, weigh in on the implications of these central bank actions, as well as current European Central Bank (ECB) policy, and what they could mean for investors on both the equity and fixed income side.

2014-11-21 Is Your Portfolio Truly Diversified? by Eric Stein of Eaton Vance

In this Insight, Eric Stein, co-director of Eaton Vance Global Income Group, discusses the potential benefits of absolute return strategies, what they invest in and the role they can play in investor portfolios.

2014-11-21 Asia's Deepening Capital Markets by Robert Horrocks of Matthews Asia

The drivers of economic growth, the region's small- and medium-sized enterprises, are finally gaining access to capital through alternative funding sources outside of just banks. Retail investors are accessing increasingly diverse products in which to store their savings and build wealth. Institutions are demanding long-dated assets to match their liabilities? Are we finally seeing more stable local demand in Asia's local capital markets?

2014-11-21 Still A Winning Hand by Scott Mather, Mark Kiesel, Mihir Worah of PIMCO

The U.S. is finally enjoying a self-sustaining economic recovery, but slow global growth remains a concern and financial markets are bouncing up and down by the day. So what exactly does this U.S. recovery mean for investors?

2014-11-21 Falling Gas Prices Fuel Holiday Cheer by Scott Minerd of Guggenheim Partners

Rising equities and falling prices at the pump will bring holiday cheer, but be aware of potential headwinds as we head into 2015.

2014-11-20 The Abenomics Death Spiral by Peter Schiff of Euro Pacific Capital

As Japanese Prime Minster Shinzo Abe has turned his country into a petri dish of Keynesian ideas, the trajectory of Japan’s economy has much to teach us about the wisdom of those policies. And although the warning sirens are blasting at the highest volumes imaginable, few economists can hear the alarm.

2014-11-20 Flows Potential: Fund Managers Remain Under-Weight Japan by Jeremy Schwartz of WisdomTree

The recent bout of aggressive monetary policy easing by the Bank of Japan (BOJ), combined with the direct purchases of equities by the Japanese Government Pension Investment Fund (GPIF), has brought on a new period of positive sentiment toward Japanese equities.

2014-11-19 Global Economy Worsening, But America is on Top by Gary Halbert of Halbert Wealth Management

With President Obama making controversial moves on several fronts this month, it is tempting to go all politics this week. The president is threatening to grant defacto amnesty to five or six million illegal aliens, via Executive Order, even though he knows this is unpopular among the American people. It’s as if he’s in full denial regarding the landslide midterm election results.

2014-11-19 Indonesian Optimism by Tek Khoan Ong of Franklin Templeton Investments

Southeast Asia represents one of the fastest-growing regions in the world today, and is one that we are excited about as investors. The Templeton Emerging Markets Group held our semiannual analyst conference in Jakarta in September, and one of the key reasons for choosing that location was to observe and discuss the changes and challenges on the ground with the new regime of President Joko Widodo. I’ve invited my colleague Tek Khoan Ong to pen some thoughts on the outlook and investment opportunities in Indonesia today.

2014-11-19 Credit Markets Signaling Near-Term Caution by Chris Puplava of PFS Group

Since the S&P 500 bottomed at 1820 on October 15th, it is up roughly 12.5% and has seen only 6 down days in the last month. According to trading desks, steady growth in the U.S. and China, better-than-feared European economic data, and accommodative global central banks are the main causes for driving the market higher. Other bullish supports are an increase in foreign buying of U.S. equities and corporate buybacks.

2014-11-19 Examining the Divergence between Equities and Credit by Bradley Krom of WisdomTree

Over the last year, U.S. equities rallied, and credit spread generally tightened. However, in recent months, this winning formula has started to diverge. Concerns about global growth, potential changes in monetary policy and uncertainty from geopolitical risk weighed on investor sentiment.

2014-11-19 Investment Implications for UK DC Schemes in Light of Tax and Regulatory Changes by William Allport of PIMCO

With greater flexibility and choices available to DC savers in the latter stages of their career, we believe DC schemes need to reconsider their traditional pre-retirement approach to providing low-risk, income-orientated and pre-retirement investment portfolios. The primary immediate challenge for UK DC schemes is navigating the need for capital stability versus a portfolio that can generate a sustainable income stream for DC savers in retirement.

2014-11-18 Has Europe’s Recovery Story Turned Back a Page? by Heather Arnold of Franklin Templeton Investments

The European economy at large had been moving forward in the wake of the 2007­–2009 global financial crisis and subsequent sovereign debt crisis, spurred by European Central Bank (ECB) President Mario Draghi’s pledge to do “whatever it takes” to save the euro in 2012 and the implementation of austerity measures in the eurozone periphery. In recent months, the recovery seemed to have stalled, with some countries, including the eurozone’s engine of growth- Germany - flirting with recession.

2014-11-18 Tinkering with the Core Bond Recipe by Alison Martier of AllianceBernstein

This is the time of year when, in almost every American household, the tinkerer in the family eyes the recipe box. Certain venerable traditions will make it to the Thanksgiving table intact. A cousin or an in-law is sure to bring an entirely new dish. And some traditional plates could use some freshening up. That’s the case with core fixed income.

2014-11-18 Is This Purgatory, Or Is It Hell? by Ben Inker of GMO

GMO is often accused of being a “glass half empty” investor, and I admit that in a year that has seen the S&P 500 rise 8.3%, MSCI All-Country World rise 3.7%, and the Barclays U.S. Aggregate rise 4.1% through the third quarter, the words “Purgatory” and “Hell” are unlikely to come to mind to most investors when opening their brokerage statements. It has been a dull year, perhaps, but certainly not a hellish one. So what is bringing Danteesque visions of damnation into our slightly warped minds?

2014-11-18 Bubble Watch Update by Jeremy Grantham of GMO

As you may remember, the January Rule serves as a kind of barometer for the behavior of the market in the coming year. Historically, when January was down, the rest of the year had over twice the declines than one would expect randomly, far more mediocre months, and a very sub average return. But it is far from perfect and it had the unusual problem this year of bumping into the positive signal from the Presidential third year, which started for us on October 1.

2014-11-18 The Beginning of the End of the Fossil Fuel Revolution (From Golden Goose to Cooked Goose) by Jeremy Grantham of GMO

The quality of modern life owes almost everything to the existence of fossil fuels, a massive store of dense energy that for 200 years had become steadily cheaper as a fraction of income. Under that stimulus, the global economy grew ever larger, more complex, more inter-related and, I believe, more fragile. Then around the year 2000 the costs of finding oil start to rise at over 10% a year, and with the global economy growing at only 4% oil starts to fall behind in affordability.

2014-11-17 When Will Value Come Back Into Favor? by Will Nasgovitz, Ted Baszler, Dave Fondrie of Heartland Advisors

An investment style may be inherently biased toward one part of a market cycle. Understanding that fact can help investors stay the course when faced with superficially inferior results during an unfavorable portion of the cycle.

2014-11-17 U.S. Economy: The Disconnect between Reality and Perception by Russ Koesterich of BlackRock

American sentiment remains weak despite encouraging improvement in economic fundamentals. We think sluggish growth in wages plays a major part in keeping optimism at bay.

2014-11-17 Economic Data Continues to Impress, Driving Equities Higher by Robert Doll of Nuveen Asset Management

Once again, a combination of solid economic data, decent earnings results and receding fears of global deflation pushed stock prices higher. The S&P 500 Index rose for a fourth consecutive week, gaining 0.4%. The telecommunications and technology sectors showed particular strength while utilities and energy lagged.

2014-11-16 Weighing the Week Ahead: Time to Buy Commodities? by Jeff Miller of New Arc Investments

It may not be the exact bottom for energy stocks, but they are among the cheapest on a P/E basis. There is a lot of bad future news in current commodity prices, so the risk/reward balance has shifted. Many seem to start with the commodity prices and infer future economic weakness. This method is unreliable with a lot of false signals. I prefer to begin with economic data and then find the most attractive stocks. I provide more detail in Circular Reasoning about Commodities, including why I favor ESV and FCX.

2014-11-15 U.S. Economy: The Disconnect between Reality and Perception by Russ Koesterich of BlackRock

American sentiment remains weak despite encouraging improvement in economic fundamentals. We think sluggish growth in wages plays a major part in keeping optimism at bay.

2014-11-15 Explore and Discover the Winners When Gas Prices Fall by Frank Holmes of U.S. Global Investors

West Texas Intermediate (WTI) oil for December delivery is currently priced at $75 per barrel, Brent for January delivery at $78 per barrel. Many investors, publications and news sources focus only on the drawbacks to falling oil and gas prices-don't get me wrong, there are many-but today we're going to give the spotlight to the biggest winners and beneficiaries.

2014-11-15 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Falling oil prices produce gain... and pain; Brazil's post-election challenges; The Fed may seek to overshoot its inflation target

2014-11-14 High-Yield Bonds & Oil Prices by Team of LPL Financial

The decline in oil prices and its impact on the high-yield market has been cited as a concern for investors. This week we stay on the topic of high-yield bonds and take a closer look at the potential impact of oil prices on the high-yield bond market and whether recent concerns are justified.

2014-11-14 Contemplating Stocks without QE by Peter Schiff of Euro Pacific Capital

Some influences on the stock market are casual, subtle or open to interpretation, but the catalyst behind the current stock market rally really shouldn't be controversial. As far as stocks go, we have lived by QE. The only question now is, whether we will die without it.

2014-11-14 Global Investing: Are Foreign Stocks Attractive? by Mark Ungewitter of Charter Trust Company

One of today’s most glaring inter-market divergences is the relative performance of US versus non-US equities. For dollar-based investors, non-US stocks have underperformed US stocks by a whopping 40% over the past five years. But are foreign stocks attractive at current prices? And if so, how much of my portfolio should I allocate abroad?

2014-11-14 How the Long Bond Stole the Trophy by Gibson Smith of Janus Capital Group

The aggressive bet many investors made on long-end rates in 2014 was the equivalent of betting on a Hail Mary pass to win the game. It has been rewarding, but is it repeatable? Probably not. Janus Fixed Income CIO Gibson Smith reflects on why he believes consistency beats the long shot, in sports and in investing.

2014-11-14 Bad #Deflation by Keith McCullough of Hedgeye Risk Management

Obviously times, technologies, and mostly everything other than the Old Wall have changed. But the very basic difference between what I’ll call good vs. bad #deflation has not.

2014-11-13 The ETF Trader Interview Series: Ken Dolan, Jefferies & Company by David Abner of WisdomTree

In this edition, Dave Abner, Head of Capital Markets at WisdomTree, speaks with Ken Dolan, Senior Vice President on the ETF trading desk at Jefferies & Company, Inc. Ken joined the desk in 2011 after spending nine years at LaBranche & Co. as a Managing Director and Head of ETF Trading. In addition to his ETF trading experience, Ken has nine years of trading experience across equities, fixed income and emerging markets at Deutsche Bank, Credit Suisse and Lehman Brothers. He received a BS from Providence College and is a Chartered Financial Analyst.

2014-11-12 Oil Prices: Good News by the Barrel by Milton Ezrati of Lord Abbett

Ignore the pessimists. Declining petroleum prices likely will give an overall boost to the U.S. economy.

2014-11-12 Four Questions on Investors’ Minds Today by Chris Engelman of Cedar Hill Associates

From the strengthening U.S. dollar to Bill Gross’ departure from Pimco, a few common questions have been coming up in Cedar Hill’s meetings with clients during the past few months. In this article, Managing Director Chris Engelman shares the firm’s thoughts on these timely issues.

2014-11-12 When Oil Prices Dip, Unexpected Winners Emerge by Russ Koesterich of BlackRock

A stronger dollar is one of the reasons that oil prices are low, which serves many energy-importing economies in Asia while weighing on large oil-producing nations.

2014-11-12 Is Levering Bonds a Loser’s Game Today? by Michael DePalma, Arnab Nilim of AllianceBernstein

Multi-asset strategies like risk parity owe much of their popularity to their ability to navigate the global financial crisis. Lately, critics have cited levered bond returns as the driver—and as a looming headwind. We think they’re missing a key point.

2014-11-12 October’s Market Ups and Downs Put Into Perspective by Ed Perks, Don Taylor, Peter Langerman of Franklin Templeton Investments

Global equity markets went on a rollercoaster ride in October, although given the cauldron of global issues that were brewing for some time and the month’s history of big moves, it shouldn’t be all that shocking many investors got spooked. While much of the media focused on the short-term panic, long-term investors used such pullbacks to search for bargains.

2014-11-11 The Last Argument of Central Banks by John Mauldin of Mauldin Economics

In this week’s letter I have for you a brief essay on the topic of deflation. Depending on your view, you might find some of my thoughts controversial, but I will try to make my case clear, at least. Please note this is the 30,000-foot view and is nowhere close to definitive.

2014-11-11 Early Freeze Could Derail Economic Growth Forecasts by Lance Roberts of Streettalk Live

This past August I discussed the potential for the market to rise to 2100 along with "5-risks" to that forecast. One of those risks related to the "Polar Vortex" that shut down economic activity across much of the northern part of the economy.

2014-11-11 One year in: I’m doubling down on investment discipline by Jeff Hussey of Russell Investments

Since assuming the role of Global CIO here at Russell Investments one year ago, I have been met by one inescapable truth again and again: Discipline matters!

2014-11-11 Capital Raising in the MLP Sector Remains Active by David Chiaro of Eagle Global Advisors

We continue to see evidence that underpins our long term positive outlook on MLPs and midstream energy infrastructure companies. The need for new midstream infrastructure remains significant and announcements of large projects continue to be made. New export markets for U.S. hydrocarbons continue to develop and offer new profit opportunities for MLPs.

2014-11-11 The Continuation of QE by Bob Andres of Andres Capital Management

October 30, 2014 ended the third and final round of Quantitative Easing. Right? The announcement was couched in a hyperlinked document at the end of the FOMC statement. Those who made it through the statement and still felt like reading, realized that the end of QE was not as finalized as one may have expected.

2014-11-11 The Return of the Dollar by Mohamed El-Erian of Project Syndicate

The recent dollar rally, the result of genuine economic progress and divergent policy developments, could contribute to the “rebalancing” that has long eluded the global economy. But that outcome is far from guaranteed.

2014-11-11 Factors: An Essential Part of Any Nutritious Portfolio by Adam Butler, Mike Philbrick, Rodrigo Gordillo of Dundee Goodman Private Wealth

We recently posted a piece on factor investing so we were thrilled to have an opportunity to see Dr. Andrew Ang and Don Raymond discuss factor investing at a seminar in Toronto last week.

2014-11-11 The Opportunity in Japan is Not Over by Christopher Gannatti, of WisdomTree

We believe that the ultimate success of Abenomics will be judged over a period of multiple years, and while certain actions—especially those from the Bank of Japan—have been significant, others, like structural “third arrow” reforms, will take time.

2014-11-11 The 5 E’s for Equity Investors by Kristina Hooper of Allianz Global Investors

As we move closer to the end of 2014, there are some key considerations that will wield significant influence over the stock market, writes Kristina Hooper.

2014-11-10 Dollar, China and Brazil In The Short Or Medium Term by Sebastiao Buck Tocalino of SBTCapital Clube de Investimento

The Dollar Index is approaching two important and converging barriers for its recent uptrend. The Shanghai Composite Index is also bordering the top of its channel. Brazil lost a good chance at recent elections to recycle its unsuccessful policies and government. But technical analysis may show some relief for optimism in Brazilian stocks and the EWZ ETF.

2014-11-10 Ebola and Inequality by Joseph Stiglitz of Project Syndicate

The Ebola crisis reminds us, once again, of the downside of globalization. And, though governments may not do a perfect job in addressing such crises, one of the reasons that they have not done as well as we would hope is that we have underfunded the relevant agencies at the national and global level.

2014-11-10 Three Reasons Why Commodity-Related Debt May Hold Value Under Pressure by Kathleen Gaffney of Eaton Vance

In this timely Insight, Kathleen Gaffney discusses how a flexible multisector bond strategy can be a great way to gain exposure to, and take advantage of, potential value opportunities in hard-hit commodity related debt.

2014-11-10 Emerging Markets Trends: What’s Negative for One Market May Boost Another by Steve Cao of Invesco Blog

Economic conditions have continued to deteriorate in emerging markets, and corporate earnings forecasts have fallen. Overall, emerging markets were down 4.3% in the third quarter, underperforming the developed world. In the midst of this negative news, however, we’re seeing a few bright spots start to emerge, and we’ve been able to add holdings that, in our view, became mispriced during market volatility.

2014-11-08 And the Winner is…Investors? by Liz Ann Sonders, Brad Sorensen & Jeffrey Kleintop of Charles Schwab

The pullback seen in October is now just a memory and stock indexes are again pushing into record territory. Seasonality and the election cycle are lining up with still solid earnings growth and an expanding economy to help support further gains. Complacency is a risk but we continue to believe the trend in US stocks is higher.

2014-11-07 Knowing What You Can't Know, Knowing What You Don't Know, and Staying Disciplined in Your Investment by Team of Litman Gregory

In our investment analysis and decision-making, we try to focus on what is knowable with a reasonable degree of certainty or within a reasonable range of outcomes. We also recognize the importance of staying within our circle of competency, which means not investing in things we don't fully understand. And while our investment discipline requires us to adapt and change our views if the facts and circumstances change, it also protects us against getting swept up in the short-term noise and emotions of the markets.

2014-11-07 Japanese Equities Look Better and Better by Nick Niziolek of Calamos Investments

Based on an intersection of bottom-up and top-down criteria, we've become increasingly constructive on Japan's equity market over recent months. Last week, the BOJ made a surprise announcement that it would increase its monetary target by ¥80 trillion and also purchase stock assets. Also significant was the BOJ's statement that it would consider buying exchange traded funds that track the Nikkei 400 Index, which should promote higher dividends, buybacks, and/or capex spending-all positive for equity markets and potentially for Japan's economy as well.

2014-11-07 It's The Economy, and They're Not Stupid by Peter Schiff of Euro Pacific Capital

The sharp rebuke to the Obama administration delivered by the mid-term elections should not be construed as an endorsement of the GOP, which remains as unpopular as ever. Rather, as has been the case in the last few election cycles, voter revolts have hinged on continued dissatisfaction with the strength of the economy and the diminishing financial prospects of ordinary citizens.

2014-11-07 Central Planners Are In A State of Panic by Chris Martenson, PeakProsperity.com of PeakProsperity.com

By the time a central bank is behaving as recklessly as Japan, it's time to edge towards the exit, because the chance of a flash fire in the building has grown uncomfortably high. That is, instead of providing comfort, these most recent moves should invoke greater worry for those of us alert enough to see them for what they are: acts of panic:

2014-11-07 The ETF Trader Interview Series: Aaron Kehoe, Cantor Fitzgerald by Anita Rausch of WisdomTree

In this edition, Anita Rausch, Director of Capital Markets, speaks with Aaron Kehoe, Managing Director and Head of Fixed Income ETF trading at Cantor Fitzgerald. Aaron joined Cantor in September 2013 and focuses primarily on managing and trading the firm’s book of fixed income ETFs. In addition, Aaron was instrumental in the product launches of many new fixed income ETFs and all senior loan ETFs.

2014-11-07 5 Things To Ponder: GOP Takes Control by Lance Roberts of Streettalk Live

This past Tuesday the conservative Republican candidates garnered a resounding victory over their Democratic challengers in even some of the "bluest" states. The message that was sent by voters was quite clear: "The real economy sucks."

2014-11-07 Weekly Market Summary by Carl Tannenbaum of Northern Trust

The mid-term elections: A new cast faces old problems; Japan: Kuroda's Halloween surprise; The U.S. has very solid job growth but not much wage growth

2014-11-07 The Investing Evolution: How We Got Here by Robert Isbitts of Sungarden Investment Research

One of the main themes of the Schwab Impact conference was the urgency the industry feels to go beyond traditional asset allocation. I could not agree more with that concept. But as for the execution of it, I see what I have seen so many times before…a good idea to help investors, which the industry then bludgeons to death with complexity, excessive fees and a bunch of me-too products. I will devote much more space in this blog to this in the coming weeks and months.

2014-11-07 'Risk On' for Now by Scott Minerd of Guggenheim Partners

U.S. high-yield bonds, leveraged credit, and equities will likely outperform in the coming months, but there are obstacles ahead.

2014-11-06 Whither the Consumer? Taxation Impacts by Stephen Roseman of Calamos Investments

We believe the U.S. consumer is in a better position to spend this year. Our confidence reflects: 1. Recent non-farm employment numbers were near all-time highs. 2. Home values have largely recovered to their pre-crisis highs. 3. While volatility has been top of mind these past weeks, consumers have benefited from a five-and-a-half-year bull market. 4. Consumer confidence, highly correlated to consumer spending, has been rising, steadily but choppily, since the 2009 bottom. In this post, we look at impacts of taxation on the consumer landscape.

2014-11-06 Believing Anything by Keith McCullough of Hedgeye Risk Management

For those of you who didn’t know that Cockburn was a British journalist and proponent of communism , now you know. His aforementioned quote was cited by Jim Rickards at the beginning of an excellent chapter titled “Prophesy” in The Death of Money.

2014-11-06 Emerging Europe: Regional Economic Review - Q3 2014 by Team of Thomas White International

While Russia has been experiencing a slowdown for quite some time, the new round of sanctions imposed by the West has hit the economy even harder.

2014-11-06 Global Economic Overview: September 2014 by Team of Thomas White International

Global economic growth concerns resurfaced during the month of September, as data from the Euro-zone suggested that select large counties yet again face recession. Even Germany, the bulwark that shielded the common currency area during the fiscal crisis, has slowed down as subdued external demand has taken a toll on exports.

2014-11-06 What Stimulus Overseas could mean for U.S. Investors by Russ Koesterich of BlackRock

Could the end of easy money in the United States be the beginning of even more stimulus everywhere else? Russ explains.

2014-11-06 3 Things Worth Thinking About, Including the Odds of a Sucker’s Rally by Lance Roberts of Streettalk Live

Each week in my weekly newsletter I do a complete overview on major markets, sectors and other market areas such as interest rates, gold and oil. I bring this up because the recent melt-down in oil and energy related stocks is something that I warned about in early August of this year.

2014-11-05 Hong Kong: Looking at Commercial Rental Prices and Automotive Demand by Dilip Badlani of The Royce Funds

Hong Kong is a very important market to Royce's international efforts, though its economy has seen a significant slowdown over the past several years. Royce International Micro-Cap Fund Portfolio Manager Dilip Badlani discusses why he returned after having recently visited earlier in the year and what he learned from his meetings with company management teams.

2014-11-05 What a Rising Dollar Means for Your Stock Portfolio by Jeremy Schwartz of WisdomTree

Typically, if a company’s home currency is weakening compared to the currency where the company’s sales are generated, this will have a positive effect on sales and profitability, and if the home currency is strengthening, it could negatively impact sales and profitability.

2014-11-04 Martin Wolf on the Financial Crisis: The Fire Next Time by Michael Edesess (Article)

If you think the global financial crisis of 2007-2009 was a one-time event caused by lax regulation and a financial industry run riot, then Financial Times chief economics commentator Martin Wolf has some bad news for you. Wolf, one of the world's most respected economists, says these circumstances were only part of its proximate cause and that the financial crisis was the inevitable product of the global economic system. If that system does not undergo radical change, says Wolf, financial crises may keep on recurring until the world economic order collapses.

2014-11-04 The Critical Importance of Evidence-Based Persuasion by Daniel Solin (Article)

The disconnect between the rigorous, peer-reviewed data we require before making investment recommendations and the lack of comparable data when converting prospects into clients is an anomaly worthy of discussion.

2014-11-04 Black Dog: Are Plunging Oil Prices a Positive or a Negative? by Liz Ann Sonders of Charles Schwab

The bear market in oil prices is largely a positive for the consumption-oriented US economy, but there are caveats. Oil's plunge is more a function of increased supply and the stronger US dollar than it is of weaker global demand. Oddly, many investors are worried about the stock market because of oil's plunge; but history suggests otherwise.

2014-11-04 Bear Markets, Corrections, and Benchmarks by Kendall Anderson of Anderson Griggs

Since the last day of 1926 through today, the S&P 500 has had a total of eight bear markets. This is assuming a bear market is one with a decline of 20% or more. Since it has been eighty-five years since the first of these great bear markets, and five since the bottom of the last one, it might be interesting to see some details on each. Let’s take a trip down memory lane.

2014-11-04 Snail Trail Vortex by Niels Jensen of Absolute Return Partners

The world is undergoing a radical shift towards lower economic growth at the moment. Some of the dynamics driving growth down are structural in nature (e.g. demographics), and even the most extreme monetary or fiscal policy will not change that. We are in for a period of lower, but still positive, global growth whether we like it or not. Despite the somewhat muted outlook, we continue to expect significant regional variations in growth and therefore also in interest rates and equity returns.

2014-11-04 Double Dose of Stimulus Sending Japan Stocks Up, Yen Down by Jeremy Schwartz of WisdomTree

On October 31, the Bank of Japan (BOJ) unleashed a surprise round of further stimulus to its monetary policies. This additional monetary easing occurred the same week that the U.S. Federal Reserve (Fed) completed its monetary policy program, showing a transition in global central bank accommodation leadership.

2014-11-04 The Macro Playbook by Darius Dale of Hedgeye Risk Management

The Hedgeye Macro Playbook aspires to present investors with the robust quantitative signals, well-researched investment themes and actionable ETF recommendations required to dynamically allocate assets and front-run regime changes across global financial markets. The securities highlighted above represent our top ten investment recommendations based on our active macro themes, which themselves stem from our proprietary four-quadrant Growth/Inflation/Policy (GIP) framework.

2014-11-04 Three Words for Brazil by Mark Mobius of Franklin Templeton Investments

As long-time investors in Brazil, the recent presidential election has been of keen interest to us. One can certainly say it’s been an interesting race! The market had been volatile based on the changing polls leading up to the election; there were hopes that new leadership would ignite a positive new direction for Brazil’s economy, which hasn’t experienced the type of economic boom many (including us) had hoped for—and believe is possible.

2014-11-04 Consumer Confidence Hit a 7-Year High in October... But by Gary Halbert of Halbert Wealth Management

The two most widely-followed indicators of consumer confidence jumped to the highest levels in seven years last week. The Conference Board reported Tuesday that its Consumer Confidence Index climbed to 94.5 in October, the strongest reading since October 2007 before the economy entered the Great Recession.

2014-11-04 Rhyme and Reason by John Mauldin of Mauldin Economics

We’ll revisit the phenomenon of October as a month of negative market surprises. It actually has its roots in the interplay between farming and banking.

2014-11-04 Emerging Markets Equity Commentary: September 2014 by Team of Thomas White International

Emerging market equity prices corrected in September on concerns about weaker global growth even as the U.S. Federal Reserve is set to wind down its bond purchases. Signs of yet another downturn in the Euro-zone economy are likely to hurt the export outlook for the major emerging countries that had seen a modest improvement in exports in recent months.

2014-11-04 International Equity Commentary: September 2014 by Team of Thomas White International

International equity prices corrected in September as investors became concerned about slower global growth and the continued withdrawal of monetary stimulus by the U.S. Federal Reserve. Stronger than expected U.S. growth could support the global economy in the coming quarters, but has made investors anxious of early interest rate hikes. The Euro-zone economic recovery is faltering yet again as growth has slipped in most large countries.

2014-11-04 Americas: Regional Economic Review - Q3 2014 by Team of Thomas White International

The clear divergence in economic growth trends between the developed economies in North America and Latin America widened during the third quarter. The U.S. is now the fastest growing developed country in the world, and has lifted the outlook for Canada and Mexico, two of its major trading partners in the region.

2014-11-03 Worried About the Unknown? Focus on the Business Cycle Instead by John Greenwood of Invesco Blog

Lately, I’ve been fielding questions about the possible “unknowns” that could bring about the end of the current economic expansion. While I understand investors’ trepidation about the unknown, I believe this concern is misplaced. Business cycles do not generally end because of unforeseen accidents. They normally end because central banks, in an effort to bring down inflation, raise interest rates, which creates an inverted yield curve and slows money and credit growth. We are clearly a long way from this scenario at present.

2014-11-03 Celebrity Central Bankers by Kenneth Rogoff of Project Syndicate

Major central banks’ growth and inflation forecasts in the years since the financial crisis have consistently overestimated both growth and inflation – and by wide margins. So why do the comments of major economies’ central bankers command outsize attention?

2014-11-03 Losing Velocity: QE and the Massive Speculative Carry Trade by John Hussman of Hussman Funds

What central banks around the world seem to overlook is that by changing the mix of government liabilities that the public is forced to hold, away from bonds and toward currency and bank reserves, the only material outcome of QE is the distortion of financial markets, turning the global economy into one massive speculative carry trade. The monetary base, interest rates, and velocity are jointly determined, and absent some exogenous shock to velocity or interest rates, creating more base money simply results in that base money being turned over at a slower rate.

2014-11-03 Economy, Earnings and Policy Push Equities to New Heights by Robert Doll of Nuveen Asset Management

A combination of receding global growth fears, strong corporate earnings results and continued monetary policy support helped U.S. equities rise for a second week, with the S&P 500 Index climbing 2.7%.

2014-11-03 Digging Deep for Value in Volatility by Grace Hoefig of Franklin Templeton Investments

Selloffs like those seen recently in US equities have provided a respite from soaring share prices for deep value investors, and they have been out in force, scouring the markets for quality stocks at bargain prices. Grace Hoefig, research analyst and portfolio manager for Franklin Equity Group®’s US Value Equity team, says that recent stock market dips have presented value opportunities in some market sectors, but, as through all market conditions, a little patience and a lot of research and flexibility are required to uncover them.

2014-11-03 Clarifying Confusion: American Depository Receipts (ADRs) Have Currency Risk by Jeremy Schwartz of WisdomTree

It is a common misconception that, because an ADR is traded in U.S. dollars in the United States, there is no exchange-rate risk. But that’s not the case. Here’s why.

2014-11-03 The Trouble with Porosity and Prosperity by William Gross of Janus Capital Group

I am a philosophical nomad disguised in Western clothing, a wondering drifter, masquerading in a suit near a California beach. Sand forms the foundation of my being and its porosity is at once my greatest strength and deepest wound. I have become after 70 years, a man who believes that no belief is sacred. I have ideals and moral standards, but I believe them specific to me. Had I inherited your body and ego, “I” could just as clearly have assumed "yours." If so, I wonder, if values are relative, then what are mortals to make of them, and what would a judging God make of

2014-11-01 The Single-Engine Global Economy by Nouriel Roubini of Project Syndicate

The global economy is like a jetliner that needs all of its engines operational to take off and steer clear of clouds and storms. Unfortunately, only one of its four engines is functioning properly, the pilots must navigate menacing storm clouds, and fights are breaking out among the passengers.

2014-11-01 Don’t Be Spooked by Market Volatility—Opportunity Is Still Knocking! by Frank Holmes of U.S. Global Investors

One of the greatest fears this October—possibly the most volatile month of the year—has been the correlation between the S&P 500 Index’s ascent in the first three quarters of the year and the possible ramifications of the end of quantitative easing (QE).

2014-10-31 Trick or Treat? Slow Global Growth Hits Cyclical Sectors Hardest by Francis Gannon of The Royce Funds

As of October 13, the small-cap Russell 2000 Index was down 12.9% from its 2014 high on July 3—a double-digit correction not seen in more than three years. With the U.S. economy slowly improving and Fed tapering winding down as scheduled, what is driving this pullback? Co-Chief Investment Officer Francis Gannon talks about economic growth beyond our borders and how it has been playing a role in shifting investor sentiment.

2014-10-31 Financial Markets Review Third Quarter 2014 by Team of AMG Funds

Similar to earlier this year, the third quarter featured further evidence of a multi-speed economic recovery across the globe. Central banks reacted in a less-than-coordinated fashion compared to years prior, with the European Central Bank (ECB) and the Bank of Japan (BOJ) loosening monetary policy while the U.S. Federal Reserve (the Fed) retained more of its status quo as detailed further here.

2014-10-31 5 Things To Ponder: "Spooky" Things by Lance Roberts of Streettalk Live

I love this time of year, in particular it is the festivities surrounding one of the biggest commercial shopping days of the year - Halloween. According to Wikipedia:

2014-10-31 Weekly Economic Commentary by Team of Northern Trust

Stress testing is performed in a number of arenas. Tools and parts are stressed to ensure that they will stand up to extreme conditions. Medical patients are stressed to detect heart disease. Computer systems are stressed to ensure that they can operate stably at peak times.

2014-10-30 Recovery Reality by John Canally of LPL Financial

The U.S. economy is improving, and in many cases is back to normal, but it remains stubbornly weak in some areas. “Real world” indicators that point to the health of the economy include crane rental rates and customer traffic in restaurants. Economic uncertainty -- likely a drag on economic growth in 2011, 2012, and 2013 -- has faded as a concern in 2014, consistent with the Fed’s most recent Beige Book.

2014-10-30 Got Loans? by Mark R. Kiesel, Elizabeth (Beth) MacLean, Rudy Pimentel of PIMCO

?We believe select investors looking to reposition portfolios may benefit from a move to senior secured floating rate loans. CLOs have been an important source of demand in the market, and even with more strict risk retention rules just announced under Dodd Frank, we think demand will remain strong. While the Fed has criticized some banks for not following their leveraged lending guidelines, Fed members themselves, in our view, do not appear concerned about loans having a major impact on financial stability.

2014-10-30 Newsletter by Harold Evensky of Evensky & Katz

Harold Evensky presents his quarterly newsletter.

2014-10-30 Stay the Course in Small Caps by Jonathan Coleman of Janus Capital Group

Small-cap stocks sold off in the third quarter, but now is not the time to abandon the market cap segment. In this article, Jonathan Coleman, Co-Portfolio Manager of the Janus Venture Fund, gives his perspective on current small-cap valuations, and why an allocation to small caps is beneficial in an environment where the U.S. economy is on stronger footing than the rest of the world.

2014-10-30 The ETF Trader Interview Series: Kathryn Sweeney, Goldman Sachs by Anita Rausch of WisdomTree

In this edition, Anita Rausch, Director of Capital Markets, speaks with Kathryn Sweeney, the Global ETF Product Manager and Head of U.S. ETF Trading for Goldman Sachs.

2014-10-29 Corporate Calm by Burt White, Jeffrey Buchbinder of LPL Financial

We remain confident in corporate America’s ability to generate solid earnings growth in the current global economic environment despite the slowdown in Europe (and to a lesser extent, China). A number of U.S. companies have performed relatively well in Europe, with some not yet seeing signs of a slowdown in their business. The business environment overseas appears to be good enough for companies to largely maintain their outlooks for the rest of the year and into 2015.

2014-10-29 Americans Even More Pessimistic Ahead of Elections by Gary Halbert of Halbert Wealth Management

Republicans remain in a favorable position heading into the midterm elections. A new Wall Street Journal/NBC News poll released on Sunday showed that the GOP now holds an 11-point lead among “likely voters.” That’s up from only a 5-point lead a week earlier. Some 52% of likely voters want a Republican-led Congress, while 41% favor Democratic control.

2014-10-29 As the Market Rebounds, Two Opportunities Bubble to Top by Russ Koesterich of BlackRock

Stocks staged a strong rebound last week. Russ discusses where he sees value in the market looking forward.

2014-10-28 How Moving Average Strategies Can Really Work by Jerry A. Miccolis, CFA®, CFP®, FCAS, CERA, Marina Goodman, CFA®, CFP® and Rohith Eggidi (Article)

In a previous article, Paul Allen explored the universe of moving average crossover (MAC) strategies. In his thorough and even-handed analysis, Allen concluded that MAC strategies can effectively decrease periodic drawdowns in portfolios but can materially underperform during bull markets. In this article, we propose how to improve MAC strategies so that they may perform better during bull markets and still provide protection during bear markets.

2014-10-28 Why Consider Brazil Now? by David Nadel of The Royce Funds

We see Brazil as a country whose investment appeal appears evident based on enduring themes, including burgeoning middle-class consumption, a young and unlevered population, business acumen in fields as diverse as agriculture and manufacturing, and more.

2014-10-28 Under the Magnifying Glass by Brian Andrew of Cleary Gull

Recent market volatility has investors trying to sort through the little things to determine what is most important to the future of asset prices. Securities markets move up and down on a daily basis based on many different factors, some more relevant than others. The markets during October have proven that little things can lead to greater volatility as investors attempt to sort out the most relevant facts from those with less meaning. Our objective, and that of our investment managers, is to sift through these details to discern what has relevance and what is noise during the trading day.

2014-10-28 Will the Ebola Scare Haunt the Stock Market? by Kristina Hooper of Allianz Global Investors

Kristina Hooper prescribes four key takeaways from the Ebola epidemic and what it means for investors.

2014-10-28 U.S. Budget: How Is Spending Trending? by Milton Ezrati of Lord Abbett

With the pivotal 2014 midterm election around the corner, here is the first of a two-part look at both sides of the U.S. budget. First up: Examining where U.S. taxpayers’ money actually goes—and whether current spending trends are sustainable.

2014-10-28 The Echo of Wirtschaftswunder by Bill O'Grady of Confluence Investment Management

Economic problems in the Eurozone continue to periodically emerge. Complicating matters significantly is German opposition to fiscal and monetary stimulus measures. We believe the experience after WWII and the Wirtschaftswunder (economic miracle) that lasted into the early 1960s has played a large role in shaping current German policy. This week we discuss German history with a focus on how German leaders shaped the economy and rebuilt the nation after the war, paying particular attention to the economic model and how the Merkel government is trying to impose that model on the entire Eurozone.

2014-10-27 India: Seizing Opportunities in the New Era by Eswarie Subrahmanyam Balan of WisdomTree

Last week, the Institutional Investor Forum (IIF) held its two-day annual India Investment Forum. There was much hype going into the conference, as a slew of ministers and distinguished institutional investors were slated to speak.

2014-10-27 Four Investor Takeaways from the Recent Volatility Spike by Russ Koesterich of BlackRock

Last week market volatility spiked to the highest level since 2011. To some degree, this should not come as a shock; we’ve been in an unusually quiet period that was due to end at some point and now has.

2014-10-27 Equities Recover Some Ground and Still May Have Room to Run by Robert Doll of Nuveen Asset Management

With global deflation and growth fears fading, U.S. equities snapped their four-week losing streak last week with the S&P 500 Index gaining 4.1%. This advance marked the largest weekly gain since January 2013. Following the correction from the mid-September to mid-October, the S&P 500 has now rallied 8%, leaving it only 3% from its all-time high.

2014-10-27 Fall Quarterly Commentary by John Prichard, Miles Yourman of Knightsbridge Asset Management

Born in the city of Lemberg in the Austrian-Hungarian empire (present-day Ukraine) (future-day Russia?), Ludwig von Mises would be a familiar figure to those interested in the intellectual underpinnings of economic libertarianism. He was an important contributor to the Austrian school of economic thought, which, while ultimately losing mainstream support to the Keynesians and their followers, has still remained influential in certain circles as an alternative.

2014-10-27 Tobacco Bonds’ Appeal May Be Smoke and Mirrors by Tom Metzold, Cindy Clemson, Leanne Parziale of Eaton Vance

Despite attractive returns, tobacco bonds may be too risky for many investors. In this Insight, we compare these bonds with traditional municipal bonds and pinpoint what matters most now for investors in this sector.

2014-10-26 A Scary Story for Emerging Markets by John Mauldin of Mauldin Economics

The all-too-predictable effects of a rising dollar on emerging markets that have been propped up by hot inflows and the dollar carry trade will spread far beyond the emerging markets themselves. This is another key aspect of the not-so-coincidental consequences that we will be exploring in our series on what I feel is a sea change in the global economic environment.

2014-10-26 Plot Twist…or a Different Book? by Liz Ann Sonders, Brad Sorensen & Jeffrey Kleintop of Charles Schwab

Volatility could continue but equity investors should keep the longer-term picture in mind, which we believe is positive. The U.S. economy is improving and monetary policy remains quite loose. The international picture is more concerning but diversification is important across asset classes. We currently favor emerging markets within a diversified international portfolio.

2014-10-25 As the Eurozone Stalls, China Cuts the Red Tape by Frank Holmes of U.S. Global Investors

France and Germany’s industrial production has turned down recently. Their purchasing managers’ index (PMI) numbers are below the 50-mark line, indicating contraction. This trend is especially worrisome because Europe is a bigger trading partner with China than the U.S. is. So what’s the solution? The EU would do well to look east, specifically to China.

2014-10-25 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Inflation is falling, but it won't go through the floor; Income inequality is affecting consumption categories; Do new mortgage lending rules strike the right balance?

2014-10-25 Swimming Naked by Robert Isbitts of Sungarden Investment Research

We have our swim trunks firmly tied around our waists, and the life preserver is tied to our hand. If nothing else, this is a time to remember that investing is a balancing act, regardless of what appears to be happening around us.

2014-10-24 What to Expect from U.S. Midterm Elections by Robert McConnaughey of Columbia Management

Next month’s midterm election battle for control of the U.S. Senate is going to be a dramatically close call. Republicans can gain control of the Senate if they win six new seats. Incumbent Democrats are defending 21 seats, and seven of those are in broadly red states won by Mitt Romney in 2012.

2014-10-24 Risk Aversion on the Rise – Gold Back in Vogue by Ade Odunsi of AdvisorShares

In this week’s commentary we present a simple methodology for measuring the amount of risk aversion in gold markets. This measure of risk aversion (which we define below) compares the variability of observed gold prices versus the variability that can be implied from gold option prices.

2014-10-24 5 Things To Ponder: To QE Or Not To QE by Lance Roberts of Streettalk Live

Over the last few weeks, the markets have seen wild vacillations as stocks plunged and then surged on a massive short-squeeze in the most beaten up sectors of energy and small-mid capitalization companies. While "Ebola" fears filled mainstream headlines the other driver behind the sell-off, and then marked recovery, was a variety of rhetoric surrounding the last vestiges of the current quantitative easing program by the Fed. As I have shown many times in the past, there is a high degree of correlation between the Fed's liquidity programs and the advance in the markets.

2014-10-24 Japanese Style Deflation Coming? Fed Falling Behind the Curve? by Mike "Mish" Shedlock of Sitka Pacific

There's some interesting discussion points in the UK-based Absolute Return Partners October 2014 Letter, by Niels C. Jensen, most of which I agree with, others not.

2014-10-24 The Positive Impact of Falling Oil Prices by Nick Kalivas of Invesco Blog

Crude oil prices have dropped sharply over the last few months thanks to abundant global production and signs of slowing global economic growth. Lower oil prices could inject spending power into the economy as consumers eventually pay less for gasoline and open their wallets in other areas. This would provide a positive shock and potentially bolster the performance of consumer discretionary shares.

2014-10-23 When Will Rates Potentially Rise? by Team of Osterweis Capital Management

When 2014 started, some Wall Street strategists predicted a continuing rise in interest rates as U.S. economic growth accelerated and the Federal Reserve (the “Fed”) reduced its monthly stimulus. Instead, it has been a one-way street in government bond markets as they continued to deliver low yields at higher prices. In August, the yield on the benchmark U.S. 10-year Note fell to 2.3%, back down to June 2013 levels.

2014-10-23 Is This the Beginning of a New Bear Market? Important Signs to Watch by Chris Puplava of PFS Group

How the markets behave in the coming weeks will go a long way to help determine if the September-October correction was the start of a new bear market or just a normal correction in a bull market. Chris Puplava provides a detailed outlook

2014-10-23 Quarterly Review and Outlook by Team of Hoisington Investment Management

The U.S. economy continues to lose momentum despite the Federal Reserve’s use of conventional techniques and numerous experimental measures to spur growth. In the first half of the year, real GDP grew at only a 1.2% annual rate while real per capita GDP increased by a minimal 0.3% annual rate. Such increases are insufficient to raise the standard of living, which, as measured by real median household income, stands at the same level as it did seventeen years ago

2014-10-23 How Consensus Thinking Works Against Investors by Bob Andres of Andres Capital Management

Over the past several years we have used this newsletter to voice our concerns regarding the macro-economic landscape, while attempting to provide practical solutions for investors. Since our venture into financial commentary, we have questioned the veracity of consensus opinion and how it tends to be wrong, especially in regards to interest rates.

2014-10-23 No More Black Mondays by Jeffrey Saut of Raymond James

In a true demonstration of impeccable and apropos timing given the recent volatility we have experienced, yesterday marked the 27th anniversary of one of the stock market’s most infamous and chronicled events. Black” Monday, October 19, 1987 was one of those multiple standard deviation occurrences that statisticians will tell you are not supposed to ever really happen, but as is the case more frequently than most realize, it of course did happen, and its impact is still being felt today even as there are fewer and fewer investors around that actually had to suffer through it.

2014-10-23 Risk and Uncertainty, Confidence and Fear by Scott Brown of Raymond James

In recent weeks, the financial markets appear to have been reacting less to weaker expectations of global growth and more to the increased downside risks – that is, to the fear that things could get a lot worse. The downside risks to Europe are considerable, but America is much less dependent on exports than most other countries and the prospects for moderately strong growth into 2015 remain promising.

2014-10-23 Equities: Is the Bull Market Under a Threat? by Keith Wade of Schroders Investment Management

Equity markets have experienced a setback recently and this has led many strategists to question the longer term case for the asset class. However, we remain positive on shares and believe that equities can still generate an attractive premium for investors.

2014-10-23 3 Things Worth Thinking About: Inflation, the Current Rally and Faith in the Fed by Lance Roberts of Streettalk Live

What is quickly being realized on a global basis is that injecting the system with liquidity that flows into asset prices, does not create organic economic demand. Both Japan and the Eurozone's interventions have failed to spark inflationary pressures as the massive debt burden's carried by these countries continues to sap the ability to stimulate real growth.

2014-10-22 The Eighth Default of Argentina by Kaisa Stucke, Bill O'Grady of Confluence Investment Management

Very few countries have seen as spectacular of a decline in its economic standing over the past 100 years as Argentina has. Argentina has been in the international headlines recently due to its sovereign debt default, the eighth default in the history of the country. This week we will look at Argentina, its long history of economic booms and busts, its political background, and its extensive chronicle of sovereign debt defaults. As always, we will conclude with market ramifications.

2014-10-22 Oil Hits the Skids by Burt White of LPL Financial

We believe the oil sell-off is overdone and expect the commodity to find a floor in the low $80s. We expect firming global growth to increase the market’s confidence in global oil demand despite weakness in Europe. Energy service stocks are particularly oversold and may be attractive as the services-intensive U.S. energy renaissance continues.

2014-10-22 Mr. Toad’s Wild Ride by Alan Hartley of Black Cypress Capital Management

Every time the stock market falls 3% or 4%, investors start to act like we’re staring at an oncoming locomotive. Though, each train has been the sort from Mr. Toad’s Wild Ride–not really a train at all, just bright lights and sounds meant to scare us.

2014-10-22 Retirement: How To Avoid Outliving Your Savings by Gary Halbert of Halbert Wealth Management

With over 10,000 Baby Boomers retiring every day, a pattern that will continue for the next 20 years, retirement savings continues to be one of the most important issues of our day. With 76 million Americans born between 1946 and 1964 – the “Baby Boom Generation” – saving enough for retirement is critically important.

2014-10-22 Despite Volatility, This Bull Is Likely to Charge Higher by John Calamos, Gary Black of Calamos Investments

As the fourth quarter begins, the market has found itself engulfed in anxiety. Volatility has surged in the equity markets while the 10-year Treasury yield has dropped to 2%-leading some to question whether this bull market is breathing its last breath. We believe: * Global GDP growth will likely be in the 2.0%-3.0% range. * The U.S. is in the 5th or 6th inning of recovery, with slow but improving growth. * Despite the surge in volatility, this bull market has more room to run. * A balance of secular and cyclical growth companies presents the most attractive portfolio for this mid-cycle phase.

2014-10-22 Stay Out of the Echo Chamber – Focusing on the Market Fundamentals by Pamela Rosenau of HighTower Advisors

In the middle of the recent stock market correction, I read an article emblazoned on the front page of the New York Times reporting on the market volatility and “fear.” The introductory line read, “The party is over.” This was the classic contrarian sign that we were forming an interim bottom in the correction.

2014-10-21 The Price We Will Pay for Cheap Oil by Richard Vodra (Article)

Suddenly in June, oil prices started dropping, reaching levels unseen since 2010. What is going on? Why does the price of oil matter to financial advisors? What might these fluctuations mean to the price and supply of oil for the rest of the decade? Isn't oil just another commodity?

2014-10-21 Help is on the Horizon to Ease Student Debt by Sponsored Content from Legg Mason (Article)

To preempt the college funding crisis that lies ahead, we must ensure that future generations avoid excessive debt. With the current path unsustainable, experts believe the partnership between 529s, colleges and government must evolve. Get a preview of tomorrow's college conversation and advisors' role in the holistic solution.

2014-10-21 The Economy: October Viewpoint by Robert Cron of Bronfman E.L. Rothschild

The U.S. economy continues to move forward in its slow but steady recovery. Despite the Federal Reserve ending their bond buying program in October, demand for U.S. fixed income continues to be robust. The recent downward movement in the stock markets has some investors talking “correction” once again, and growth concerns overseas finally seem to affecting the performance of the domestic markets. We believe there is still more room for improvement for foreign economies, while the U.S. seems to be a more stable environment.

2014-10-21 The Skinny on Fatter Tails for Fed Policy by Kristina Hooper of Allianz Global Investors

Kristina Hooper comments on escalating fears that a slowdown in global growth could hamstring the US recovery and what that means for monetary-policy outcomes in the United States.

2014-10-21 Opportunities Amid Divergence by Michael Gomez of PIMCO

As in developed markets, the trends of increasing growth and policy dispersion will be borne out in emerging markets over the next 12 months. Brazil has some of the highest interest rates in the world, which presents an opportunity for investors, and we expect the next four years will be marked by a better mix of fiscal and monetary policy. Because our outlook for China has moderated somewhat, we are focusing attention on trade and financial linkages and how the ripple effects of a slower China might unfold.

2014-10-21 Blurring the Lines Between Emerging-, Frontier- and Developed-Market Stocks by Mark Mobius of Franklin Templeton Investments

There has been some convergence in terms of how one might classify emerging-, frontier- or developed-market companies—and how they might fit into investors’ portfolios. Recently, we have noted an increase in liquidity and transparency of many frontier-market stocks (the smaller and lesser-developed subset of emerging markets).

2014-10-21 The Flat Debt Society by John Mauldin of Mauldin Economics

Since at least the beginning of 2006, the most asked question I get after a speech is “Do you think we will have inflation or deflation?” In an attempt at humor, my answer has been “Yes.”

2014-10-21 Attractive Stocks in a Bifurcated Market by William Smead of Smead Capital Management

As value stock picking managers, we assume we will be operating in a bifurcated equity environment. We think the bifurcation will be between sectors of the stock market which appear over-capitalized due to “rear-view mirror” success and those which look undervalued when considering the present value of their future income stream. The combination of numerous forces, both positive and negative, will most likely create this bifurcation.

2014-10-21 The Tool that Will Transform Firmwide Financial Planning by Bob Veres (Article)

Alex Murguia, founder and CEO of InStream Solutions, may be the most creative visionary in today's advisor software ecosystem. And like all people who think outside the box, sometimes he discovers that his best ideas have far better uses than he intended.

2014-10-20 Equity Losses Continue, but This Correction May Be Ending by Robert Doll of Nuveen Asset Management

Markets endured a sharp pullback and higher volatility, but technical factors suggest we may be nearing the end of the current correction. Long-term, we believe fundamentals remain sound, the U.S. economy should continue to grow and equities should be able to grind higher.

2014-10-20 Five Ways to Keep Out of the Bond Liquidity Trap by Douglas Peebles of AllianceBernstein

Bond investors are used to managing interest-rate risk and credit risk. But the financial crisis should have taught us that there are times when liquidity risk can be just as important to manage. Now is one of those times.

2014-10-20 Five Things You Should Know About U.S. Small-Caps by Francis Gannon of The Royce Funds

Co-Chief Investment Officer Francis Gannon offers five statistics we think every investor should know about U.S. small-caps in the current volatile investment environment.

2014-10-19 Where Are We? A Psychological View by Robert Isbitts of Sungarden Investment Research

When markets get temporarily unruly as they have recently, it tends to drive folks like us to go back and prove to ourselves once again that each and every part of our existing portfolios (the stocks and the hedge positions we own) is as valid to us as it was when we bought it. And, with many stocks on our watch list getting closer to being viable additions to the mix as their prices drop, we are essentially scouring our investable universe to see if we can either improve our upside potential, strengthen our defenses, or both. It is a rigorous process, always.

2014-10-19 Weekly Economic Commentary by Team of Northern Trust

The market’s correction has many scratching their heads. Russia’s economy is feeling a pinch but not real pain. Long-term remedies will be needed to secure U.S. budget health.

2014-10-19 What the Strong Dollar Does to Yellow and Black Gold and Why We're Seeing Green by Frank Holmes of U.S. Global Investors

The United States is doing better than it has in years. Jobs growth is up, unemployment is down, our manufacturing sector carries the rest of the world on its shoulders like a wounded soldier and the World Economic Forum named the U.S. the third-most competitive nation, our highest ranking since before the recession.

2014-10-19 Weighing the Week Ahead: Is the Correction Over? by Jeff Miller of New Arc Investments

Was that the bottom? Nearly everyone is trying to time the market, so the financial media will focus on remaining risk versus signals of a bottom.

2014-10-17 Disinflation Infatuation by Anthony Valeri of LPL Financial

Inflation expectations have fallen sharply in recent weeks, driven by European disinflation, lower energy prices, and overall growth concerns. The persistence of low inflation expectations may intensify the “lower for longer” theme via lower growth expectations and delays to potential Federal Reserve (Fed) interest rate hikes.

2014-10-17 A Moody Market by Doug MacKay, Bill Hoover of Broadleaf Partners

For those that may not have noticed, stock market volatility has been on the rise in October, with more up and down 1-2% days and powerful intraday moves than we've seen since the Great Recession. Weak overseas economies, fears over what rapid declines in energy prices could mean, and Ebola are just a few of the factors that have been used to explain the disappointing action.

2014-10-17 Pullback Perspective by Burt White of LPL Financial

We see the recent increase in volatility as normal within the context of an ongoing bull market. We do not believe the age of the bull market, at more than 5.5 years old, means it should end. We maintain our positive outlook for stocks for the remainder of 2014 and into 2015.

2014-10-17 5 Things To Ponder: "Buy" or "Run" by Lance Roberts of STA Wealth Management

This past week investors to a blow from a sharp selloff in the financial markets. I have spilled quite a bit of ink in recent months discussing the probabilities of such as corrective event as the Federal Reserve’s current liquidity operation came to a conclusion this month.

2014-10-17 Why High Yield, Why Now by Tim Gramatovich, Heather Rupp of AdvisorShares

Here are some of the reasons we believe that the high yield bond market looks attractive at current levels.

2014-10-16 Global Worries (And Some Benefits) by Scott Brown of Raymond James

In the latest update of its World Economic Outlook, the IMF revised lower its expectations of global growth in 2014 and 2015. None of that should have surprised anyone. At this point, the IMF expects that European GDP will be relatively weak in 2014 (+0.8% 4Q14/4Q13) and should improve in 2015 (+1.6% 4Q15/4Q14). However, risks are weighted predominately to the downside. Weaker European growth and a stronger dollar will have a significant impact on many U.S. firms, but may have some benefits for the economy as a whole.

2014-10-16 The Right Question by Jeffrey Saut of Raymond James

In this business it has been said, “Sometimes knowing the right question is more important than actually knowing the answer.” Over the years I have found that old Wall Street axiom to serve me well. One example would be reading the footnotes in a company’s annual report.

2014-10-16 October is a Scary Month by Brian Andrew of Cleary Gull

The current environment for stock investors can be trying. Global cross currents regarding economic growth, employment, government policy, and corporate earnings have created the first test of investors’ mettle in almost two years. We have an opportunity to use current market events to review our investment plan and check our emotional temperature.

2014-10-16 Global Carry a.k.a. Risk Parity by Alexander Giryavets of Dynamika Capital L.L.C.

It is customary to think of “Risk Parity Asset Allocation” and “Carry Trading Strategy” as two different things. We explain that the Risk Parity after the Global Financial Crisis is nothing else but a hugely successful Global Carry Trade funded in Japanese Yen, Dollar and Euro. The performance of this trade is fantastic, the allocation is huge (100s of blns of $) and the risk of crash that will precipitate the next financial crisis is growing day by day. But for now the music is still playing.

2014-10-16 The Case for High Multiples by David Kleinberg of Universal Orbit

High P/E multiple companies, along with their near cousins N/A and NMF, display the characteristics of mid- to late-cycle reporting periods—increasing trends in cash flow, from negative to positive. The case for high multiples is initially supported by lofty valuations and low interest rates amid robust earnings in this perhaps peak cycle. Irrespective of the cycles and subcycles driving profitability, we look forward to more variable less certain comparables among changing industry-specific capital market dynamics.

2014-10-16 Optimizing a Portfolio Allocation to Gold by Ade Odunsi of AdvisorShares

Gold continues to be an attractive asset class that many investors wish to hold in their portfolios primarily for its diversification benefits and defensive characteristics during periods of high risk aversion in global markets. And notably many investors gain their gold exposure via exchange traded products given the ease of access, liquidity and the transparency they offer, particularly to retail investors who historically faced numerous barriers to holding gold in their portfolios.

2014-10-16 Global Evolution a Game Changer for Real Estate by Patrick Brophy of Janus Capital Group

As investors consider rising rates and the impact on yield-based assets, it is time to address a couple of common misperceptions about real estate. Patrick Brophy, Portfolio Manager of the Janus Global Real Estate Fund, explains why rising rates are not directionally bad for real estate equities. He also explains why real estate can be more than just a source of income for portfolios.

2014-10-16 Risk Aversion and Dollar Strength by Rick Harper of WisdomTree

Since the dollar is the primary reserve currency of the world, investors typically seek exposure to the dollar via short-term assets when market sentiment begins to shift. As we explain, the U.S. dollar can serve as an effective hedge to market uncertainty when volatility unexpectedly spikes.

2014-10-15 Fed “Management by the Dots” Signals New Tightening Cycle by Payson Swaffield of Eaton Vance

The Fed has been signaling a gradual tightening, and market reaction in the third quarter produced modest increases in the two- to seven-year maturities. We believe “management by the dots” is the Fed’s attempt to engineer a soft landing for the credit markets. The inevitable volatility of this process is likely to offer increased opportunities for investors.

2014-10-15 The Sell-Off Continues, But an Opportunity Appears by Russ Koesterich of BlackRock

In recent weeks, investors have been contending with two trends: anxiety over a change in Fed policy and evidence of a slowdown in the global economy. While global growth is likely to remain below historic norms, it is not collapsing. This suggests that investors should be positioned for a slow growth environment, not another recession. This, in turn, implies taking some selective risk in asset classes that have become less expensive as a result of the sell-off. One example of an asset that warrants another look: U.S. high yield bonds.

2014-10-15 Disruptive Innovation: The New Normal by Team of Manning & Napier

The current economic and market environment is not one in which a rising tide of economic growth will lift all ships; actually, it’s quite the opposite. As businesses compete, the winners will largely succeed at the expense of the losers. Consider recent examples such as Nokia and BlackBerry; both companies once widely recognized as dominating their respective markets, only to be disrupted by innovative competitors.

2014-10-15 Unlocking Alere’s Potential by Igor Golalic of Diamond Hill Capital Management, Inc.

Health care has historically been a good business, especially in the United States. Investors like to invest in good businesses and will usually pay a premium for those that generate stable, predictable, and excess returns or any combination thereof. There are certain characteristics that create an environment within which such businesses can prosper – higher barriers to entry, sticky customer base, secular growth prospects, low capital intensity, and lack of credible substitutes.

2014-10-15 Who Will Blink First? by Portfolio Management Team of SMC Fixed Income Management

While tax-exempt yields did follow Treasuries higher during September, the snap-back has been fast and significant; yields have recently established new twelve-month lows. Meanwhile, investors appear to be repositioning from equity and other asset classes into fixed income. The move to bonds includes municipal securities, as evidenced by strong flows into tax-exempt funds, which is forcing cash-laden portfolio managers to buy at the highest prices of the year.

2014-10-15 Dilma or No Dilma? by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

During the first round of Brazilian presidential elections on October 5, the incumbent Dilma Rousseff received 42% of the votes while Aecio Neves received 34%. Since neither candidate received more than 50% of the vote, the second round of runoff elections will be held on October 26. This week, we will look at the Brazilian presidential elections along with the country’s current political and economic environment. We will briefly describe the recent political history of the country and look at the specifics of Brazil’s economic development. As usual, we will conclude with market ra

2014-10-14 High Quality Mid Caps Enjoy Performance Advantage by Sponsored Content from ClearBridge Investments (Article)

Since 1965, high-quality midcap stocks have outperformed their low-quality peers by a meaningful margin-a premium that has been most pronounced during periods of market transition. As we approach an inflection point in the current market and economy, investors should consider high-quality mid-cap stocks, which appear poised to thrive.

2014-10-14 Sea Change by John Mauldin of Mauldin Economics

The final chapter and conclusion pretty much end as you would expect: the demise of monetary policy’s ability to soothe the soul of the markets and the return of volatility. We hopefully get a full-fledged restructuring of the sovereign debt markets. The Fed and sister central banks will try the same tired tools they have been using. Except they have already been to the zero rate boundary and have wasted the opportunity they had to increase rates so that they could lower them later. Another round of quantitative easing?

2014-10-14 The Eurozone Plots Its Long Road to Recovery by David Zahn of Franklin Templeton Investments

Growth in much of Europe is slow - some observers even say the economy is moving sideways. Lately, the eurozone seems to have more in common with Japan, whose economy has been idling for years, than it does with the UK or the United States.

2014-10-14 How’s the Market Feeling These Days? by Edward Perkin of Eaton Vance

Recent investor sentiment on the equity market – and what conclusions might be drawn. Recent investor sentiment readings suggest that lingering fear from the 2008 financial crisis has abated somewhat, and that sentiment has finally begun to catch up with market performance.

2014-10-14 Can The Market Make A Comeback? by Jerry Wagner of Flexible Plan Investments

Although I’m a Detroit Lions’ fan and thoroughly enjoyed my team’s rare, 19-to-7 triumph over Green Bay’s football team last month, I’ve always respected the Packers. (Maybe because as a Lions’ season ticket holder since the 80s, I probably have seen the Lions lose to them more than anyone else.) They epitomize what football is all about.

2014-10-14 Finally, a Five Handle! by Brian Andrew of Cleary Gull

Last Friday’s jobs report was significant in that for the first time since July of 2008 the unemployment rate dipped below 6%. The September report indicated that the unemployment rate fell from 6.1% to 5.9%. While we have seen improvement in labor markets for some time now, the Fed still seems to want to take their time reducing stimulative policy.

2014-10-13 New Depths of Shallowness by Michael Kayes of Willingdon Wealth Management

What happens in the corporate world often is a reflection of the values and trends in our society. Here are a couple of recent stories that, well, leave me scratching my head...

2014-10-13 Five Ways to Keep Out of the Bond Liquidity Trap by Douglas J. Peebles of AllianceBernstein

The good news is that liquidity risk is manageable—and can even offer attractive opportunities, given the right time horizon. When liquidity dries up in one sector, it can be plentiful in another. If managed properly, it can be an additional source of returns. Here are five things investors can do to stay afloat.

2014-10-13 5% Corrections Have Been Normal in this Bull Market by Gary Black of Calamos Investments

We believe the 3Q earnings season, which moves into full swing next week, combined with greater unity by European officials on how to jump start economic growth, and additional soothing comments from our own Fed about keeping short-term rates low for a considerable time, should allow this correction to dissipate without incident, propelling the five-and-a-half year bull market to new highs.

2014-10-13 Inconceivable by Lance Roberts of Streettalk Live

The point is that there are many risks investors should not ignore. Making up losses is much harder than reinvesting stored capital once a clearer picture emerges. While the current belief that a correction of magnitude in the markets is "inconceivable," I am not sure that word means what they think it means.

2014-10-12 Weighing the Week Ahead: Can Corporate Earnings Reports Reverse the Stock Market Decline? by Jeff Miller of New Arc Investments

Last week featured a low signal to noise ratio – speech after speech, but little fresh information. This week heralds the start of earnings season. While we have a normal measure of government data, market participants will carefully parse the announcements and conference calls. This week will be all about earnings.

2014-10-11 Warning: Market Correction This Week? Did You See the Opportunity? by Frank Holmes of U.S. Global Investors

While stocks fell around the world this week amid growing concerns over global economic growth, Europe’s slowdown can’t stop emerging market population growth that drives long-term commodity demand. If the short-term market volatility concerns you, a solution is short-term tax-free municipal bonds. Check out the 5 Reasons Why.

2014-10-11 Global Fears by Liz Ann Sonders, Brad Sorensen, Michelle Gibley & Jeffrey Kleintop of Charles Schwab

Volatility could continue but equity investors should keep the longer-term picture in mind, which we believe is positive. The U.S. economy is improving and monetary policy remains quite loose. The international picture is more concerning but diversification is important across asset classes. We currently favor emerging markets within a diversified international portfolio.

2014-10-11 Five Things To Ponder: Through The Looking Glass by Lance Roberts of Streettalk Live

Is this the beginning of a bigger correction, or just a respite before the next advance? This is the first correction, since the beginning of the Federal Reserve’s latest round of quantitative easing, where the market has broken decisively through its shorter term moving average as shown below.

2014-10-11 Setting Global Standards for Central Clearinghouses by William G. De Leon, Tracey Jordal, Libby Cantrill of PIMCO

While a possible central counterparty (CCP) failure is a very remote event, there is no one single solution that alone will prevent it. However, PIMCO believes that if several conditions are met, including 1) a CCP is capitalized correctly and sufficiently with its own skin in the game, 2) segregation of client assets are consistent across cleared derivatives, 3) CCPs have a way to access cash easily to manage liquidity and 4) stress tests are consistently performed and reviewed, a CCP will be much more likely to recover than to be forced into a resolution process.

2014-10-11 Protecting Whom? by Tiffany Hsiao of Matthews Asia

China has long been accused of protectionist policies that restrict access to many markets.Recently, this has garnered more press attention. But has China really become more confrontational with U.S. business? In today’s world, what exactly is protectionism, and who are these protections meant to benefit? This month Asia Insight explores.

2014-10-10 You Only Dance Twice by William Gross of Janus Capital Group

Dancing, or better yet as the beginning of my Investment Outlook suggests, being asked to dance, seems to have become an important part of my life over the past month or so. Having first been asked by my wonderful wife, Sue, and now by Dick Weil and Janus from a business standpoint, I write to you today from my desk in a new Janus office in Newport Beach, California.

2014-10-10 Practical Policy Prescriptions to Help Offset Geopolitical Uncertainties by Scott Mather, Greg Sharenow of PIMCO

We believe Europe should relax fiscal budget constraints to allow for fiscal stimulus to offset any economic drag, while maintaining extremely accommodative monetary policy. The U.S. and its relatively newfound energy renaissance can also play an important role in supporting Europe and the global economy by signaling its intention to compete for energy market share.

2014-10-10 Japan: Changes in Sentiment and Tokyo's Property Market by Dilip Badlani of The Royce Funds

In his second trip to Japan this year, Portfolio Manager Dilip Badlani observed a change in sentiment, though his bullishness on Japanese micro-caps remains unshaken.

2014-10-10 Are Hedge Funds the Great Diversifier? by Team of Milliman Financial Risk Management

The California Public Employees’ Retirement System (CalPERS) announced on September 15th that it would divest its entire $4.5 billion hedge fund investment. With a market value of $298 billion, a move by Calpers may be a bellwether for the industry. The decision comes at a time when many pensions are reconsidering hedge fund investments as a risk management tool.

2014-10-10 Japan Strategist Roundtable: Jesper Koll—What Is Different This Time? by Jeremy Schwartz of WisdomTree

When I spoke with Jesper Koll from J.P. Morgan Securities, one particular theme appeared in our conversation: Prime minister Shinzo Abe is an important catalyst—but not necessarily the primary factor—for what is different this time in Japan.

2014-10-09 Global asset allocation outlook by Global Asset Allocation Team of Columbia Management

Recent market performance, particularly in September, has been negative across a widespread array of asset classes as we have seen the U.S. dollar exchange rate rise with increasing intensity in recent months. The worst returns, not coincidentally, were delivered by the very assets that have shown historically high sensitivity to dollar strength. This disruption to currency stability in general, and the particular importance of a rise in exchange value for the world’s reserve currency, represents an important change in capital market conditions.

2014-10-09 Tocqueville Gold Strategy Investor Letter by John Hathaway of Tocqueville Asset Management

John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), states in his latest quarterly letter on gold that "On a near term basis, this looks and feels like a bottom to us. On a longer term view, we are more bullish than ever." He goes on to write that "Expanding earnings and valuations, the underpinnings of the four year bull market in financial assets, may be approaching an inflection point. A reversal of this cycle would in our opinion restore interest in gold."

2014-10-09 Can Anything Go Wrong for the Markets??? by Vineer Bhansali of PIMCO

?Risk management in proper portfolio construction consists of a combination of dynamic risk balancing, diversified beta sources, explicit options-based tail hedging and a minimum amount of liquidity. Faced with a long and expanding list of things that could go wrong, uncertainties about the likelihood of each shock and the lack of dependable precursory indicators, it seems that a structurally sound portfolio construction methodology that uses all these tools is essential.

2014-10-09 2014 Outlook Update: A Year of Validation Indeed by Andrew Pease of Russell Investments

Andrew Pease, Global Head of Investment Strategy, outlines the economic and markets predictions by the team of Russell strategists at the end of the third quarter and going into the fourth quarter, comparing these forecasts to the firm’s Annual Global Outlook from last December.

2014-10-09 The Fed's Invisible Hand, and Other Things to Think About by Lance Roberts of Streettalk Live

I have not been a huge advocate of the Federal Reserve's QE programs for the simple reason that outside of inflating asset prices, it has done nothing for the broad swath of the American economy.

2014-10-09 Why You Should Stick With Tech Stocks by Russ Koesterich of BlackRock

Recent stock market losses have engendered a good deal of investor angst about technology stocks, but Russ believes anxiety over the technology sector is premature. In fact, it remains one of his favorite sectors. Here’s why.

2014-10-09 How Alibaba Could Capitalize on the EBay-PayPal Split by Frank Holmes of U.S. Global Investors

Ebay and Paypal Split - U.S. Global InvestorsInternet auctioneer and retailer eBay announced last week that it will be spinning off its online payment service PayPal into two listed companies. This decision, heralded by activist shareholder Carl Icahn, among other investors, will allegedly enable both companies to focus exclusively on what they do best.

2014-10-09 Rethinking Core Fixed Income in a Rising-Rate Environment by Michael Hasenstab of Franklin Templeton Investments

Michael Hasenstab, chief investment officer, Global Bonds, Franklin Templeton Fixed Income Group®, says it is time for fixed income investors to think outside traditional boxes. He believes that with today’s market environment and the prospect of rising US interest rates on the horizon, investors need to rethink their core fixed income portfolio. He makes the case for an actively managed, global, unconstrained fixed income strategy.

2014-10-09 Putting the Pieces Together: An In Depth Chart Review of Global Financial Markets by Team of GaveKal Capital

One of our favorite grounding exercises is to peruse our chart library and review what has happened in the global financial markets so we can opine about what those prices and patterns are telling us about the world. We'll save the opining for another time, so we present the following charts with little commentary.

2014-10-08 Is Style Box Investing Holding You Back? by Richard Bernstein, Kathleen Gaffney of Eaton Vance

In today’s market environment, tethering your portfolio to a style box or a benchmark could potentially lead to volatile investment returns when those asset classes or investment styles fall out of favor. Consider taking a flexible approach, which looks at the entire spectrum of equity and fixed income assets, to widen your opportunity set and further diversify your portfolio.

2014-10-08 The State of Small-Cap Valuations and Holding High-Confidence Names by Jay Kaplan of The Royce Funds

With the U.S. economy and employment rate slowly improving, small-cap valuations may not see a correction significant enough to offer attractively discounted share prices any time soon—at least at the levels that Royce typically seeks. Portfolio Manager and Principal Jay Kaplan discusses how he's been managing his portfolios in a market environment that's been largely unkind to value investors and talks about some names he likes going forward.

2014-10-08 Nervous Investors, Choppy Markets by Richard Michaud of New Frontier Advisors

It was a choppy third quarter for global asset classes. Domestically, Large Cap equities rose slightly but Small Cap US stocks fell.

2014-10-08 A Japan Strategist Roundtable: What’s Next for Japan? by Jeremy Schwartz of WisdomTree

The start of 2014 was a challenging time for the Japanese equity markets. But recently things started to perk up. I recently spent time in Tokyo and want to share my observations from the trip.

2014-10-07 A Q3 Letter to Clients: How to Navigate Rough Waters by Dan Richards (Article)

Each quarter I post a template for a client letter, as a starting point for advisors who want to send clients an overview of the three months that just ended and an outlook for the period ahead. Be sure to customize the letter to reflect your views, especially when it comes to recommendations for the period ahead.

2014-10-07 How Risky are Stocks in the Long Run? by Michael Edesess (Article)

What is the risk that equity investments won’t turn out as well in the long run as we would like them to? This is obviously a very important question. We are often assured that stock investments will eventually pan out because of “mean-reversion.” However, mean-reversion in securities prices is ill-defined, oversimplified and little more than a physics metaphor.

2014-10-07 The Statistical Recovery Continues by Lance Roberts of Streettalk Live

This past Friday, investors awoke to news that, according to the U.S. Labor Department, employers added 248,000 jobs last month. In addition, job numbers for previous months were revised upward, and the jobless rate fell to 5.9% from August's 6.1%. These numbers had the mainstream media cheering that "economic victory" was nigh and stocks were propelled upward.

2014-10-07 Most Risk Assets Should Continue to Find Support by Robert Doll of Nuveen Asset Management

Equity prices continued to slide in the face of uncertainty over global growth and pending changes to monetary policy. U.S. growth is continuing to improve, and shows further signs of divergence from the rest of the world. Markets may remain sloppy for a while, but fundamentals suggest most risk assets should continue to perform well.

2014-10-07 A Case of ‘Conscious Uncoupling’ by Kristina Hooper of Allianz Global Investors

Kristina Hooper comments on the divergence of monetary policy among global central banks and why the Fed must tread lightly while acting decisively and swiftly.

2014-10-07 How M&A Resurgence May Unlock Value by Francis Gallagher, Peter Drippe of Visium Funds

Growth is a strong motivator for initiating mergers and acquisitions (M&A). For years, businesses created progressively more complex organizations, acquiring or expanding into unrelated business lines, consequently often suppressing overall company valuations. The complexity of melding disparate corporations appeared to make it exceedingly difficult for investors to evaluate companies’ true worth. In the present period of slow U.S. economic growth, a new trend in M&A has emerged, as many companies are reversing these moves, benefiting stock prices, investors and, potentially, the

2014-10-06 The Most Important Chart in the World by Mark Ungewitter of Charter Trust Company

One of today’s most glaring inter-market divergences is the relative performance of US versus non-US equities. For dollar-based investors, non-US stocks have underperformed US stocks by an astounding 40% over the past five years.

2014-10-06 Emerging from the Global Competitiveness Ranks by Mark Mobius of Franklin Templeton Investments

The World Economic Forum (WEF) recently released its annual “Global Competitiveness Report,” which details the strengths and weakness of 144 countries in myriad factors including education, infrastructure, health and technology. There aren’t many huge surprises in the developed markets, as most countries’ overall rankings were fairly stable from the prior year. There were, however, a few interesting shifts in the ranks among emerging markets: some making leaps forward, and others, regressing.

2014-10-06 Nontraded REITs’ Dividends Come With Confusion, Controversy by Walter Stabell III of Invesco Blog

Interest rates have been low for quite some time, and investors are searching for ways to generate higher yields. An increasing number of them have turned to non-exchange-traded real estate investment trusts (nontraded REITs). However, nontraded REITs offer high levels of confusion and controversy along with their high yields, and regulators are concerned that these products may not be appropriate for many of the people who invest in them.

2014-10-05 Weighing the Week Ahead: Will global weakness drag down the US economy? by Jeff Miller of New Arc Investments

Last week was all about data. This week will be the opposite. The calendar already dished up the big news, and the major earnings reports are still a week away. Meanwhile, we have more conferences and speeches than I can remember seeing for many months. For those of us who think of data as the signal and politicians and pundits as noise, we must get ready for a low ratio! This week will emphasize commentary rather than data, with world leaders, Fed types, and pundits all joining in.

2014-10-04 The Wayback Machine Birthday Tour by John Mauldin of Mauldin Economics

I’ve been writing this letter for some 15 birthdays now, well over 10,000 pages of collected work. Every word is still at my website – a history, if you will, of what I was thinking at the time. I asked my longtime (and long-suffering) editor, Charley Sweet, to go back over this past decade and a half and give us a review of what I was saying my birthday week.

2014-10-04 600 Million Reasons to Keep Your Eyes on India by Frank Holmes of U.S. Global Investors

In the wake of his rock star reception at Madison Square Garden on Sunday, Prime Minister Narendra Modi has emphatically announced to our nation's top corporate and political leaders that India is now open for business. Between September 26 and 30, he met with not only President Barack Obama and other high-profile politicians but also the CEOs of some of our nation's largest and most successful companies.

2014-10-04 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

What is a good monthly U.S. payroll number?; The September U.S. job data were strong but may not move the Fed's needle; Falling inflation and inflation expectations will keep central banks from tightening

2014-10-04 What PIMCO Management Changes Mean for Investors by Team of Charles Schwab

Bill Gross resigned from his role as PIMCO’s Chief Investment Officer to join Janus Capital. The PIMCO funds on the current edition of Schwab’s Mutual Fund OneSource Select ListTM are not managed by Gross. There are no PIMCO ETFs currently on Schwab’s ETF Select ListTM. A list of funds formerly managed or co-managed by Gross is available below.

2014-10-03 China’s Inscrutable Contraction by Kenneth Rogoff of Project Syndicate

As China shifts to a more domestic-demand driven, services-oriented economy, a transition to slower trend growth is both inevitable and desirable. But the challenges are immense, and no one should take a soft landing for granted.

2014-10-03 Financial Repression (and How to Defend Yourself From It) by Mike Shedlock of Doug Short

I had the pleasure of being interviewed by Gordon Long last week. Gordon is publisher and editor of Gordon T Long Macro Analytics. The topic was "Financial Repression". What is financial repression? I defined it as "a set of fiscal and monetary policies for the expressed benefit of the ruling class: politicians, banks, and the already wealthy, at the expense of everyone else." In the video, I give numerous examples of repression, noting that central bank sponsored inflation is the epitome of financial repression. We also discuss what to do about financial repression.

2014-10-03 Our DNA by Douglas M. Hodge of PIMCO

Our investment process, which lies at the heart of the value we offer clients, is ingrained – it is stamped into our DNA. Our culture of rigorous and open debate will continue to animate quarterly forums of our global investment and executive leadership, as well as the daily meetings of the Investment Committee. We remain a team-oriented organization. Indeed, it could hardly be otherwise in a firm which over many years has grown to nearly 2,500 investment professionals and staff stationed in 13 global offices, with nearly $2 trillion in assets and a full suite of strategies, including co

2014-10-03 Vision 1994 by Mark Headley of Matthews Asia

Twenty years ago, Paul Matthews decided to launch two Asia ex-Japan mutual funds in the U.S. and create what is today the Matthews Asia Funds. One was a core Asia ex-Japan growth fund with a mid-capitalization bias. The other fund was a unique portfolio with a focus on Asian convertible bonds. Thus began the journey of the Matthews Pacific Tiger and the Matthews Asian Growth and Income Funds.

2014-10-03 5 Things To Ponder: Motley Cognizance by Lance Roberts of Streettalk Live

It has been an interesting week in the financial markets as the current correction process has continued. As shown in the chart below, the correction has primarily occurred in the mid, small and international equities as money has rotated into mega-large cap stocks for safety.

2014-10-02 Will Risk Parity Performance Persist? by Chris Maxey, Brian Payne of Fortigent

With risk parity portfolios on the whole having outperformed traditional 60/40 allocations since the trough of the financial crisis, one must be mindful of the risks that lie ahead when determining the efficacy of such an approach.

2014-10-02 Voya Fixed Income Perspectives – September 2014 by Christine Hurtsellers, Matt Toms of Voya Investment Management

Change is in the air, and it’s evident beyond the riot of color overwhelming our natural landscape. Market dynamics, too, are shifting, with the yield on the U.S. two-year Treasury inching higher and the U.S. dollar appreciating. Both not only suggest markets are pricing in a stronger U.S. economy, they are also potential harbingers that the end of zero interest rate policy is near.

2014-10-02 3Q14 Market: Small-Caps at a Relative Disadvantage by Jack Fockler of The Royce Funds

We believe that equities continue to represent an attractive option, that fundamentals matter, especially on a long-term basis, and that stock pickers, i.e., active managers, are uniquely positioned to add value in the current market environment and beyond.

2014-10-02 PIMCO Cyclical Outlook for the Americas: Recovery Remains Intact, Yet Uneven by Ed Devlin, Mike Cudzil, Lupin Rahman of PIMCO

U.S. growth can potentially exceed expectations over the cyclical horizon, in part bolstered by a healing consumer and a very accommodative Federal Reserve. While real growth in Canada has been modest in recent years, it increased to 3.1% in the second quarter and we expect that positive momentum to continue this year. In Latin America, we expect growth will pick up for the region as a whole with outperformance by smaller economies like Colombia and Panama.

2014-10-02 Six Months of Nothing by Niels Jensen of Absolute Return Partners

Political problems have escalated over the past seven months. Russia has been aggressive and so have extremists in certain Muslim countries. Having said that, financial markets seem to care about nothing but QE. Despite a growing disconnect in some markets between equity valuations and economic fundamentals, we expect the low interest rate environment to carry the equity bull market for a little longer, but eventually it will end in tears.

2014-10-02 Correction Awakens Sleeping Bears, Plunging Oil and Dollar Spikes by Lance Roberts of STA Wealth Management

Since the end of 2012, the S&P 500 has been on an inexhaustible rise despite rising geopolitical tensions, extremely cold weather and weak economic data. The driver, of course, has been the massive liquidity inflows from the Federal Reserve that have catapulted the markets from their previous upward bullish trend into an accelerated push. This is shown in the chart below.

2014-10-02 Uncertainty in markets, economy puts focus on stock picking by Michael Avery, Cynthia Prince-Fox, Chace Brundige of Ivy Investment Management Company

The U.S. Federal Reserve (Fed) has indicated it will stop buying U.S. Treasury bonds and mortgage-backed securities – the “taper” of its QE3 program – by the end of October. The Fed also has said it will keep interest rates at a very low level for a “considerable time.”

2014-10-01 How High US Corporate Tax Rates Hurt the Economy by Gary Halbert of Halbert Wealth Management

The US corporate tax rate is the highest among developed nations at 35% at the federal level. Tack on state and local taxes, which can add 5-7%, and US corporations are looking at a 40%-42% income tax burden. But the US takes it even another step further, unlike any other country in the developed world.

2014-10-01 Markets’ Rational Complacency by Nouriel Roubini of Project Syndicate

A century ago, financial markets priced in a very low probability that a major conflict would occur, blissfully ignoring the risks that led to World War I until late in the summer of 1914. Back then, markets were poor at correctly pricing low-probability, high-impact tail risks; they still are.

2014-10-01 Making Sense of the Bond Market by Phelps McIlvaine of Saturna Capital

A persistent reduction in the US inflation rate and well-anchored inflation expectations continue to contradict the common understanding that interest rates have reached a cyclical floor.

2014-10-01 Forget Active vs. Passive: It's All About Factors by Adam Butler, Mike Philbrick, Rodrigo Gordillo of Butler|Philbrick|Gordillo & Associates

We just love a good debate, and there seems to be quite a heated debate at the moment about the relative utility of passive versus active investing. Perhaps this debate is as timeless as investment management itself, but a flurry of recent studies may have finally armed passive advocates with enough ammunition to settle the argument once and for all.

2014-10-01 Looking Back, Looking Ahead by Scott Brown of Raymond James

Real GDP is now estimated to have risen at a 4.6% annual rate in 2Q14. However, the second quarter’s strength must be balanced against the first quarter’s weakness (a -2.1% pace). As the third quarter ends, we still don’t have a complete picture. However, figures are likely to suggest a moderately strong pace of growth and a gradual taking up of economic slack.

2014-09-30 The Fed Trap by Stephen Roach of Project Syndicate

The US Federal Reserve is grappling with the disparity between its unconventional policy's success in preventing economic disaster and its failure to foster a robust recovery. Given that this disconnect has fueled financial-market excesses, the exit will be all the more problematic – especially for the market-fixated Fed.

2014-09-30 Ebola by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

Last week marked six months since the Ebola outbreak was identified in Guinea. The current Ebola epidemic is the most severe and most complex outbreak of the disease in the history of the virus. This week, we will explore the Ebola outbreak, looking at the origin of the disease and how it has spread and developed into a serious epidemic. Although it is hard to find comparable epidemics due to its complexities, we will look at other disease outbreaks in order to gain a better understanding of the scale of the current Ebola epidemic. We will finish with geopolitical and market ramifications.

2014-09-30 Economic Atonement by Peter Schiff of Euro Pacific Capital

This Friday is Yom Kippur, the day when Jews around the world ask forgiveness for their transgressions from the year past. Rabbis remind the penitent to dwell on their sins of omission, in which they did nothing when a more thoughtful and proactive action was needed, and sins of commission, in which they actively participated in an unjust action. And while not all economists are Jewish, Gene Epstein the economics editor at Barron's, offered his thoughts on how this applies to the group.

2014-09-29 Time for an Allocation by Tim Gramatovich of AdvisorShares

The size of the U.S. dollar high yield bond and loan market is over $3 trillion, representing nearly 30% of the corporate credit markets.

2014-09-29 Short Equity ETFs: An Imperfect Market Hedging Strategy by Bob Andres of Andres Capital Management

“So the Wizard unfastened his head and emptied out the straw. Then he entered the back room and took up a measure of bran, which he mixed with a great many pins and needles. Having shaken them together thoroughly, he filled the top of the Scarecrow's head with the mixture and stuffed the rest of the space with straw, to hold it in place.” – L. Frank Baum, The Wonderful Wizard of Oz

2014-09-29 Slower Growth in China and Japan Pressures the Region by Scott Mather, Tomoya Masanao, Adam Bowe of PIMCO

Our forecast for the global economy is below consensus mainly because of our views for regions outside of the U.S., including Asia, the emerging markets and Europe, although higher growth in the U.S. should offset some of the slowdown we see coming from China. Japan made a kick start under so-called Abenomics with massive monetary and fiscal reflation policies, but the recent data suggest to us that the effectiveness of those cyclical policies are already challenged by secular and structural headwinds.

2014-09-29 Looking Past the Risks, Equities Still Appear Attractive by Robert Doll of Nuveen Asset Management

Last week featured some positive economic news, but equity markets sank nonetheless, with the S&P 500 Index falling 1.3%. On the bright side, we saw some strong data from the housing market and an upward revision to second-quarter gross domestic product growth (GDP).

2014-09-28 The End of Monetary Policy by John Mauldin of Mauldin Economics

Let’s explore the limits of monetary policy and think about the evolution and then the endgame of economic history. Not the end of monetary policy per se, but its emasculation.

2014-09-27 5 Reasons Why Short-Term Municipal Bonds Make Sense Now by Frank Holmes of U.S. Global Investors

Although short-term bonds might not be as sexy as common stocks in fashionable brands like Apple and Tesla, they play an important role in any serious investor's portfolio. Below are five reasons why investing in municipal bonds makes sense now more than ever.

2014-09-27 Clear Sailing…or Choppy Seas? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley & Jeffrey Kleintop of Charles Schwab

We are at a tenuous point in the market seasonally speaking and a pullback is quite possible. We don’t recommend trying to time a potential correction, however, as that is virtually impossible and exposes investors to missed upside opportunities waiting on the sidelines. Elsewhere, the international picture looks a little shaky, but diversification is important and we do favor emerging markets within an international portfolio.

2014-09-26 When it Comes to Interest Rates, Who Says What Comes Down Must Go Up? by Zachary Karabell of Envestnet

We are, at long last, nearing the end of one of the great central banking experiments: the U.S. Federal Reserve’s policy of quantitative easing, which began in the wake of the financial crisis of 2008-2009. While the unwinding of the monthly purchases of billions of dollars of mortgage-backed securities and other bonds has been going on for many months, markets are now increasingly attuned to what comes next. And the primary question is quite simple: will interest rates rise and if so, by how much and when?

2014-09-26 Reading Fed Tea Leaves by Christopher Molumphy of Franklin Templeton Investments

Monetary policy is of keen interest to fixed income investors, and the US Federal Reserve (Fed) has been known to be particularly obtuse when it comes to interest-rate talk. One thing is clear: The Fed is winding down its longstanding quantitative easing (QE) program. What’s not so clear: when the Fed will actually raise short-term interest rates.

2014-09-26 Many Investors Still Fear Stocks: Good News for Markets? by Russ Koesterich of BlackRock

The economy and the stock market are no longer depressed, yet the share of U.S. adults who own stocks remains at multi-year lows. Russ explains why investors haven’t yet fully embraced equities and what this could mean for longer-term stock market performance.

2014-09-25 Playing Defense in Emerging Market Fixed Income by Bradley Krom of WisdomTree

When looking around the global fixed income landscape, investors searching for income potential have essentially two choices: non-investment grade debt or emerging markets (EM). While high yield flows continues to dominate the headlines, emerging markets have generally flown under the radar in recent months. In this discussion, we focus on how investors may be able to best position against a change in Federal Reserve (Fed) policy while maintaining income potential from investments in emerging markets.

2014-09-25 Awakening Japan Inc. by Yu Zhang of Matthews Asia

Japanese Prime Minister Shinzo Abe's first two "arrows" of his expansionary fiscal policies have done well to curb deflation. Now, investors are concerned about Japan's so called "third arrow"—the country's growth strategy. Can credible structural reform be implemented to remove impediments to its growth?

2014-09-25 Don’t Fight the ECB? Part 2 by Burt White of LPL Financial

Last week we discussed why buying European stocks now, following the recent stimulus announced by the ECB, is very different from buying U.S. stocks during periods of Fed stimulus in recent years. This week we take a deeper dive into the investment opportunity in Europe and evaluate fundamentals, valuations, and technicals. We recommend that investors “fight the ECB.” We do not believe the additional stimulus is enough for us to recommend European equities over U.S. equities at this time.

2014-09-25 Europe’s Commercial Real Estate Deleveraging: ‘Not Too Fast, Not Too Slow’? by Tareck Safi, Tom Collier of PIMCO

As European bank deleveraging accelerates, we expect that commercial real estate (CRE) will continue to constitute a significant proportion of bank assets to be sold, albeit with a shifting geographical mix. We believe CRE opportunities remain in the form of single assets and complex structured transactions in particular; but a disciplined approach will be key given competition in specific types of assets and in certain jurisdictions. This will require flexible capital, local investment expertise and hands-on asset management, in addition to strategic sourcing capabilities.

2014-09-25 Three Reasons to Consider EM Asia by Russ Koesterich of BlackRock

Though EM stocks have been struggling of late, Russ still believes investors should have emerging market exposure, particularly in emerging Asia. He provides three reasons why.

2014-09-25 China Defies Analysts’ Predictions with an Encouraging PMI by Frank Holmes of U.S. Global Investors

HSBC announced Tuesday that the preliminary purchasing managers’ index (PMI) for China rose to 50.5, a modest improvement from August’s 50.2. Analysts were expecting the index to decline to a neutral 50.0, based on softening factory employment, but this is a case when you’re relieved others were off the mark.

2014-09-25 Global Equities Stay Thirsty for Liquidity by Rick Golod of Invesco Blog

Taking a step back from the usual economic and market insights, my September commentary is devoted to a topic that I’ve been long overdue in addressing. Financial advisors have frequently asked about my approach to asset allocation, and I’ve outlined my strategy for diversifying within the US equity space in my commentary, “Harnessing the Market’s Natural Rotation: An Asset Allocation Strategy.” Here, I’d like to provide a summary of my outlook, which remains unchanged from the previous month.

2014-09-24 Open Sesame by Brian Andrew of Cleary Gull

Often times, investors are interested in pursuing investments in the hottest asset class. The hype surrounding the Alibaba IPO is an example of how a sector gets a boost from a hot new stock. The fact that the stock traded up almost 40% in the first day of trading is an indication that the sector is “hot.” It is difficult not to want to add more capital to that portion of your portfolio that is performing best while ignoring the portion that isn’t performing as well. Of course that is exactly what you are supposed to do and what rebalancing is all about.

2014-09-24 Equities: Finding the Path to Value? by Virginie Maisonneuve, Anne Gudefin of PIMCO

Going forward, earnings growth and stock selection - more than multiple expansion and beta - will likely play a bigger role in driving positive returns. Our research has uncovered numerous examples of stocks trading below our estimate of intrinsic value - notably in Europe and various special situations. Investors with the capacity for deep, fundamental research and a long-term unconstrained equity strategy may be positioned to capitalize on these opportunities.

2014-09-24 India: A Bright Spot in Emerging Markets by Christopher Gannatti of WisdomTree

In 2013, emerging markets were the laggards of the global equity markets. 2014 has seen some bright spots, but various uncertainties, most notably with respect to Russia, have tended to constrain equity rallies. However, there is one market that seems to have completely shrugged off 2013 concerns and emerge as an extremely strong performer thus far this year.

2014-09-24 Bull Market Mirage by Team of GaveKal Capital

On an equal weighted basis, the MSCI World index is up 2.58% YTD, is down 3.39% QTD and down 3.01% MTD. The equal weight index gives us a better idea of our chances of picking stocks that outperform.

2014-09-23 Why "Healthspan" Trumps "Lifespan" for Clients by Dan Richards (Article)

Advisors spend a great deal of their time with clients who ask, "Will I run out of money?" As a result, few issues get more attention than the sustainable withdrawal rate in today's environment. But new research shows that an equally pressing question is, "How can I enjoy life in my 60s, before health issues creep in?"

2014-09-23 Weekly Market Update by Team of Castleton Partners

In a week defined by increased rate volatility, Treasury yields ended mixed, as the yield curve continued to flatten. Registering its first monthly decline in over a year, the Consumer Price Index (CPI) continued to support a benign inflationary environment, further supporting long-dated instruments. With global inflation subdued, central banks around the world remain more concerned about lapsing back into recession than about frothy risk markets and potential bubbles.

2014-09-23 Back to Iraq by Bill O'Grady of Confluence Investment Management

President Obama has decided to build a coalition to dislodge the Islamic State (IS). The U.S. is leading the coalition, but American efforts will be limited to air power. In this report, we will offer a short synopsis of the war plan. This analysis will be followed by a broader discussion of U.S. Middle East strategy, including a history of American policy. We will move to discuss the most likely outcome from these efforts and conclude, as always, with market ramifications.

2014-09-23 Keeping Up With Global Relative Performance Trends by Team of GaveKal Capital

The MSCI All Country World Index (ACWI) is a comprised of two basic pieces: the MSCI World (Developed) Index, which contains about 1,600 companies and the MSCI Emerging Markets Index, which contains about 850 companies. The MSCI ACWI is a good global reference point for measuring relative performance trends.

2014-09-23 Stocks Rally Following Janet Yellen’s Conference and Scotland’s Historic Referendum by Frank Holmes of U.S. Global Investors

Interest rates can’t stay zero forever, but for now it’s more of the same.

2014-09-22 The Ponzi Economy by John Hussman of Hussman Funds

When the most persistent, most aggressive, and most sizeable actions of policymakers are those that discourage saving, promote debt-financed consumption, and encourage the diversion of scarce savings to yield-seeking speculation rather than productive investment, the backbone that supports a rising standard of living is broken.

2014-09-22 It’s Time for Your Portfolio to Break from Tradition by Kathleen Gaffney, Kevin Dachille of Eaton Vance

Given the current low-yield environment and with rising interest rates looming, now may be the right time to consider new strategies for generating favorable returns in your fixed-income portfolio.

2014-09-22 A Lack of Surprises Helps Equity Markets Make Gains by Robert Doll of Nuveen Asset Management

Equity markets rose again last week, with the S&P 500 Index climbing 1.3% and reaching another record high. Bond yields and the U.S. dollar drifted higher, while emerging market equities and commodities struggled. Two major events that resulted in a continuation of the status quo helped market sentiment.

2014-09-22 Copper Breaking Through Important Support as USD Continues to Surge by Team of GaveKal Capital

Copper, after having been turned down by the falling trendline last week, is breaking down through the upward sloping support line today.

2014-09-22 Two Themes Investors Should Focus on Now by Russ Koesterich of BlackRock

With countries’ growth, monetary policy and market performance increasingly diverging, Russ shares two themes investors should focus on as year-end approaches.

2014-09-22 Alternative Approaches for Managing Emerging Market Equity Portfolios by Roger Edgley, Laura Geritz, Andrey Kutuzov, and Ajay Krishnan of Wasatch Funds

The shortcomings of indexing are especially evident in frontier markets, where some very small markets have significant weights. This paper discusses three approaches for targeting inefficiencies in emerging markets. These approaches are designed to fit together and complement each other within an investment portfolio. Overlap is generally minimal, so investors may reasonably employ all three.

2014-09-22 Certainty is Not the Same as Precision: What Feels Like Stability Often Is Only an Ephemeral Equilib by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at the seemingly stable state of the current bull market and examines research on how and when such "stability" erodes. Hint: very quickly and without discernible warning. He explores the "Black Swan" and "Fingers of Instability" research by Nassim Taleb and John Mauldin respectively, noting that: "…even experts who have analyzed how shocks to the system might strike have failed to offer precise warning systems."

2014-09-21 Where’s the Growth? by John Mauldin of Mauldin Economics

Call me a heretic, but I take a different view than the economists in charge. To my mind, the sluggish recovery is a sign that central banks, governments, and, quite frankly, the “textbook” economists (despite their best intentions) are part of the problem. As Detlev Schlichter commented in his latest blog post (“Keynes was a failure in Japan – No need to embrace him in Europe”), “To the true Keynesian, no interest rate is ever low enough, no ‘quantitative easing’ program ever ambitious enough, and no fiscal deficit ever large enough.” It&r

2014-09-20 Stocks Rally Following Janet Yellen's Conference and Scotland's Historic Referendum by Frank Holmes of U.S. Global Investors

This news gives stocks reason to rally for a “considerable time,” or at least until the Fed gives us a more concrete timeframe for a rate hike.

2014-09-19 Panic in Bermuda: When Your Business Turns into an “Interesting New Asset Class” by Krishna Mohanraj of Diamond Hill Capital Management, Inc.

All else equal, we prefer to invest in strong franchises in stable industries. However, even within industries undergoing turmoil, understanding the differing prospects of individual firms can present us with attractive investment opportunities, both long and short.

2014-09-19 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The choice for Europe: coming together or breaking apart; Scotland votes nay; The dollar has been the beneficiary of global uncertainty

2014-09-19 A Revolutionary Idea: Investing in Europe (even Russia) by Tucker Scott of Franklin Templeton Investments

The eurozone appeared to have emerged from a prolonged recession when conflict in Ukraine intensified earlier this year with Russia’s annexation of Crimea. The continued complexity of the crisis in Ukraine now threatens to derail Europe’s fragile economy, and European stocks have suffered. That said, more attractive valuations in Europe may lure investors back to European stocks, according to Tucker Scott, portfolio manager and executive vice president, Templeton Global Equity Group™. He sees opportunity through the fog of crisis and makes a case for finding value in Europe&m

2014-09-18 Room to Run by Marie Schofield of Columbia Management

The U.S. economy passed a milestone of sorts in August, in that the current business cycle has now surpassed the last one in length. The prior business cycle started in 2001 and continued until the December 2007 peak, lasting 6.8 years. This is longer than the post-war average of 5.6 years, but shorter than the business cycles in the 1980s and 1990s which lasted 9 to 10 years.

2014-09-18 What the Scottish Referendum & Fed News Could Mean for Investors by Russ Koesterich of BlackRock

Last week’s stock losses were partly a reflection of investors looking ahead to the Scottish independence vote this Thursday and the Federal Reserve (Fed)’s statement on Wednesday. Russ weighs in on the investing implications of these two big news events.

2014-09-18 The Sand Demand: Finding Opportunities Beyond Direct Shale Plays by Frank Holmes of U.S. Global Investors

Total U.S. crude oil production averaged an estimated 8.6 million barrels per day in August, the highest monthly production since July 1986, according to the Energy Information Administration (EIA). In our Special Energy Report: An American Energy Renaissance, we highlight that just a few years ago investors were contemplating the supply constraints facing the petroleum industry, but with the disruptive technology in shale oil and gas in the U.S., we could now be looking at decades of drilling ahead.

2014-09-18 “You’re Going to Need a Bigger Boat”: Alpha and Interest Rates by Brooks Ritchey of Franklin Templeton Investments

Caution has been the dominant sentiment among investors in recent times even as equities have continued to march along. But as the prospect of rising US interest rates becomes ever more real, Brooks Ritchey, senior managing director at K2 Advisors, Franklin Templeton Solutions, takes a look at how some individuals and institutions are changing their guarded approach. He says alternative investments could find increased interest among savvy investors as interest rates start to tick higher.

2014-09-18 Then and Now by Jeffrey Saut of Raymond James

Dallas-based Greenbrier Partners is captained by my friend Frederick E. Rowe, who is fondly referred to as Shad. Now anyone from Virginia is familiar with the fish known as a shad, and are probably familiar with the political event known as the Shad Planking.

2014-09-17 Markets’ Rose-Tinted World by Mohamed El-Erian of Project Syndicate

This has been an unusual year for the global economy, characterized by a series of unanticipated economic, geopolitical, and market shifts – and the final quarter is likely to be no different. So why are financial markets behaving as if they were in a world of their own?

2014-09-17 America in the Driver’s Seat – Enjoy the Ride by Doug MacKay, Bill Hoover of Broadleaf Partners

Like clockwork, earnings season has drawn to a close, creating an information vacuum for the stock market, one in which the media spends more time "making" the news than perhaps reporting it. The marginal dollar at trade - or the price maker in a high frequency dominated trading world - is one more likely to be concerned about the Fed's words over the next two days than the stream of earnings produced by corporate America over the next few quarters.

2014-09-17 Will the Scottish Vote on Independence Be the "Black Swan"to Financial Markets? by Dawn Bennett of Bennett Group Financial Services

I wonder if the issue of an independent Scotland would actually be something of a black swan for the U.S. and world financial markets? According to Reuters, the international news agency, investors this past month, August 2014, have pulled approximately $27 billion out of UK financial assets. This is the biggest capital outflow since the Lehman crisis in 2008.

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 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 Of Kilts, Ballots, Bankers and Dots by Kristina Hooper of Allianz Global Investors

Kristina Hooper breaks down the hairy mix of economic data, central bank policy and geopolitical events, including Scotland's potential exit from the UK, that markets are combing through right now.

2014-09-16 Indonesia by Kaisa Stucke, Bill O'Grady of Confluence Investment Management

The recent presidential election in Indonesia has attracted international interest as both candidates’ platforms included promises of import substitutions, export restrictions and retention of production processes in Indonesia. Although Indonesia holds substantial growth promise for foreign investors, the potential trade restrictions are making international companies nervous. This report discusses Indonesia, briefly describing its history, economy and political landscape. It delves into the election, promises made on the campaign trail and the implications of the results on foreign inve

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 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 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.

2014-09-14 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 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 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 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.

2014-09-10 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 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 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 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 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 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 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 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.

2014-09-04 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 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 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 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 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 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 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 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 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 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 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.

2014-09-01 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.

2014-08-30 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.

2014-08-29 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 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 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 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.

2014-08-27 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 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 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 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 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 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 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 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

2014-08-22 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 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.

2014-08-21 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 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.

2014-08-20 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 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.

2014-08-19 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.

2014-08-19 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.

2014-08-18 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 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 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 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 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 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 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 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 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.

2014-08-12 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 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).

2014-08-11 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 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 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?

2014-08-07 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.

2014-08-06 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 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 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.

2014-08-05 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 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 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.

2014-08-04 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 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.

2014-08-02 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 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 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.

2014-07-31 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 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.

2014-07-30 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 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 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.

2014-07-29 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 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 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 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 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 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.

2014-07-28 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 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 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.

2014-07-26 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 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 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 “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 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 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 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 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.

2014-07-24 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 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.

2014-07-23 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 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 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. 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 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 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 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.

2014-07-22 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 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 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 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?

2014-07-21 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.

2014-07-19 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 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.

2014-07-19 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 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 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.

2014-07-18 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 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 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 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 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 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 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.

2014-07-17 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 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 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 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.

2014-07-16 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 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 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.

2014-07-15 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 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 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 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 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 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 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 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.

2014-07-14 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 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.

2014-07-12 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 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 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.

2014-07-09 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 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.

2014-07-08 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 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 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.

2014-07-07 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 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 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 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 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 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 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 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 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 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 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 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 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 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.

2014-06-28 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.

2014-06-27 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 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.

2014-06-26 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 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. ?

2014-06-25 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 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 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.

2014-06-24 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 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 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 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 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 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 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 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 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.

2014-06-19 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 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 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 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 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 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 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 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 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 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.

2014-06-16 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 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 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 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.

2014-06-14 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 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 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 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 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 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 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.

2014-06-12 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 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 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.

2014-06-11 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 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 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 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 The Orphaned Bull Market by William Smead of Smead Capital Management

Howard Gold is an inquisitive writer for Marketwatch.com 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 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 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 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?

2014-06-06 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 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

2014-06-05 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 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 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 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 US Housing Market's Darkening Data by Brian Pretti of PeakProsperity.com

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 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 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 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 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 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 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 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 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 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.

2014-05-29 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 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 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.

2014-05-28 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 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.

2014-05-27 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 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 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.

2014-05-25 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.

2014-05-23 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 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

2014-05-22 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 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 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 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.

2014-05-20 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 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.

2014-05-19 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 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.

2014-05-16 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 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 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 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 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.

2014-05-14 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 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?

2014-05-13 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 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.

2014-05-12 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 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 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 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 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 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 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 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 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 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 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 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 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 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 TheStreet.com 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.

2014-05-05 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 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 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.

2014-05-04 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 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

2014-05-02 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 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.

2014-05-01 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 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.

2014-04-30 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 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 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 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.

2014-04-29 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 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 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 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 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 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.

2014-04-27 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 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 (dshort.com)

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 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.

2014-04-24 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 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 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 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 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.

2014-04-22 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 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 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 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.

2014-04-21 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 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 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.

2014-04-17 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 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 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 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.

2014-04-16 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.

2014-04-15 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 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 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.

2014-04-14 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 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.

2014-04-12 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 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 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 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

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 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 "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 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.

2014-04-09 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 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.

2014-04-08 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 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 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 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.

2014-04-07 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.

2014-04-05 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 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 (dshort.com)

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 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.

2014-04-03 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 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 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 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 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 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.

2014-04-01 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 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. ?

2014-03-31 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 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 ?rms increase the chance of the client’s later feeling fooled, and feeling like a fool. Independent ?rms 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.

2014-03-28 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 ?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 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 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

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 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 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 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 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 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 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.

2014-03-25 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 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.

2014-03-24 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 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 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.

2014-03-22 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 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 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 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 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 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 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 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 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

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).

2014-03-20 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.

2014-03-19 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 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 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.

2014-03-19 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.

2014-03-18 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 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 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 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.

2014-03-17 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 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 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.

2014-03-15 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 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?

2014-03-13 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 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 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.

2014-03-11 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 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 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.

2014-03-10 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 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 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.

2014-03-07 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 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 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.

2014-03-06 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 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.

2014-03-05 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 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 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 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 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 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 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 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.

2014-03-03 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 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 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.

2014-03-01 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 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 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 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 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.

2014-02-26 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 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 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 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 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 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 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 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.

2014-02-22 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.

2014-02-20 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 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 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 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 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 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.

2014-02-19 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 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.

2014-02-18 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 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 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.

2014-02-15 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 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 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 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.

2014-02-12 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%.

2014-02-11 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 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 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.

2014-02-09 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 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.

2014-02-08 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.

2014-02-07 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.

2014-02-07 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 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 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 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 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 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.

2014-02-06 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 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 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."

2014-02-06 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 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."

2014-02-05 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 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 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 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 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 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 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 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 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 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.

2014-02-01 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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.

2014-01-24 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.

2014-01-23 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 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 Be Selective by Jim Goff, Adam Schor of Janus Capital Group

After broad rally, focus shifts to individual company growth prospects.

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 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.

2014-01-22 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 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.

2014-01-21 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 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 Stocks 2014: Investing for Growth - The Power and Protection of High Compounding Earnings Growth by Chuck Carnevale of F.A.S.T. Graphs

As I become more mature (translate: gotten older), my investment philosophy has slowly evolved into a more conservative posture. When I was a younger investor I felt I had time on my side, and therefore, was willing to take on greater risk as long as I believed that greater rewards could follow. In other words, if I made a mistake by investing in an aggressive and more risky growth stock that went badly, I felt I had adequate time to overcome or recover my losses. Consequently, as a younger investor I relished a good growth stock.

2014-01-21 Achieving Escape Velocity by Mohamed El-Erian of Project Syndicate

While the prospect of faster global GDP growth in 2014 is good news, it is too early to celebrate. Indeed, there is a risk that, by tempting policymakers into complacency, this year’s economic upturn could even end up being counterproductive.

2014-01-21 And That's The Week That Was by Ron Brounes of Brounes & Associates

With a few more days to digest the labor data, investors began the week on another sour note, but a sense of normalcy returned on some other better-than-expected releases. Still, the Fed’s stimulus remains atop the headlines as speculation runs amuck about how the tapering will play out. Earnings season pushes ahead and, thus far, the results are lackluster at best. Don’t forget, as January goes...

2014-01-21 Kansas by Jerome Schneider of PIMCO

In the coming year, traditional money market strategies, long viewed as safe havens, will be challenged by new regulations, near 0% returns and a lack of investable assets. Short-term bond strategies could provide the right balance between risk-taking and liquidity management, and offer the potential for positive returns. Active managers have a distinct advantage because they can manage interest rate volatility and potentially source assets by identifying underappreciated sectors.

2014-01-21 The Deflation Menace by Peter Schiff of Euro Pacific Capital

Dedicated readers of The Wall Street Journal have recently been offered many dire warnings about a clear and present danger that is stalking the global economy. They are not referring to a possible looming stock or real estate bubble (the paper sees few threats there). Nor are they talking about other usual suspects such as global warming, peak oil, the Arab Spring, sovereign defaults, the breakup of the euro, Miley Cyrus, a nuclear Iran, or Obamacare.

2014-01-21 Digging for Natural Resource Opportunities in 2014 by Frederick Fromm, Stephen Land, Matthew Adams of Franklin Templeton

The natural resources sector has been through a period of transition in the past year, one which has pushed many companies toward cost reduction and greater capital discipline amid an environment of rather sluggish global economic growth. Franklin Equity Group Analysts Fred Fromm, Stephen Land and Matthew Adams think an improving economic outlook could set the stage for potentially stronger commodity demand going forward, and see healthy potential demand growth for energy in particular. They share their outlook for the natural resources sector in 2014, and where they are finding opportunities.

2014-01-21 Emerging Markets 2014 Outlook: Shaping the Next Decade by Mark Mobius of Franklin Templeton

As we embark upon a new year, the Templeton Emerging Markets Group believes 2014 could be an important year for many emerging markets, possibly establishing trends that could play out through much of the remainder of the decade. In particular, Chinese government reform initiatives announced in late 2013 could have far-reaching significance. And, major elections in a number of countries in 2014 could bring dramatic (or not-so-dramatic) changes. Here are a few themes and countries we’ve got our eye on in the new year.

2014-01-21 Brother, Can You Spare a Bitcoin? by Milton Ezrati of Lord Abbett

The electronic currency has attracted attention from speculators and financial media, but it’s unlikely to upend the existing monetary order.

2014-01-18 Dialing Down the Drama by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

We remain optimistic on stocks for 2014, but there will likely be bumps in the road. Investor sentiment is elevated, complacency seems to be building, and the valuation story is less compelling. But waiting for a correction can be quite detrimental to portfolio performance, evidenced by last year. QE tapering will likely continue at a very modest pace and U.S. interest rates will likely drift higher throughout the year. We remain positive on Europe and our outlook toward China is improving, while we are in at wait-and-see sort of mode with Japan.

2014-01-18 Forecast 2014: 'Mark Twain!' by John Mauldin of Millennium Wave Advisors

The surface of the market waters looks smooth, but the data above suggest caution as we proceed. Perhaps slowing the engine and taking more frequent soundings (or putting in closer stops!) might be in order. The cry should be "Mark twain!" Let’s steam ahead but take more frequent readings and know that a course correction may soon be necessary.

2014-01-17 Rebalancing the U.S. Economy by Marie Schofield of Columbia Management

It’s happening again-a fourth quarter bounce in economic activity that extends into the first quarter and supports the view that growth really, finally, has started to accelerate. Such bounces have disappointed so far, although it does appear to be more than just hope this time.

2014-01-17 Digging for Natural Resource Opportunities in 2014 by Frederick Fromm, Stephen Land, Matthew Adams of Franklin Templeton

The natural resources sector has been through a period of transition in the past year, one which has pushed many companies toward cost reduction and greater capital discipline amid an environment of rather sluggish global economic growth. Franklin Equity Group Analysts Fred Fromm, Stephen Land and Matthew Adams think an improving economic outlook could set the stage for potentially stronger commodity demand going forward, and see healthy potential demand growth for energy in particular. They share their outlook for the natural resources sector in 2014, and where they are finding opportunities.

2014-01-17 Continuing a Winning Formula for 2014 by Frank Holmes of U.S. Global Investors

In any competition, sports or investment management, there are lessons to learn to improve and better results.

2014-01-17 The Profits Bubble by Chris Brightman of Research Affiliates

Profits are dangerously elevated by all reasonable measures. S&P 500 Index real earnings per share are far above their long-term historical trend. Industry profit margins are at or near all-time highs. Corporate profits, both as a percentage of GDP and relative to labor income, are at or near record levels. The dramatic rise in income inequality is a direct consequence of this spectacular reallocation of income to capital and away from labor.

2014-01-17 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

You might be surprised to learn that the top 20 percent of income earners bring in a household income of just over $100,000. The top 10 percent of earners have a household income of more than $148,687. To be considered in the top 1 percent, household income is at least $521,411.

2014-01-16 A Flight to Quality by Ben Fischer of Allianz Global Investors

CIO NFJ Ben Fischer delivers his 2014 outlook, focusing on the Fed’s tapering of its bond-buying program and how high-quality, dividend-paying stocks should respond.

2014-01-16 Reversal of Fortune - Competitive Advantages Redefining Industrial Investment in the U.S. by Niall O'Malley of Blue Point Investment Management

As an investment manager, I seek investments with sustainable growth. I have the freedom to look anywhere in the world. Quietly, the U.S. has developed a competitive advantage in energy costs that is rewriting the history books. For the first time in generations an abundant energy supply has the potential to improve the air we breathe while creating hundreds of thousands of new jobs. It is creating opportunities where just five years ago energy intensive industrial production was being shuttered in the U.S.

2014-01-16 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Last year ended very well for us! The New Year has started slowly both because of the weather and because of the middle of the week timing of the holidays. Last Friday’s employment report for December was the 1st real piece of economic data which the financial markets could sink their teeth into, and the results have most people (not us) confused.

2014-01-16 EM Sovereign Debt 2014: Neither Phoenix nor Failure by Paul DeNoon of AllianceBernstein

Emerging-market (EM) sovereign bonds were burned badly in 2013. Will they rise from the ashes in 2014? We believe some will and some won’t. The watchword for 2014 will be selectivity.

2014-01-15 The Haves and the Have Nots by Scott Migliori of Allianz Global Investors

CIO Equity US Scott Migliori’s 2014 outlook calls for moderate growth, an accommodative Fed and a stock-picker’s market, favoring areas of the economy that are insensitive to growth.

2014-01-15 U.S. Inflation Outlook 2014: Signs of Life by Nicholas Johnson, Mihir Worah of PIMCO

We expect headline CPI to rise to around 2.0% year-over-year in 2014, with our base case oil forecast in the $105-$110 per-barrel range and expectations for food prices to be stable. PCE, in our view, will likely remain below the Fed’s 2% target, around 1.5%. Individuals will get some relief at the supermarket, but they will feel a pinch from landlords, who will likely raise rents.

2014-01-15 Investment Insights from a Road Warrior by Frank Holmes of U.S. Global Investors

As part of our investment process, we often take the explicit knowledge learned from our statistical models and overlay them with global travel.

2014-01-14 What Have We Learned from the Financial Crisis? by Michael Edesess (Article)

Why do we need yet another discussion of the 2007-09 financial crisis and its aftermath? That question is asked and answered by Alan S. Blinder in his new book, After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead. Blinder provides new details about this harrowing chapter in our financial history and valuable insights about the effectiveness of potential regulatory policies.

2014-01-14 Fed Taking a More Holistic View of Data by Kristina Hooper of Allianz Global Investors

Recently released FOMC minutes and jobs numbers show why the Fed wants to add a qualitative dimension to its forward guidance, writes Kristina Hooper: The unemployment rate can fall significantly, but it may be for the wrong reasons.

2014-01-14 The Great Man or the Great Wave by Bill O'Grady of Confluence Investment Management

One of the seminal debates among historians is how the process of history develops, characterized as the "great man versus the great wave" debate. In this report, we will begin by developing this debate with relation to America’s superpower role; specifically, we will examine whether the U.S. is struggling with the superpower role because of a lack of leadership (a great man position) or because the wave of history is aligned against the U.S. keeping that role. As always, we will conclude with potential market ramifications.

2014-01-14 The Financial Fire Next Time by Robert Shiller of Project Syndicate

Just as most people are more interested in stories about fires than they are in the chemistry of fire retardants, they are more interested in stories about financial crashes than they are in the measures needed to prevent them. That is not exactly a recipe for a happy ending.

2014-01-14 Market Outlook by Scotty George of Alexander Capital

The stock market’s valuation expansion has left a bittersweet taste in the mouths of some who believe that this historic sequence of "new highs" is simply smoke and mirrors and accelerated expectations. Indeed, while the wealth effect is improving the lot of many, it is also exacerbating the gap between "reality" and "perceived-reality".

2014-01-13 Money Matters Part 2: China's Bitcoin Ban by John Greenwood of Invesco Blog

This second of a two-part series about bitcoin looks at the impact of China’s recent ban on the virtual currency. Part 1 examined the viability of bitcoins as a potential global currency.

2014-01-13 Stocks Rise Modestly in First Full Week of Trading by Bob Doll of Nuveen Asset Management

U.S. equities finished mostly higher for the first full week of the year, with the S&P 500 gaining approximately 0.6%. There were no meaningful directional drivers behind the price action, which is a dynamic that has been prevalent so far in 2014.

2014-01-13 3 Reasons the Dollar Should Strengthen This Year by Russ Koesterich of iShares Blog

Russ explains why the U.S. dollar is likely to strengthen in 2014, and what this means for various asset classes.

2014-01-10 5 Investor Tips for 2014 by Kristina Hooper of Allianz Global Investors

While the winding down of QE signals better times ahead, investors need to be selective and focused in taking smart risks, says US Investment Strategist Kristina Hooper.

2014-01-10 Automation and Lean Manufacturing: Boost Profits, Squeeze Employment by Tyler Howard of Saturna Capital

Despite industrial production reaching all-time highs in August of this year, employment in the manufacturing sector remains substantially below levels witnessed before the 2008-2009 recession. When looking at longer term employment trends in manufacturing, it becomes clear that companies increasingly boost production without adding incremental labor. Profit margins, while not yet recovered to pre-recession peaks, endure at historically high levels. Several long-term changes in the manufacturing economy contribute to this divergence: outsourcing, automation, and lean manufacturing.

2014-01-10 High Yield and Bank Loan Outlook- January 2014 by Team of Guggenheim Partners

Improving U.S. macroeconomic conditions should spur additional investor demand for high-yield bonds and bank loans, particularly with defaults exceptionally low. Still, investors should monitor trends pointing to an erosion of safety in leveraged credit.

2014-01-10 2014 Economic and Investment Outlook by Team of Ivy Investment Management Company

Although the December 2013 U.S. budget pact between House and Senate negotiators was a welcome development, partisan battles over government spending still are possible in 2014. The agreement ends a three-year budget fight and sets government spending through fall 2015, but it does not eliminate the need to raise the nation’s borrowing limit - the "debt ceiling."

2014-01-10 Macro Strategy Review by Jim Welsh of Forward Investing

Heavy emphasis on the fundamentals factors driving the U.S., European Union, China, and Emerging economies, and how the fundamentals are likely to impact markets.

2014-01-10 Hasenstab: Fed Tapering Was Inevitable by Michael Hasenstab of Franklin Templeton

The US Federal Reserve (Fed) announced its decision to reduce its $85 billion monthly asset purchase program by $10 billion starting in January 2014. What might the eventual end of the Fed’s policy of aggressive money printing mean for fixed-income investors? Michael Hasenstab, Ph.D, executive vice president, chief investment officer, Global Bonds, Franklin Templeton Fixed Income Group, believes there’s no reason for investors to panic. He outlines why he thinks that’s the case, and where on the map he’s spotting fixed income opportunities.

2014-01-10 Exploring Ceylon Tea Country by Jodi Morris of Matthews Asia

Riding by train through the Sri Lankan highlands recently, I found it difficult not to be mesmerized by the views of mountains blanketed in tea plantings and cool mist. My days spent exploring Sri Lanka’s mountainous interior were among my favorite as a first-time visitor to the country.

2014-01-10 Continuing a Winning Formula for 2014 by Frank Holmes of U.S. Global Investors

We believe there’s a way that increases the odds of winning. It’s by combining a bottom-up approach with a top-down strategy: Find great, fast-growing and shareholder-focused companies and focus on the best stocks in the sectors experiencing positive momentum.

2014-01-09 The Year Ahead - 2014 by Mark Ungewitter of Charter Trust Company

In the spirit of year-end prognostication, here’s my annual review of secular trends and historic behaviors that are likely to influence key markets in 2014.

2014-01-09 AdvisorShares Active ETF Market Share Update by AdvisorShares Research of AdvisorShares

The active ETF market experienced a slight downtick during the shortened New Year’s week, with total net assets exceeding $14.7 billion. The Global Bond category, led by the PIMCO’s Total Return ETF and Global Advantage Inflation-Linked Bond Strategy, had the highest weekly decrease in net assets by about $62 million. Net assets in the Alternative category decreased by almost $28 million, which included the AdvisorShares Ranger Equity Bear ETF.

2014-01-09 A Great Time for Investors by Scott Minerd of Guggenheim Partners

Last January, the global economy faced myriad headwinds, choppiness lay ahead, and we expected plenty of volatility. Nevertheless, I said then that risk assets were the best choice for investors. Now, the headwinds of 2013 have largely dissipated, and the outlook is benign for risk assets for the first three to six months of 2014, if not longer.

2014-01-09 Seesaw Rider by William Gross of PIMCO

There’s 50 ways to leave your lover and maybe more than that to lose your money or "break the buck," as some label it in the money markets. You can buy the Brooklyn Bridge, bet on the Cubs to win the World Series or have owned 30 year Treasury bonds in 2013, to name just a few. But bridges and baseball aside, what you’re probably interested in hearing from me is how to avoid breaking your investment buck in 2014.

2014-01-08 Rehab World by Niall Ferguson of Project Syndicate

The late English chanteuse Amy Winehouse sang, "They tried to make me go to rehab, but I said ’No, no, no.’" Perhaps 2013 should be known as the year of Winehouse economics, with the singers being the world’s most important central banks, led by the Federal Reserve.

2014-01-08 When the QE Tide Recedes, Focus on What is Revealed by Robert McConnaughey of Columbia Management

While there is fierce debate on the ultimate effectiveness of monetary stimulus surging from the central banks, one cannot dispute the boost that it has given to asset prices. While we may be seeing some "green shoots" of overall growth pick-up in the developed world, the post-crisis recovery in asset values has not been primarily driven by economic or earnings growth. Instead, we have been in a high correlation environment where the rising tide lifted most diversified investor boats as repressed "risk-free" rates pushed money out into riskier asset classes.

2014-01-08 Ready For Lift-Off? by Scott Brown of Raymond James

While some had expected a quick recovery from the recession, that was never likely to be the case. Recessions that are caused by financial crises are different from the usual downturns - they are more severe, they last longer, and the recoveries take a long time. The economy has been in recovery mode for the last four and a half years, but finally appears to be poised for an acceleration in 2014.

2014-01-07 More Jobs to Turn Up the Taper Dial - But Not Yet by Kristina Hooper of Allianz Global Investors

The job market is a focal point for the Fed and early signs point toward further progress in reducing unemployment. But don’t expect central bankers to speed up the tapering process until there’s more evidence of a turnaround, writes Kristina Hooper.

2014-01-07 The World of Thinking Machines by Bill O'Grady of Confluence Investment Management

The New York Times recently published an article that discussed a new version of a computer chip that will be released later this year that is expected to automate tasks that currently require direct programming. In this report, we will open with an examination of the philosophy of learning. We will then discuss the potential dangers of such machines, including the ability to perform humanlike actions without a moral sense. We will also examine the potential economic and social side effects. As always, we will conclude with potential market ramifications.

2014-01-07 A Healing Economy by Richard Michaud of New Frontier Advisors

The quarter continued the theme of the year, with U.S. equities continuing their dramatic performance. For the quarter, the Dow was up 9.6%, the S&P 9.9%, and the NASDAQ 10.7%. The year’s returns substantially exceeded last year"s "expert predictions" and much of this year’s punditry with the Dow up 26.5%, S&P up 29.6%, and NASDAQ up 38.3%.

2014-01-07 Is 2014 the Year That Alternatives Matter Again? by Chris Maxey, Ryan Davis of Fortigent

In the wake of the financial crisis of 2008, investors piled into alternative investments en masse to help insulate their portfolios from another dramatic market decline. For those who had not yet bought into the idea of improving portfolio risk-adjusted returns, the 50% drawdown in the S&P 500 provided all the convincing needed.

2014-01-07 Waiting for the Great Pumpkin by James Moore of PIMCO

Shortly before Thanksgiving, I had the privilege of being on an investor panel at Bank of America’s Debt Capital Markets and Derivatives Conference. On the panel before me was a trio of BofA’s chief strategists, among them Michael Hartnett, their chief investment strategist. Mr. Hartnett reminded the audience that he was the man who coined the phrase "The Great Rotation" and after much anticipation, at long last, it was here.

2014-01-07 Emerging Markets 2014 Outlook: Shaping the Next Decade by Mark Mobius of Franklin Templeton

As we embark upon a new year, the Templeton Emerging Markets Group believes 2014 could be an important year for many emerging markets, possibly establishing trends that could play out through much of the remainder of the decade. In particular, Chinese government reform initiatives announced in late 2013 could have far-reaching significance. And, major elections in a number of countries in 2014 could bring dramatic (or not-so-dramatic) changes. Here are a few themes and countries we’ve got our eye on in the new year.

2014-01-07 Turn the Page: Outlook for Economy/Stocks in 2014 by Liz Ann Sonders of Charles Schwab

In this comprehensive (read: long...sorry!) 2014 outlook report, we assess the likelihood a correction is in the offing given the strong gains since 2009.

2014-01-06 Reflections on 2013: What's Important, What's Not, and What's Ahead by Mike Shedlock of Sitka Pacific Capital Management

A tale of 2 halves with lingering questions characterizes what we can say was the story for housing for 2013. In the first half of the year, rates were low as the 10 year note was well under 2%. People were still refinancing, as home prices rocketed. Multiple bids were common, and pundits like Ivy Zelman cheered the improving market with praise like "Housing is in Nirvana".

2014-01-06 The Great Malaise Drags On by Joseph Stiglitz of Project Syndicate

Maybe the global economy will perform a little better in 2014 than it did in 2013, or maybe not. Seen in the broader context of the continuing Great Malaise, both years will come to be regarded as a time of wasted opportunities.

2014-01-06 Value Stocks Beckon in Emerging Markets by Henry D'uria, Morgan Harting of AllianceBernstein

Years of playing defense have left many emerging-market (EM) equity portfolios laden with pricey safe-haven stocks. We think they risk missing the big opportunity that’s brewing in value stocks, especially as EM economies begin to stabilize.

2014-01-06 How High Can US Stocks Go this Year? by Russ Koesterich of iShares Blog

Russ explains why last year’s combination of significant multiple expansion and higher interest rates suggests more muted gains for U.S. equities in 2014.

2014-01-06 And That's The Week That Was by Ron Brounes of Brounes & Associates

To say that 2013 was an interesting year would be a bit of an understatement. We learned a long time ago not to make predictions about the stock market because no matter what is predicted, it is likely to be wrong. Even if we get lucky one year, we are not likely to even get close the following year. We do try to give guidance, however. Last year we suggested that, given the late run in the market in 2012 and its 15% return, investors should be happy with a return of 8 to 10% in 2013. Obviously, investors enjoyed much better returns.

2014-01-06 Money Matters Part 1: Bitcoin as Global Currency? by John Greenwood of Invesco Blog

In 2009, bitcoin became the first cryptocurrency, or digital medium of exchange, to begin trading. Is it currency or a commodity? Is it a potential peer or a threat to existing currencies? Let’s take a closer look.

2014-01-04 Forecast 2014: The Human Transformation Revolution by John Mauldin of Millennium Wave Advisors

It is that time of the year when we peer into our darkened crystal balls in hopes of seeing portents of the future in the shadowy mists. This year I see three distinct wisps of vapor coalescing in the coming years. Each deserves its own treatment, so this year the annual forecast issue will in fact be three separate weekly pieces.

2014-01-03 Is it Lift off Time for Commodity Prices? 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. Martin shares his technical analysis on short and long term market momentum and the potential effect for commodity prices.

2014-01-03 Gold Stocks: What to Expect in the New Year by Frank Holmes of U.S. Global Investors

After three years of pain, can gold stocks break their losing streak and see a gain in 2014? History says chances are good.

2014-01-03 2014 Outlook: The Emergence of a Global Expansion by Team of Loomis Sayles

After years of a global recovery characterized by fits and starts, we expect more synchronized global growth in 2014. Global GDP growth will accelerate modestly from 2.7% in 2013 to approximately 3.4% in 2014, primarily driven by larger advanced economies. In particular, we are optimistic that US growth will be sustainable. The fading economic drag from government policy and the ongoing housing recovery should help boost US GDP growth toward 3% as the year progresses. The UK is poised for a similar rate of expansion in 2014, and Europe will likely post positive growth in the coming year.

2014-01-02 Slow Growth and Short Tails by Nouriel Roubini of Project Syndicate

The global economy will grow faster in 2014 than it did in 2013, while tail risks will be lower. But, with the possible exception of the US, growth will remain anemic in advanced economies, and emerging-market fragility - including China’s uncertain efforts at economic rebalancing - could become a drag on global growth.

2014-01-02 The World Economy's Shifting Challenges by George Soros of Project Syndicate

As 2013 comes to a close, efforts to revive growth in the world’s most influential economies are exerting competing pressures on the global economy. Perhaps not surprisingly, while Europe and the US will continue to play an important global role, developments in Asia will determine the worldwide outlook in 2014 and beyond.

2013-12-31 The 10 Most-Read Articles of 2013 by Various (Article)

As is our custom, we conclude the year by reflecting on the 10 most-read articles over the past 12 months. In decreasing order, based on the number of unique readers, those are...

2013-12-31 Letter to the Editor by Various (Article)

A reader responds to Michael Edesess’ article, How Much Should We Pay to Emit Carbon?, which appeared last week.

2013-12-31 Tech Bubble Circa 1999, or Something Different? by J.P. Scandalios of Franklin Templeton

Technology sector stocks have been investor favorites in 2013, pushing the tech-heavy Nasdaq Composite Index to its highest level since 1999 and drawing comparisons to the "dot com" bubble which burst soon thereafter. Will we see a redux of the tech bust in 2014? John P. Scandalios doesn’t think so. Investor fever for anything "dot com" in the late 1990s was built more on promise than actual results.

2013-12-31 A Look Ahead at 2014 by Russ Koesterich of iShares Blog

Last week, Russ shared his annual look back at his 2013 economic and investment calls. Now, it’s time for his annual look forward.

2013-12-30 What Does US Tapering Mean for Asia? by Paul Chan of Invesco Blog

The US Federal Reserve (Fed) took its first step toward unwinding its unprecedented monetary stimulus. Beginning in January 2014, the Fed will reduce monthly asset purchases by $10 billion to $75 billion. The scale of the tapering was very much in line with market expectation. While timing may have surprised some investors, the market had already priced in the Fed’s imminent move.

2013-12-27 A Look Back at 2013 Calls by Russ Koesterich of iShares Blog

It’s time again for Russ K’s annual look back at his economic and investment calls. Find out what he got right - and what he got wrong.

2013-12-27 Global Equity Outlook: Clouded by Uncertainty by Norman Boersma of Franklin Templeton

Global equity investors generally had reason to cheer in 2013, and seemed more willing to embrace risk as the year progressed. Will the bullish mood persist in 2014? Norm Boersma, Chief Investment Officer, Templeton Global Equity Group, says that while it’s clear global investors have been allocating more dollars toward equities in recent days (particularly US equities), there are still a number of unknowns that make it hard to be overly exuberant.

2013-12-27 The Risk Tolerance Paradox....And What You Can Do About It by Ken Mungan, Matt Kaufman of Milliman Financial Risk Management

The risk tolerance level many investors expect to achieve over the long-term rarely equals the same tolerance investors actually experience over shorter periods. This paper provides a brief introduction to this paradox, explores the main reason we think it exists, and introduces a risk management strategy that seeks to solve the problem.

2013-12-27 Gary Shilling: Review and Forecast by John Mauldin of Millennium Wave Advisors

It’s that time of year again, when we begin to think of what the next one will bring. I will be doing my annual forecast issue next week, but my friend Gary Shilling has already done his and has graciously allowed me to use a shortened version of his letter as this week’s Thoughts from the Frontline. So without any further ado, let’s jump right to Gary’s look at where we are and where we’re going.

2013-12-27 2013: Looking Back at the Year of the Bull by Frank Holmes of U.S. Global Investors

Will stocks continue to climb in 2014? Odds are "very good," finds BCA Research. According to historical data going back to 1870, there were 30 times when annual returns in domestic stocks climbed more than 25 percent. Of these, 23 experienced an additional increase, resulting in a mean of 12 percent, says BCA. Thinking back to January 2013, investors had a very different frame of mind. While we recently talked about the year’s biggest stories in U.S. energy and gold, today, we recap our popular commentaries focused on the domestic market.

2013-12-26 Creating a Reliable Lifetime Income by Ken Mungan of Milliman Financial Risk Management

With the baby boomer generation rolling into retirement, financial advisors have been faced with increased demand to assist with retirement income planning. As the financial advisory community struggles to address this demand, advisors are realizing that their traditional planning techniques must improve. In this white paper, we analyze the problem of providing a reliable lifetime income. We compare several approaches and demonstrate that risk management is a key element to a successful investor outcome.

2013-12-26 A Strong Finish for 2013 by Bob Doll of Nuveen Asset Management

For our weekly subscribers, we wanted to take an opportunity to look back on the year. We began 2013 with an outlook for the prospect of improvement for the global economy and risk assets. We thought global policymaker’s unprecedented attempts to reflate global growth would show some signs of bearing fruit, especially in the United States and China. In our forecast, equity markets would continue to be choppy in light of the fiscal cliff issues, but an inevitable political compromise would reduce the economic drag.

2013-12-26 Newsletter by Harold Evensky of Evensky & Katz

I admit it, I do occasionally pick on Money Magazine and other consumer financial publications, but as I’ve written in the past, for the most part, Money does a great job of educating consumers. Its story on Lessons from the Crash "Lehman Brothers’ collapse in September 2008 sent stocks on a terrifying ride. A year-by-year look back reveals five key takeaways you need to heed today" is an excellent example. Here are Money’s "Lessons."

2013-12-24 The Price America Pays for Global Leadership by Bob Veres (Article)

America’s political debates inevitably default to finding ways to contain our federal deficits, and our investment debates focus on whether we’re facing a secular bear or bull market - and how to maneuver within that environment. I had never imagined that these two debates could be related until I heard a presentation by Bill O’Grady, of Confluence Investment Management in St. Louis, MO at the Insider’s Forum conference in Dallas.

2013-12-24 How Much Should We Pay to Emit Carbon? by Michael Edesess (Article)

Many consider emissions of greenhouse gases to be what economists call a ’negative externality,’ meaning that they are likely to impose a cost on society through climate change and ocean acidification. The cost of that externality should, in principle, be borne by the emitters, who should pay a price to emit. But what should that price be?

2013-12-24 And That's The Week That Was by Ron Brounes of Brounes & Associates

vestors thanked Bernanke this week for what they perceived as an early holiday present. While no one knew how they would react once the Fed began to taper its bond purchases, many surprised analysts by lifting stocks to one of the best showings of the year (and a new record on the Dow). And now that that uncertainty is out of the way, let the vacations begin.

2013-12-24 Fed Taper Brings Us Back to the Future by Kristina Hooper of Allianz Global Investors

A return to normal economic conditions is now more palpable following the Fed’s decision to start unwinding QE and early signs of a revival in consumer spending, growth and jobs, writes Kristina Hooper.

2013-12-24 Bernanke's Santa Claus Cheer by Scott Minerd of Guggenheim Partners

What will Santa bring for Christmas...does he exist at all? Yes he does, his name is Bernanke and he has a stock market rally to share and good holiday cheer for all!

2013-12-24 A Surprising Way to Participate in Today's Tech Boom by Frank Holmes of U.S. Global Investors

If I asked you to name the biggest online shopping day of the year, what would you guess?

2013-12-23 Risk Assets Take Fed Taper Announcement in Stride by Roger Bayston of Franklin Templeton

The US Federal Reserve (Fed) delivered an early holiday surprise to some market participants, announcing at its December 18 policy meeting it would start slowing its asset purchase program known as quantitative easing in January. For some thoughts on what this may mean for the markets in the new year, we turned just after the announcement to Roger Bayston. He believes the markets should be able to take the Fed’s tapering in 2014 in stride, although investors should prepare for the proposition of higher Treasury yields.

2013-12-23 Welcome, Taper by Dianne Lob of AllianceBernstein

The Federal Open Market Committee’s statement that it will begin to taper its bond purchases in January is a good sign that the US economy continues to heal, in our view.

2013-12-23 The Diva is Already Singing by John Hussman of Hussman Funds

The bell has already rung. The diva is already singing. The only question is precisely how long they hold the note.

2013-12-23 China's Consumer Stocks: Opportunities Despite Slower Growth by Richard Flax of PIMCO

A weaker macro environment and curbs on spending by government bureaucrats have hit a range of consumer businesses and, in some cases, forced a reassessment of expansion plans. While Chinese consumption may be challenged in the near term, we think the impact will be felt most in the retail sector where slowing demand is compounded by oversupply. We see opportunity in other sectors that benefit from secular demand growth and constrained supply or strong brands, notably casinos and luxury sectors.

2013-12-21 What Has QE Wrought? by John Mauldin of Millennium Wave Advisors

Now that we have begun tapering, we will soon see lots of analysis about whether QE has been effective. What will the stock market do? The US economy seems to be moving in the right direction, but the Fed has forecast Nirvana (seriously) - do we dare hope they can finally get a forecast right? Or have they jinxed us?

2013-12-20 Let's Get Physical: Gold Bullion and Bitcoin by John Hathaway of Tocqueville Asset Management

John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), discusses in his latest insights piece the disparity in price direction between gold bullion and Bitcoin, in spite of the strikingly similar rationale for holding the two. He notes that the "Bitcoin-Gold incongruity is explained by the fact that financial engineers have not yet discovered a way to collateralize bitcoins for leveraged trades."

2013-12-20 Celebrating Asia's Growth Past and Present by Taizo Ishida, Mark Headley of Matthews Asia

Today, Matthews Asia celebrates 10 remarkable years that have passed since we launched our Asia Growth strategy to U.S. investors. During this time, the region has evolved in many significant ways. In the early 2000s, only the "Asian Tiger" economies had managed to reach GDP per capita levels considered the tipping point for consumption growth. More recently, consumption has been on the rise in many of the region’s economies, laying the foundation for Asia’s ongoing prosperity.

2013-12-20 Staying Power by Kapish Bhutani of Diamond Hill Investments

In addition to reducing the risk of a permanent loss of capital, the staying power of a company allows for capital to compound over long periods of time. While the defensive and less cyclical nature of many consumer staples companies indicates an ability to survive, most are able to invest only a portion of earnings at historical rates of return.

2013-12-20 The Challenges of Year-End Forecasting by Jason Hsu of Research Affiliates

Many investors piled on the equity bandwagon this year, pushing prices up to dizzying heights. With current yields for U.S. equities at record lows, is it time to get off the bandwagon?

2013-12-20 Five Resolutions for 2014 by David Kelly of J.P. Morgan Funds

Entering 2014, the global investment environment is as challenging as ever. After a super 2013 in returns, U.S. equities can no longer be considered inexpensive and yet still look attractive relative to the prospective returns on savings accounts and long-term bonds. Long-term bond yields are higher than a year ago but could still rise further as the Federal Reserve begins to reduce quantitative easing.

2013-12-20 PIMCO Cyclical Outlook for the Americas: Riding the Cross-Currents of Higher U.S. Growth and the Fed by Mohit Mittal, Lupin Rahman, Ed Devlin of PIMCO

In the U.S., lower fiscal drag and the possibility of higher consumer and corporate spending should drive growth higher in 2014. Supported by higher U.S. growth and stabilization in Europe and China, Latin America is set to grow 3%-4% on average, but with a large dispersion across countries. Canada should benefit from the U.S. recovery but will likely lag U.S. growth due to lower consumption and residential investment.

2013-12-20 A Surprising Way to Participate in Today's Tech Boom by Frank Holmes of U.S. Global Investors

China has become one of the best consumption stories out there, and looking over the next few years, local technology companies are almost certain to benefit. So while many U.S. investors are getting excited about the growing number of initial public offerings in the tech sector, they would be remiss if they didn’t look beyond Silicon Valley.

2013-12-20 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

As this will be our last weekly of the year, we thought we would offer some parting reflections on the year just past.

2013-12-19 Coal in the Fed's Stock-ing by Tony Crescenzi, Lupin Rahman, Ben Emons of PIMCO

Forward guidance has become an increasingly common practice among global central banks. Communicating a possible change in the policy rate could have a large effect on long-term interest rates. Capital has moved literally around the globe as a result of central bank activism in developed countries. Looking ahead, we expect 2014 to be a year of increased differentiation across emerging markets in terms of economic fundamentals, policy reactions and market outcomes.

2013-12-19 Introducing Our Annual Global Outlook for 2014 by Jeff Hussey of Russell Investments

Jeff Hussey, global CIO, introduces Russell Investments’ 2014 Annual Global Outlook and explains why it will be important for investors to focus on risk premiums and precise exposures in 2014.

2013-12-19 One of the Most Notable Stories of the Year: Energy Renaissance in the U.S.A. by Frank Holmes of U.S. Global Investors

As we come to the end of 2013, it’s a good time to reflect on some of the biggest resources stories of the year. One that immediately comes to mind is the U.S. energy resurgence and its tremendous effect on oil and gas.

2013-12-19 What the Fed's Taper Means for Investors by Kristina Hooper of Allianz Global Investors

Kristina Hooper breaks down the Federal Reserve’s surprise move to begin unwinding its bond-buying program and its implications for markets and monetary policy.

2013-12-18 Australia Inc. by Adam Bowe, Robert Mead of PIMCO

In 2013, real growth in business investment in Australia outside the mining sector slowed to almost zero, in part due to the high exchange rate. While some sectors of the economy such as housing appear to be improving, we continue to expect sub-trend growth in 2014 due to the subdued outlook for business investment. The RBA will most likely have to keep interest rates low for an extended period to ease the transition away from mining-assisted growth and encourage a weaker exchange rate.

2013-12-18 PIMCO's Cyclical Outlook for Asia: Growth Is Stabilizing but Not Stellar by Ramin Toloui, Tomoya Masanao, Robert Mead of PIMCO

In China, near-term economic performance will be dominated by the dialing back and forth of credit conditions by policymakers, while long-term reform progresses incrementally. Japan’s GDP growth will slow in 2014 due to a consumption tax hike but will still be above the country’s potential growth as it is assisted by reflationary policies. The pace of Australia’s growth will slow due to weakness in manufacturing and mining, reflecting tempered growth in China.

2013-12-18 Three Investments that Could Return to Favor in 2014 by Jeffrey Knight of Columbia Management

When investors lose confidence in an asset class, especially one that had been popular enough to attract outsized allocations, subsequent rebalancing generally leads to prolonged periods of underperformance. Technology stocks after 1999, for example, underperformed the S&P 500 in eight of the next 10 years and by a cumulative total of more than 40 percentage points. Today, many believe that interest rate sensitive bonds might have just begun a similar era of waning investor confidence, portfolio reallocation and underperformance.

2013-12-18 Fed May Have An Unexpected Surprise In Mind by Gary Halbert of Halbert Wealth Management

My readers know that the global financial world is waiting with bated breath for tomorrow’s Fed decision on whether to start to "taper" QE purchases now or wait until next year. The Fed’s Open Market Committee (FOMC) is holding its last policy meeting of the year today and tomorrow, and Chairman Bernanke will hold a press conference afterward.

2013-12-17 Letter to the Editor by Various (Article)

A reader responds to Dan Richards’ article, How Service Screw-ups Can Create Happier Clients, and a reader responds to Patrick McVeigh’s article, Low Demand Will Depress Oil Prices, both of which appeared last week.

2013-12-17 Will 2014 Bring an End to Central Bank Intervention? by Chris Maxey, Ryan Davis of Fortigent

Nearing the final two weeks of the year, it is customary to look forward to the trends and events that will shape the coming year. A theme that may come to the fore in 2014 revolves around central bankers, specifically the diverging fates in various economies of the world.

2013-12-17 The Monster That Is Europe by John Mauldin of Millennium Wave Advisors

This week, Geert Wilders and his Party for Freedom in the Netherlands and Marine Le Pen of the Front National (FN) of France held a press conference in The Hague to announce that they will be cooperating in the elections for the European Parliament next spring and hope to form a new eurosceptic bloc.

2013-12-17 5 Takeaways from the Mini-Budget Deal by Kristina Hooper of Allianz Global Investors

The bi-partisan budget agreement inked last week has real implications for investors, including its impact on consumers, the stock market and the Fed, writes Kristina Hooper.

2013-12-17 The 2014 Geopolitical Outlook by Bill O'Grady of Confluence Investment Management

As is our custom, we close out the current year with our outlook for the next one. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international situation in the upcoming 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.

2013-12-16 A Much Better Dilemma by Mike Amey of PIMCO

While the UK economy is likely to avoid reverting to growth levels of recent years, it must transition into a more durable recovery involving business investment, higher productivity and stronger real wages. However, headwinds for domestic demand look significant and the banking system appears to favour secured lending to consumers over businesses. We believe that much of the rise in bond yields is already behind us. With clearer value in shorter bonds, our preference lies in short and intermediate gilts.

2013-12-16 The World We Live In by Michael Kayes of Willingdon Wealth Management

For me, the final month of the year has always been a time to reflect upon the past as well as plan for the future. Analyzing the year soon to pass provides a valuable perspective with which to evaluate the important issues that will impact our country and economy going forward. In this context, 2013 sure has been a memorable year highlighted by horrific natural disasters, the deaths of Margaret Thatcher and Nelson Mandela, and on the lighter side, the unforgettable ending to perhaps the greatest Iron Bowl ever played.

2013-12-16 Absolute Return Letter: Squeaky Bum Time by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners

QE has led to asset price inflation. That much we established in the November Absolute Return Letter. In this month’s letter we go one step further and look at whether we are now in bubble territory. Considering the strong bull-run we have experienced in 2012-13 it is perhaps surprising to learn that, in a historical context, it is not an outsized rally, nor are equity markets - with the possible exception of the United States - particularly expensive.

2013-12-16 The Power of the Platform: The Promise and Peril of Technology Investing by Ryan Jacob of Jacob Asset Management

Without question, technology’s rapid development during the past 20 years has played an incredibly powerful and largely positive role in furthering the progress and productivity of modern economies throughout the world. Technology’s track record as a profitable investment theme, however, is a bit cloudier.

2013-12-16 2014 Investment Outlook: Economic Growth Should Broaden by Bob Doll of Nuveen Asset Management

For the first time in several years, we approach the new year without big clouds on the horizon. In the United States, accommodative monetary policy has healed many of the wounds from the 2008-2009 crisis.

2013-12-16 Settling In by Mark Kiesel of PIMCO

An improving outlook for U.S. housing will be constructive for consumer spending, confidence and jobs. There are many ways to invest directly and indirectly in companies that should benefit from higher housing prices, a pickup in home repairs and remodeling, and residential investment spending. We continue to favor select investments in homebuilders, building materials, appliance manufacturers, lumber, home improvement, banks, title insurance, mortgage origination and servicing, and non-Agency mortgage-backed securities.

2013-12-15 Lessons Learned in 2013 by Seth Masters of Alliance Bernstein

In 2013, interest rates rose, bonds fell, equities soared, and US income-tax rates climbed higher. Before starting to place bets for 2014, investors would be wise to think about some important lessons from 2013.

2013-12-13 They Bravely Chickened Out by Peter Schiff of Euro Pacific Capital

Earlier this week Congress tried to show that it is capable of tackling our chronic and dangerous debt problems. Despite the great fanfare I believe they have accomplished almost nothing. Supporters say that the budget truce created by Republican Representative Paul Ryan and Democratic Senator Patty Murray will provide the economy with badly needed certainty.

2013-12-13 Saying Goodbye to a Great Peacemaker by Frank Holmes of U.S. Global Investors

Last week, the world lost a hero. There are so few people in this world who have fought for freedom in such a benevolent way as Nelson Mandela.

2013-12-13 And That's The Week That Was by Ron Brounes of Brounes & Associates

No one deserved a break more than investment guys/gals (except maybe politicos). Unfortunately, Thanksgiving holiday was too "short and sweet" for many and the economic week that followed was crazy. Number after number depicted an economy on solid ground with strong confirmation from the late-week labor releases. Investors took profits throughout much of the week as the final month of the year began, but the Bulls were back in force to conclude the week.

2013-12-13 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Because so many things are subject to interpretation and subjective analysis, it is comforting to stumble across some data which might inexorably lead to only one conclusion, like gravity for example.

2013-12-13 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The past two weeks were pretty quiet as the Thanksgiving holiday combined with conflicting economic data produced a stalemate on Wall Street.

2013-12-13 The Future in Focus: Relieving Labor Strains by Milton Ezrati of Lord Abbett

Demographic trends point to an expanding population of retirees and a relative shortage of working-age people. Here’s how the U.S. economy can adapt.

2013-12-13 Glance Back...Focus Forward by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

A great market year for stocks is about to be capped off...can the run continue into 2014?

2013-12-13 One of the Most Notable Stories of the Year: Energy Renaissance in the U.S.A. by Frank Holmes of U.S. Global Investors

Only a few years ago, we were contemplating the supply constraints facing the petroleum industry, as many major oil fields around the world were facing a decline in production. Now, with the disruptive technology in shale oil and gas, we may be looking forward to decades of drilling.

2013-12-12 The Fed, Inflation, and the Perfect Storm in Gold Miners by Clyde Kendzierski of Financial Solutions Group

Neither hopes of job creation nor fears of inflation (based on the massive expansion of the monetary base since late 2008) have thus far materialized. Total credit creation (i.e. money supply) during most of the last five years either shrank or barely grew despite massive growth in the monetary base. Nominal GDP (growth plus inflation) grows in response to total expansion of credit (both from the Fed and the banking system), not just the monetary base.

2013-12-12 All News is Good News by Scott Minerd of Guggenheim Partners

Financial markets have been discounting the end of tapering for months, and whether it happens in December or March is less important than the reality that the U.S. economy is recovering amid a global synchronous expansion.

2013-12-12 AdvisorShares Active ETF Market Share Update by AdvisorShares Research of AdvisorShares

Activity for the active ETF market was fairly mild for the previous week with net assets increasing slightly higher, reaching about $14.7 billion. No active ETF products launched last week, but there was growth in the short term bond category, as well as downward movement among the global bond and foreign bond categories, which included PIMCO’s Total Return ETF as a notable decliner.

2013-12-12 The Wisdom of Looking Like An Idiot Today by Adam Taggart of PeakProsperity.com

Here’s a recently-released report on the stark choice that bubble markets force investors to make: to look like an idiot now, or look like one later. Those that have sought to position themselves prudently and defensively since 2008 currently look foolish as liquidity-inflated stocks and real estate prices have passed them by over the past 2 years-- while ’safe havens’ like precious metals have suffered mightily. But it’s critical to remember that the nefarious nature of a bubble is to suck in as many participants as possible before bursting and causing maximum damage.

2013-12-12 Payment Industry - Follow the Money by Team of Baird Investment Management

The substantial growth in credit and debit card usage is a multi-decade trend driven by increased global consumer activity and a shift in behavior to less transactions completed by cash or check. As the buzz of the holiday season takes hold, consumers wouldn’t think twice about leaving home with just a debit or credit card in hand. The simple act of a purchase followed by swiping a plastic card occurs a staggering several hundred million times each day, with a step up in activity during the holiday season.

2013-12-12 Looking Back 40 Years, What Can We Learn About This Current Corporate Debt Market? by Matt Lloyd of Advisors Asset Management

I recently wrote a blog post detailing the potential opportunity in municipals as it has historically rebounded after a negative total return. Accordingly, I have been asked if this pattern was representative in the investment grade corporate arena.

2013-12-12 PIMCO Cyclical Outlook: Synchronized Optimism by Saumil Parikh of PIMCO

In the U.S., the abatement of fiscal policy tightening combined with steady improvements in labor market demand and higher asset valuations is likely to drive an increase in real growth. The eurozone should finally emerge from recession in 2014, and Japan is likely to continue to grow with the continued assistance of extraordinarily expansive policies. In China, external demand will likely improve, but domestic demand will likely slow somewhat.

2013-12-11 What Will 2014 Bring for The Equity Markets? by Marco Pirondini of Pioneer Investments

As the year draws to a close, investors are searching for clues as to what may be in store for the economy and markets in 2014. What have we learned from the markets in the month of November? Honestly, not very much. The scenario has not changed much in the last 30 days.

2013-12-11 The Fed is Playing Hamlet to the Markets by Sam Wardwell of Pioneer Investments

To taper or not to taper-that is the question the Fed is asking itself. What’s moving the market is (it appears) the odds of Fed action. For the first half of last week, "good news was bad news" as stock and bond markets apparently interpreted better economic data as suggesting an earlier QE (Quantitative Easing) Taper. On Friday, the market apparently decided the jobs report was good enough to further reduce downside risks to the economy but not strong enough to spur the Fed to action.

2013-12-11 Muddling Through: The 'Realpolitik' of the Eurozone Crisis by Andrew Bosomworth of PIMCO

The long-term cost of Europe’s economic recovery is likely to challenge social tolerance and political will to achieve a fully integrated fiscal and political union. Although able to exploit the untapped potential of European treaties, the soon-to-be-elected 8th European Parliament looks more likely to continue to muddle through. We see low medium-term risk for government and corporate bonds with maturities of up to three years, but caution may be required for securities with longer maturities and lower down in the capital structure.

2013-12-11 Municipal Bond Outlook - Institutional Fixed-Income Sector Report by Team of Guggenheim Partners

Volatility induced by headline events has created attractive price dislocations in the municipal bond market, which may now present the best buying opportunity for investors since late 2010.

2013-12-10 A Framework for Understanding Bond Portfolio Performance by Laurence B. Siegel (Article)

Investors are legitimately concerned that interest rates, after falling reliably for decades, are on their way up and that bond portfolio values are on their way down. Investors now seek interest-rate protection. I provide a framework for analyzing and, hopefully, predicting the returns on actively managed portfolios of bonds - a task different from analyzing the bond market itself.

2013-12-10 2 Unconventional Options in a Low Rate Environment by Sponsored Content from OppenheimerFunds (Article)

This paper discusses how: Global interest rates could remain low for a long time, says Krishna Memani, CIO, Fixed Income; GDP growth and interest rates tend to track each other over time, and the expectation is for slow growth; Compelling opportunities for fixed income investors willing to look beyond Treasuries.

2013-12-10 Low Demand Will Depress Oil Prices by Patrick McVeigh (Article)

The U.S. - and indeed, the world as a whole - is approaching the threshold of peak oil demand, rather than peak supply. Prices will fall in the coming years, regardless of fluctuations in supply.

2013-12-10 Best Consumed Below Zero? by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

In this report, we will turn our attention to Denmark to study its decision to undertake the below-zero rate, the specifics of the situation that prompted it and the effects of the negative rate on financial conditions and the broader economy. We will then briefly look at the possibility of a below-zero rate policy for the ECB and, most importantly, the geopolitical ramifications of the decision by the world’s second largest currency block to ease into unknown consequences of negative rates to stimulate the economy.

2013-12-10 Seven Reasons Why Industrial Commodity Prices are Headed Higher by Martin Pring of Pring Turner Capital Group

Between December 2008 and April 2011 commodity prices, as reflected by the CRB Spot Raw Industrials, doubled. In the ensuing 2-years they have retraced 20% of that rally but are now showing signs of wanting to head higher. In the interest of fair disclosure our commodity model went bullish just under a year ago but prices remained range bound instead of experiencing their normal strength. So what’s so different now that makes us bullish on commodities? Here are seven reasons.

2013-12-10 The Myth of the Most Efficient Market by Patrick O'Shaughnessy of O'Shaughnessy Asset Management

Perception of the U.S. large cap value market is that it’s the most efficient in the world, and therefore the hardest category for managers to outperform the benchmark. As a result, index funds and ETFs have been gaining dramatic market share. Our latest whitepaper debunks conventional thinking with empirically-proven factors that have significantly outperformed in the U.S. large cap space.

2013-12-09 America's Partisan Peril by Mohamed El-Erian of Project Syndicate

Many Americans started 2013 with high hopes that congressional leaders would overcome, even if only partly, the polarization and political dysfunction that had slowed recovery. But optimism foundered over the course of 2013, while frustration soared.

2013-12-09 Improving Economic Data Imply Further Global Recovery by Bob Doll of Nuveen Asset Management

U.S. equities finished last week in barely negative territory, ending the positive streak for the market. Economic data concerning the post-government shutdown climate has improved. Employment data beat estimates and increased by 203,000 jobs in November, and the unemployment rate fell to 7.0%, also surpassing expectations.

2013-12-07 Interview with Steve Forbes by John Mauldin of Millennium Wave Advisors

For whatever reason, Steve Forbes seems to bring out the passion in me. When I think about what central bank policies are doing to savers and investors, how we are screwing around with the pension system, circumventing rational market expectations because of an untested economic theory held by a relatively small number of academics, I get a little exercised. And Steve gives me the freedom to do it.

2013-12-06 Like a Shakespearean Script by Richard Bernstein of Richard Bernstein Advisors

Shakespearean plays follow a pattern. The underlying plots and storylines change from play to play, but the five-act construction is a common overlap. Market cycles tend to follow a similar pattern cycle after cycle. Like the different plots in various Shakespearean plays, the catalysts that begin and end each cycle, and the events during the cycle are always different. However, market cycles seem to follow a script and, so far, this cycle seems to be following the script almost perfectly.

2013-12-06 Bubble Watch: The Valuation & Sentiment Signs to Look For by Russ Koesterich of iShares Blog

Worried that the U.S. market is about to tilt into bubble territory? Though Russ doesn’t believe that U.S. equities are in a bubble yet, he highlights two sets of data investors can watch to gauge a bubble’s arrival.

2013-12-06 Resource Investors Who Use this Strategy Have Seen Significant Gains by Frank Holmes of U.S. Global Investors

When playing Blackjack, the house has the edge in winning...unless you know how to count cards, a strategy proven to increase a player’s chances. But did you know you can apply this concept to the market as well?

2013-12-06 Gold: Currency or Commodity? by Anthony Wile of J.P. Morgan Funds

Despite gold traditionally serving as a safe haven asset, investors should be wary of fear-inflated investments given the potential for improving global growth.

2013-12-06 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.8, up from last week’s 132.3. The WLI annualized growth indicator (WLIg) to one decimal place, rose to 2.9, up from 2.6 last week.

2013-12-06 Did the Government Shutdown Help the Economy? by Frank Holmes of U.S. Global Investors

Take the government shutdown in October, when the House and Senate fought over the debt ceiling. Economic data wasn’t released, services were halted, national parks were closed, and "non-essential government workers were told to stay home. As a result, GDP was expected to collapse. Yet, data released this week reveal a different, stronger image of the U.S. economy. I think Shakespeare would deem the media’s fear mongering tactics as Much Ado About Nothing.

2013-12-06 Going Against the Grain, Again by Cindy Sweeting of Franklin Templeton

Going against the grain is never easy, particularly when it comes to investing. But if you don’t take the risk of moving out of the crowd and taking a different path, you can’t really stand out. Templeton has focused on bottom-up value investing, which often puts it at odds with the broader market consensus. We go back in history to describe how the strategy has persevered through different market cycles, and why the Templeton team has been going against the grain by investing in Europe at a time when other investors had lost faith.

2013-12-05 A Synchronous Expansion by Scott Minerd of Guggenheim Partners

Major developed economies are all contributing to global economic growth, and this improving fundamental picture, coupled with ongoing monetary accommodation, bode well for risk assets.

2013-12-05 10 for '14 by Richard Bernstein of Richard Bernstein Advisors

Each December we publish a list of investment themes that we feel are critical for the coming year. We continue to believe the US stock market will continue its run through one of the largest bull markets of our careers. Our positive outlook extends to the following areas: US Equities, Japanese Equities, European small cap stocks, high yield municipals.

2013-12-05 Running Out of Time by Jeffrey Saut of Raymond James

Well, so far the Federal Reserve is winning out over my timing models that continue to suggest caution should be the preferred strategy in the short-term; and last week that strategy was wrong footed as the D-J Industrial Average notched another new all-time high.

2013-12-05 No Silver Bullets in Investing by James Montier of GMO

In a new white paper today, James Montier of GMO’s asset allocation team reviews recent "innovation in our industry." He argues, "one of the myths perpetuated by our industry is that there are lots of ways to generate good long-run real returns, but we believe there is really only one: buying cheap assets."

2013-12-04 Why Investing in High Quality Companies is More Important Today than Ever by Kendall Anderson of Anderson Griggs

One of the first rules a new financial advisor learns is that success in the business has nothing to do with how well your clients do in creating or maintaining wealth. Success is measured by how much wealth the advisor creates for him or herself. The same rule extends beyond the local advisor to the great halls of institutional management.

2013-12-04 What's the Problem With Advanced Economies? by Kenneth Rogoff of Project Syndicate

Is today’s slow growth in advanced economies a continuation of long-term secular decline, or does it reflect the normal aftermath of a deep systemic financial crisis? Fortunately, we do not need to answer that question definitively in order to boost the pace of economic recovery.

2013-12-04 Gold, What Is It Good for? by Miguel Perez-Santalla of BullionVault

Absolutely nothing! Well, except 5,000 years of value exchange, non-correlation, and preserving wealth...The current market environment has led many in the press to question gold’s value as an investment or an asset class, writes Miguel Perez-Santalla at BullionVault.

2013-12-04 The Eastern Lust for Gold by Peter Schiff of Euro Pacific Precious Metals

Having replaced savings with debt on both the national and individual levels, I think it’s well past time for Westerners to take a few lessons from our creditors in the East. Many Americans consider gold a "barbarous relic," but in Asia, the yellow metal remains the bedrock of individual savings plans. This means that either greater than half of the world’s population are barbarians, or they’ve held onto an important tradition that our culture has forgotten.

2013-12-04 Patience in Asia by Mark Mobius of Franklin Templeton

Investing in a multitude of markets and companies as we do within the Templeton Emerging Markets Group means that at any given point in time it may appear to some that they are underperforming or outperforming any particular benchmark index or market. Such is the nature of global financial markets. Of course, we’d like all of our investments to go straight up, but at the same time continually like to find new bargains for investors.

2013-12-04 Emerging Asia Pacific: Regional Economic Review - Q3 2013 by Team of Thomas White International

The second half of 2013 has posed significant challenges to growth in major Emerging Asia Pacific economies. Almost all emerging Asia Pacific economies showed signs of strain arising from stubborn inflation, higher interest rates, slower consumer spending and lukewarm exports.

2013-12-04 And That's The Week That Was by Ron Brounes of Brounes & Associates

And stocks just keep rolling along. November ended with another bang as the Blue Chips climbed 3.5% for the month and The Dow Jones extended its weekly winning streak to eight. But did anyone even notice? Happy Thanksgivukkah.

2013-12-03 Why Does the U.S. Have High-Cost Low-Quality Healthcare? by Michael Edesess and Kwok L. Tsui (Article)

The U.S. has worse mortality rates than virtually all other developed nations, and yet it spends twice as much per capita on health care. How on earth has the U.S. racked up such an appallingly bad health-care record, and what is the solution? A recent edition of the Journal of the American Medical Association identified many of the problems but was not persuasive in prescribing a cure.

2013-12-03 Looking Out on the Horizon for Equities by Bob Doll of Nuveen Asset Management

U.S. equities finished higher for an eighth consecutive week as the S&P 500 increased 0.1%, representing the longest positive streak since 2004. Inertia may have carried markets forward in a relatively quiet trading week without major headlines. Retail news appeared fairly positive in anticipation of a strong start to the Thanksgiving shopping weekend. Economic data was mixed.

2013-12-03 Turning Over Rocks by Herbert Abramson, Randall Abramson of Trapeze Asset Management

The S&P 500 is at a record high and we believe the markets generally are fully valued. Corporate revenue growth is anemic, profit margins are stretched, and the prospect of earnings rising meaningfully is not high. And, the outlook for the U.S. and global economy is still uncertain. Market psychology is at a level suggesting the market is overbought. Margin debt is at record levels and the current popularity of stocks by retail investors at market highs is in itself a red flag.

2013-12-03 On the Wings of an Eagle by William Gross of PIMCO

I’ve always liked Jack Bogle, although I’ve never met him. He’s got heart, but as he’s probably joked a thousand times by now, it’s someone else’s; a 1996 transplant being the LOL explanation. He’s also got a lot of investment common sense, recognizing decades ago that investment managers in composite couldn’t outperform the market; in fact, their alpha would be negative after fees and transaction costs were factored in.

2013-12-03 Nasdaq 4000: Stocks are Not Behaving Like It's 1999 by Russ Koesterich of iShares Blog

The Nasdaq Composite made news last week, moving past the 4,000 mark for the first time in 13 years. But, according to Russ, the current trip above the 4,000 level looks quite different from what was happening in 1999 and 2000.

2013-12-03 From the Taj Mahal to Westminster Abbey: Notes from a Global Investor by Frank Holmes of U.S. Global Investors

I recently returned from India, a nation where an incredible 600 million people are under the age of 25. That’s nearly double the entire population of the U.S.!

2013-12-02 The Elephant in the Room by John Hussman of Hussman Funds

Investors will do themselves terrible harm if they ignore the objective warnings of history based on our subjective experience in this unfinished half-cycle. That subjective experience is far more closely related to my 2009 stress-testing decision than many investors recognize.

2013-12-02 Economic Cycle Update: Evidence Suggesting Slow Growth Reigns by Team of Manning & Napier

Since the start of the current recovery, we have made the case that the economy would grow at a slower pace compared to most other expansions in recent memory. The consumer factored prominently in this outlook as they embarked on a long overdue period of balance sheet repair. Corporations would have little reason to invest if consumer growth was weak and large fiscal deficits would limit the ability of the federal government to contribute to growth.

2013-11-30 Arsonists Running the Fire Brigade by John Mauldin of Millennium Wave Advisors

In the old days, central banks raised or lowered interest rates if they wanted to tighten or loosen monetary policy. In a Code Red world everything is more difficult. Policies like ZIRP, QE, LSAPs, and currency wars are immensely more complicated. Knowing how much money to print and when to undo Code Red policies will require wisdom and foresight. Putting such policies into practice is easy, almost like squeezing toothpaste. But unwinding them will be like putting the toothpaste back in the tube.

2013-11-29 Back to Housing Bubbles by Nouriel Roubini of Project Syndicate

What we are witnessing in many countries looks like a slow-motion replay of the last housing-market train wreck. And, like last time, the bigger the bubbles become, the nastier the collision with reality will be.

2013-11-29 ING Fixed Income Perspectives - November 2013 by Christine Hurtsellers and Matt Toms of ING Investement Management

Given rich valuations globally, we remain broadly neutral on interest rate risk with the exception of Japan.

2013-11-29 From the Taj Mahal to Westminster Abbey: Notes from a Global Investor by Frank Holmes of U.S. Global Investors

I recently returned from India, a nation where an incredible 600 million people are under the age of 25. That’s nearly double the entire population of the U.S.

2013-11-28 The Race is On by Howard Marks of Oaktree Capital

There’s a race to the bottom going on, reflecting a widespread reduction in the level of prudence on the part of investors and capital providers. No one can prove at this point that those who participate will be punished, or that their long-run performance won’t exceed that of the naysayers. But that is the usual pattern.

2013-11-28 Five Reasons Inflation Is Still Missing by Chun Wang of Leuthold Weeden Capital Management

Apart from a couple of market-oriented drivers that could reverse course on a short-term basis, we are not seeing convincing evidence of an imminent pick-up in inflation. Let us be clear. There is most definitely inflation in the financial markets, but that does not seem to benefit the average person in the U.S. The liquidity injected by various central banks went mostly into the financial markets first and foremost; only a small fraction of it trickled down to the average person. That is why all this money printing has not been reflected in various inflation measures.

2013-11-27 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

This particular time of year is often a time of contemplation and reflection. As families and friends gather for the holidays, many pause to consider the year almost past, and perhaps the year to come. Whether it’s tax-lot accounting for securities bought and sold, or healthcare issues left unattended, or simply holding ourselves accountable for goals unmet, we tackle these issues as an annual right of passage each year.

2013-11-27 Emerging Markets Equity Commentary - October 2013 by Team of Thomas White International

Equities Gain as Currencies Remain Stable and Data Trends Show Positive Signs.

2013-11-27 Global Economic Overview - October 2013 by Team of Thomas White International

Global economic trends continue to see gradual improvement, though the progress has become less steady. The developed economies remain the major drivers of global growth, but data from some of the regions have not met expectations.

2013-11-27 International Equity Commentary - October 2013 by Team of Thomas White International

Equities Advance as Global Manufacturing and Services Activity Gains Momentum

2013-11-27 The Market Hits All-Time High. So What? by Dianne Lob, Ding Liu of AllianceBernstein

With the US stock market repeatedly reaching all-time highs in recent weeks, many investors are becoming leery of investing in stocks. Focusing on the market’s level is a mistake, in our view. It’s market valuation, not level, that matters.

2013-11-27 The Future in Focus: Our Demographic Destiny by Milton Ezrati of Lord Abbett

In the first of a series on population trends that will shape the U.S. economy, Milton Ezrati looks at the policy challenges posed by an aging America.

2013-11-26 While You Were Sleeping: Asian Developments Loom for Financial Markets by Chris Maxey, Ryan Davis of Fortigent

Amid all the Fed talk dominating airwaves and headlines, a few key developments occurred overseas last week that could shape financial markets significantly in the quarters ahead.

2013-11-25 Recent Economic Trends Help Make Korea a Hidden Gem in Asia by Paul Chan and Simon Jeong of Invesco Blog

After more than two decades of financial setbacks, recent macroeconomic data is helping Korea overcome the negative economic stigma associated with its economy and equity markets.

2013-11-25 Solving the Income Puzzle by Christopher Remington, Michael Cirami, Kathleen Gaffney, Scott Page of Eaton Vance

Income needs may be as high as they’ve ever been, while the yield potential from many traditional investment classes has dwindled to generational lows. Investors who remain in high-priced, low-yielding core bond strategies could experience loss of principal (and mounting retirement shortfalls) if interest rates revert toward their mean. We advocate creating an integrated, multi-pronged income plan that may offer yield potential that meets investor needs, while managing key risks found in the typical core fixed-income allocation.

2013-11-25 An Open Letter to the FOMC: Recognizing the Valuation Bubble in Equities by John Hussman of Hussman Funds

The Fed has done enough, and perhaps dangerously more than enough. The prospect of dismal investment returns in equities is an outcome that is largely baked-in-the-cake. The only question is how much worse the outcomes will be as a result of Fed policy that has few economic mechanisms other than to encourage speculative behavior.

2013-11-25 Equities Extend Gains for the Seventh Consecutive Week by Bob Doll of Nuveen Asset Management

U.S. equities finished higher again last week as the S&P 500 increased 0.4%. The Fed continued to dominate headlines, with heightened emphasis on the distinction between tapering and tightening. Bubble speculation continued to receive attention in the press, while many articles refuted such concerns. The financial sector performed well, led by banks.

2013-11-25 Sir Isaac Newton by Jeffrey Saut of Raymond James

In 1711 the Earl of Oxford formed the South Sea Company, which was approved as a joint-stock company via an act by the British government. The company was designed to improve the British government’s finances. The earl granted the merchants associated with the company the sole rights to trade in the South Seas (the east coast of Latin America). From the start the new company was expected to achieve huge profits given the believed inexhaustible gold and silver mines of the region.

2013-11-25 Why It's (a Little) Too Quiet on the Market Front by Russ Koesterich of iShares Blog

Stock market volatility remains unusually low. While this is partially justified by loose credit conditions and strong market momentum, the drop in volatility looks exaggerated and suggests investors are becoming too complacent.

2013-11-24 Game of Thrones - European Style by John Mauldin of Millennium Wave Advisors

The Eurozone crisis is not over, and it will not end quickly or soon. Even if it seems to unfold in slow motion - like the slow build-up in a Game of Thrones storyline to violent internecine clashes followed by more slow plot developments but never any resolution, the Eurozone debacle has never really gone away. The structural imbalances have still not been fixed; politicians and central bankers have still not agreed to solve major fiscal problems; the overall economy still disintegrates; unemployment is staggeringly high in some countries and still rising; and the people are growing restless.

2013-11-22 Guidance Counselors by Richard Clarida, Saumil Parikh of PIMCO

Forward guidance is an explicit communication by a central bank that provides information today about the timing for specific policy tools in the future. There are at least three types of forward guidance: calendar-based, outcome-based and optimal control. Since 2011 the Fed has deployed both calendar-based and outcome-based guidance. We expect the Yellen Fed to enhance the current outcome-based guidance to convey more information about the timing and pace of policy moves.

2013-11-22 What is the Current Market Reality? by Giordano Lombardo of Pioneer Investments

At this year’s Global Investment Forum, the discussion among Pioneer investment professionals was generally positive. Of course, everyone was conscious of the current market reality: that the major force behind recent positive, though benign, market trends is the unprecedented creation of liquidity and extremely loose stance of monetary policies around the world. Monetary policy alone cannot be the only conduit to a new economic model of income growth and job creation.

2013-11-22 Shifting Global Fortunes by Mark Mobius of Franklin Templeton

Most investors, particularly those who live in developed markets, probably aren’t aware of the influence emerging markets have on the global economy. I’m not just talking about China or just about governments. More and more large corporations are headquartered in emerging markets, a trend that I expect to continue. In addition, more of those companies that are located in emerging markets are also joining the ranks of the top companies in the world. In fact, some might be surprised to hear that some of the world’s largest initial public offerings (IPOs) have been in emerging m

2013-11-22 Float Research: Demand Indicators Point to Jolly Holiday Season for U.S. Equity Investors by Minyi Chen of AdvisorShares

Demand Indicators Point to Jolly Holiday Season for U.S. Equity Investors. ETF Flows Turn More Encouraging for Short Term.

2013-11-22 Weekly Economic Commentary by Carl Tannenbaum, Asha Bangalore of Northern Trust

The world needs to do more to stimulate spending. Moderate gains are seen for U.S. holiday sales. The Federal Reserve may change its policy mix.

2013-11-22 Understanding the Rise of China by Frank Holmes of U.S. Global Investors

If the sweeping economic reforms planned by Chinese leaders during the Third Plenum can be our guide, it looks to be a promising decade for global investors. Details released this week confirmed President Xi Jinping’s concerted efforts to move China toward a market-based economy that mirrors the West.

2013-11-22 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.2, up from last week’s 131.0 (revised from 131.1). The WLI annualized growth indicator (WLIg) to one decimal place, rose to 2.4, up from 2.2 last week.

2013-11-22 The Market Hits All-Time High. So What? by Dianne Lob and Ding Liu of Alliance Bernstein

With the US stock market repeatedly reaching all-time highs in recent weeks, many investors are becoming leery of investing in stocks. Focusing on the market’s level is a mistake, in our view. It’s market valuation, not level, that matters.

2013-11-21 The Missing Ingredient of the Economic Recovery (Hint: It's Not Jobs) by Russ Koesterich of iShares Blog

Despite an improving labor market, household spending isn’t picking up enough to fuel a faster U.S. recovery. This missing ingredient of the economic recovery is to blame, says Russ.

2013-11-21 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Some weekly commentaries are chock full of information, editorial content, market swings, economic data, and the like. Others, like today, reveal nothing magical about the preceding week or the outlook ahead.

2013-11-21 And That's The Week That Was by Ron Brounes of Brounes & Associates

Up, up, and away. Stocks surged for the sixth straight week, the S&P 500’s longest such streak since February 2013, as institutional investors welcomed remarked from the future Fed Chair (?) and "mom and pops" finally decided to join in the fun (better late than never). Suddenly Dow 16k, Nasdaq 4k, and, heck, even S&P 2k are well within reach. What financial debacle?

2013-11-21 Some Small-Caps Are More Global Than Others by Francis Gannon of The Royce Funds

How much of a contribution have overseas revenues made to this year’s dynamic domestic small-cap rally? Part of the answer lies in where portfolios invest and where they do not. Portfolio Manager and Principal Francis Gannon notes the emerging strength shown by those more economically sensitive sectors that are closely tied to global economic activity.

2013-11-21 Two Nobel Laureates...Two Tales of Value by Vitali Kalesnik of Research Affiliates

How can you build a better value stock portfolio? The key is discerning whether the value premium stems from mispricing or risk.

2013-11-20 Entrepreneurship in Asia by Jerry Shih of Matthews Asia

Using Silicon Valley as a yardstick to measure the success of Asia’s entrepreneurs is an interesting exercise. But it offers little insight into the development of more creative processes in Asia. Many policymakers in the region have declared innovation to be a national, strategic prioritycreating policies aimed at spurring growth to increase R&D expenditure, attract knowledge-intensive foreign direct investment and building more skilled labor pools. This month, Jerry Shih, CFA, takes a look at what changes are occurring around Asia to build more robust start-up ecosystems.

2013-11-20 Valuing Quality by Bhavik Kothari of Diamond Hill Investments

As industry specialists, our analysts make key assumptions when we value a company, which are based on our in-depth research of a company’s future prospects. One of the most important assumptions we make is the multiple applied to future earnings to derive the terminal value of a company at the end of our explicit forecast period. The terminal multiple is a critical assumption because it typically accounts for a significant portion of our overall value and it captures a host of assumptions about the quality of the firm such as return on capital and future growth prospects.

2013-11-20 Follow the Leaders: Gold Opinions from New Orleans by Frank Holmes of U.S. Global Investors

Bring together some of the brightest, most engaging minds in investing and politics inside the Hilton New Orleans Riverside Hotel along with hundreds of investors eager for market knowledge and insight, and you get the 39th Annual New Orleans Investment Conference.

2013-11-20 The Disinflationary Developed World: 2 Investment Implications by Russ Koesterich of iShares Blog

Inflation remains close to historic lows, not just in the United States but also in other large developed markets. Russ explains why this is the case and what it means for investors (hint: low-for-longer rates and another reason to consider underweighting Treasury-Inflation Protected Securities (TIPS)).

2013-11-19 Asset Class Allocation and Portfolios: Critique and Complication by Adam Jared Apt (Article)

In Part 1 of this essay, I explained that for asset class allocation to become an investment practice, it required a foundation of theory. And Modern Portfolio Theory was that foundation. But today, most financial journalists and investment advisors who proffer advice centered on asset class allocation are?if I may judge from their writings?oblivious of this. And why shouldn’t they be? Theory is abstract and difficult to apprehend.

2013-11-19 A Glimpse of a Yellen-Led Fed by Kristina Hooper of Allianz Global Investors

Kristina Hooper highlights some key takeaways from incoming Federal Reserve chair Janet Yellen’s testimony before the Senate last week, including when the Fed is likely to taper its bond-buying program.

2013-11-19 Breaking News! U.S. Equity Market Overvalued! by Ben Inker of GMO

In GMO’s quarterly letter to institutional clients today, co-head of asset allocation Ben Inker outlines the reasoning behind GMO implementing a new forecast methodology for the U.S. stock market. While the new methodology has slightly increased GMO’s seven-year forecast for U.S. equity returns, Ben notes, "The basic point for us remains the same -- the U.S. stock market is trading at levels that do not seem capable of supporting the type of returns that investors have gotten used to receiving from equities."

2013-11-19 Ignoble Prizes and Appointments by Jeremy Grantham of GMO

Chief investment strategist Jeremy Grantham comments on this year’s Nobel Prize in economics and "the most laughable of all assumption-based theories, the Efficient Market Hypothesis"; candidates to succeed Chairman Bernanke at the Fed; the impact of commodity price rises and the housing bubble in the crash of 2008; and prospects for the U.S. equity market.

2013-11-19 France and the Iranian Negotiations by Bill O'Grady of Confluence Investment Management

Earlier this month, negotiations between Iran and the P5+1 failed to reach an agreement despite great hopes that one was near. In this report, we will examine the reasons behind French objections to a nuclear deal with Iran. We will begin with an examination of France’s relations with the Middle East, focusing on its relations with Israel. Using this history as a guide, we will analyze why the French scotched the potential agreement. A short discussion will follow of the impact of France’s objection on the evolution of U.S. policy with Iran. As always, we conclude with market ramif

2013-11-18 Chumps, Champs, and Bamboo by John Hussman of Hussman Funds

At bull market peaks, it often seems that the market is simply headed higher with no end in sight, and “buy-and-hold” appears superior to every alternative. Meanwhile, the reputation of value-conscious investors and risk-managers goes from “champ” to “chump.” Then, the bamboo tree suddenly sprouts, and the entire lag is often replaced by outperformance in less than a year. Only after the fact does the reputation of risk-managed strategies surge from “chump” to “champ.”

2013-11-18 Willing a Fiscal Win by Christine Hurtsellers, Matt Toms of ING Investment Management

Why can’t we just will our desired political outcomes the way the most fervent seemingly can impact ballgames? After watching Fenway Park packed to the rafters with Red Sox faithful exercising their sovereign and ethereal right to psychically encourage baseballs out of the yard and knowing that millions of others in Red Sox nation were doing the same in front of their televisions we’re left wondering if the fans of Team U.S.A. can apply a little of that classic Carlton Fisk mojo a few hundred miles down I-95.

2013-11-18 The Muddle-Through Economy and Grind-Higher Equity Market Continue by Bob Doll of Nuveen Asset Management

U.S. equities finished higher last week as the S&P 500 and Dow Jones Industrial Average closed at record highs, marking the sixth straight week of advances.1 Several macroeconomic themes are important as third quarter earnings season comes to an end. Fed Chairman nominee Janet Yellen spoke before the Senate in support of current monetary policy and suggested a similar path under her leadership. Economic data was mixed for the week, and any economic weakness continues to be perceived as supporting a delay in tapering. In turn, this can be seen as positive for equities.

2013-11-18 Two Investments to Consider when You're Coming off the Sidelines by Russ Koesterich of iShares Blog

For investors on the sidelines of the equity market, Russ offers his take on which market segments to consider now and which to remain cautious of.

2013-11-17 The Unintended Consequences of ZIRP by John Mauldin of Millennium Wave Advisors

Two recently released papers make an intellectual and theoretical case for an extended period of very low interest rates and, in combination with other papers from both inside and outside the Fed from heavyweight economists, make a strong case for beginning to taper sooner rather than later, but for accompanying that tapering with a commitment to an even more protracted period of ZIRP. We are going analyze these papers, as they are critical to understanding the future direction of Federal Reserve policy. Secondly, we’ll look at some of the unintended consequences of long-term ZIRP.

2013-11-16 Gliding to Year End? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Although we remain optimistic, the path to year-end may have some potholes. US stocks are among the more attractive investment options available, but there is the risk of a pullback in the near term should sentiment conditions continue to be elevated. There is also a risk of a melt-up in stocks given recent momentum. Europe is dealing with falling inflation and weak growth, although expectations are low, leaving investment opportunities somewhat attractive. Both Japan and China appear to be at a crossroads and we are watching political and monetary developments carefully.

2013-11-15 In the Wake of Disaster by Robert Horrocks of Matthews Asia

As humanitarian organizations scrambled to send relief to the Philippines this week following the country’s battering by Typhoon Haiyan, foreign governments prepared to support the rebuilding and economists looked to assess the tragedy’s near-term impact.

2013-11-15 Has Washington Drama Taken Its Toll On MLPs? by David Chiaro of Eagle Global Advisors

“They did it! They blew it up!” shouts Charlton Heston in the iconic ending scene of the film Planet of the Apes when he finds out he has been living on a post-nuclear war planet Earth. Americans are probably having some of the same feelings about our current world resulting from the ongoing political “nuclear war” raging in our nation’s capital.

2013-11-15 “Great Rotation?” How About “Selective Rotation?” by Eric Takaha of Franklin Templeton

A few months ago there was a lot of buzz about a so-called “Great Rotation,” used to describe an investor exodus from fixed income and into equities, conjuring up images of a massive herd of wildebeest on the African plain racing for greener pastures. Oftentimes, when investors react to the market with a herd mentality, they can wind up losing sight of where they are going, and why. Eric Takaha, senior vice president and portfolio manager for Franklin Strategic Income Fund, says what he’s seen is more of a “selective rotation.”

2013-11-15 Passive Management ? Passive Investing by Ashwin Alankar, Michael DePalma, Guoan Du of AllianceBernstein

Passive investments are often misunderstood. Instead of providing static positioning as implied by the label, they can be very capricious because of market and sector turbulence. To tame a passive asset, we think investors need to exert more active control over the dynamics of volatility.

2013-11-15 Dressed to the Nines with Gold by Frank Holmes of U.S. Global Investors

While paper gold is getting the cold shoulder in the West, the Love Trade buyers in the East are wrapping their arms around all the physical gold they can get their hands on.

2013-11-15 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The Federal Reserve’s policies may remain easier for longer than previously thought. What’s the best way to arrest falling labor force participation? Look for the Fed to adopt a lower unemployment target.

2013-11-15 DC Plan Design for the Bumpy Road Ahead by Mohamed El Erian of PIMCO

In late October, PIMCO’s CEO and Co-CIO Mohamed A. El-Erian presented the keynote speech at Pensions & Investments’ West Coast Defined Contribution Conference. He also spoke with P&I about top-of-mind concerns for retirement plan providers and sponsors. The Q&A below is based on that conversation.

2013-11-15 Are You Prepared for Economic Recovery? by Nanette Abuhoff Jacobson of Hartford Funds

Nanette Abuhoff Jacobson discusses how many portfolios are out of balance today and explains why investors should consider increasing their equity exposure.

2013-11-15 The Future of the Indian Rupee Is Tied to Oil Imports by Ignatius Chithelen of Knowledge @ Wharton

The weakness or strength of the Indian rupee will continue to be largely determined by the level and costs of the country’s crude oil imports, according to Ignatius Chithelen, managing partner of Banyan Tree Capital Management.

2013-11-14 In 20 Years, What Country Will Produce the Most Gold? by Frank Holmes of U.S. Global Investors

A question like that is impossible to answer, of course, due to mining difficulties, diminishing resources, and changing government policies and regulations that help or hinder a country’s ability to mine, farm or drill efficiently.

2013-11-14 This May Sting Just a Bit: Global Diversification by Jeff Hussey of Russell Investments

Russell Investments’ global chief investment officer argues that times when global diversification falls out of favor might provide opportunities for investors.

2013-11-14 And That's The Week That Was by Ron Brounes of Brounes & Associates

Data keeps coming fast and furious and (for the most part) it has been favorable. Investors remain torn between being ecstatic about the solid recovery or worried about the implications for another Fed move. Stocks were mixed throughout the week with the Dow Jones staying in record territory. Is that worth a Tweet (now that it’s public)?

2013-11-14 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Here in the United States, we had local and regional elections last Tuesday. Several of the ballot initiatives, and many of the candidates, addressed what has commonly been phrased as “the inequality gap”. To be sure, in an ideal world, everyone has access to, and participation in, the bounty that this country has to offer. From “sea to shining sea” we do have a plentitude of idea-makers and resources available.

2013-11-14 The Secret of the Euro's Survival by Milton Ezrati of Lord Abbett

Despite fiscal strains and political controversy, the common currency still enjoys broad support among member nations. Here’s why.

2013-11-13 Accenture: Continuing To Deliver A Growth Story by Team of F.A.S.T. Graphs

Accenture (ACN) is a global management consulting, technology services and outsourcing company with approximately 275,000 people serving clients in more than 120 countries. As of the end of fiscal year 2013, the company had revenues just shy of $29 billion and a market capitalization that was roughly double that amount. Additionally, Accenture provides services to a wide spectrum of industries ranging from Automotive and Aerospace to Energy and Travel. Effectively, Accenture wants to deliver a high performance solution to whatever problem you have on hand.

2013-11-13 When Flexibility Meets Opportunity in the European Commercial Real Estate Market by Laurent Luccioni of PIMCO

The pace of asset sales by European banks has been slower than many anticipated due to the fragile economic, political and regulatory environment across the continent. A complex CRE landscape and the pervasive effects of cognitive bias, capital rigidity and the unintended consequences of regulation mean mispricing can occur frequently. Unlocking value in this environment requires a flexible approach to investing across the capital structure and the resources to source, underwrite, structure, service and operate commercial real estate assets.

2013-11-12 The Bomb Shelter Portfolio: Maximum Income with the Least Risk by Geoff Considine (Article)

Conservative investors are faced with unappealing choices. They can reduce risk and accept low yields and high exposure to rising rates, or they can push the bounds of their risk tolerance to increase yield. My analysis shows a way out of this predicament: a “bomb shelter” portfolio of ETFs, which offers attractive yield with minimal volatility and exposure to rising rates.

2013-11-12 Investing Megatrends: New Technology by Sponsored Content from OppenheimerFunds (Article)

This whitepaper discusses how: The ’Data Deluge’ we are experiencing is one of the world’s durable investment themes; Significant capital investments in data infrastructure provide structural support for this trend; Many companies can benefit from the collection, analysis, transmission and storage of data

2013-11-12 Markets Vacillate Between Stronger Economy and Fed Accommodation by Bob Doll of Nuveen Asset Management

U.S. equities finished mostly higher last week as the S&P 500 increased 0.6%, ending higher for the fifth straight week. The return of central bank action was a primary concern. The European Central Bank (ECB) surprised investors with a 0.25% rate cut, while the debate over the Federal Reserve’s impending tapering decision continued in earnest.

2013-11-12 New Fed Papers Foreshadow a Dovish Fed Policy Under Yellen by Sam Wardwell of Pioneer Investments

New Fed Papers Foreshadow a Dovish Fed Policy Under Yellen Two new Fed papers presented at the International Monetary Fund (IMF) argue for prompt lobbying for continued aggressive monetary policy, but suggest prompt tapering of quantitative easing (QE) and more emphasis on forward guidance. The assumption is that these papers would not have been released if Janet Yellen intended to push policy in a different direction . . . and they reinforce the message of papers released at Jackson Hole this summer, suggesting that QE wasn’t acting as effective economic stimulus.

2013-11-12 Big Ideas on Gold and Resources in the Big Easy by Frank Holmes of U.S. Global Investors

For nearly four decades, curious investors have made their way to the Big Easy for a taste of New Orleans and several helpings of advice and perspective at the New Orleans Investment Conference.

2013-11-12 EPV: Establishing Predictive Value (i.e., Relative Outperformance) by David Kleinberg of Universal Orbit

EPV: Establishing Predictive Value (i.e., Relative Outperformance) is a linear narrative outlining general limitations in third party data provider presentations and implied effects on peer group analytics. Reconciling the modulation of data with nomenclature is one facet of the qualitative assessments associated with quantitative analysis.

2013-11-10 What Would Yellen Do? by John Mauldin of Millennium Wave Advisors

In advance of this week’s confirmation hearings for Federal Reserve Board Chairperson-nominee Janet Yellen, let’s pretend we are prepping our favorite Banking Committee senator for his or her few questions. What would you like to know? In this week’s letter I offer a few questions of my own.

2013-11-08 U.S. Shale Oil: A Central Banker's Best Friend by Charles Wilson of Thornburg Investment Management

After nearly a decade of sustained high energy prices , U.S. oil and natural gas producers responded to the market’s call for supply with newly exploitable shale resources. The fresh supply helped reduce concerns about global spare production capacity and limited upward pressure on energy prices. Central bankers around the world were able to maintain highly accommodative monetary policies for prolonged periods as a result.

2013-11-08 Who Needs Gold Really? by Miguel Perez-Santalla, Adrian Ash of BullionVault

Four reasons to waste your time with the deeply historic, deeply human value ascribed to gold...

2013-11-08 Manager Q&A: Tocqueville Gold Fund by John Hathaway, Doug Groh of Tocqueville Asset Management

In a new Q&A, John Hathaway and Doug Groh, the co-portfolio managers of the Tocqueville Gold Fund (TGLDX), answer questions about the price of gold, the relationship between the price of the commodity and gold miner stock prices, and industry consolidation amongst gold miners.

2013-11-08 Bubbles Without Borders? by Vivek Tanneeru of Matthews Asia

If you are a wealthy person living in Asia, you might be tempted, with good economic reason, to look overseas to diversify your asset base. Overseas markets often offer good diversification as they are typically exposed to different economic cycles and also give exposure to different currencies. But while overseas stocks, bonds and other financial instruments all offer diversification, few asset classes seem to have the same allure as overseas propertythat is, overseas property in the right cities.

2013-11-08 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.0, down from last week’s 131.4 (revised from 131.5). The WLI annualized growth indicator (WLIg) to one decimal place, rose to 1.8, up from 1.7 last week.

2013-11-08 Asset Allocation: Pie in the Face? by Robert Isbitts of Sungarden Investment Research

The typical approach to spreading one’s assets in order to diversify and conquer, is to have the client complete a risk tolerance questionnaire. That survey is important not only to establish guidelines for how the assets will be managed, but also because some form of it is required by securities regulators to make sure advisors know who their clients are. The magical conclusion usually includes a color pie chart, representing a variety of asset classes that are assumed to be a path toward asset growth and preservation of capital.

2013-11-08 Government Shutdown Doesn't Shut Down Markets in October by Karen Cavanaugh of ING Investment Management

The stage was set for an October selloff, but markets treated investors to another round of across-the-board gains. Headlines comparing today’s equity market with 1999 are way off; the current rally has been driven by solid corporate fundamentals, and the market remains compellingly valued. Global economic growth remains sluggish, and eventual Fed tapering is likely to introduce volatility into markets worldwide.

2013-11-08 Taking Stock in the Economy by Ken Taubes of Pioneer Investments

Now is a good time to take stock in the current macro environment from a market perspective. Here’s what we think could happen at the end of this year and next year.

2013-11-08 Janet Yellen's Mission Impossible by Peter Schiff of Euro Pacific Capital

Most market watchers expect that Janet Yellen will grapple with two major tasks once she takes the helm at the Federal Reserve in 2014: deciding on the appropriate timing and intensity of the Fed’s quantitative easing taper strategy, and unwinding the Fed’s enormous $4 trillion balance sheet (without creating huge losses in the value of its portfolio). In reality both assignments are far more difficult than just about anyone understands or admits.

2013-11-08 Big Ideas in the Big Easy by Frank Holmes of U.S. Global Investors

This is likely a contrarian view to the folks in the White House, but I think investors benefit from being contrarian and thinking differently. In preparation for my presentations in New Orleans as well as for the Metals & Minerals Investment Conference in San Francisco and the Mines and Money in London in a few weeks, I’ve been pulling together this kind of research that we can all put to use now.

2013-11-07 EM: The Growth Story That Isn't by Richard Bernstein of Richard Bernstein Advisors

We remain very concerned about emerging market stocks and bonds. The recent outperformance of EM stocks is again luring investors to once again touch the hot stove. Emerging markets seem to have some significant structural and cyclical issues about which investors seem unaware or seem to be ignoring.

2013-11-07 Selective Value = Price plus Quality by Chris Richey of Neosho Capital

A paper on backtesting results using many of the metrics that Neosho Capital utilizes when screening for equities.

2013-11-07 Global Forecast: Synchronized Growth - So Long as Governments Behave by Andrew Pease of Russell Investments

Russell Investments released its Q4 Strategists’ Outlook and Barometer report, a quarterly update to its Annual Global Outlook which helps inform the short to medium term asset allocations in Russell’s multi-asset strategies and portfolios.

2013-11-07 Welcome to the Two-Speed Economy by Russ Koesterich of iShares Blog

Russ explains why the U.S. economy is starting to look like a two-speed economy and what this means for investors.

2013-11-07 Absolute Return Letter: Euthanasia of the economy? by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners

QE has had two noticeable and positive effects. It has saved the world from a financial meltdown not once, but twice, and it has had an overwhelmingly positive impact on asset prices, so in that respect QE has been a success. However, there are growing signs that QE may be beginning to impair economic growth and it may even cause dis-inflation, precisely the opposite of what was widely expected. For these reasons we believe it is time to call it quits and begin to tackle the root problem a banking industry still suffocating from bad loans.

2013-11-07 Putting Macro Trends in Context: What do They Mean to a Bottom-Up Investor? by Will Nasgovitz of Heartland Advisors

For some time now, we’ve had a generally positive economic outlook. The occasional setback is assured, but on the whole we believe that the U.S. economy is still in the early stages of a multi-year recovery.

2013-11-07 Global Inflation: A Mixed Picture by Monty Guild, Anthony Danaher 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. However, it has not translated to rapidly rising prices for goods and services that many expected.

2013-11-06 Welcome to the Two-Speed Economy by Russ Koesterich of iShares Blog

Russ explains why the U.S. economy is starting to look like a two-speed economy and what this means for investors.

2013-11-05 The Key Issues in Today’s Muni Bond Market by Hildy Richelson and Stan Richelson (Article)

Investing in high quality municipal bonds paying a predictable cash flow and returning your principal at the end of the investment is a well-trodden system for lifetime economic success. In this article we discuss some key issues in purchasing municipal bonds to help you make wise choices for your investing system.

2013-11-05 Combating Climate Change - And Responding to Skeptics by Michael Edesess (Article)

The climate-change threat is real, even if it is only a matter of probabilities. What action we should take, and how action should be brought about, are knotty problems. Harvard Business School’s Business and Environment Initiative (BEI) says they can be attacked with a business approach.

2013-11-05 Three Articles to Help Clients to Happy Retirements by Dan Richards (Article)

For many clients in their 50s and early 60s, the challenges to achieving happy and secure retirements have never been greater. Three recent articles will help you when talking to clients about retirement.

2013-11-05 Skepticism Still Abounds by Bob Doll of Nuveen Asset Management

U.S. equities were mixed last week as the markets were broadly unchanged. The October FOMC statement was a bit more hawkish than expected, causing concern that the recent delay in tapering may have been too aggressive. Other worries appear to be tail risks surrounding a possible Fed liquidity trap and accompanying asset bubbles. Economic data were mixed as markets struggle with the trade-offs between recovery and policy normalization.

2013-11-05 Ex-US Property Bubble Peaking? by Chris Maxey, Ryan Davis of Fortigent

For several years now, a common storyline on China was the immense overcapacity in the country’s housing market. A mixture of easy credit policies and officials’ explicit economic growth plans based on capital investment yielded construction on a massive scale across the countryside. So-called ghost towns emerged as the pace of building and the migration of rural citizens into these cities fell out of sync.

2013-11-05 The Saudi Tribulation by Bill OGrady of Confluence Investment Management

In this report, we will discuss the basic history of U.S. and Saudi relations, focusing on the historical commonality of goals between the two nations. We will detail how the aims of the two nations have diverged since the Cold War ended and use this to examine America’s evolving plans for the Middle East. We will discuss how the evolution of U.S. policy is affecting Saudi Arabia and the pressures these changes are bringing to the kingdom. As always, we will conclude with market ramifications.

2013-11-05 Don't Miss This Golden Cross in Resources by Frank Holmes of U.S. Global Investors

While investors have been focusing on the strengthening U.S. market, we’ve also kept our eyes on other improving indicators happening in resources, Europe, and emerging markets. These places may not be as widely popular, but we believe investors can benefit greatly from taking a view that’s different from the ones observed by the majority.

2013-11-05 Fed in Holding Pattern, but for How Long? by Christopher Molumphy of Franklin Templeton

At its October 29-30 policy meeting, the US Federal Reserve (Fed) again put off the so-called “tapering” of its $85 billion-a-month asset purchase plan, now over a year old, until some future date. In an official statement released at the conclusion of the meeting, the Fed cited fiscal policy issues as restraining growth and said it will continue its quantitative easing program (known as “QE”) until the job market improves “substantially.”

2013-11-04 Steve Jobs Didn't Give a *!@% About the Debt Ceiling by Jeffrey Bronchick of Cove Street Capital

A quick nod to Bloomberg columnist Caroline Baum from whom we lifted our title. Anything else you might have been (or will be) subjected to on the subject of how the government operates pales in materiality to the headline. And as miserable as our predicament seems to anyone over the age of 13, it really and truly is old and increasingly dull news. To wit, I present the following, highly curated list of quotes-please note the timeline.

2013-11-04 Sovereign Ambitions to Develop Infrastructure Benefit Emerging Asia's Utilities Sector by Raja Mukherji, Emily Au-Yeung of PIMCO

The scope for infrastructure development in emerging Asia is tremendous, and the utilities sector has potential to contribute to and benefit from that growth. In general, we have found that state-owned utilities benefit from a range of operational advantages, partly as a result of the government’s vested interest. PIMCO’s bottom-up research allows us to analyze evolving company- and sector-specific factors within the greater macroeconomic picture to identify the best investment ideas in Asia’s utilities sector.

2013-11-04 The Great Stall of China by Steve Cao, Mark Jason of Invesco Blog

While China is without question the growth driver and the outperformer among Asian emerging markets, it’s clear the country is transitioning toward slower growth because of demographic factors and domestic rebalancing. In our view, China is entering a multiyear period of slower growth, but we consider its future growth robust and sustainable when compared with overall global gross domestic product (GDP) growth -- albeit below the annualized pace of more than 10% China experienced from 2001 to 2010.

2013-11-02 Bubbles, Bubbles Everywhere by John Mauldin of Mauldin Economics

The froth and foam on markets of all shapes and sizes all over the world. It is an exhilarating feeling, and the pundits who populate the media outlets are bubbling over with it. There is nothing like a rising market to help lift our mood. Unless of course, as Prof. Kindleberger famously cautioned, 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 and then step aside before it bursts? Research says we all think that we are, yet we rarely demonstrate the actual ability.

2013-11-01 Bank Reform: Europe's Slow and Steady Progress Continues by Monty Guild, Tony Danaher of Guild Investment Management

When Spain’s real estate bubble burst in 2008, the country went into a recession. The country was returning to growth in 2010, just in time to be taken down by the continent’s emerging banking and sovereign debt crisis.

2013-11-01 Where Do Profits Go from Here? Up. Here's Why. by Joseph Tanious, Anthony Wile of J.P. Morgan Funds

After record-setting earnings in the first two quarters of 2013, the S&P 500 is on track to hit another historic high in profits for 3Q13. If this occurs, the first three quarters of this year will have been the most profitable ever in the 56-year history of the S&P 500. Future earnings growth through margin expansion seems unlikely, as an improving labor market and higher interest rates will most likely squeeze margins. However, stable revenue growth, share buybacks and the additional use of debt financing should support modest earnings gains in the year ahead.

2013-11-01 What the End of a Greek Tragedy Means for Investors by Frank Holmes of U.S. Global Investors

After six long years, Greece’s economy is finally expected to grow in 2014. GDP expectations of 0.6 percent next year is a remarkable improvement compared to a loss of 4 percent this year. In addition to rising GDP, here are a few other significant changes from Greece lately:

2013-11-01 Risk Management: An Ounce of Prevention by Seth Masters, Daniel Loewy, Martin Atkin of AllianceBernstein

They say an ounce of prevention is worth a pound of cure. But if the sickness is excessive portfolio volatility, “prevention” can entail more than one step.

2013-11-01 When Small is Big by Mark Mobius of Franklin Templeton

There’s a popular saying in the US, “good things come in small packages,” which is generally a statement about gifts of jewelry. My team and I find this saying can apply to the investment world, too, as we often find companies that are small in size, but which may have big long-term potential.

2013-11-01 Emerging Markets Equity Commentary by Team of Thomas White International

Emerging market equity prices saw a robust recovery in September as investor concerns about slower capital inflows to these markets faded after the U.S. Federal Reserve unexpectedly decided to delay the tapering of bond purchases.

2013-11-01 Korea Raises Voice for Shareholders by Soo Chang Lee of Matthews Asia

Corporate governance practices in South Korea’s family-controlled conglomerates, known as chaebol, find their roots in a social contract that was implicit in the process of the country’s economic development under military dictatorship, which began in the early 1960s. Korea’s previously autocratic government initiated economic plans and wielded power in the private sector by assigning different areas of development to each of several chosen corporate families.

2013-11-01 Weekly Economic Commentary by Team of Northern Trust

The public needs to move beyond its bad feelings toward financial institutions. Should we modify the price stability mandate of central banks? The Fed offers no surprises.

2013-10-31 Third Quarter Letter by Team of Grey Owl Capital

Despite the recent shenanigans in Washington concerning funding the government and raising the debt ceiling, as well as the constant news coverage of the quantitative easing “taper” that the Federal Reserve may or may not begin, we are going to spare (at least for this quarter) both you and us another long discussion of these very real issues.

2013-10-31 Global Economic Outlook by Carl Tannenbaum of Northern Trust

The United States avoided a fiscal accident after Congress struck a deal to end the partial government shutdown and bought time to resolve differences over the federal budget. Assuming political discord will not result in another standoff, the U.S. economy is projected to show steady and stronger growth in 2014 compared with 2013.

2013-10-31 Fund Flows Shift Dramatically This Year as Investors Embrace Risk by Minyi Chen of AdvisorShares

The Federal Reserve has been trying for almost five years to coax savers and investors into stocks by printing money to inflate the prices of assets in general and U.S. stocks in particular. The Fed finally seems to be succeeding. We are witnessing the biggest shift in fund flows since the crash of 2008.

2013-10-31 A Rebound in Global Equities by Scott Minerd of Guggenheim Partners

With the U.S. economic expansion entering its fifth year and the global economic picture improving, it appears equities in Europe and Asia can still rise.

2013-10-31 The Age of Experimentation (Global Economic Outlook for Fourth Quarter 2013) by Robert Scherfke of Hartford Funds

Macroanalyst Robert Scherfke, PhD discusses the progress global economies have made since 2008 and the challenges officials face as they normalize fiscal policies.

2013-10-31 Scrooge McDucks by William Gross of PIMCO

With the budget and debt ceiling crises temporarily averted, perhaps a future economic priority will be to promote economic growth; one way to do that may be via tax reform. How to proceed depends as always on the view of the observer and whether the glasses are worn by capital, labor or government interests.

2013-10-31 International Equity Commentary by Team of Thomas White International

International equity prices saw robust gains in September as the U.S. Federal Reserve unexpectedly refrained from reducing its bond purchase programs. In addition, the lowering of the U.S. growth forecast by the Fed lifted investor optimism that the quantitative easing is likely to be wound down at a very gradual pace.

2013-10-30 The Thermometer of the Stock Market by Bill Smead of Smead Capital Management

As long-duration owners of common stock, we believe it is the wealth created by the businesses which causes the owners to prosper. We have also been participants in the US stock market since 1980 and are very aware of big swings in enthusiasm for owning common stocks. So we thought it would be helpful to share our opinion on the current temperature of the market. To take the temperature of the market we need to examine the thermometer readings.

2013-10-30 Getting Back into Value Equities by Kevin Simms of AllianceBernstein

It finally feels like a great time to be a value investor again. After several challenging years, market conditions have become much more conducive to finding undervalued, controversial stocks with long-term payoff potential. Even after this year’s equity-market rally, we think the value rebound is just beginning.

2013-10-29 Why Deficits Don’t Matter by Bob Veres (Article)

Stephanie Kelton, Associate Professor of Economics at the University of Missouri/Kansas City, believes that the root of our deficit problems can be found in a fundamental misunderstanding ? shared by Democrats, Republicans and mainstream voters alike ? about the government’s balance sheet. She argues, plausibly, that the whole idea that we should control the deficit at all is costing our nation trillions of dollars in lost output. The result is lost income, savings, wealth and prosperity.

2013-10-29 Defining the EM Corporate Bond Opportunity by Sponsored Content from Loomis Sayles (Article)

Finance is a numbers business. Investors study prices, yields, rates of return. However, when it comes to sizing up emerging markets, we think they should also pay attention to semantics. In the past, terming a country “emerging” made it synonymous with low credit quality and higher risk. But today, many emerging markets boast strong credit profiles while parts of the developed world buckle under heavy debt loads.

2013-10-29 India's Maoist Problem by Bill OGrady, Kaisa Stucke of Confluence Investment Management

India has fought numerous wars with outside forces in its history and has also had several internal conflicts.The most notorious civil struggle has been the conflict with Kashmir insurgents, a border conflict between India and Pakistan that has claimed tens of thousands of lives.So it generally came as a surprise when the Indian Prime Minister Manmohn Singh declared the Maoist movement in the eastern part of the country to be the single biggest internal security challenge ever faced by India.

2013-10-29 We Must Avoid Seeing the New Arctic through an Old World Lens by Scott Minerd of Guggenheim Partners

It would be easy to think those with a thirst for exploration were born too late - to assume that humanity has already reached every corner of the earth there is to discover. But one region - the Arctic - still contains uncharted mysteries.

2013-10-29 Only RED That You Have Seen in October... by Blaine Rollins of 361 Capital

The markets felt a bit different this week. While equities finished with another weekly gain, it was lead to new highs by a new and interesting cast of characters: the Dow Industrials, Dividend Stocks (like Utilities & Industrials), Germany, the United Kingdom, Gold & Silver, and Long Maturity Treasuries. While everyone under invested in risk is hoping for a pullback, the rest who are equal or overweight seem to be looking to buy on any pullback.

2013-10-29 And That's The Week That Was by Ron Brounes of Brounes & Associates

Nice to have a week free of politico rhetoric and distractions for a change (don’t get used to it). With little in the way of budget battles, investors focused on earnings and generally liked what they saw. Add in some positive economic news from China and a labor picture that should prompt the Fed to stay put (for now) and you have another record for the S&P.

2013-10-29 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

With most of the political wrangling and debate nearly over, one hopes, we are left to deal with the residue of their cacophony. Politically, I’m not astute enough to try and unravel the truths and un-truths spoken during the government budget debate and shutdown. But as an economic scientist, the numbers reveal an extraordinary landscape of congruent trendlines, missed opportunities, and plausible strategies for safely navigating the next 3 months.

2013-10-29 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

A very quiet week for stocks as earnings season kicked into high gear at last.

2013-10-29 Equities Reach All-Time HighsYet Again! by Bob Doll of Nuveen Asset Management

U.S. equities marked another all-time high last week as the S&P 500 increased 0.9%. (1) Global equities reached new cycle highs for the second week in a row. Many investors have concerns that the gains will not last since the world economy remains lackluster and the liquidity driving the current rally will eventually stop.

2013-10-28 The Grand Superstition by John Hussman of Hussman Funds

One thing that separates humans from animals is the ability to evaluate whether there is really any actual mechanistic link between cause and effect. When we stop looking for those links, and believe that one thing causes another because “it just does” we give up the benefits of human intelligence and exchange them for the reflexive impulses of lemmings, sheep, and pigeons.

2013-10-28 Beyond the Noise, More of the Same? by Scott Brown of Raymond James

Delayed economic data reports have begun to arrive. The figures point to a disappointing 3Q13 (relative to expectations) and the partial government shutdown is unlikely to help in 4Q13. The recovery had been poised for improvement this year, but fiscal policy has been a major headwind. Economic figures will be distorted in October (due to the government shutdown) and in November (due to the rebound from the shutdown). Yet, beyond the noise, the underlying pace of growth is likely to remain disappointing in the near term. Is there hope for 2014?

2013-10-28 The Markets in a Tug of War in the Short Run by Matt Lloyd of Advisors Asset Management

As the damage to sentiment that was brought about by the Washington “Drama Club,” a somewhat cautious number has come about. On October 21, 2013, the Wall Street Journal had an article detailing margin debt hitting new highs which counteracts some of the investor sentiment numbers that are detailed by several sources. To get a better understanding, we ran the margin debt as a percentage of corporate equities over the last 25 years.

2013-10-28 Why Growth is Deep in the Heart of Texas by Frank Holmes of U.S. Global Investors

A recent TIME Magazine cover features an engaging collage of the 50 states reassembled to fit within the boundaries of Texas. With a growing number of solid-paying jobs, affordable housing, and low taxes, “the Lone Star State is America’s Future,” declares economist and writer Tyler Cowen.

2013-10-26 A Code Red World by John Mauldin of Millennium Wave Advisors

The heart of this week’s letter is the introduction of my just-released new book, Code Red. It is my own take (along with co-author Jonathan Tepper) on the problems that have grown out of an unrelenting assault on monetary norms by central banks around the world.

2013-10-26 Why U.S. Dollar Will Remain World's Reserve Currency, Despite Political Brinkmanship by Tatjana Michel of Charles Schwab

The U.S. dollar is not likely to lose its premier world reserve-currency status anytime soon. But continuing U.S. political brinkmanship could drive foreign countries into other currencies faster. With the market focus shifting to monetary policy and growth, we expect a Fed taper delay to give foreign currencies some time to recover.

2013-10-25 Why Growth is Deep in the Heart of Texas by Frank Holmes of U.S. Global Investors

TIME Magazine’s cover this week features an engaging collage of the 50 states reassembled to fit within the boundaries of Texas. With a growing number of solid-paying jobs, affordable housing, and low taxes, “the Lone Star State is America’s Future,” declares economist and writer Tyler Cowen.

2013-10-24 Risk-On Returns by Scott Minerd of Guggenheim Partners

Ultra loose U.S. monetary policy continues pushing asset values higher at home and abroad. Seasonal factors should also provide a tailwind and lift asset prices across nearly every investment class.

2013-10-24 The Pillars of Commodities Investing by Miguel Perez-Santalla of BullionVault

As an advisor your job is to know the most secure places to invest one’s money. This difficult task only becomes more difficult when confronted with demands for an alternative investment.

2013-10-24 Trying to Stop a Bull Market Has Risks by Frank Holmes of U.S. Global Investors

U.S. stocks have been on a tear. The S&P 500 Index has climbed a surprising 20 percent so far this year, as a global synchronized recovery takes shape and funds flow back to equities. As I often say, investors take risks when they try to stop a bull run, and plenty of data suggest you might regret taking that action this year.

2013-10-24 Africa's “Glass With Attitude” by Mark Mobius of Franklin Templeton

Africa has been an area of interest to our team, for many reasons. One might say Africa’s biggest asset is its youthful population. With a median age of under 20 in many countries today, that means a very high portion of Africa’s population is dependent on the adult workforce. Tomorrow, however, it means that the workforce will be massive, and the ratio of dependents to workers (the dependency ratio) could be among the lowest in the world. This huge and youthful population is a key rationale for our interest there.

2013-10-24 Putting Tax-Deferred Accounts to Best Use by Kathleen Fisher, Tara Thompson Popernik of AllianceBernstein

The common wisdom about retirement planning is to fund tax-deferred vehicles such as 401(k) plans and IRAs to the maxand we agree. But how to put these accounts to best use is more complicated.

2013-10-23 At 40 I'm Half Dead by Liam Molloy, Bethany Carlson of Galway Investment Strategy

So goes comedian Louis CK’s bit about hitting middle age. “Not old enough for anyone to care that you’re old. Not young enough for anyone to be proud of you or impressed.” And as we head into the backstretch of this economic cycle, that same cynicism and resignation seems to be settling right in. The glory days of riding the upward slope when almost everything was screamingly cheap in 2009 are behind us.

2013-10-23 Shifting Gears: The Fed Turns from Tapering to Tempering Expectations by Nanette Abuhoff Jacobson of Hartford Funds

Federal Reserve (Fed) Chairman Ben Bernanke surprised markets on September 18 by announcing a continuation of the Fed’s $85 billion-per-month bond purchases and more muted expectations for economic growth and inflation. With this proverbial monkey wrench thrown into the gears of financial markets, investors are now asking how the Fed’s new course changes the investment outlook.

2013-10-23 What a Yellen Fed Could Mean for Interest Rates by Zach Pandl of Columbia Management

A major question among investors after Janet Yellen’s nomination for Fed Chair is whether she will be too soft on inflation. Part of Yellen’s dovish reputation stems from a debate among the FOMC in July 1996, in which she warned the committee about the risks of pushing inflation too low. With the passage of time, however, the views Yellen expressed at that meeting now come across as very sensible. Indeed, today they would be considered uncontroversial among most economists. In reality Yellen is closer to the Fed consensus on inflation than her reputation in markets would suggest.

2013-10-23 Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management

The portfolio enjoyed another index-beating month with a gain of 0.9% versus 0.6%, so improving further the long term numbers. As noted in previous Bulletins, correlations between growth and equity market returns are low. Investors remain fixated otherwise, but some confusion is reasonable given that growth in earnings per share is also slowing. Yet strong equity markets can be justified by the Free Lunch Theory.

2013-10-23 Can Kicked Down the Road Once Again... by Blaine Rollins of 361 Capital

Donkeys 1, Elephants 0, Congress -535. The can was kicked down the road once again. We would all like to think that Congress will avoid another last minute battle in early 2014, but unfortunately we can’t put it past the current list of non-negotiators. The only thing that is certain in the future is that it will be many election cycles before a member of Congress makes it into the World Series of U.S. Presidential ballots.

2013-10-23 Economic & Capital Market Summary by Gregory Hahn of Winthrop Capital Management

It has been five years since the Financial Crisis wreaked havoc on the economy and capital markets. With equity markets trading near record highs and new issue corporate bonds coming to market regularly, the capital markets have largely recovered. However, we are concerned that the economic recovery is just an illusion that exists in spite of the efforts in Washington D.C. to kill it.

2013-10-23 Singaporean Consumer Consumption and Confidence is Weak - Should Investors Worry? by Team of Manning & Napier

Singapore is the world’s 35th largest economy by nominal GDP, yet ranks 6th in the world by GDP per capita, signifying its position as an advanced and highly-productive economy. With an efficient regulatory framework, low tax rates, and a flexible labor market, Singapore has a reputation for being one of the most business-friendly countries in the world.

2013-10-23 I Thought The Safety Was On by Liam Molloy, Bethany Carlson, Charlie Mas of Galway Investment Strategy

For the past thirty years investors could allocate a portion of their portfolio to investment grade bonds and regard that money as “safe”. Wealth preservation was easy buy a ladder of Treasuries or triple-A rated corporates and go back to bed. That perceived safety was a direct result of a continuing, if not steady, decline in interest rates.

2013-10-23 Emerging Europe: Regional Economic Review - 3Q 2013 by Team of Thomas White International

In its latest World Economic Outlook, the International Monetary Fund (IMF) further trimmed its forecast for global growth. The Washington-based lender said expansion will be driven more by developed economies as emerging markets grapple with slowing growth and a tighter global financial scenario as interest rates hint of trending higher in advanced economies such as the United States. However, a reading of economic tea leaves for the Euro-zone and economies such as Russia, Turkey, Poland, Hungary, and the Czech Republic offers room for optimism.

2013-10-22 Venerated Voices? 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 Q3 2013.

2013-10-22 Inching Closer by Sponsored Content from Janus Capital Group (Article)

How is the recent flooding in Colorado related to global economies and the financial crisis of 2008? Get a unique perspective from Colleen Denzler, CFA, Janus’ Global Head of Fixed Income Strategy, on how global economies are grappling to wean themselves off government support and grow their economies from within.

2013-10-22 Rolling Returns: A Better Way to Measure Performance by Sponsored Content from The Royce Funds (Article)

Though calendar-year returns are among the more common measurements of a portfolio’s performance, rolling returns arguably offer a more compelling story. They provide a particularly robust analytical tool for evaluating manager performance, especially during volatile periods.

2013-10-22 Washington Strikes a No-Surprise Deal - Now What? by Sam Wardwell of Pioneer Investments

Congress called a time-out in the budget/debt fight last week, striking a deal to avoid default and fund the U.S. government through January 15, 2014 and raise the debt limit through February 7, 2014. While the parties agreed to budget talks, they did not commit to reaching an agreement (technically, Paul Ryan and Patty Murray, the House and Senate budget committee chairs will begin a process of fiscal negotiations, due to wrap up by mid-December).

2013-10-22 A Green Light for Gold? by Peter Schiff of Euro Pacific Capital

It is rare that investors are given a road map. It is rarer still that the vast majority of those who get it are unable to understand the clear signs and directions it contains. When this happens the few who can actually read the map find themselves in an enviable position. Such is currently the case with gold and gold-related investments.

2013-10-22 Could US Issues Lead Investors to Emerging Markets? by Mark Mobius of Franklin Templeton

The US government had been shuttered for more than two weeks, and investors around the world, including those in emerging markets, have been watching the impasse and beginning to plan in the event of a default of US government debt. Late Wednesday, the US Congress agreed to a short-term extension of the debt ceiling until February and set the stage for the government to reopen. However, a definitive, long-term solution to the nation’s debt issues was still not reached and we could see a repeat of the political dysfunction.

2013-10-22 After the Minimalist Debt Ceiling Deal: The Good & Bad News by Russ Koesterich of iShares Blog

Last week, investors cheered that Washington finally reached a last-minute debt ceiling deal. But despite their big sigh of relief, the debt ceiling deal wasn’t all good news. Russ provides a quick look at the good, the bad and the investing implications of the compromise.

2013-10-22 The Boys Are Back in Town by Jeffrey Saut of Raymond James

The boys are indeed back in town as Washington D.C. opened its doors for business as usual last week following a contentious debt ceiling debate and a 16-day shutdown of the government. This outcome had been anticipated in these letters for often-stated reasons, and just like when the ”fiscal cliff” was averted, I now expect the media to turn its focus to the next Armageddon.

2013-10-22 ProVise Bullets by Ray Ferrara of ProVise Management Group

Last month, a Wells Fargo/Gallup survey of non-retired investors showed just how lingering the hangover is from the financial crisis five years ago. Much like the Great Depression financially scared their great grandparents and grandparents, the Great Recession is impacting investors’ expectations about the future.

2013-10-22 And That's The Week That Was by Ron Brounes of Brounes & Associates

The gov is back in biz (so get back to work). Investors were pleased (for now).

2013-10-22 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

If you’re like most of us, the continuum of political discourse is, by now, becoming (a) boring (b) laughable (c) shameful (d) disgusting. Let Washington worry about Washington, the markets are churning based upon rumor, innuendo, and hyperbole. It doesn’t matter from which “side” of the circle one enters this maze, all that matters is finding an exit door.

2013-10-22 How Many Monkeys Does it Take to Find a Successful Strategy? by Michael Edesess and Kwok L. Tsui (Article)

Give a monkey enough darts and she will eventually hit the bulls-eye on a dartboard. We wouldn’t dare consider that monkey an expert dart thrower, but investment professionals have been using essentially that same logic to assert that their strategies ? often called “smart betas” ? will outperform the market. New research exposes the faulty mathematics upon which such claims are based.

2013-10-21 Fourth Quarter Investment Outlook by Bob Doll of Nuveen Asset Management

The macro theme of the fourth quarter and early 2014 is monetary reflation and global growth resynchronization. The Fed’s surprising decision to postpone tapering its QE program will likely encourage further risk-taking. In the meantime, we observe increasing signs of a synchronized improvement among the four important economies - the United States, Europe, Japan and China.

2013-10-21 Europe Turning a Corner? by Brandon Odenath of J.P. Morgan Funds

Since late last year, investors have seen periods of strong outperformance by assets from the most impacted parts of Europe, leaving many observers wondering if Europe is turning a corner. Intervention by the ECB and the ability of those liquidity injections to stop the bleeding in the economy has helped. The reduction of austerity and drag coming from fiscal policy should be the key to faster economic growth.

2013-10-20 The Damage to the US Brand by John Mauldin of Millennium Wave Advisors

There is no doubt that the image what I will refer to in this letter as the "brand" of the United States has been damaged in the past month. But what are the actual costs? And what does it matter to the average citizen? Can the US recover its tarnished image and go on about business as usual? Is the recent dysfunction in Washington DC now behind us, or is it destined to become part of a bleaker landscape?

2013-10-18 United States Debt Default Averted - For Now by David Edwards of Heron Financial Group

The US Senate passed H.R. 2775 Continuing Appropriation Act, 2014 Wednesday afternoon 81 votes to 18. The House of Representatives passed the bill around 10PM Wednesday night 285 to 144, and the bill was signed into law by President Obama at 12:30 AM Thursday morning. 100% of Democratic Representatives voted for the bill, but only 37% of Republican Representatives in what is widely regarded as a disastrous outcome for the Republican strategy of shutting down the government in order to “defund ObamaCare.”

2013-10-18 Connecting the DOTs: The Role of North America's Emerging Markets' in Achieving Energy Independence by John Devir of PIMCO

The midstream energy sector is likely to grow more quickly than the overall U.S. economy over the next several years, creating the potential for attractive investment opportunities. North Dakota, Oklahoma and Texas, or the “DOTs” for short, stand to disproportionally benefit from strong growth in onshore U.S. oil and gas shale development. PIMCO’s approach is to identify and invest in the companies, including pipeline operating companies, favorably positioned to benefit from prolific oil production.

2013-10-18 Despite Uncertainty, the Market Still Looks Strong by Charlie Dreifus of The Royce Funds

Although it was an ugly battle, on Thursday morning October 17 President Obama signed a bill that reopened the government into January 2014 and raised the debt ceiling until early February of next year.

2013-10-18 Formosa: Back to Beautiful by Patricia Huang of Matthews Asia

When the Portuguese first landed on Taiwan, they called it Ilha Formosa or “Beautiful Island.” However, Taiwan’s route to success has been far more prosaicit rapidly industrialized by mass producing a wide range of consumer goods, including textiles and footwear, toys, bicycles, appliances and computer chips. It famously grew its economy via an export-driven model, making the “Made in Taiwan” label ubiquitous.

2013-10-18 Fall is in the Air by Christopher Singleton of Kanawha Capital Management

Autumn has arrived, and many creatures have been making dutiful preparations to survive the winter months. But not all are so inclined, particularly our political leaders. Indeed, along with crisper air temperatures and more vibrant colors, it would just not feel like fall without the annual Washington squabbles to fund the federal government and increase its borrowing authority.

2013-10-18 Trying to Stop a Bull Market Has Risks by Frank Holmes of U.S. Global Investors

U.S. stocks have been on a tear. The S&P 500 Index has climbed a surprising 20 percent so far this year, as a global synchronized recovery takes shape and funds flow back to equities. As I often say, investors take risks when they try to stop a bull run, and plenty of data suggest you might regret taking that action this year.

2013-10-18 In Other News by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

It will take some time to gauge the full impact of the government shutdown and data is likely to be somewhat skewed over the next couple of months. However, sitting on the sidelines isn’t a great option and stocks still appear to us to be the best place to invest money for the longer term. International growth, although not robust, appears to be more supportive as we head into 2014 than it has since the financial crisis, and we favor developed over emerging markets for the time being.

2013-10-17 Fixed Income Investment Outlook by Team of Osterweis Capital Management

Last quarter we wrote about the confusion that can be created by the Federal Reserve’s (Fed’s) two official mandates: keeping inflation in check and ensuring full employment. We also pointed out that given the rather fragile economic backdrop, talk of letting the economy stand on its own two feet by reducing their bond buying might be premature. During the third quarter, it appeared most economists felt comfortable that the Fed would indeed begin “tapering” its purchase of Treasuries and mortgage securities after the September Federal Open Market Committee (FOMC) meetin

2013-10-17 Global Brand Companies: Well Positioned to Deploy Incremental Capital at High Rates of Return by Jenny Hubbard of Diamond Hill Investments

Achieving an optimal balance between growth and return on invested capital is critically important to value creation. Many discretionary product companies attain this equilibrium for a short period of time, but fickle and geographically divergent consumer preferences make it challenging to sustain over the long-term.

2013-10-17 Investing in Retirement: Bonds Aren't Enough by Kathleen Fisher, Tara Thompson Popernik of AllianceBernstein

What should you invest in after the spigot of earned income is turned off? It’s a vexing question, especially since we expect lower stock and bond returns going forward.

2013-10-17 And That's The Week That Was by Ron Brounes of Brounes & Associates

The gov is closed for business. Nuff said. (But help may be on the wayor not?)

2013-10-17 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

October 17th looms large as a critical inflection point in our economic/political discourse. On that date the U.S. Congress is supposed to “raise the debt limit”, which simply means allocating the funds to cover debts already incurred by the Federal government. The date is being held hostage by both political parties in order to relegitimize the previous election (2012) and to dial-up the rhetoric of disparate political ideology.

2013-10-17 ProVise Bullets by Ray Ferrara of ProVise Management Group

Last month, a Wells Fargo/Gallup survey of non-retired investors showed just how lingering the hangover is from the financial crisis five years ago. Much like the Great Depression financially scared their great grandparents and grandparents, the Great Recession is impacting investors’ expectations about the future. 41% indicated they were concerned about another global crisis during their retirement years, and 28% were convinced they would have a lower standard of living during retirement.

2013-10-16 Pacific Basin Market Overview - September 2013 by Team of Nomura Asset Management

North Asian markets ended higher during the quarter after comments from Federal Reserve Chairman Bernanke appeared to infer that the Fed’s asset purchase program would be extended for a while longer. On the other hand, India and the ASEAN (Association of Southeast Asian Nations) region underperformed along with weakening currencies and continued fund outflows. In China, Premier Li Keqiang’s statement that China would meet its gross domestic product (GDP) growth target this year, coupled with better-than-expected economic data, brought some relief to the equity markets.

2013-10-16 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Since the end of September, total AUM in all active ETFs increased by almost $443 million. Assets in the two largest categories “Short Term Bond” and “Global Bond” fell by $61 million and $12.77 respectively. The “Foreign Bond” category also fell, by $19.38 million. The largest gain was in “Currency” active ETFs, which added an impressive $499.5 million in value due to flows into one fund.

2013-10-16 Looking Past Default, Be An Investor, Not a Trader by Charles Lieberman (Article)

Many investors are focused on whether a budget agreement will be reached before the U.S. defaults on its debt and worry that they should sell out some equity holdings beforehand. In our judgment, this seems to be a far riskier approach than ignoring the entire matter and waiting for some sort of settlement to be reached. Day traders move the markets in reaction to every bit of news, no matter how fleeting, while investors actually have the advantage here. Investors can ignore the noise and volatility and invest for the longer term.

2013-10-16 Equity Outlook by Team of Osterweis Capital Management

As we write this outlook, our political leaders once again have succeeded in holding the U.S. government budget, and by extension the financial markets and the broader economy, hostage to their respective political agendas. We believe it is important to avoid getting caught up in the drama on Capitol Hill and remain focused on the slow but continued healing taking place in the U.S. economy.

2013-10-16 Two More Reasons to Like Equities: Growth & Inflation by Russ Koesterich of iShares Blog

Russ offers more evidence supporting his preference for equities over bonds: Historically equities have tended to outperform bonds on a monthly basis in a growth and inflation scenario like the one we’re in today.

2013-10-16 Being Contrarian Could Lead to Lucrative Energy Plays by Frank Holmes of U.S. Global Investors

Sometimes the most attractive energy assets aren’t found in the ground. Rather, at times like today, they are listed on the stock exchange.

2013-10-15 Is Gold Overpriced? by Adam Jared Apt (Article)

New research, based on an econometric model of gold prices, has attempted to answer the question, “Is gold overpriced?”

2013-10-15 A Q3 client letter: Mike Tyson on Sticking to Your Plan by Dan Richards (Article)

Each quarter I post a template for a client letter, as a starting point for advisors who want to send clients an overview of the three months that just ended and the outlook for the period ahead.

2013-10-15 Letters to the Editor by Various (Article)

Readers respond to Robert Huebscher’s article, The Futility of the Endowment Model, which appeared last week.

2013-10-15 Bond Market Review & Outlook by Thomas Fahey of Loomis Sayles

Flip-flopping Federal Reserve (Fed) policy defined the third quarter. Last quarter, the Fed threw the markets a curve ball by announcing possible tapering of its large-scale asset purchases beginning this year. That “taper talk” set off a mini-riot in global bond markets. Many emerging market (EM) countries, like Brazil, India, Indonesia and South Africa, were the biggest victims, as their bond yields rose and their currencies crashed.

2013-10-15 6 Truths About D.C.'s Debt Debacle by Kristina Hooper of Allianz Global Investors

Kristina Hooper highlights what every investor should know about the ongoing fiscal crisis in Washington and what to expect from Congress and the Fed.

2013-10-15 US Default: How Bad Would It Be? by Chris Maxey, Ryan Davis of Fortigent

Treasury Secretary Jack Lew has publicly declared October 17 this Thursday as the date when the US government would no longer be able to pay its bills, should Congress not reach a budget resolution.A once unthinkable outcome is becoming all too close to reality due to brinksmanship in Washington.For the second time in two years, investors have had to contemplate just how such a situation would shake out for financial markets.

2013-10-15 The Turmoil in Washington by Bill OGrady of Confluence Investment Management

At the time of this publication the budget situation has not been resolved, although it appears that both parties are backing away from the default abyss. However, given that these crises seem to come once or twice a year, it seemed appropriate to weigh in on the geopolitical impact of the intractable problems of American government.

2013-10-14 Equity Market Review & Outlook by Richard Skaggs of Loomis Sayles

Equities generally performed well across the board in the third quarter. The S&P 500 Index’s solid 5.24% return built on strong gains from earlier in the year. The Index has returned more than 19% through September, surpassing expectations at the start of the year. Slow but steady economic growth in the US, support from the Federal Reserve (the Fed), and more recently, signs of potentially better growth in Europe and Asia have been important positive catalysts.

2013-10-14 What Uncle Sam Taketh Away, You Can Give Back (and Get a Tax Deduction) by Kathleen Fisher, Tara Thompson Popernik of AllianceBernstein

The government shutdown, now in its second week, has temporarily stopped the flow of government funding for many worthy organizations and may strain the resources of others. Federal grant administration is being delayed. For example, the grant administration staff at the National Institutes of Health has been furloughed; that may stop or slow grants for medical research.

2013-10-14 Me and My Horse by Jim Goff of Janus Capital Group

This is not a story about getting back on the horse that throws you. It is about just staying on the horse. It is also a market story.

2013-10-12 These Could be the Most Lucrative Energy Plays by Frank Holmes of U.S. Global Investors

Sometimes the most attractive energy assets aren’t found in the ground. Rather, at times like today, they are listed on the stock exchange.

2013-10-12 Sometimes They Ring a Bell by John Mauldin of Millennium Wave Advisors

Three items have come across my screen in the past month that, taken together, truly do signal a major turning point in how energy is discovered, transported, and transformed. And while we’ll start with a story that most of us are somewhat aware of, there is an even larger transformation happening that I think argues against the negative research that has come out in the last few years about the reduced potential for growth in the world economy.

2013-10-11 The Fed's Surprise and Yellen's Challenge by Mohamed A. El-Erian of Project Syndicate

To ask what Janet L. Yellen, the nominee to succeed Ben Bernanke as Chair of the Federal Reserve, has in store for US monetary policy is to pose the wrong question. The real issue is the decline of the Fed’s policy effectiveness.

2013-10-11 Flying Blind: Forecasting with No Data or Endgame by Diane Swonk of Mesirow Financial

Everything from the government shutdown to posturing regarding the lifting of the debt ceiling has heightened uncertainty about the economic outlook. Consumer and business confidence have fallen since the threat of a shutdown emerged, while the reality has taken a toll on communities where a large number of federal workers have been furloughed. Everyone, from cab drivers to restaurant owners, small retailers and (largely) defense manufacturers, were affected in the early days of the partial shutdown of government agencies.

2013-10-10 Frustrating the Most People by Bill Smead of Smead Capital Management

A venerable sage once said, "The markets do whatever they have to do to frustrate the most people." For the long-duration investor, this means that you need to look at what people are invested in to determine where the frustration will come from. Thanks to the Associated Press, we know what the masses have done with their investments in the last five years.

2013-10-10 What Is Due Diligence? Here's How I Do It by Chuck Carnevale of F.A.S.T. Graphs

The lexicon of the financial world is full of phrases and jargon that are often tossed about without considering that there may be those who are not exactly familiar with the true meaning of the terms. It recently came to my attention that due diligence may be one of those idioms. In my own writings, I routinely recommend that readers conduct their own due diligence and/or comprehensive research. However, I recently had a reader ask me exactly what due diligence was and how to do it?

2013-10-10 The Fire Fueling Gold by Frank Holmes of U.S. Global Investors

Gold took quite a beating in September, bucking its seasonal average monthly return of 2.3 percent. The political battle between President Barack Obama and Congress, China’s Golden Week, and India’s gold import restrictions likely weighed on the metal.

2013-10-10 Economic and Market Overview: Third Quarter 2013 by Team of Envestnet

The economic environment in the third quarter was one of growth, albeit at a slower pace than most economists, and the Federal Reserve (“Fed”), believe can be self-?sustaining. The slow but steady gains the economy made were enough to buoy the stock market, but likely only because the Fed has seen it necessary to maintain its aggressive monetary policy. While employment gains were anemic during the quarter, the unemployment rate actually declined to 7.3%, largely due to a contraction in the labor force.

2013-10-09 Little Visible Progress on the Budget Shutdown, but Some Inside Baseball In Play by Sam Wardwell of Pioneer Investments

President Obama canceled his planned visit to Asia and participation in the Asia-Pacific Economic Cooperation summitciting the inconvenience caused by the government shutdown (“the difficulty in moving forward with foreign travel in the face of a shutdown), sending John Kerry in his place, and reiterating his unwillingness to negotiate with Republicans.

2013-10-09 Five Years in Limbo by Joseph Stiglitz of Project Syndicate

The US financial system may be more stable than it was five years ago, but that is a low bar it was teetering on the edge of a precipice. Those in government and the financial sector who congratulate themselves on banks’ return to profitability and mild regulatory improvements should focus on what still needs to be done.

2013-10-09 The Squeeze Play by Jerome Schneider of PIMCO

Reductions in Treasury bill and commercial paper issuance compounded by developments on the demand side mean the “squeeze play” is on for many short-term portfolios. Investors should consider the potential for substantive changes to liquidity conditions as banks contend with increases in capital requirements due to updated Basel III regulations. Active management of short-term investments is important: Don’t rely on static regulatory frameworks or traditional indexes to determine a portfolio’s unique liquidity needs.

2013-10-09 Taper Time - Mining, That Is by Adam Bowe, Robert Mead of PIMCO

Recent data suggest that mining investment is tapering, with the sector detracting from real growth in the first half of 2013. We see three possible growth scenarios: a handoff to the corporate sector; no handoff, with demand continuing to slow; or a handoff to the highly levered household sector, which would create long-term risks. Until we see meaningful signs of a growth handoff from the mining sector to a new balance sheet that has the capacity to expand, our base case calls for sub-trend growth and low interest rates, supporting bond prices over the cyclical horizon.

2013-10-09 Getting Serious About Investing Responsibly by Luke Spajic, Josh Olazabal of PIMCO

To date, much of ESG-related investing has focused on negative screening, but we believe there is a better approach. This approach rests on three pillars: identifying and analyzing key ESG issues facing a given investment sector, engaging with the issuers of securities, and supporting the development of markets for ESG investments.

2013-10-09 Emerging Values by Cliff Stanton of Envestnet

The current valuations and fundamentals in Emerging Markets make for an attractive entry point, if you can stomach the increased volatility and risk associated with the asset class.

2013-10-08 What Happens if the Government Shuts Down and Nobody Notices? by Michael Temple of Pioneer Investments

Yes, this is a facetiously philosophical title (what is the sound of one hand clapping?) that pokes fun at the current situation in Washington. And we’re well aware that if Republicans and Democrats can’t reach a compromise in a couple of weeks to deal with the debt ceiling “time-bomb”, none of us will be joking around.

2013-10-08 Government Shutdown Masks Pending Debt Ceiling and Third Quarter Earnings by Bob Doll of Nuveen Asset Management

Equities were mixed last week as the markets were focused on the budget impasse in Washington, D.C., that forced the federal government into a partial shutdown. As with the 17 prior shutdowns, we do not anticipate a lasting impact on the economy or markets. While the shutdown makes headlines, the issues that will likely have the most impact are the debt ceiling debate and third quarter corporate earnings announcements, which could mean a bumpy ride for investors.

2013-10-08 The Market May Be Signaling a Return to a More Typical Recovery by Whitney George of The Royce Funds

Despite the Fed’s indecision about whether or not to taper, we see evidence that business activity is normalizing and the global economy is getting healthier. Co-CIO, Managing Director, and Portfolio Manager Whitney George talks about how economically sensitive sectors have begun to benefit from rising rates in the small-cap rally, how recent news coming out of China has affected certain portfolio investments, where he is currently seeing long-term opportunities, and stocks in which he has high confidence.

2013-10-08 Detente with Iran? by Bill OGrady of Confluence Investment Management

On September 28th, President Obama reportedly called Iranian President Rouhani to confer over American and Iranian relations. In addition, Iran’s nuclear program was discussed. This was a historic eventthe first documented call between a U.S. president and his counterpart in Iran in 35 years. The last time such a conversation occurred was when the Shah was in power.

2013-10-08 Listen to the 10th Man by Kristina Hooper of Allianz Global Investors

There’s no shortage of short-term risks in today’s market or conventional wisdom on how they will play out. But prepping for the unexpected could limit the number of surprises and better insulate investors’ portfolios, writes Kristina Hooper.

2013-10-08 The Death of Fixed Income? Not so Fast . . . by Giordano Lombardo of Pioneer Investments

Recent market movements have reminded investors that the fixed income market is facing a secular change, after a 30-year-long bull market driven by a continuous decline in interest rates. I believe the announcements of the death of fixed income as an asset class are greatly exaggerated, and in order to face the new reality, fixed income investors and asset allocators need to adopt a significant change of approach.

2013-10-08 Maybe Mark Twain Said It Best... by Blaine Rollins of 361 Capital

President Barack Obama and his top economic officials appear to be pushing for some market unrest to exert pressure on the GOP to throw in the towel. Asked in his CNBC interview Wednesday whether Wall Street is right to remain calm over the standoff, Mr. Obama replied: “No.”

2013-10-08 And That's The Qaurter That Was by Ron Brounes of Brounes & Associates

An obsession with Fed policy; troubles in Syria; new concerns in DCand yet the market kept rolling (for a while).

2013-10-08 And That's The Week That Was by Ron Brounes of Brounes & Associates

The gov is closed for business. Nuff said. Coming up in the week ahead: ISM Fed Minutes (Wednesday) Retail Sales (Friday), PPI (Friday)or maybe not.

2013-10-08 Absolute Return Letter: Heads or tails? by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners

Demographics captivate me. There are around 7.1 billion of us occupying planet earth today, going to 10 billion by 2050. I often think about how good old mother earth will cope with the additional 3 billion people we are projected to produce between now and 2050. More people translate into increased pressure on already scarce resources, but that is only part of the story and a story well covered by now.

2013-10-07 Auto Focus: Voluntary Plans Morphing to Mandatory? by Jon Vogler of Invesco

The American private retirement system has historically been voluntary. Employers first decide whether they’re going to sponsor a plan and then select the plan’s features. But over the last several years, focus has intensified on two criticisms of the voluntary system.

2013-10-07 Defining the EM Corporate Bond Opportunity by Elisabeth Colleran, Peter Frick, Peter Marber, David Rolley, Edgardo Sternberg of Loomis Sayles

Finance is a numbers business. Investors study prices, yields, rates of return. However, when it comes to sizing up emerging markets, we think they should also pay attention to semantics. In the past, terming a country “emerging” made it synonymous with low credit quality and higher risk. But today, many emerging markets boast strong credit profiles while parts of the developed world buckle under heavy debt loads.

2013-10-05 Pinch Yourself. U.S. Stock Markets Have Grown 145% in Four-Plus Years by Ron Surz of PPCA

Thankfully, 2008 has become a distant memory. We’ve made back its 37% loss and a lot more. Things are good, but are they going to stay that way? We still face anemic economic growth, burgeoning debt, global social unrest and more. The S&P 500 has returned 145% in the past 55 months (4.5 years).

2013-10-04 Nowhere to Hide: Navigating Rising Rate Risk in High-Yield Markets by Gibson Smith, Colleen Denzler of Janus Capital Group

Over the past few years, investors have flocked to high-yield credit, many believing it a good way to mitigate their interest rate risk as well as capture additional yield. However, they may not realize the level of rate risk that has followed them. High-yield indices, negatively correlated to five-year Treasury bond yields over the past 15 years, have been positively correlated for the past year.

2013-10-04 After Detroit: Rigorous Research and Credit Selection Is the Key to Investing in Municipal Bonds by David Hammer, Sean McCarthy of PIMCO

Detroit recently declared bankruptcy, setting off the largest municipal Chapter 9 proceeding in history. There has been and will continue to be a lot of noise in the media, underscoring challenges but also presenting opportunity for experienced investors. PIMCO has long favored special revenue essential service bonds over GO bonds. Detroit Water and Sewer bonds are payable by a pledge of and statutory lien on net revenues of the water or sewer system, and as such benefit from provisions in the federal bankruptcy code ensuring that the pledge is not affected by the petition.

2013-10-04 The New Normalization of Fed Policy by Tony Crescenzi of PIMCO

The Fed is sending a message that the unwinding of its extraordinary accommodation will be done with great care and patience, and will take time - a long time. In delaying a taper, not only did the Fed show markets it has little tolerance for any tightening of financial conditions, it also strengthened its forward guidance considerably. The Fed’s decision to delay a taper will likely relieve some of the upward pressure on longer-term interest rates.

2013-10-04 The Economy, the Fed, and Politics by Richard Michaud of New Frontier Advisors

It was a good quarter to invest in equities, and despite a down second quarter, overall a good year as well. The Dow was up 1.5%, the S&P 4.7% and the NASDAQ 10.8%. Year-to-date returns were very positive with the Dow up 15.5%, S&P up 17.9%, and NASDAQ up 24.9%. International equities were also positive for the quarter and year with the MSCI ACWI ex US up 9.4% and up 7.5% year-to-date. While emerging market equity indices were up 5% for the quarter they remained negative -6.4% for the year.

2013-10-04 The Banking Sector: Better, with Room for Improvement by Russ Koesterich of iShares Blog

Russ K. explains the good news behind his recent upgrade of the global financial sectors as well as the bad news keeping his sector outlook somewhat subdued.

2013-10-04 The Debt Ceiling Drama is Heating Up by Team of Northern Trust

The debt ceiling drama is heating up. Threatening default is reckless, but long-term budget issues require attention. Measures of policy uncertainty show a link to economic performance

2013-10-04 Much Ado About Fed Tapering by Michael Hasenstab of Franklin Templeton

In the past few months, the global markets seem to have been fixated on the US Federal Reserve’s words and actions (or lack thereof). Will the Fed wind down its longstanding quantitative easing (QE) program, and when? Will the money tap dry up, and, with it, global liquidity? In more recent days, US markets in particular have been focused on a looming government shutdown, adding a dose of uncertaintyand volatility.

2013-10-04 Is the Pump Primed for Emerging Markets Investors? by Mark Mobius of Franklin Templeton

The vulnerabilitiesor rather, perceived vulnerabilitiesof emerging markets have been the focus of heightened discussions over the past few months. Concerns about the health of emerging markets came on the heels of political upheavals in Egypt, economic deceleration in China and protest demonstrations in Brazil and Turkey this summer.

2013-10-04 Washington's Prolonged Saga and the Market's Reaction by Josh Timmons and Libby Cantrill of PIMCO

The federal government shutdown represents yet another self-inflicted wound to already modest growth. While the market seems to be mostly sanguine about the government shutdown, a breach of the debt ceiling which we feel is highly unlikely would be incredibly negative for financial markets.

2013-10-04 Introducing the Tortoise Economy by Sam Stewart of Wasatch Funds

All things considered, large U.S. companies that operate globally appear to be particularly attractive right now. Because many of these companies are generating significant portions of their sales outside the U.S., investors are effectively getting some international exposure with what I consider to be more-quantifiable risks.

2013-10-04 Government Shutdown and Beyond by Team of Neuberger Berman

After months of eerie quiet in Washington, DC, fiscal conflicts have taken center stage, most prominently with the October 1 "shutdown" of U.S. government services. Markets are nervously watching if Congress can move past current wrangling to create a workable budget while navigating both the debt ceiling and shutdown-related fallout. In this issue of Strategic Spotlight, we consider how the budget debates could play out and the implications for investors.

2013-10-03 Third Quarter Market Commentary: Let's Reminisce by Robert Stimpson of Oak Associates

US stocks have risen each quarter of 2013, outperforming most other asset classes and emerging markets along the way. In the third quarter, the S&P 500 Index rose 5.24% and pushed the year-to-date gain to 19.79%. All sectors within the S&P 500 have produced positive returns this year, although the pro-cyclical groups have outperformed the defensive ones.

2013-10-03 Buying the Shutdown by Scott Minerd of Guggenheim Partners

Volatility from the government shutdown and other political developments in Washington D.C. will likely continue to rise. Despite this, the reduction in output from this will be short-term, and investors still have several attractive options for deploying capital across asset classes in the United States and globally.

2013-10-03 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week, total AUM in all active ETFs fell by almost $40.9 million. Assets in the two largest categories “Short Term Bond” and “Global Bond” fell by $7.74 million and $10.156 respectively. In addition, the “Foreign Bond” category decreased by $36.33 million, while AUM in “Currency” active ETFs fell by almost $5.2 million.

2013-10-03 Survival of the Fittest? by William Gross of PIMCO

I hate crows and my wife Sue hates bugs, but like most married couples we have learned to live with our differences. Crows eat bugs though, and bugs eat bugs, and that scientific observation sets the context for the next few paragraphs of this month’s Investment Outlook.

2013-10-03 PIMCO Cyclical Outlook for the Americas: A Slow-Moving Fed Benefits Economies on Both Continents by Mohit Mittal, Lupin Rahman, Ed Devlin of PIMCO

PIMCO expects the U.S. economy to grow 2.0%2.5% over the next year. However, a continued government shutdown would be a drag on growth. In Latin America, we see growth picking up to 3.0%3.5%, but the outlook varies by country. Mexico should fare well, but Brazil’s story is more mixed. In Canada, we believe the housing correction will be less severe than many are predicting, and we expect GDP to grow 1.5%2.0% over the cyclical horizon.

2013-10-02 The Math is Pretty Straightforward... by Blaine Rollins of 361 Capital

Congress and the White House must be pretty fired up that D&D2 started filming last week. The new movie might be the only thing more stupid than our elected leaders failing to negotiate and reach a deal. Most everyone either wants to spend our tax dollars like drunken professional athletes or hold our economy and financial markets hostage via a government shutdown and failure to raise the debt ceiling.

2013-10-02 Countdown to a Government Shutdown (Sept. 30) by Liz Ann Sonders of Charles Schwab

Unless an 11th hour deal is struck, the government will shut down at midnight tonight. Memories are fresh from similar "fiscal follies" in the summer of 2011 and we’ll compare and contrast. The last shutdown was 17 years ago and a look at that history may also be instructive.

2013-10-02 The Death Knell of Global Synchronized Trade by Bill Smead of Smead Capital Management

At Smead Capital Management, we believe the interest on September 18th in emerging markets, oil and gold are the last gasps of a dying trend. Our discipline demands that you must avoid popular investments and completely avoid investments attached to a perceived “new era.” We argue that the international investment markets reaction to Bernanke’s reprieve on September 18th is proof of a vision we have of the future.

2013-10-02 Weak Credit Growth Main Reason for Lackluster Economic Recovery by Minyi Chen of AdvisorShares

The U.S. economy is a credit-based economy. Economic expansion is fueled mostly by borrowing and consuming rather than saving and investing. A continuous expansion of credit is needed for the economy to grow. The main reason the economic recovery has been so lackluster is that credit growth has remained weak despite the Federal Reserve’s continuing liquidity injections.

2013-10-02 And That's The Week That Was by Rob Brounes of Brounes & Associates

Move over Ben BernankeTed Cruz has the floor. (Somehow investors seem more interested when Dr. B speaks.) With politicos facing debates on debt ceilings and budget funding, few have confidence that they can act reasonably and with compromise (and the Cruz debacle did not help matters). Stocks fell over five consecutive days as portfolio managers set up positions for the next quarter. Labor and manufacturing releases highlight a hectic week on the economic calendar, but shenanigans from DC may steal the headlines.

2013-10-02 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Financial markets have now become a function of how investors are guessing the drama in Washington DC will play out.

2013-10-02 Quarterly Market Commentary by Scotty George of du Pasquier Asset Management

Many of us bear emotional scars from the excesses of a debt-driven, casino-like mid-2000 decade. The last recession was punctuated by lost jobs, lowering wages, diminishing portfolio valuations, putrid returns on cash savings, and a total decimation of confidence in the so-called “Titans” who drove the Wall Street bus during that period.

2013-10-01 The Ultimate Income Portfolio Revisited by Geoff Considine (Article)

Rising interest rates will be unkind to income-generating assets and the investors who depend on them in retirement. My ultimate-income portfolio (UIP) provides a solution to this problem. It has reliably produced high income and low volatility with respect to the stock market, and its performance is likely to continue, even if rates rise further.

2013-10-01 The Key Succession Issues for an Advisory Practice by Bob Veres (Article)

Succession planning has moved to the top of the practice management priority list for tens of thousands of advisory firms. As the average age of founder/advisors creeps ever closer to traditional retirement age, the profession is asking itself a lot of hard questions about how to keep these businesses alive ? and take care of clients ? after the founder retires.

2013-10-01 The Eight Principles of Value Investing by Scott Clemons and Michael Kim (Article)

In any environment, but especially one characterized by uncertainty, eight principles of investing are critical. These bedrock beliefs help guide our thinking at the levels of asset allocation, security selection and identification of the third-party managers we engage to help manage our clients’ assets.

2013-10-01 Bracing for a Beltway Bombshell by Kristina Hooper of Allianz Global Investors

With Washington mired in a fiscal gridlock, investors need to be prepared for short-term volatility. But buying on the dip and boosting exposure to risk assets can keep their long-term goals from getting jammed up, says Kristina Hooper.

2013-10-01 Putin's Gambit by Bill OGrady of Confluence Investment Management

Earlier this month, President Obama found himself in a very difficult position regarding Syria. An ill-advised comment about making the use of chemical weapons a “red line” forced a response when the weapons were clearly used in Syria. The administration began moving toward a military response. However, support for military operations was lacking both domestically and internationally. The clearest signal of this opposition was the British Parliament’s vote to prevent P.M. Cameron from authorizing military action in support of the expected U.S. military strike.

2013-09-30 October Plus Shutdowns And The Debt Ceiling Equals More Volatility by John Rothe of Riverbend Investment Management

Upcoming Congressional debates on the U.S. budget and debt ceiling may cause an increase in volatility in global markets over the next few weeks.

2013-09-30 The Global Sea Change Continues by Richard Bernstein of Richard Bernstein Advisors

Most investors will readily admit the global credit bubble is deflating, yet continue to favor credit-based asset classes within their portfolios. Whereas many investors still believe that the emerging markets are a growth story, the data tell us that U.S. investors can find growth in their own backyard.

2013-09-30 Investing In Corporate Bonds: The Compelling Case For Active Management by Ed Devlin, Michael Kim of PIMCO

Passive investment returns in the Canadian corporate bond market have been unimpressive because of the way corporate bond indices are constructed and factors unique to the Canadian market. Unconstrained by these limitations, active managers with global reach may provide superior returns. The current environment presents an attractive opportunity for Canadian investors to implement a wide discretion, active approach to managing corporate bonds.

2013-09-30 Investing in a Fairly Valued World by Herb Abramson, RJ Steinhoff, Randall Abramson, Anthony Visano, Jeff Sayer of Trapeze Asset Management

For several years we have been arguing that global equity markets are undervalued and represent the best investment alternative given growing corporate profits (S&P 500 Index earnings have nearly doubled in the last five years), a favorable monetary backdrop and a recovering economy.

2013-09-30 Congress Holds Equities Hostage by Bob Doll of Nuveen Asset Management

U.S. equity advances ended last week and the S&P 500 declined -1.0%.1 Markets appeared concerned about overbought conditions from a strong run up over the past three weeks and uneasy about Federal Reserve (Fed) monetary policy normalization as well as the credibility of its communication strategy. Other widespread reasons for the downturn included increased focus on the fiscal battles in Washington, D.C., heightened worries about a possible near-term government shutdown and the contentious debt ceiling debate.

2013-09-30 Fourth Quarter Outlook: A Turning Point? by Gene Goldman of Cetera Financial Group

It seems sometimes that the outlook for the global economy and the markets has been unchanged for years. Since the end of the recession, each year has commenced with forecasts that the United States economy would break out of its below-trend growth mode, only to see expectations dashed. Meanwhile, Europe has been mired in its own recession as it struggles with heavy post-crisis debt burdens. Growth has slowed in the emerging markets, ending the commodity boom of the first decade of this century.

2013-09-28 The Renminbi: Soon to Be a Reserve Currency? by John Mauldin of Millennium Wave Advisors

Contrary to the thinking of fretful dollar skeptics, my firm belief is that the US dollar is going to become even stronger and will at some point actually deserve to be the reserve currency of choice rather than merely the prettiest girl in the ugly contest the last currency standing, so to speak. But whether the Chinese RMB will become a reserve currency is an entirely different question.

2013-09-27 Achievement Awards Announced at the 2013 Insider’s Forum Conference and Leadership Forum by Bob Veres (Article)

The first annual Insider’s Forum conference attracted more than its share of industry leaders. But two of its more prominent attendees received special recognition for their contributions to the financial planning/investment advisory profession.

2013-09-27 Read My Lips... by Dimitri Balatsos of Tesseract Partners

Chairman Ben Bernanke’s press conference this week, commenting on the decision by the Federal Open Market Committee (FOMC) not to “taper,” reminded us of the famous slogan of Presidential hopeful George H.W. Bush at the 1988 Republican National Convention “Read my lips: no new taxes.” Yet, after he won the election, he raised taxes in an effort to reduce the public deficit.

2013-09-27 What Makes Alternative Beta Smart? by Chris Brightman of Research Affiliates

A Smart Beta strategy should be “low cost, transparent and systematic,” according to Towers Watson. Our research suggests many alternative beta strategies fall short.

2013-09-27 Global Destinations for Yield by Scott Minerd of Guggenheim Partners

While U.S. stocks are increasingly due for a consolidation, the outlook for global equities is improving. Now appears to be a good time for investors to increase allocations toward Asia and Europe.

2013-09-27 Don't Cry for Me, Ben Bernanke by Simon Johnson of Project Syndicate

The Federal Reserve will decide on monetary policy for the US based primarily on US conditions. Economic policymakers elsewhere who are pleading for a postponement of US monetary tightening should understand this hard reality and prepare accordingly.

2013-09-27 Bridging the Gap: Global Listed Infrastructure by Wilson Magee of Franklin Templeton

Simply spreading your investments across a smattering of asset classes with the idea that diversification should automatically produce a positive result is an approach that’s maybe a little too similar to a roll of the dice. For investors hunting for classes to diversify into, Wilson Magee, Director of Global Real Estate and Infrastructure Securities, Franklin Templeton Real Asset Advisors, and co-manager of Franklin Global Listed Infrastructure Fund, has one word: infrastructure.

2013-09-27 Invest to Your Full Potential Even Under Pressure by Frank Holmes of U.S. Global Investors

In times of extreme pressure, athletes, students and investors have one thing in common: they occasionally choke. Whether it’s Rick Perry forgetting the third item on his list during the Republican debate or a favorite basketball player missing the basket in the playoffs, when stakes are high, people can fail to perform to their full potential.

2013-09-27 Celebrate with Tokyo by Kenichi Amaki of Matthews Asia

Many in Tokyo erupted with delight and excitement following the recent news of the city’s selection as host to the 2020 Summer Olympic Games. Following a failed bid in 2016, Tokyo edged out rivals Istanbul and Madrid on its way to becoming the first Asian city to host the Games for a second time.

2013-09-27 The Weekly Speculator by Michael Shaoul, Ranita Ragunathan, Timothy Brackett, Brendan Moynihan of Marketfield Asset Management

We wrote last week on the eve of the FOMC meeting which resulted in the surprising decision not to reduce the current program of treasury and mortgage security purchases. What was to our eyes equally surprising was the volume and strident tone of the commentary that was issued following this release, ranging from the arrogant to the outraged as if anything really meaningful had changed.

2013-09-27 How to Profit from a Changing China by Frank Holmes of U.S. Global Investors

We believe China’s rebalancing is positive for investors who selectively invest in its stocks. As Jim O’Neill puts it, “When a country is embarking on a significant compositional change to its economy, stock-pickers rather than index-trackers have the upper hand.”

2013-09-27 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.9, up from last week’s 132.3 (revised down from 132.4). The WLI annualized growth indicator (WLIg) rose to 4.9% from last week’s 4.5%.

2013-09-27 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Merkel’s win is unlikely to lead to any changes in the Eurozone. Extra lift from exports is not guaranteed. Robust growth is a challenge in India, Brazil and Indonesia.

2013-09-27 You Never Know by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Surprises come at any moment in the investing world, reinforcing the need to have both a long-term view and a balanced/diversified portfolio. We believe signs are pointing to better US and European growth, a near-term rebound in China, and some possible positive momentum building in Japan. But near-term fiscal policy risks abound. Investors that need to add to equity positions should use pullbacks to do so.

2013-09-26 One Trick Pony: Whipping the GDP Donkey into a Stallion by Cliff Draughn of Excelsia

The difficulty since 2012 has been that if you are not significantly overweight US equities, then your returns are less than stellar. Employing a diversified, risk-averse investment strategy in 2013 has in hindsight been the wrong thing to do, given that every other asset class is negative year-to-date, while US stocks are up double digits. The combination of the Fed’s Zero Interest Rate Policy and the artificial bubble in Treasury bonds has forced conservative investors into riskier positions in order to find risk-adjusted returns.

2013-09-26 PIMCO Cyclical Outlook for Europe: Near-Term Recovery, Long-Term Risks by Andrew Balls of PIMCO

While Europe has emerged out of recession, the relative tightness of monetary policy means the eurozone is still struggling to get back to potential pre-Lehman growth rates. The European Central Bank should be able to maintain stability over the cyclical horizon while policymakers continue to address outstanding issues as they look to build a less vulnerable monetary union. We are selective in our approach to regional credit and remain neutral on the euro, balancing our cyclical outlook with longer-term secular concerns on the eurozone outlook and valuations.

2013-09-25 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week, total AUM in all active ETFs increased by almost $80.2 million. Assets in the two largest categories “Short Term Bond” and “Global Bond” fell by $20.65 million and $38.585 respectively. As the dollar weakened on the Federal Reserve’s decision to delay tapering, the “Foreign Bond” category increased by $65.725 million and “Currency” active ETFs added $7.43 in value. Just like the previous week, the second largest increase in AUM came in the “High Yield” ETF category, which this time rose by over $44.35 million, main

2013-09-25 Secular Trends in Asian Credit Markets Shape Long-Term Investment Themes by Robert Mead, Raja Mukherji of PIMCO

The next several years will likely see many Asian corporate issuers to come to the market for financing, whether to pursue long-term business plans or to employ traditional corporate finance and leverage strategies. Rigorous credit research, flexible resources, experienced local portfolio management and strong relationships with local stakeholders are all crucial to uncovering attractive opportunities while monitoring volatility in Asia’s credit markets.

2013-09-25 Occupy QE by Stephen Roach of Project Syndicate

The Occupy Wall Street movement began two years ago this month, galvanizing attention to income and wealth inequality in the US and around the world. But, if anything, economic inequality has deepened since then and, lost in the angst over inequality, is the critical role that central banks have played in exacerbating the problem.

2013-09-25 Thank You! by Jeffrey Saut of Raymond James

Thank you Franklin Templeton for allowing me to speak at your world headquarters in San Mateo, California last week. I had the privilege of meeting John Templeton on a number of occasions and it is heartwarming to see your organization carrying on with Sir John’s impeccable traditions. Thanks to all the portfolio managers (PMs) that met with me in the San Francisco Bay area, as we swapped ideas and renewed friendships.

2013-09-25 More Than a “Sugar High” by Pamela Rosenau of HighTower Advisors

The recent decision by the Fed to delay any tapering may be a preview of what to expect by a “Yellen Fed”. As the Fed appeared to remove “virtually every yardstick or goal post” that they have provided recently, one thing is certain, “they seem determined to keep the accelerator nailed to the floor as they drive the economy at full speed.” According to Cornerstone Macro, based on the Fed’s move, it appears increasingly likely that “growth is more likely to reaccelerate.”

2013-09-25 Surprise... by Blaine Rollins of 361 Capital

Clearly, the numbers didn’t meet the Fed’s preconditions for tapering. And while the jobless rate has fallen to 7.3% (from 8.1% when QE3, the current round of quantitative easing began), Bernanke had to acknowledge what’s been obvious to all. The decline in the jobless rate hasn’t occurred just because more folks are getting jobs; it’s because many are dropping out of the workforce, which means they’re not counted as unemployed by the government.

2013-09-24 William Bernstein ? “Stocks for the Long Run” by Michael Edesess (Article)

William Bernstein’s reading of history is that if you want to build a nest egg and protect against the “four horsemen” that threaten it over the long term, the best thing to do is invest in a globally diversified stock portfolio.

2013-09-24 ENERGY MLPs: A Suitable and Sustainable Asset Class by Sponsored Content from ClearBridge Investments (Article)

Key Takeaways: MLPs have provided income with little correlation to other asset classes and little sensitivity to interest rates, commodity prices or economic cycles. The market for MLP stocks has expanded greatly and offers liquidity which appeals to long-term institutional investors. The renaissance in U.S. energy production is driving sustainable growth in the infrastructure that MLPs own and operate

2013-09-24 Michael Aronstein’s Warning to Fund Investors by Robert Huebscher (Article)

Fixed-income investors may think rising interest rates are their biggest worry. But bond funds face a new risk, driven by their need for liquidity to service investors’ daily redemptions, according to Michael Aronstein.

2013-09-24 And That's the Week That Was by Ron Brounes of Brounes & Associates

Hail the Almighty Fed. Despite a rather hectic week on the economic calendar, investors instead focused primarily on news from the Federal Reserve. They rejoiced the end of Summer’s campaign for Chair and further rejoiced another Fed meeting with far more words than action. The week ended with profit-taking and plenty of uncertainty heading into the homestretch of the year.

2013-09-24 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Financial markets have found out the answer to important questions in the last week. While there have alternatively been both positive and negative reactions, the net result is lower interest rates and higher stock prices.

2013-09-24 The Brazil Conundrum by Bill OGrady, Kaisa Stucke of Confluence Investment Management

The last decade has been exceptionally good for emerging markets. Never before have so many countries grown so rapidly, and at the same time. The average growth rate from 2003 to 2012 was 13.1% for emerging markets, while the long-term average stands at 5.0%. This growth rate was partly due to mean reversion after sluggish growth periods in the 80s and 90s, when the average growth rate for the group stood at 3.5%.

2013-09-24 Lehman Five Years LaterLessons and Threats by Dean Curnutt of Macro Risk Advisors

The five-year anniversary of the Lehman bankruptcy and onset of financial crisis is here and so too is the raft of opinion pieces around what caused the meltdown and how it is different this time.In a recent interview with Charlie Rose, when asked about the risk of another 2008 event, Morgan Stanley CEO James Gorman said, “The probability of it happening again in our lifetime is as close to zero as I could imagine.”

2013-09-23 Seeking Global Growth: Our Outlook for Credit by James Balfour of Loomis Sayles

Global business and credit cycles are nothing new to investors. The familiar sequence of recession, recovery, expansion and slowdown plays out over time, influencing interest rates, credit availability, business climate and capital markets. It’s a time-honored process, but in practice, no two business and credit cycle pairings are exactly alike. Business and credit cycles tend to be driven by specific but varying factors that accumulate until an economic “tipping point” is reached, after which the business and credit climates deteriorate.

2013-09-23 The Euro Tug-of-War by Thomas Kressin of PIMCO

Faced with lingering economic stagnation, record unemployment and continued political strife in the region, the common consensus for a depreciation of the euro seems only natural and very much required to counter the weak cyclical position of the eurozone. The rising current account surplus in combination with net long-term capital inflows point to a stronger euro that could stay with us for an extended period; such a development could potentially undermine the fragile social consensus to continue with the necessary structural and fiscal reforms.

2013-09-23 America's Labor Market by the Numbers by Mohamed El-Erian of Project Syndicate

Net monthly job creation in the US was up in August, while unemployment was down. But, to get a real sense of the American labor market’s health, we need to look at other indicators, and what these numbers have to tell us about both the present and the future is far from reassuring.

2013-09-23 Credit Rating Agencies: Can They Get It Right? Part 3: Five Years After the Fall by Michelle Shwarzman of Invesco Blog

This three-part series takes a critical look at the growing role of credit rating agencies (CRAs) in the global financial system. This post reports on the United Nations General Assembly (UNGA) debate about the role of CRAs in the international financial system. Part 1 focused on the involvement of CRAs in recent financial and economic crises in the US and Europe, while Part 2 described post-crises attempts to reform CRAs.

2013-09-23 Happy Anniversary? Perspectives on the Financial Crisis Five Years Later by Nanette Abuhoff Jacobson of Hartford Funds

Since 2008, there’s been slow but steady improvement in the global economypolicy makers’ unconventional tools have helped stabilize ?nancial markets and bought time for economies to rebalance. Expectations are too low for developed-market growth and in?ation, in our view. As such, we think this environment will be positive for developed-equity marketsparticularly in Europe and Japan.

2013-09-23 Fed Inaction Lengthens Reflationary Economy by Bob Doll of Nuveen Asset Management

U.S. equities advanced last week as the S&P 500 increased 1.32%.1 The Federal Reserve (Fed) delivered a big surprise by leaving intact the current $85 billion monthly purchase program. The Committee appears nervous about the resiliency of the economy. Chairman Bernanke pointed to three factors for postponing tapering: 1) the need for more labor market data to be confident in the outlook, 2) a desire to assess the degree to which tighter financial conditions, particularly mortgage rates, are affecting the real economy and 3) an interest in gaining clarity on “upcoming fiscal debates.̶

2013-09-23 Post Fed, Expect More Surprises by Kristina Hooper of Allianz Global Investors

Kristina Hooper says investors should brace for more big market swingsand some fiscal curveballsin the wake of the FOMC’s decision not to taper in September. But the economy is throwing some good surprises our way too.

2013-09-23 Aberdeen Global Investment Outlook: September 2013 by Mike Turner of Aberdeen Asset Management

The point of maximum policy accommodation may now be in sight: Markets volatile as investors forced to contemplate U.S. Federal Reserve (Fed) exit strategy. Slowing growth in China is putting pressure on Asian and emerging markets to develop domestic led demand. This time really could be different for Japan - however reflating the economy was never going to be easy.

2013-09-21 Rich City, Poor City by John Mauldin of Millennium Wave Advisors

This week we will conclude our look at pension plans for the nonce with a 30,000-foot overview of the states and then take a deeper dive into one city: mine. This will give you at least one version of how to do your own homework about your own hometown. But fair warning, depending on your locale, you may need medical help or significant quantities of an adult beverage after you finish your research.

2013-09-21 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Global deleveraging has a long way to go. Fiscal drama and the economy. Funding for economic statistics needs to be enhanced

2013-09-21 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.4, to one decimal place unchanged from last week’s 132.4 (revised down from 132.3). The WLI annualized growth indicator (WLIg) rose to 4.5% from last week’s 4.3%.

2013-09-21 How Did The Fed Catch Markets Off Guard? What Does it Mean for Investors? by Ken Taubes of Pioneer Investments

We think this decision prolongs the positive market environment we have seen in both equities and fixed income. With the Fed seemingly a distance away from tapering and raising rates, this could bode well for the risk sectors, where we could see further tightening in credit spreads on both high yield and investment-grade corporate bonds.

2013-09-21 Fifty Shades of Gold by Frank Holmes of U.S. Global Investors

Unlike many commodities, there are many shades to gold, such as the Love Trade’s buying gold for loved ones and the Fear Trade’s purchasing gold as a store of value. An additional “shade” investors need to be aware of is how the Fed interprets the recovery of the U.S. economy.

2013-09-20 Will Europe's Improving Economy Push Interest Rates Higher by Giordano Lombardo of Pioneer Investments

Gross Domestic Product (GDP) increased in the second quarter after six straight declines. Data expectations were on the optimistic side, but investors appeared to become more confident before the release, thanks to encouraging evidence from supposedly reliable forward-looking indicators.

2013-09-20 U.S. Commercial Real Estate: Will the Good Times Last? by Devin Chen of PIMCO

The CRE market has experienced a gradual recovery in asset pricing since the 2008 financial crisis. Despite the duration of the recovery, there continues to be dislocation in the CRE market that astute investors can capitalize on. We believe certain properties in non-major markets look attractive for acquisition, and have been acquiring residential land on an opportunistic basis.

2013-09-20 Q&A: Emerging Markets Powerhouses China and India by Mark Mobius of Franklin Templeton Investments

Given their heft in the emerging markets world, China and India are among the countries I get asked most often about, particularly when they show market distress signals like economic slowing.This past week, the Templeton emerging markets team and I have been in China as part of a large research trip, doing further analysis on the market and key company prospects. I thought it would present a good opportunity to share a few of my answers to recent questions on both China and India.

2013-09-20 Companies Can Do More to Unlock Shareholder Value by Kurt Feuerman of AllianceBernstein

As the global recession and financial crisis move further back in the rearview mirror, companies have been more proactive about using their balance sheets in ways that enhance shareholder value. But we think they can do a lot more.

2013-09-20 5 Years Later: The Crisis We Haven't Tackled Yet by Russ Koesterich of iShares Blog

Five years after the Lehman bankruptcy, the proximate causes of the 2008 crash are no longer threats. But while the risk of another imminent financial system crisis has abated, there are two major issues that foretell a coming retirement funding crisis.

2013-09-20 Growth and Rising Stars by Mark Kiesel of PIMCO

While developed market growth in several regions is picking up cyclically from low levels, overall global economic growth should remain subdued over the next several years. We believe credit spread tightening and rating upgrades are most likely for specific companies in industries and areas with strong growth. We see these "rising star" companies in the U.S. and European auto sector, the gaming, energy and chemical industries and in sectors tied to the U.S. housing market.

2013-09-20 Investment Bulletin: Global Income Strategy by Team of Bedlam Asset Management

The Global Income equity strategy is unconstrained by geography, sector or stock, and is committed to achieving the target yield based on the opening NAV at the beginning of each financial year of 4.5%, payable in equal quarterly dividends with any excess paid out at the end of the year. It may only invest in companies with an historic dividend yield of at least 2.5% based on the price at the date of purchase. There is a bar on using derivatives or options to achieve the target yield and it must invest in a company on its merits rather than rotational dividend stripping.

2013-09-19 A Fine Balance in the Global Profits Cycle by Saumil Parikh of PIMCO

In the U.S., we expect growth to accelerate over the cyclical horizon, but to disappoint elevated consensus expectations. In Europe, we also expect growth to accelerate, but just barely, and also below consensus. In Japan, we expect growth to remain heavily reliant on aggressive fiscal and monetary policies. And in emerging markets, we expect a stabilization in growth assisted by central banks regaining control of currency and financial market conditions. The outlook for global corporate profits is a key measure of success in determining the handoff to self-sustaining growth going forward.

2013-09-18 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks rallied last week as military options in Syria no longer look likely given the disapproval of the American people and Congress. Additionally, this embarrassing agreement reached with Russia is an admission that the USA will not intervene.

2013-09-18 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Depending upon where you reside, or on which side of the issues you fall, it was a good week last week. We averted a military strike on Syria by the U.S., at least temporarily; we had reasonable adjustments to economic growth statistics; and most made some money in their portfolios. While cyclical dynamics are relatively benign, the broader secular outlook continues to build a solid foundation for recovery.

2013-09-18 The End Times for Strategic Ambiguity by Bill O'Grady of Confluence Investment Management

Strategic ambiguity is defined as a condition where various parties say something similar but believe something entirely different. A good example of this is U.S. and Chinese policy toward Taiwan. Both nations say Taiwan is part of China. The U.S. believes that Taiwan’s democratic government should become the model for the mainland, whereas China believes Taiwan should be part of its nation as it is currently structured. Because both nations say the same thing, the policy difference is not publicly obvious and thus not a problem, at least as long as the ambiguity lasts.

2013-09-18 Is the Commodity Supercycle Dead? by Nicholas Johnson, Greg Sharenow of PIMCO

While commodity price appreciation won’t likely mirror the supercycle, this shouldn’t necessarily imply a negative view on commodity returns going forward. We believe commodity prices are at reasonable levels from a long-term valuation perspective. In addition, the roll yield from investing in commodities is the highest it’s been since 2005. The outlook for commodity returns today seems broadly consistent with historical returns, and commodities remain an important tool for hedging inflation risk.

2013-09-18 You have crossed into The Twilight Zone... by Blaine Rollins of 361 Capital

In this month’s episode of The Twilight Zone, Congressional Democrats and U.S. public opinion will organize to thwart a White House attack on Syria and their #1 choice for the next Fed Chairman. To conclude the show, Vladimir Putin will be the front runner for the 2014 Nobel Peace Prize and the Financial Markets will soar. You have just crossed over into The Twilight Zone!

2013-09-18 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week, total AUM in all active ETFs increased by over $68.76 million. Assets in “Short Term Bond” active ETFs increased by nearly $140 million. The second largest increase in AUM came in the “High Yield” ETF category, which rose by about $20.366 million, largely due to creation units. “US Equity” active ETFs also saw a significant increase in AUM of over $8.68 million. The biggest decreases in AUM came in the “Global Bond” and “Foreign Bond” categories, which fell by $58.85 million and $44.3 million respectively.

2013-09-17 Where, Oh Where, is Ferdinand Pecora? by Martin Weil (Article)

Five years later, one would like to think that the fundamental conditions that led us to the precipice in 2008 have been corrected. One might presume that the individuals and companies who gamed a largely unsupervised bazaar of counterparty debt and derivatives for their own benefits have been charged and convicted. One would be wrong on both counts.

2013-09-17 How One Advisor Attracts HNW Clients by Dan Richards (Article)

Recently, a California-based advisor explained how she shifted her practice to focus on affluent clients. Her success was the result of a simple but thoughtful five-step plan.

2013-09-17 Charles de Vaulx: “We Have Never Been as Cautiously Positioned” by Robert Huebscher (Article)

Charles de Vaulx is the chief investment officer and a portfolio manager at International Value Advisers. In this interview, he discusses his outlook for the market and the economy, and why his fund has never been as cautiously positioned as it is today.

2013-09-17 Letter to the Editor by Various (Article)

A reader responds to Joe Tomlinson’s article, A New Tool to Calculate Long-Term Care Needs, which appeared last week.

2013-09-17 Investing for Real People by Sponsored content by Oppenheimer Funds (Article)

Investor goals are the same, but solutions have changed. Today, aiming to meet basic needs requires new solutions. Laser focus on investor goals will help uncover appropriate investment opportunities. Expanding the opportunity set beyond the usual suspects will be critical to long-term success.

2013-09-17 High Yield Market Overview August 2013 by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch U.S. High Yield Master II Constrained Index, was down 0.62% for the month of August. Political uncertainties continue to weigh on investor sentiment, including a potential military response to Syria and the U.S. approaching the debt ceiling limit in mid-October. Uncertainty about Fed policy and who will be the next Chairman are also in the background.

2013-09-17 “Risk-On” Resumes as Uncertainty Subsides by Bob Doll of Nuveen Asset Management

Equity markets rallied last week with the hope of a diplomatic solution to the crisis between Syria and the United States. The S&P 500 advanced 2.03% for the week.1 Broadly, the S&P 500 is in a churning phase after witnessing an all-time high of 1709 on August 2 and then stalling.1 We believe the market has been on hold while waiting for lower oil prices, progress on Syria, further global growth and successful Federal Reserve tapering.

2013-09-17 The Upside of Low Expectations by Kristina Hooper of Allianz Global Investors

The stock market has benefited from a pessimistic outlook recentlyand so could the consumer, writes Kristina Hooper.

2013-09-17 Consumers Face An Economy at a Crossroads by Chris Maxey, Ryan Davis of Fortigent

As the Federal Reserve prepares to debate the merits of tapering its asset purchase program this week, a key area of the economy that will be closely analyzed by Bernanke and Co. is the health of the American consumer. There are tenuous signs that consumers are spending more, but attitudes towards the economic recovery are hardly encouraging. Consumers will find it difficult to stay the key cog of economic growth in the U.S., but at the very least, their participation in the recovery is imperative, and leaves much to be desired.

2013-09-16 Russia is Tough to Love, Easier to Hate, Hard for Investors to Ignore. Here's Why by Frank Holmes of U.S. Global Investors

Russian President Vladimir Putin created a stir recently when he shared his thoughts with Americans in an op-ed printed in The New York Times. According to The Times, very few pieces written by heads of state have been published by the paper and very few received the attention Putin attracted.

2013-09-16 Europe's Fragile Recovery by Tucker Scott of Franklin Templeton Investments

Investors have tentatively begun to buy into the European recovery story, but remain fearful of the region’s fragility. A few bits of upbeat economic data recently have provided grounds for optimism, and the European Central Bank’s continued commitment to holding the Eurozone together has boosted confidence. Tucker Scott, portfolio manager forTempleton Foreign Fund, still sees a few economic roadblocks in Europe but also plenty of progress. He shares where he’s finding signs of strength and investment opportunities.

2013-09-16 Opportunities in Uncertainty by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Uncertainty and volatility are elevated, which we believe provides opportunities for investors.

2013-09-13 Trumping Cheap Labor by Teresa Kong of Matthews Asia

Wages in China have surely risen, and some pundits argue that this growth will eventually make the country less competitive. But more nuanced and recent theories suggest that manufacturing centers can cluster around pools of more skilled labor, transportation networks and economies of scale. This month, Teresa Kong, CFA, examines the reasons why China is about more than just low-cost workers.

2013-09-13 Pacific Basin Market Overview August 2013 by Team of Nomura Asset Management

Asian equity markets ended lower in August, chiefly due to concerns about currency weakness in India and Indonesia, while improved macroeconomic data from China contributed to this market’s outperformance. The MSCI AC Asia Pacific Free Index including Japan fell by 1.3% while the MSCI AC Asia Pacific ex Japan Free Index closed 0.71% lower during the month. (All performance figures are based on MSCI indices in U.S. dollar terms with dividends included unless otherwise stated.)

2013-09-13 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week, total AUM in all active ETFs increased by around $38.2 million.As in previous weeks, assets in “Short Term Bond” active ETFs increased, this time by almost $61.7 million, while AUM in the “Global Bond” category fell by about $39 million.The “Global Bond” category had another bad week, ending over $18.3 million below where it began.The “Alternative Income” category increased again but by less than in previous weeks; AUM increased by nearly $4.26 million. The “Alternative” active ETF category’s AUM rose by approximately

2013-09-13 What's Developing in Emerging Markets by Gene Goldman of Cetera Financial Group

Despite strong returns in United States equity markets, a different story has played out in the emerging markets. The MSCI Emerging Market Index, a proxy for emerging market equity returns, has fallen 9.94 percent year-to-date through Aug. 31, 2013. In contrast, the S&P 500, a proxy for U.S. equity markets, has risen 16.15 percent over that same span.

2013-09-13 Start Bargain Hunting in Asian Stocks Again? by Frank Holmes of U.S. Global Investors

If you compare the Asian stock market these days to prior years, it’s looking like “dj vu” all over again, says Credit Suisse.

2013-09-13 What's Happening to Bonds and Why? by Mohamed El-Erian of PIMCO

To say that bonds are under pressure would be an understatement. Over the last few months, sentiment about fixed income has flipped dramatically: from a favored investment destination that is deemed to benefit from exceptional support from central banks, to an asset class experiencing large outflows, negative returns and reduced standing as an anchor of a well-diversified asset allocation.

2013-09-13 September Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management

Year-to-date end-August the strategy performed well with a gain of 22.2% vs. 14.6% for the benchmark. During the month, the index “tumbled” 3.9%, partly out of fear of foreign military action in Syria and partly that central banks would cease printing money to hold down interest rates commonly known as tapering. Even so, the portfolio held up in August, with a much lesser 2.4% fall, thereby further widening outperformance over the index to 760 basis points so far in 2013.

2013-09-13 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.3, an increase from last week’s 131.5. The WLI annualized growth indicator (WLIg) rose to 4.1% from last week’s 3.9%.... At this point the company is still featuring a commentary posted at the end of July, Becoming Japan, which highlights the decline in GDP growth for Japan and seven other major economies, including the US.

2013-09-13 The View from Here - September 13, 2013: Five Years After by Carl Tannenbaum of Northern Trust

How much have we recovered from the global financial crisis?

2013-09-13 Open for Business Down Under by Kenneth Lowe of Matthews Asia

Swiftly after fighting off what most observers deemed to be a fairly weak incumbent Labor opposition in the recent Australian election, the leader of the Conservative coalition and the country’s newly crowned Prime Minister, Tony Abbott, firmly declared Australia to be “once more open for business."

2013-09-12 The Best Time to Own Cash: No Return is Better than a Negative Return by Francois Sicart of Tocqueville Asset Management

In his latest essay, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, writes about "the best time for an investor to own cash," which somewhat counter-intuitively, he believes is when that cash pays nothing.

2013-09-12 Brave New World by Christine Hurtsellers, Matt Toms of ING Investment Management

If the monotony of high school lulled you into a catatonic state the semester you were supposed to read Brave New World, here’s the CliffsNotes summary of what you missed. Aldous Huxley imagined a futuristic utopia in which the government promotes economic and emotional stability through the plentiful use of a soporific opiate called “soma”. Soma allows the mind to take a holiday from worldly problems via a gram, or two or three. Imagine the chaos into which this fictional world would descend were the government to abandon its role as pharmacist to the masses.

2013-09-11 Underwriters Lose No Time Pumping Out New Shares after Labor Day by Minyi Chen of AdvisorShares

The monthly flows of Mutual Fund and ETF volatility continued as a roller coaster trend was apparent in the last three months. Read this investor insight by Minyi Chen, CFA, Chief Operating Officer of TrimTabs Investment Research and Portfolio Manager of AdvisorShares TrimTabs Float Shrink ETF (NYSE Arca: TTFS) to learn about the variable trend flows.

2013-09-11 Absolute Return Letter: A Case of Broken BRICS? by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners

EM currencies, stocks and bonds have struggled since the Fed signalled its intent to change course in late May. This has seemingly triggered an exodus of speculative capital from emerging markets but, as is always the case, there is more to the story than that. EM countries (ex. China) no longer run a current account surplus with the rest of the world, and this hurts global liquidity. It is not yet a re-run of the 1997-98 Asian crisis, but it has the potential to become one with all sorts of consequences for bond yields in developed markets, currency wars, etc.

2013-09-10 Why DFA’s New Research is Flawed by Michael Edesess (Article)

DFA is a company with a laudable history, founded on solid principles and a valuable product concept. From its launch, the investment firm identified and filled a need at low cost to the client, based on elementary but sound theory and simple, compelling, transparent empirical research. It later increased its value to clients by pioneering passive trading strategies. I admire its founders and their accomplishments. But I am afraid the company has succumbed to a dreadful descent into scientism.

2013-09-10 Letters to the Editor by Various (Article)

Several readers responded to Michael Edesess’ article, Did Steve Jobs Really Build That?, which appeared last week. A reader responded to Stephen Roach’s commentary, The Global QE Exit Crisis, which appeared on August 26.

2013-09-10 The Party's Over. Why Own Commodities? by Jon Ruff, Seth Masters of AllianceBernstein

Commodity prices soared during the first decade of this century. But now the party’s over: new sources of supply are coming on line just as demand from China is slowing, leading to expectations of price declines. So should investors shun commodity-related investments?

2013-09-10 Capital Spending: A Double-Edged Sword by Milton Ezrati of Lord Abbett

Rising business outlays on equipment and technology will likely contribute to a subpar pace of hiringand help boost corporate profit margins.

2013-09-10 QE Tapering: Why Whether' or When' Doesn't Really Matter by Sam Wardwell of Pioneer Investments

We didn’t go to war last week what will happen is highly uncertain but the perceived probability of an imminent U.S. attack on Syria seemed to drop as the week proceeded.

2013-09-10 Investor Anxiety + Uncertainty = More Volatility Ahead by Russ Koesterich of iShares Blog

As Russ expected, both equity and bond market volatility have risen in recent weeks. Russ explains why this rocky road is likely to continue, and he provides two ideas for potentially insulating portfolios amid volatility.

2013-09-10 Raising the Bar on Target Date Due Diligence by Manning & Napier/Strategic Insight of Manning & Napier

Deeming whether target date fund investments are appropriate for a specific participant population is an arduous and imperfect task, made more complicated by a lack of full transparency. Fiduciaries should question whether the underlying securities of target date funds are appropriate to meet the retirement saving needs of plan participants. However, the question itself raises concern about what it would take to examine the funds in such detail.

2013-09-10 Check or Checkmate... by Blaine Rollins of 361 Capital

The White House’s goal is to persuade Congress to authorize a limited military strike against Syria to punish it for a deadly chemical weapons attack. But after a frenetic week of wall-to-wall intelligence briefings, dozens of phone calls, and hours of hearings with senior members of Mr. Obama’s war council, more and more lawmakers, Republican and Democrat, are lining up to vote against the president.

2013-09-09 Get Ready for “Taper Lite”: 3 Signs the Labor Market Isn't Picking Up by Russ Koesterich of iShares Blog

While the overall US economy is healing, the labor market’s recovery continues to be frustratingly slow. Friday’s payroll report suggests investors should prepare for a less aggressive Fed, a more muted backup in interest rates and a bond market that can go up as well as down.

2013-09-09 Moving On - Five Years After Lehman by John Petrides (Article)

This month marks the fifth anniversary of the Lehman Brothers failure and the start of worst financial crisis in American history since the Great Depression, and yet to some investors, it seems like only yesterday. Investors still hold onto that period of volatility as if it will happen again tomorrow, paralyzing and confusing their investment decisions. Consequently, many investors have watched from the sidelines as the stock market has recovered solidly year after year.

2013-09-09 Reasons for Optimism in a Sloppy Third Quarter by Ron Sloan of Invesco Blog

Investors are anticipating the day that we transition from a market dominated by monetary stimulus to an earnings-driven market. The problem is that earnings aren’t cooperating yet. In my view, we’ve still got a sloppy third and maybe fourth quarter to get through, but I think 2014 will likely be a much better earnings market.

2013-09-09 The Shape of Things to Come by Kristina Hooper of Allianz Global Investors

With a week to go before the September FOMC meeting, there’s little that stands in the way of Fed tapering. Friday’s jobs report didn’t impress but it probably wasn’t bad enough to stop central bankers from pulling some punch, writes Kristina Hooper.

2013-09-09 Equities Advance Despite Concerns Over Weak Employment and Growth by Bob Doll of Nuveen Asset Management

U.S. equities moved higher last week, with the S&P 500 advancing 1.40%.1 In the face of another disappointing employment report, positive recovery expectations provided tailwinds. Key manufacturing and service sector data surprised to the upside, and improved corporate confidence was highlighted by merger and acquisition activity. Developments outside the U.S. supported recovery and reform, and emerging market fears lessened. A potential U.S. military strike on Syria was an overhang as President Obama’s decision to seek congressional approval raised concerns about other looming battles.

2013-09-09 And That's the Week That Was by Ron Brounes of Brounes & Associates

A couple of holidays during the week prompted some light volume and volatility as investors were forced to digest a slew of key economic releases and some potentially concerning geopolitical developments on a limited work schedule. In the end, investors took advantage of bargains leftover from a poor August, but many still maintain the same uncertainties that caused the pullback in the first place. Syria and the Fedthe headlines should be around for the foreseeable future.

2013-09-09 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

The Syrian war crisis has prompted another “moment in time” for the markets to reflect and digest both the near-term and long term consequences of our response from a political and economic perspective. What’s most worrisome is the precedent of previous actions the U.S. has taken in global conflicts, and the potential catalysts for negative consequences for the markets.

2013-09-09 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks finished higher last week, but August was a down month as worries about monetary policy including who will lead the Federal Reserve next year, along with the confusion surrounding the Obama administration’s Syria decisions have put a damper on things for now.

2013-09-07 Unrealistic Expectations by John Mauldin of Millennium Wave Advisors

Two well-respected analysts of pension funds have produced reports this summer suggesting that pensions are now underfunded by more than $4 trillion and possibly more than $5 trillion. I would like to tell you that the underfunding is all the bad news, but when you probe deeper into the problems facing pension funds, it just gets worse.

2013-09-06 The Emerging Markets Debt Evolution by Giordano Lombardo of Pioneer Investments

My colleagues Mauro Ratto, Head of Emerging Markets, and Yerlan Syzdykov, Head of Emerging Markets Bond & High Yield, offered these thoughts on emerging markets.

2013-09-06 Float Research: Fund Flows Swing Wildly for Third Consecutive Month by Minyi Chen of AdvisorShares

The monthly flows of Mutual Fund and ETF volatility continued as a roller coaster trend was apparent in the last three months. Read this investor insight by Minyi Chen, CFA, Chief Operating Officer of TrimTabs Investment Research and Portfolio Manager of AdvisorShares TrimTabs Float Shrink ETF (NYSE Arca: TTFS) to learn about the variable trend flows.

2013-09-06 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

Last year ECRI switched focus to their version of the Big Four Economic Indicators that I routinely track. But when those failed last summer to "roll over" collectively (as ECRI claimed was happening), the company published a new set of indicators to support their recession call in a commentary entitled The U.S. Business Cycle in the Context of the Yo-Yo Years (PDF format). Subsequently the company took a new approach to its recession call in a publicly available commentary on the ECRI website: What Wealth Effect?.

2013-09-06 The Good, The Bad and The Ugly by Douglas Cote of ING Investment Management

“Good” economic news in developed markets has been overshadowed lately by the “bad” (burgeoning Asian currency crisis) and the “ugly” (Syria). Unwinding central bank support from the markets will be arduous; it is already contributing to destabilization of certain emerging market currencies. News out of Washington this autumn tapering, Fed leadership and the debt ceiling has the potential to add volatility and uncertainty. The U.S. equity market has been the place to be this year, but diversification remains key.

2013-09-06 Will Gold Follow Its Seasonal Pattern This Year? by Frank Holmes of U.S. Global Investors

There are factors beyond Syria this week driving gold. That’s the Love Trade. This group gives gold as gifts for loved ones during important holidays and festivals. This is the time of the year that we are in the midst of right now. Historically, September has been gold’s best month of the year. Looking at more than four decades of monthly returns, the precious metal has seen its biggest increase this month, averaging 2.3 percent.

2013-09-05 Seventh Inning Stretch by William Gross of PIMCO

They say that reality is whatever you wish it to be and I suppose that could be true. Just wish it, as Jiminy Cricket used to say, and it will come true. Reality’s relativity came to mind the other day as I was opening a box of Cracker Jacks for an afternoon snack. That’s right I said Cracker Jacks! I can’t count the number of people who have told me during the seventh inning stretch at a baseball game to make sure I sing Cracker Jack (without the S) because that’s what the song says. I care not. No one ever says buy me some “potato chip” or some “pea

2013-09-05 Dividends Matter by Mark Mobius of Franklin Templeton Investments

Many people think of emerging market stocks as pure growth plays, and may not realize that there is a separate potential benefitdividendsthat can also be available to investors in these markets. A prolonged period of easy monetary policies in many developed nations (particularly the US) has left income-seeking investors searching for alternatives to traditional fixed income, including dividend-paying stocks. Many investors may not realize dividends aren’t just a developed-market phenomenon.

2013-09-05 Is China Past Its Manufacturing Prime? by Sammy Suzuki of AllianceBernstein

China has been an incredible export engine of manufactured goods over the past decade and the central player of the BRICs era. But mounting competition from other countries is gradually pulling production away from China. How should investors proceed?

2013-09-04 Fixed Income - Where to Now? by Chris Maxey, Ryan Davis of Fortigent

Since the end of the Global Financial Crisis (GFC), investors moved aggressively into fixed income asset classes. They were quickly rewarded in the years following the crisis with a combination of falling interest rates and tighter credit spreads, which led to positive absolute returns. The easy money in fixed income is gone, however, and now is the time for careful asset class selection.

2013-09-04 Off to the Races by Peter Schiff of Euro Pacific Precious Metals

Summer is traditionally a slow season for precious metals, but this summer started with a rout. In the last week of June, gold and silver hit 2-year lows of $1,192 and $18.61 respectively. Fortunately, after staggering along the lows, the precious metals are off to the races once more - with gold rallying more than 18% and silver 31%. This remarkable performance continues even in the face of the Fed’s sustained tapering threats.

2013-09-04 The Vultures' Victory by Joseph Stiglitz of Project Syndicate

The recent decision against Argentina by a United States appeals court threatens to upend global sovereign-debt markets. Indeed, a basic principle of modern capitalism that when debtors cannot pay back creditors, a fresh start is needed has been overturned.

2013-09-04 Abe Wins - Does Japan Benefit? by Milton Ezrati of Lord Abbett

The Japanese seem willing to give Abe room to reform when he decides to act.

2013-09-03 Did Steve Jobs Really Build That? by Michael Edesess (Article)

The conventional wisdom is that only the private sector can marshal the entrepreneurial energy to create innovation and growth, while government can do little more than shift around the wealth that the private sector creates. But is that really true?

2013-09-03 Getting Prospects to Respond to Your Emails by Dan Richards (Article)

The chances that a prospect will open an email from someone they don’t know are slim. Advisors who rely on mass emails are increasingly challenged to find creative ways to get their message through. But a few advisors who are succeeding in attracting clients via email invitations told me of five ways they get past inbox filters.

2013-09-03 Autumn's Known Unknowns by Nouriel Roubini of Project Syndicate

During the height of the Iraq war, then-US Secretary of Defense Donald Rumsfeld spoke of “known unknowns” foreseeable risks whose realization is uncertain. Today, the global economy is facing many known unknowns, most of which stem from policy uncertainty.

2013-09-03 How to Find Value in Real Estate With “Risk On, Risk Off” Off Again by Walter Stabell, III of Invesco Blog

Recent trends, including falling stock correlations, have been strong indicators that the global economy is normalizing and the practice of “risk on, risk off” investing, in which investors enter and exit perceived riskier investments based on how they feel about the economy, is now off again after becoming a phenomenon in the post-financial crisis years.

2013-09-03 So Step Right Up, Pick Your Favorites... by Blaine Rollins of 361 Capital

So with the backing of The White House, the State Department, the Senate & The Economist, the United States is going to launch Tomahawks on Syrian targets. The President did say that he will let Congress vote on a strike, but both he, Secretary Kerry and Senator Reid let it be known that they will be lighting fuses soon. So as a refresher as to who is supporting whom in Syria, the chart below will both assist and thoroughly confuse you...

2013-09-03 Momentum in Europe by Janus Equity Investment Team of Janus Capital Group

We think now is a good time to be investing in Europe. European equity valuations are at the lowest level in more than 40 years, by some measures, and we are seeing green shoots in the region’s downtrodden economy. Meanwhile, European companies in several industries have right-sized their cost structures or refocused their businesses, setting them up to be more competitive on a global scale.

2013-09-03 As Uncertainty Abounds in September, Sideways Consolidation Continues by Bob Doll of Nuveen Asset Management

Global equities struggled last week, with the S&P 500 declining -1.39%.1 Volatility rose from geopolitical uncertainty over the military strike in Syria.2 Oil prices spiked with concerns about escalation and tension but retreated due to dampened international support and expectations that a military campaign would be short-lived. The U.S. Treasury announced its borrowing capacity will be exhausted by mid-October, exposing contentious fiscal battles. Reports mentioned former Treasury Secretary Larry Summers may be leading the succession race for Fed Chairman.

2013-08-31 How Do I Hate Thee? by John Mauldin of Millennium Wave Advisors

I will list a number of reasons why I hate this market and then suggest a few reasons why that should get you excited. We will look at some charts, and I’ll briefly comment on them. No deep dives this week, just a survey of the general landscape.

2013-08-30 Beware the Dangerous Stretch for Yield by Ashish Shah of AllianceBernstein

The US Federal Reserve talked in early summer about tapering its quantitative easing plan and raising interest ratesin part to stop investors from chasing yield into the arms of riskier loans. In the high-yield market, however, the conversation had exactly the opposite effect.

2013-08-30 Look for these European Stocks to Exert a Lot of Horsepower by Frank Holmes of U.S. Global Investors

The Wall Street Journal recently published an article, “Emerging Europe is a Haven in Selloff,” highlighting the region’s recent success in “rising above the storm” that other developing markets have not been able to avoid. Dark clouds have been swirling around emerging markets, with the MSCI Emerging Markets Index falling about 12 percent on a year-to-date basis.

2013-08-30 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Global policy-makers increasingly at odds with one another. Foreign exchange reserves may hold key to stabilizing emerging markets. Geopolitics weigh heavily on energy markets.

2013-08-30 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.3, an increase from last week’s 131.0 (revised from 131.1). The WLI annualized growth indicator (WLIg) declined to 4.2% from last week’s 4.5%.

2013-08-30 An American Energy Revolution by Frank Holmes of U.S. Global Investors

In Texas these days, there’s a feeling of absolute and unwavering confidence in the concept of an American energy revolution. From the depths of reserves to the richness of the energy, an incredible transformation is taking place.

2013-08-29 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week, total AUM in all active ETFs increased by over $69 million. As in previous weeks, assets in “Short Term Bond” active ETFs increased, this time by almost $64.6 million. AUM in the “Foreign Bond” category fell by nearly $58 million both because of falling values for ETFs in the category and because redemption units in certain ETFs. The “Global Bond” category had another bad week, ending over $18.3 million below where it began.

2013-08-29 Monthly Investment Commentary by Litman Gregory Research Team of Litman Gregory

U.S. stocks resumed their positive streak in July (after a slightly negative June). Large-cap stocks rose in three out of the four weeks and were up 5% for the month. Smaller companies generally outperformed their larger-cap counterparts. After Federal Reserve comments regarding the timing of its stimulus withdrawal upset markets in May and June (particularly the bond market), investors seemed to take comfort in the Fed’s more recent comments. Among other points, Chairman Bernanke reiterated that a decision to taper bond purchases is different from raising the federal funds rate

2013-08-29 Have Emerging Markets Gotten Oversold? by Mark Mobius of Franklin Templeton Investments

At Templeton, we’ve repeatedly championed our value-driven philosophy by frequently buying at times others are most pessimistic. This is not easy to do, even for seasoned market veterans. During the past few months, emerging markets have been subject to such pessimism. These periods of short-term volatility are certainly not new to us, and don’t change our long-term conviction of the potential emerging markets hold.

2013-08-29 Middle East Tensions, Oil Prices and the US Economy by Russ Koesterich of iShares Blog

A further escalation of violence in the Middle East will not only have a terrible human toll, it could also lead to rising oil prices, which in turn could hurt consumers and the global recovery. Russ explains the situation and shares how investors can prepare.

2013-08-28 On Tapering, All Signs Point to “Maybe” by Scott Brown of Raymond James

Investors looking to the July 30-31 Fed policy meeting minutes for clear clues on future moves were left disappointed. Nearly all senior Fed officials expect that a reduction in the pace of asset sales is likely to be warranted by the end of the year. However, they appear evenly divided on whether that will be sooner (September) or later (December). The economic data remained mixed, suggesting that the decision will be a close call.

2013-08-28 ING Fixed Income Perspectives August 2013 by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

While it’s been said that a picture is worth a thousand words, some pictures are just not that complicated. Take the current U.S. yield curve, for example, our interpretation of which can be boiled down to just a handful of syllables: “zero interest rate policy” and “taper”.

2013-08-27 The Price Clients Pay for Worst-Case Forecasts by Bob Veres (Article)

Clients and the world at large give inordinate attention to downside scenarios, and nobody is calling our attention to the much larger upside of our business and investment landscape. The human brain amplifies this effect, because it is hardwired to notice threats much more than opportunities. I recently spoke with Dennis Stearns ? an advisor who happens to be an expert in scenario planning ? about the role planners need to play to counteract media-driven negativity.

2013-08-27 Why Bad Decisions Happen to Good People: An Introduction to Behavioral Finance by Scott Clemons (Article)

Cognitive biases frequently cause even skilled investors to make irrational decisions. Thankfully, irrationality is fairly predictable. Here are four behavioral biases that investors face and techniques for recognizing and overcoming them.

2013-08-27 The Egyptian Coup: an Update by Bill O'Grady of Confluence Investment Management

In this report, we will update developments in Egypt and discuss how the military’s actions increase the odds of future problems. We will study the military’s goals for the coup. From there, we will examine the Obama administration’s difficult position and how the Egyptian coup has caused a divergence of responses from regional powers. As always, we will conclude with potential market ramifications.

2013-08-27 Lehman's Morbid Legacy by Mohamed El-Erian of Project Syndicate

As the fifth anniversary of Lehman Brothers’ collapse approaches, we need analyses of the previously unthinkable outcomes that have become reality with profound implications for current and future generations and that our systems of governance have yet to address properly. Four such outcomes come to mind.

2013-08-27 Policy Uncertainty on the Rise by Libby Cantrill, Josh Thimons of PIMCO

Congress seems to be digging in and ramping up the rhetoric in advance of a possible government shutdown, a debt ceiling increase and a probable selection of a new Fed chair. We think it is likely policymakers will agree to a short-term deal to fund the government and avert a shutdown, and also cobble together a resolution on the debt ceiling, although neither is likely until the last minute. The Fed chair debate will likely continue to sway markets over the next few months, leading to greater uncertainty and greater market volatility.

2013-08-27 Choose Your Door Wisely.. by Blaine Rollins of 361 Capital

If I was being forced to choose a side for year end 2013 performance, I would have to agree with Mr. Plant. While September is historically a difficult month for the markets, we also know that the Q4 tends to reward the equity markets.

2013-08-26 The Case for More Mortgage QE by Kristina Hooper of Allianz Global Investors

Disappointing new home sales don’t mean that tapering is less likely to occur in September. Rather, it may only mean that when tapering begins, the Fed’s likely to start small and only trim Treasuries.

2013-08-26 The Global QE Exit Crisis by Stephen Roach of Project Syndicate

The global economy could be in the early stages of another crisis and, once again, the Federal Reserve is in the eye of the storm. As the Fed attempts to exit from its unprecedented policy of massive purchases of long-term assets, many high-flying emerging economies suddenly find themselves in a vise.

2013-08-26 Could Clarity Confuse? The Industry Strikes Back by Jon Vogler of Invesco Blog

The intention of the Department of Labor (DOL) proposal to illustrate lifetime income streams on 401(k) statements is to clarify retirement income status for participants. But according to industry and trade groups, the requirement may have the opposite effect, creating more confusion than clarity.

2013-08-26 Inflation Update by Team of North Peak Asset Management

As can be seen in the schematic above, most portfolios are effectively a bet on a low inflation environment due to their heavy reliance on mainstream equities and fixed income securities. In order to protect a portfolio from the damage that inflation can inflict, asset classes that are sensitive to increases in inflation need to be incorporated into the asset mix. These include Inflation Linked Bonds (TIPS), Precious Metals, Global Natural Resource equities and Commodities.

2013-08-26 Equities Relatively Flat as Crosscurrents Remain by Bob Doll of Nuveen Asset Management

U.S. equities finished mostly higher last week, and the S&P 500 advanced 0.50%.1 The Dow Jones Industrial Average was the only the only major U.S. index to falter last week.1 Market sentiment was dominated by the notion that the market had become too bearish in the wake of the prior week’s sell-off in equities and credit. Continued improvement in global recovery sentiment seemed to provide a notable tailwind. The Fed dominated headlines markets appear obsessed with policy normalization and succession issues.

2013-08-25 France: On the Edge of the Periphery by John Mauldin of Millennium Wave Advisors

Charles de Gaulle said that "France cannot be France without greatness." The current path that France is on will not take it to renewed greatness but rather to insolvency and turmoil. Is France destined to be grouped with its Mediterranean peripheral cousins, or to be seen as part of the solid North Atlantic core? The world is far better off with a great France, but France can achieve greatness only by its own actions.

2013-08-24 Hong Kong: A Gateway to Chinese Companies by Dilip Badlani of The Royce Funds

While many investors and businesses in Hong Kong are struggling with China’s slowed-growth policy, increased rates on commercial rentals, and government intervention to cool the residential property market, we at Royce are looking for opportunities in Hong Kong-listed companiesour primary entrance to gain access to Chinese companieswhose valuations are reflective of the macro challenges facing their economy.

2013-08-24 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.1, a decline from last week’s 131.2. The WLI annualized growth indicator (WLIg) declined to 4.5 from last week’s 4.7%.

2013-08-24 Revisiting the USD Bull Market by Paresh Upadhyaya of Pioneer Investments

The USD bull market has begun with signs that the USD is transitioning to a cyclical currency. Monetary policy divergences in G4, slowing in USD diversification and a dramatic turnaround in the twin deficits, provide a strong fundamental underpinning to a USD rally going forward.

2013-08-23 What Does an Improving Economy Mean for Stocks and Bonds? by Charlie Dreifus of The Royce Funds

With the economy improving, inflation tame, and a Federal Reserve meeting approaching in September, Portfolio Manager and Principal Charlie Dreifus believes that small-caps remain an attractive option within the equities market.

2013-08-23 Why We Still Like China by Philippe Brugere-Trelat, Andrew Sleeman of Franklin Templeton Investments

When China, the world’s second-largest economy and an engine of global growth, sneezes many other markets catch colds. A spike in the country’s short-term lending rate in June gave some investors the sniffles at least temporarily, while others have turned bearish on China amid concerns growth rates this year could be under the weather. However, many investors may be overlooking some powerful macro-economic long-term shifts taking place in the economy that could ultimately improve China’s bill of health.

2013-08-23 Is Asian Turbulence a Win for China? by Anthony Chan of AllianceBernstein

While this week’s sell-off in Asian currency and bond markets does not, as yet, amount to a crisis in our view, it is obviously cause for concern. At this stage, we think two outcomes are likely: one is that central banks and supranational funding agencies will work together to avert a full-blown crisis; the other is that China will emerge with its power and prestige as a regional financial powerhouse considerably enhanced.

2013-08-23 Switcheroo by Tony Crescenzi of PIMCO

What is priced into the bond market in terms of its outlook for the Federal Reserve? Does the increase in interest rates sufficiently reflect the market’s perceived policy shifts?

2013-08-23 5 China Charts That Look Bullish for Commodities by Frank Holmes of U.S. Global Investors

Over the past few months, investors have seen better economic data coming out of Europe. Consumer confidence in the continent has been rising, manufacturing data is improving and the fiscal situation is on the mend. Now, China appears to be strengthening as well, which could signal better times ahead. Below are five charts that look bullish for China and commodities. While not meant to be comprehensive, they do point to areas where investors might want to pay close attention.

2013-08-23 Embrace Bottom Up by Herbert and Randall Abramson of Trapeze Asset Management

With all the conflicting macro news, some good, some not, and with the S&P 500 and the Dow at new highs while many sectors languish, it is preferable to focus on the little picture not the big one. The big one may currently be more unpredictable than the small one, being bottom up investment in undervalued securities. Those may currently be less popular, but we value investors are naturally driven to buy investments low, that are neglected and unpopular, with the view of selling them high when their popularity is enhanced. Buy low and sell high. Not buy high and sell higher as is now in vogue.

2013-08-23 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

India: Broken promise or temporary hiccup? Bond markets appear unmoved by central bank guidance. Rising mortgage rates are taking some of the steam out of housing.

2013-08-23 The Next Big Challenge to Investors: Duration by Mike Temple of Pioneer Investments

Many investors have been conditioned to accept that the economy will be in the rehabilitation ward for the foreseeable future, rates will remain low, and monetary stimulus unending. We believe this is an increasingly dangerous mindset and the next great risk for bond investors is coming into view: the return of higher interest rates. We look at the “refuge” subsectors those areas of the fixed income market that investors may believe provide “safe haven” from the gathering storm.

2013-08-22 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week, total AUM in all active ETFs fell by over $60.5 million. AUM in the “Global Bond” category fell by nearly $89 million both because of falling values for ETFs in the category and redemptions in certain ETFs. The “Foreign Bond” category had another bad week, ending almost $36 million below where it began. As in previous weeks, assets in “Short Term Bond” active ETFs increased, this time by almost $36.5 million.

2013-08-22 Bernanke's Taper Tinkering by Tad Rivelle of TCW Asset Management

For at least the past five years, the Fed has cast an exceedingly long shadow over the capital markets. For this reason, understanding Fed policy has been central towards proper guidance and direction of investor capital allocations. Since Chairman Bernanke’s trial ballooning surrounding a potential “taper” of the Fed’s QE policy, longer maturity Treasury interest rates have soared over 100 basis points.

2013-08-22 Excess Cash in the Technology Sector: A Source of Underappreciated Value by Nate Palmer of Diamond Hill Investments

As analysts,we are constantly searching for opportunities to purchases hares of a business at a meaningful discount to our estimate of intrinsic value, or short shares of a business at a meaningful premium to our estimate of intrinsic value. While this premium or discount is often a function of our estimate of the value of the business’s future earnings power, it can also be the result of the current market price not properly reflecting the value of assets on a company’s balance sheet.

2013-08-22 Hot Potato: Momentum As An Investment Strategy by Ryan Larson of Research Affiliates

Investors increasingly are attracted to momentum as a key ingredient in their portfolios. But how does momentum fare as a stand-alone strategy? In this issue of Fundamentals, we look at the pros and cons of this important risk factor.

2013-08-22 Determined to Taper by Scott Minerd of Guggenheim Partners

The release of the July Federal Open Market Committee meeting minutes today and the Jackson Hole Economic Policy Symposium starting tomorrow are likely to dominate near-term activity in financial markets. Despite mixed economic data, it appears increasingly likely that some form of tapering will be announced at the FOMC’s September meeting.

2013-08-20 Who Are You Going to Believe-These Non-GAAP Numbers or Your Lying Eyes? by Jeffrey Bronchick of Cove Street Capital

Great performance in the short-run-either absolute or relative-is a mixed blessing. If an investor owns a portfolio of stocks that is embedding 30% undervaluation, and voila, finds himself up 30% (this is a hypothetical number for the purposes of this example but it’s not far from recent reality) in six months, without a concurrent upward improvement in underlying fundamentals, you have to be a regular on CNBC to expect another 30% return over the next six months.

2013-08-20 Change is Coming by Chris Maxey, Ryan Davis of Fortigent

The summer months brought a period of calm to global markets and economies. Nearing the move to autumn, it is time to look ahead and see what resides on the horizon. Investors could be due for a renewed bout of volatility based on any number of events set to happen before year-end.

2013-08-20 A Lot Of Action In What Was Expected To Be A Quiet Week by Sam Wardwell of Pioneer Investments

Most of the U.S. economic data released last week was rather ho-hum, consistent with continuing slow growth, but markets weren’t boring. Maybe markets are thin because it’s August, but the U.S. Treasury market had one of its worst weeks in a long time, and the selling spilled over into the U.S. stock market.

2013-08-20 August Monthly Investment Bulletins by Team of Bedlam Asset Management

For the first seven months of the year the portfolio rose by 25.2% vs. 19.3% for the index. During the month, the 6.4% gain was 150 basis points ahead. Three trends continued: the gradual increase in fund flows into equity markets relative to other asset classes, slightly improving economic data across most developed countries, and a mild deterioration in many developing nations.

2013-08-20 Epic Climb Up and to the Right... by Blaine Rollins of 361 Capital

Interest rates continue to make an epic climb up and to the right...

2013-08-19 Equity Fatigue Continues with Headwinds from Bond Sell-off by Bob Doll of Nuveen Asset Management

U.S. equities finished lower for the second straight week as the S&P 500 declined 2.04%, narrowly escaping its worst week of the year. A specific catalyst behind the pullback was not identified by us or market analysts.

2013-08-19 What's the Point of Investing in Dreams? by Vadim Zlotnikov of AllianceBernstein

Is innovation dead or are we on the cusp of new technological revolutions? Without resolving this epic debate, we believe that market conditions today are conducive to investing in companies with disruptive potential, but it takes a sober approach to find big dreams that can deliver big returns.

2013-08-17 Signs of the Top by John Mauldin of Millennium Wave Advisors

The investment media seems obsessed with the question of whether the Fed will taper. The real question should be not about "tapering" but about credibility. What happens when fundamentals become the narrative as opposed to what the central bank is doing? What happens if the Federal Reserve throws a liquidity party and nobody comes? Today we look at some of the fundamentals. The market is in fact overvalued, but that doesn’t mean it can’t become more overvalued. Is this August 1987 or August 1999?

2013-08-16 Pacific Basin Market Overview July 2013 by Team of Nomura Asset Management

Asian markets ended higher in July after comments from Federal Reserve Chairman Bernanke appeared to infer that the Fed’s asset purchase program would be extended for a while longer. In China, Premier Li Keqiang stated that China would meet its gross domestic product (GDP) growth target this year, which brought some cheer to the markets. The MSCI AC Asia Pacific Free Index including Japan gained 1.5% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.0% higher during the quarter.

2013-08-16 Preparing for Rising Interest Rates: Bond Ladder vs. Bond Fund Ladder by BMO Tax-Free Fixed Income Team of BMO Funds

The last few years have seen interest rates hold steady or drift lower, causing investors to be concerned about how their fixed income portfolios will be affected when rates eventually rise. The question is, how can investors protect themselves from rising rates while still earning income while they wait?

2013-08-16 Using Equities to Hedge Inflation? Tread With Care by Bob Greer, Raji Manasseh of PIMCO

Historically, broad equity returns have not intrinsically provided a good hedge against inflation. Three key attributes may help companies withstand inflationary environments - pricing power, supply side advantages and a willingness and ability to sustain dividend hikes at a rate faster than inflation. To realize equities’ long-term potential as a key source of portfolio returns, investors should consider enlisting active managers who select stocks with a view on inflation and its effect on specific companies.

2013-08-16 The Case for Global Dividends: Valuations and the Impact of Rising Rates by Ehren Stanhope of O'Shaughnessy Asset Management

The S&P 500 Index has risen over 150 percent since March 9, 2009 in what could arguably be deemed the most hated equity rally of all time. The MSCI All Country World Index, one of the broadest global indices, has risen “just” 110 percent since its March 2009 nadir. Evidence indicates that United States (U.S.) investors have not participated in this rallya truly sad state of affairs. It is worthy of noting that over the last several years a number of well known market pundits have viscerally rejected the equity rally due to macroeconomic concerns.

2013-08-16 Purgatory Is Heaven by Tony Crescenzi of PIMCO

Since June, the Fed has stressed three messages: Tapering is not tightening, the federal funds rate will not move in tandem with a slowdown in asset purchases, and any change in Fed policy will rely on data, rather than a date. If Ben Bernanke leaves the Fed when his term expires, whoever is chosen to replace him will be bound by rules and the strength of the institution. The outlook for interest rates depends more on the Fed’s overall approach to the policy rate, and PIMCO believes the Fed will not increase that rate until 2016.

2013-08-16 The Telecommunications Services Sector Untethered and Poised to Grow by Chuck Carnevale of F.A.S.T. Graphs

Suffice it to say that the Telecommunications Services sector of today is not your grandfather’s Telecommunications Services sector. The explosion, and rapidly becoming ubiquitous implementation, of wireless technologies have been disruptive and game changing. As a result, the very nature of the established stalwarts within this industry have gone through an extraordinary metamorphosis.

2013-08-16 What Happens When You Tell Indians to Stop Buying Gold by Frank Holmes of U.S. Global Investors

With the government in India raising its import tax for gold to 10 percent this week, I firmly believe Indians will continue indulging in gold, even if they have to smuggle it in.

2013-08-16 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.2, a decline from last week’s 131.5 (a downward revision from 131.8). The WLI annualized growth indicator (WLIg) declined to 4.7 from last week’s 4.9%.

2013-08-15 High Yield Market Overview July 2013 by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch High Yield Master II Constrained Index, was up 1.88% for the month of July. High yield recovered some of the sell-off experienced in May and June as Treasury yields stabilized and mutual fund and ETF (exchange traded fund) flows turned positive. The market’s rally occurred as rate fears subsided, which resulted in retail flows returning to the asset class.

2013-08-15 China and the Outlook for Financial Crises by Scott Minerd of Guggenheim Partners

China’s elevated and rising debt levels appear to be one of the largest risks to the global economy today. Although it is difficult to gauge when the risks in that country could manifest as a crisis, investors should act with the knowledge that the margin of safety in the global investment environment continues to decrease.

2013-08-15 Once-a-Generation European Opportunity? by Cindy Sweeting of Franklin Templeton Investments

Sir John’s contrarian conviction was so strong, that in 1939 when WWII had investors fleeing the markets, he bought every stock on the New York Stock Exchange trading under a dollar. Cindy Sweeting, Director of Portfolio Management at Templeton Global Equity Group, espouses Sir John’s contrarian approach, although as a more selective bottom-up stock-picker today. As the markets have bumped along recently she has also echoed his money-where-your-mouth-is action, avoiding the same trend plays everyone else is making by the doing the far more difficult work of going against the grain.

2013-08-15 What Lies Ahead for China? McKinsey Lists 10 Forces by Frank Holmes of U.S. Global Investors

By 2022, research by McKinsey suggests that 75 percent of urban consumers in China will earn around $9,000 to $34,000. This income level, which is currently between the average earned in Brazil and Italy, is only 4 percent of what Chinese households were bringing home in 2000.

2013-08-15 To Manage Rising Rates, Consider Benching Your Benchmark by Douglas Peebles, Michael Mon of AllianceBernstein

As we enter a period of rising rates, many bond investors are growing more aware of the risks of benchmark-oriented bond portfolios. It may be time to sit the benchmark down and consider more flexible, unconstrained approaches to fixed income.

2013-08-15 Correlation and Portfolio Construction by Dean Curnutt of Macro Risk Advisors

We review recent periods of financial market stress, which bring about elevated levels of asset volatility and during which investors are vulnerable to incurring substantial loss of capital. We illustrate that risk is determined both by the volatility of individual investments in a portfolio and the degree to which they are correlated. Often overlooked, correlation is a critical factor. Because assets become more correlated at the same time they become more volatile, we argue that the benefits of diversification often are difficult to achieve when they are most needed.

2013-08-14 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Overall the total AUM in all active ETFs declined by $1.2 million last week, an insignificant amount for the $14.4 billion space. “Short Term Bond” increased by almost $29.3 million, while “Global Bond” fell by around $15.8 million. “Foreign Bond” had another bad week, ending almost $34 million lower than where it began, as did the “Currency” category which declined by more than $8.7 million.

2013-08-14 Focused Only on the US? Here's What You're Missing by Russ Koesterich of iShares Blog

Many investors remain fixated on what’s happening in the United States -- and particularly on what the Federal Reserve will do -- but Russ explains why they shouldn’t lose sight of what’s happening abroad.

2013-08-14 How to Invest in Emerging Markets 3.0 by Sammy Suzuki of AllianceBernstein

It’s been 25 years since the emerging-market equities index was created, and much has changed. Today, we believe that emerging markets are on the cusp of a third phase that might compel investors to shift away from benchmarks and focus on absolute risk.

2013-08-14 What Role for Emerging Markets After the Sell-Off? by Ramin Toloui of PIMCO

While history suggests that the sell-off in emerging market bonds could ultimately offer attractive buying opportunities, it is important to anchor investment decisions firmly within a forward-looking economic and market outlook. Continuing vulnerabilities in global growth suggest there is fundamental value in EM bond yields at present valuations, as interest rate hikes priced into EM yield curves are unlikely to materialize in an environment of tentative growth.

2013-08-13 A Better Way to Measure Systemic Risk by Michael Edesess (Article)

The economics profession has faced harsh criticism since the financial crisis of 2007-09 ? not least from its own members?for relying on mathematical models that failed to foresee the crisis and in some cases abetted its onset. Is the criticism justified, and what can be done about it?

2013-08-13 So Now What? by Scott Brown of Raymond James

What did we learn last week? The Fed may not be in any hurry to begin reducing the rate of asset purchases. The economic data suggest a mixed picture.

2013-08-13 Dog Days! by Jeffrey Saut of Raymond James

The phrase “Dog Days” refers to the sultry days of summer. In the Northern Hemisphere, the Dog Days of summer are most commonly experienced in the months of July and August, which typically experience the warmest summer temperatures of the year. In the Southern Hemispheres, they tend to occur in January and February, in the midst of the austral summer. “Dog Days” is also defined as “stagnation,” so I think “Dog Days” is the proper moniker for last week’s market action as all the markets stagnated!

2013-08-13 China Struggles to Fight the Trend by Chris Maxey, Ryan Davis of Fortigent

Prior to the global financial crisis, decoupling’ was the word du jour. In the years since the crisis began, however, decoupling has vanished from the everyday lexicon. In recent weeks, the financial media noticed a new form of decoupling, one that shows improving growth prospects in the developed world but slower growth in developing economies. Rightly or otherwise, much of that slowdown is pinned on China and recent data continues to suggest a slower pace of growth than investors became accustomed to in prior decades.

2013-08-13 Emerging Asia Pacific: Regional Economic Review - Q2 2013 by Team of Thomas White International

Asia’s emerging nations, the darling of the world economy since the 2000s, uncharacteristically slowed in the first quarter of 2013. After a decade of robust growth, many of Asia’s fast-growing economies are coming to terms with structural changes. Asian currencies, which had appreciated quite a bit over the past few years thanks to ultra-loose monetary policy in the developed world, came tumbling down at the first talk of a slowdown in the supply of cheap money.

2013-08-13 Developed Asia Pacific: Regional Economic Review Q2 2013 by Team of Thomas White International

Many developed economies in the Asia Pacific region rebounded during the second quarter of 2013 to post a healthy set of growth and inflation numbers. Turning on the monetary spigots during the past one year provided a major fillip to many developed Asian economies. Countries that fumbled in the wake of natural disasters in the recent past, showed marked improvement. Even those countries that were said to be suffering from structural deficiencies, too, responded well to the monetary medicine administered by their various central banks.

2013-08-13 And That's the Week That Was by Ron Brounes of Brounes & Associates

When the Fed talks, people listen (and it doesn’t even have to be Bernanke). This week, a few key policymakers (not named Bernanke) expressed their views that the bond buying program may begin to be tapered this year, perhaps as early as the September meeting. Some investors used the opportunity to sell stocks and book some profits, though news from China eased certain concerns that the global economy was on shaky ground.

2013-08-13 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Despite the market’s jittery, almost daily, responses to the Federal Reserve’s inferences about “taking their foot off the pedal”, the reality is that secular changes, like the kind considered, occur very slowly and give us enough time to prepare for, and analyze, the consequences real and imagined.Most importantly, we need to see significant changes in data, and perception of that data, over the long term in order to corroborate the Fed’s decision.

2013-08-13 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stock prices declined modestly last week. A shrinking trade deficit caused 2nd quarter GDP estimates to increase (over 2% now annualized), thus renewing fears that the Federal Reserve would commence “tapering” at their September meeting.

2013-08-13 The Gordon Dilemma by Bill O'Grady of Confluence Investment Management

In this report, we will discuss Professor Gordon’s thesis, examine the geopolitical impact if he is correct and offer some criticisms of his thesis. We will conclude with potential market ramifications.

2013-08-13 Dog Days of Summer Are Upon Us by Blaine Rollins of 361 Capital

Hopefully you are reading this from the beach, because there is so little news happening in the markets that those of us in the office are about to start making news up to justify stock price movements. But while news and volumes are at August lows, here are some thoughts that might ring a bell to help you to either make some money or to set down your smartphone and get back to the water.

2013-08-12 The Key Economic and Market Forces Guiding Equity Markets by Bob Doll of Nuveen Asset Management

This week we want to address important themes that underline our continued cautious optimism for a slowly improving global economy and signs of revenue and earnings growth momentum.

2013-08-12 Lower Your Expectations for Future Return by Cory Fulton of Mesirow Financial Wealth Management

While equities are not priced particularly well and the current environment does not bode well for future long-term expected real returns, they are currently a better choice for investors relative to the alternative. Right now, any meaningful shifts in one direction or the other could be setting the investor up for additional disappointment. At this stage in the game, equities look to offer better prospects in the long-term. However, the time is not right to abandon your long-term investment plan in the face of the positive market headlines and lofty predictions emanating from Wall Street.

2013-08-10 We Can't Take the Chance by John Mauldin of Millennium Wave Advisors

What would it have been like to be a central banker in the midst of the crisis in 2008-09? You’d know that you won’t have the luxury of going back and making better decisions five years later. Instead, you have to act on the torrent of information that’s coming at you, and none of it is good. Major banks are literally collapsing, the interbank market is nonexistent and there is panic in the air. Perhaps you feel that panic in the pit of your stomach. This week we’ll perform a little thought experiment to see if we can extrapolate what is likely to happen in when the nex

2013-08-09 Charts for the Beach by Richards Bernstein of Richards Bernstein Advisors

Our basic positions are now famous (or infamous). We continue to favor US assets and to shield our portfolios from the on-going and broad problems in the emerging markets. In the spirit of August, we forego significant text this month to present a series of charts that outline a few of the opportunities and risks we see in the global markets.

2013-08-09 A Generational Selling Opportunity for the U.S. Long Bond by Jim O'Shaughnessy of O'Shaughnessy Asset Management

Because investors tend to extrapolate what their general experience in markets has been recently well into the future, it’s easy to see why investors are having a long-term love affair with bonds. Yet the data in this paper suggests that a crisis in long bonds is coming and, given this information, individual and institutional investors alike should reconsider the bond portion of their portfolios.

2013-08-09 The Half Full Economy by Peter Schiff of Euro Pacific Capital

The marginal economic strength that was described in the most recent GDP release from Washington has caused many to double down on their belief that the Fed will begin tapering QE sometime later this year. While I believe that is a fantasy given our economy’s extreme dependence on QE, market observers should have learned long ago that the Bureau of Economic Analysis (BEA) initial GDP estimates can’t be trusted. A perusal of their subsequent GDP revisions in the last five years reveals a clear trend: They are almost twice as likely to revise initial estimates down rather than up.

2013-08-09 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The global productivity "bust" is largely cyclical. The Bank of England tries forward guidance. Will low labor force participation keep the Fed from tapering?

2013-08-09 A Surprising Way to Play a Europe Rally by Frank Holmes of U.S. Global Investors

After a lengthy period of stagnant growth and lackluster results, the gradual crescendo of improving economic data that’s been coming out of Europe lately certainly commands attention.

2013-08-09 Real-Time Tax Data Indicates U.S. Economy Rapidly Losing Steam by Minyi Chen of AdvisorShares

The U.S. economy real growth is slowing even more now than in July as signs indicate an even weaker economy than we think. Read this investor insight by TrimTabs Asset Management to learn what tax withholdings and recent fund flows may be foretelling.

2013-08-09 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.8, essentially unchanged from last week’s 131.7 (a downward revision from 131.8). At the end of July the company posted a new commentary, Becoming Japan, which highlights the decline in GDP growth for Japan and seven other major economies, including the US. Also this week ECRI’s Lakshman Achuthan defended his company’s recession call on Bloomberg TV.

2013-08-08 Market Melt-Up Catches Defensive Investors by Surprise by Douglas Cote of ING Investment Management

Extraordinary returns in the fourth year of a bull market remind us that long-term defensiveness can’t be rationalized. July saw remarkable returns across global equity and fixed income markets, with the exception of U.S. Treasuries. Investors would be well served to ignore media drama and fear mongering and simply follow the fundamentals. Five years spent worrying about Armageddon is too long, but there’s still time to get back to a normal allocation.

2013-08-08 Absolute Strategies Fund Portfolio Commentary by Jay Compson of Absolute Investment Advisers

In our last quarter commentary we posed a simple question: "Why does the economy need so much stimulus and quantitative easing for so little growth?" Over the last two years or so, we feel that we have identified and explained the structural issues and risks very clearly. But in the second quarter, the equity and credit markets may have done a better job offering investors a true glimpse of the realities facing global markets.

2013-08-08 Bond Wars by William Gross of PIMCO

Adaptation is tantamount to survival in the physical world. So argued Darwin, at least, and I am not one to argue with most science and its interpretation of natural laws. Adaptation has been critical as well for the survival of countries during wartime, incidents of which I am drawn to like a bear to honey, especially when they concern WWI. Stick with me for a few paragraphs on this the following is not likely to be boring and almost certainly should be instructive.

2013-08-08 Quarterly Letter by Team of Grey Owl Capital Management

To begin, let us state that we are tired of writing about macroeconomic issues. We suspect you are tired of reading about them. We would like nothing more than to send out a quarterly letter full of updates on the companies we own and the rationale for individual buy and sell decisions. Nevertheless, we must address the market action following Federal Reserve Chairman Ben Bernanke’s May 22nd testimony before Congress, where he merely floated the idea of “tapering” the Fed’s quantitative easing efforts.

2013-08-08 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Overall the total AUM in all active ETFs declined by $2.5 million last week, an insignificant amount for the $14 billion space. The biggest change of the week was the “Short Term Bond” category overtaking the “Global Bond” to become the largest category in active ETF space.

2013-08-08 Dcf Vs. Multiples by Kurt Havnaer of Jensen Investment Management

Valuing a stock is arguably one of the investment manager’s most difficult tasks. A variety of tools and methodologies exist to value equities, and the assumptions used in those are estimates of future unknowns. According to Aswath Damodaran, a valuation expert and finance professor at New York University, multiples are the most common method used by investors to value stocks.

2013-08-08 Coming Soon: September Volatility by Russ Koesterich of iShares Blog

Since spiking earlier this summer, market volatility is now back to spring lows. Investors, however, shouldn’t expect this calm to continue come September. Russ has four reasons why.

2013-08-08 Is The Financial Crisis Over For Financial Stocks? by Chuck Carnevale of F.A.S.T. Graphs

The cause of the financial crisis of 2007 -2008, also known as the Great Recession of 2008, is attributed to many different theories. However, one of the most common theories is an easy money regulatory environment that led to an abundance of subprime loans, which in turn inflated real estate prices to bubble levels. Additionally, many blame the Financial sector, predominantly the money center banks, for exploiting the lax lending requirements with reckless and greedy behavior.

2013-08-08 The Role of Confidence by Howard Marks of Oaktree Capital

The so-called wealth effect plays an important and well recognized part in the functioning of an economy. When assets appreciate in value, the owners translate their increased wealth into increased spending. While at first glance this is unsurprising, it should be noted that this is true even if the appreciation is unrealized, and thus the increased wealth exists solely on paper. The relationship can be stated as follows: the richer people feel, the more they spend. Changes in confidence have an impact on behavior similar to the wealth effect. That’s what this memo is about.

2013-08-07 Adapt or Die... by Blaine Rollins of 361 Capital

Bond king Bill Grosss $261.7 billion Total Return Fund at Pacific Investment Management Co. suffered a $7.5 billion net outflow last month, according to data from fund tracker Morningstar Inc. on Friday. It is the third straight monthly outflow for the Fund, on the heels of nearly $10 billion in redemptions in June. Clients have yanked $15.6 billion from Gross’s Fund in 2013 through July. Jeffrey Gundlach’s $37.9 billion DoubleLine Total Return Bond Fund suffered $580 million net outflow in July, according to Morningstar.

2013-08-07 Japan The Land of the Rising Stock Market by Richard Bernstein of Richard Bernstein Advisors

We have been ardent bulls on the Japanese stock market since last Fall. Our thesis has been a simple one: For the first time in the history of our data, Japan began running consecutive monthly current account deficits.

2013-08-06 Is China the New France? by Marianne Brunet (Article)

Imagine a country that grows its economy by greatly devaluing against the reserve currency to develop a strong export sector. As the country becomes a major world power, it accumulates massive amounts of the reserve currency, and fears grow that its actions could destabilize global markets. If you think that description sounds like China today, you’re right. But it also describes France in the 1920s. Lessons from that era are instructive for those seeking to forecast China’s long-term position in the world.

2013-08-06 And That's the Week That Was by Ron Brounes of Brounes & Associates

After a week like this, everyone needs a vacation. Big Oil led the earnings trail and the results were not pretty. Europe and China both expressed nice signs for their previously weaker manufacturing sectors. At home, the labor results were mixed, manufacturing looked solid, the consumer remained active, and Michael delayed the vote yet again.

2013-08-06 The Changing of the Monetary Guard by Joseph Stiglitz of Project Syndicate

With leadership transitions at many central banks under way, many of those who were partly responsible for creating the global crisis that erupted in 2008 are departing to mixed reviews. The main question now is the extent to which those reviews influence their successors’ behavior.

2013-08-06 Equities Grind Higher as the Economy Continues to Muddle Through by Bob Doll of Nuveen Asset Management

U.S. equities advanced last week, with the S&P 500 increasing 1.10%.1 For the month of July, the S&P gained 5.09%, and equities have increased 21.33% year to date. Second quarter earnings season is nearly complete, and there has not been a material change in estimated earnings for the balance of the year or 2014. Revenues were slightly ahead of expectations, and earnings per share were approximately 3% higher than expected, annualizing at about $110 per S&P 500 share.

2013-08-06 China's Slowdown by Bill O'Grady of Confluence Investment Management

Over the past three decades, China has seen its economy grow significantly.

2013-08-06 Low Quality Jobs Recovery Continues in July by Chris Maxey, Ryan Davis of Fortigent

In a busy week of economic data, investors ended the week on a mixed note.The government jobs report revealed a labor market experiencing steady if not unspectacular growth, as nonfarm payrolls came in below consensus estimates while the unemployment rate surprised to the upside.

2013-08-05 Can It Get Any Better Than This? by John Mauldin of Millennium Wave Advisors

What in the world is going on?! As I write this letter from the Maine woods, the S&P 500 has just cleared 1,700 for the first time. The German DAX continues to set all-time highs above 8,400. The United Kingdom’s FTSE 100 is quickly approaching its 1999 record high of 6,930, and its mid-cap cousin, the FTSE 250, just broke through to its all-time level above 15,000. And last but not least, Japan’s Nikkei 225 is extending its gains once more, toward 14,500.

2013-08-05 Weekly Economic Commentary by Team of Northern Trust

July U.S. employment report a bit disappointing. Part-time employment gains are not uniform across nations. Affordable Care Act and small business employment.

2013-08-05 Two Charts Illustrate How to “Follow the Money” by Frank Holmes of U.S. Global Investors

Too often investors get caught up in their political allegiance or parties, focus on the negative and lose confidence in stocks. As a result, they can miss great bull markets. I believe when it comes to finding investment opportunities, it’s not about the political party, it’s about the policies, both monetary and fiscal.

2013-08-02 Avoiding Pricey Low Volatility Investing by Feifei Li of Research Affiliates

Low volatility investing reduces a portfolio’s exposure to the market factor in favor of other historically reliable sources of equity risk premium.But the alluring risk-adjusted performance characteristics of low volatility strategies have lately attracted serious investors, and many managers have developed products to meet the growing demand.Is it possible to preserve the benefits of low volatility investing when prices rise?Feifei Li, Head of Research, suggests implementation refinements that might make a difference.

2013-08-02 Detroit Broke City by Peter Schiff of Euro Pacific Capital

It should come as no surprise that the lessons that should be learned from the bankruptcy of Detroit, a city that once stood as the shining example of America’s industrial might, are being ignored by the American political establishment and its allies in the docile press corps. While the death spiral of the Motor City may be extreme in relation to conditions throughout the country, it is a difference of degree rather than design.

2013-08-02 A Biotech and Pharmaceutical RX by Evan McCulloch of Franklin Templeton Investments

When you visit your doctor or reach into your medicine cabinet for something to cure your ills, you probably don’t think much about the amount of science and innovation packed into that little pill. Evan McCulloch, portfolio manager of Franklin Biotechnology Discovery Fund, has his eye on products in the healthcare, biotechnology and pharmaceutical sectors that have the potential to change the world of medicine. He says new product cycles and therapies have made it a particularly exciting time for the sector, and potentially for investors.

2013-08-02 Stock Forecast: Positive With a Chance of Rally? by Frank Holmes of U.S. Global Investors

The S&P 500 Index closed the month of July with a 4.9 percent gain. What does this increase mean for the next few weeks and following three months? Research suggests markets continue to rally.

2013-08-02 The Shariah Appeal by Mark Mobius of Franklin Templeton Investments

For some, the only guiding rule they have for investing is to grow their assets. For others, the rules are more complicated. Specifically in the Muslim world, demand has been growing for investments compliant with Islamic law (Sharia or Shariah) which adhere to a set of religious beliefs and principles. Considering the global Muslim population is expected to grow to 2.2 billion by 2030, representing more than a third of the world’s total population1, I expect rising demand for Shariah-compliant investment vehicles to continue.

2013-08-02 3 Reasons Silver Is Not the Same As Gold by Russ Koesterich of iShares Blog

Many investors who remain cautious on gold wonder whether they should get their precious metal exposure through silver instead. In response, Russ explains why the two metals aren’t interchangeable.

2013-08-01 Weekly Commentary & Outlook by Scotty George of du Pasquier Asset Management

Throughout the 1980’s, we heard talk from the investment community to “go global”, invest worldwide, perhaps driven by true globalization of corporate exchange and balance sheets, and perhaps also by the need by firms to create “new” products for their consumers to devour. Mutual funds, brokerages, and private equity companies alike saturated the media with product offerings from every corner of the globe and every possible market sector, including telecom, basic materials, energy and industrial development.

2013-08-01 Lack of US Economic Growth May Slow Fed Tapering by Kevin Mahn of Hennion & Walsh Asset Management

While we are encouraged that the U.S. economy has been growing, as measured by Gross Domestic Product (GDP) growth, for 15 consecutive quarters starting in the third quarter of 2009, we are concerned that the growth rate has been below that of previous economic recoveries and the economy appears to be stalling and struggling to get back above a 2% growth rate thus far in 2013.

2013-08-01 Alternatives for Today's and Tomorrow's Market Challenges by Jennifer Bridwell, Sabrina Callin of PIMCO

Investors should consider alternative investment strategies, which could enhance diversification and the potential for alpha, or risk-adjusted returns, because returns from traditional asset classes in coming years may be lower and more volatile than those realized historically.

2013-08-01 July 2013 Market Commentary by Andrew Clinton of Clinton Investment Management

Fixed income investors have enjoyed a steady move higher in bond prices over the past five years. Given the consistency with which bond values have increased, it is understandable if bond investors were surprised by the just over 0.60%, or 60 basis point rise in ten year Treasury yields and corresponding movement down in bond prices during the second quarter.

2013-08-01 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week total AUM in all Active ETFs fell by almost $20 million. This was almost entirely due to redemptions in “Foreign Bond” Active ETFs. The “Short Term Bond” category continues to gain assets and increased by $38 million just last week. Total AUM in this category could possibly surpass the “Global Bond” category in the coming months in trends continue.

2013-07-31 An Important Week on the Economic Front by Scott Brown of Raymond James

The markets have placed too much emphasis on the Fed tapering. Whether policymakers decide to slow the rate of asset purchases in September or December shouldn’t matter all that much. The Fed’s decision will be data-dependent. Note that it’s not the figures themselves that matter. Rather, it’s what the data imply for the overall economic outlook.

2013-07-31 Still High Time for High Yield? by Team of Rainier Funds

Given recent strong performance and yields hovering at historic lows, a current topic of debate has been whether the high yield bond market has become an asset bubble and how much of a risk is the potential end to the Federal Reserve’s accommodative monetary policy to high yield investors. While we at Rainier acknowledge there are current risks in the fixed income market, we believe these concerns are not unique to high yield bonds.

2013-07-31 The Context of Price by Pamela Rosenau of HighTower Advisors

While the stock market has enjoyed a recent rally, some investors are experiencing some “weakness in the knees” as they continue to ascend the climb. These new all-time highs in the market compound the problem for some investors as they suffer from the recency effect, or the not-too-distant memory of significant market losses.

2013-07-31 Investors Pull $17.5 Billion from Bond Mutual Funds in July by Minyi Chen, TrimTabs of AdvisorShares

Investors keeping socking money into U.S. Equities while outflows from bond mutual funds continue. Read this investor insight by TrimTabs Asset Management to learn more about the recent fund flows and what other activity may be foretelling.

2013-07-30 The Power of Diversification and Safe Withdrawal Rates by Geoff Considine (Article)

When Bill Bengen published his seminal research in 1994, a 4% safe withdrawal rate (SWR) was clearly attainable with a variety of asset allocations. But bond yields are lower now than they were then, and equity returns for the next 20 years are unlikely to exceed those of the prior two decades. Indeed, a new paper by three highly respected researchers showed that SWRs for stock-bond portfolios are well below 4%. But as I will demonstrate, a 4% SWR is still possible with a more diversified portfolio ? and without subjecting clients to additional risk.

2013-07-30 Conflicting Crosscurrents Move Equities Sideways by Bob Doll of Nuveen Asset Management

U.S. equities finished last week narrowly mixed, with the S&P 500 falling -0.02%.1 While the second quarter earnings per share growth continues to move higher, revenue growth remains below trend. The economic calendar is focused on this week’s release of the July employment report. Global macro headlines generated more uncertainty than direction for the markets.

2013-07-30 Earnings Take a Back Seat to Policy by Chris Maxey, Ryan Davis of Fortigent

Although it was a quiet week on the economic front, there were a few notable indicators to digest.

2013-07-30 Economic & Capital Market Summary by Gregory Hahn of Winthrop Capital Management

We are approaching the five year anniversary of the beginning of the Financial Crisis. By this time in 2008 we had already experienced the complete seizure of the Auction Rate Preferred securities market and the takeover of Bear Stearns by JP Morgan Chase. In August of 2008, we would see the collapse of Lehman Brothers and the government takeover of AIG. We stand here today, shoulders slumped, and heads bowed mourning the lack of real progress in addressing the structural problems that are impeding sustained economic growth and private credit expansion.

2013-07-30 The U.S. Energy Revolution by Bill O'Grady of Confluence Investment Management

In March 1971, the Texas Railroad Commission (TRC), which allocated oil production for the state of Texas, announced that producers in the state would be allowed a “full allocation.” This was the first time the TRC had allowed Texas producers to supply an unlimited amount of crude oil since WWII.

2013-07-30 Pennies from Heaven, Irrationality, and “Dys-information” by Chris Richey of Neosho Capital

If QE4 holds to course, ending, not just tapering, sometime in mid-2014, the U.S. will have spent 4+ years out of the past 6 living on monetary stimulus, all the while continuing to pile up ever more claims against future prosperity.

2013-07-30 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stock averages were nearly unchanged last week as earnings reports are being reported mostly in line albeit with the usual concerns about the pace of economic activity. This is reflected once again by a lack of revenue growth for many industries.

2013-07-30 Leuthold's Chun Wang on 10-year Rates by Chun Wang of Leuthold Weeden Capital Management

So now the question is how high can it go? Just like every other market, bond yields tend to overshoot, and we think 3% is the upper bound in the short-term. However, we believe it will settle back closer to 250 bps by the end of the year.

2013-07-30 ING Fixed Income Perspectives July 2013 by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

We are constructive on interest rate risks in many developed and emerging economies as global central banks reinforce accommodative monetary policy. We favor the U.S. dollar versus the Japanese yen, the Euro and other developed market currencies. Credit spreads should narrow from current levels as the markets gain confidence and the Treasury market stabilizes. preads offer more than adequate compensation for likely credit losses and a further rise in interest rates. Spreads have been pressured to pre-QE3 levels and mortgages look attractive at these higher levels as prepayment speeds slow.

2013-07-29 And That's the Week That Was by Ron Brounes of Brounes & Associates

So now Prez Obama is sharing his two cents about the economy. After weeks of endless babble from the Fed Chief and his partners in crime about the economy and the longevity of the bond buying program, O is now making job creation his number one priority. Is anyone listening to his urgent messages (certainly no one in DC)? Investors (at least those not on vacation) were less than impressed with the less than impressive earnings of the week, though markets held their own.

2013-07-29 Driftingbut for How Long? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Equities have drifted higher during a decent earnings season with few surprises, while yields have calmed and volatility has plunged. Typical lackluster summer action may prevail for the next month, but action is likely to heat up as the weather begins to cool.

2013-07-29 Why China Has Become a Value Play by Russ Koesterich of iShares Blog

Russ explains why it’s time for investors to change how they think about China, and he explains why there’s a strong case for viewing the Chinese market as a value -- rather than a growth -- play.

2013-07-29 Global Economic Outlook by Team of Northern Trust

Growth is expected to improve in the United States and the United Kingdom while disappointing in Europe.

2013-07-26 Attention 3-D Shoppers by John West of Research Affiliates

Why do retail shoppers love a sale while capital markets flee from falling prices? Investors should consider starting to fill their shopping carts while inflation hedges are cheap....

2013-07-26 Emerging Markets Equity Commentary June 2013 by Team of Thomas White International

Emerging market equity prices declined appreciably on heightened investor concerns over an early withdrawal of the monetary stimulus measures in the developed world. The most recent policy statement issued by the U.S. Federal Reserve, which was more optimistic about the growth prospects for the U.S. economy, and comments by Fed officials seemed to suggest that the central bank is preparing to wind down its bond purchase program.

2013-07-26 Wedding Bells in Romania by Mark Mobius of Franklin Templeton Investments

I was invited to attend the wedding of one of our Romanian staff in June, and I jumped at the opportunity to celebrate with the happy couple, visit a different part of Romania, and talk to locals about life there. The celebration represented a microcosm of the juxtaposition of old and new in Romania, and this is similar for investors there as progress continues toward market reform.

2013-07-26 Is Europe Ready to Take Off? by Frank Holmes of U.S. Global Investors

After the U.S.’s huge run, is it possible the country will be handing off the baton across the Atlantic for the next leg of the relay race? Here are a few areas of strength that could send European stocks higher.

2013-07-26 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Income inequality is rising, but it’s not clear what to do about it. Brazil’s struggles come at a delicate time. Detroit’s road to bankruptcy does not set a path for others to follow.

2013-07-25 A Midyear Update: Getting Back to “Normal” by Douglas Cote of ING Investment Management

Though markets were whipsawed by the announcement, the Fed’s plan to step aside and allow normalization is a good thing. Today, the primary risk for investors to hedge is economic growth and the strong equity returns it tends to produce not financial Armageddon. While risks in Europe and China persist, U.S. fundamentals look relatively strong. Two consecutive quarters of S&P 500 earnings growth prompts a forecast update.

2013-07-25 Perspective by Jim McDonald of Northern Trust

Investors have faced a torrent of central bank actions and communications during the last month, and markets continue to differentiate among economies and companies a welcome maturation from the markets’ prior regime of “risk on/risk off.” We believe the Federal Reserve has moved from an easing bias to one of tightening but at an elongated pace that will remain data dependent. Joining in this parsimony are some key emerging-market central banks, including the People’s Bank of China, which is working to control credit risk in the Chinese economy.

2013-07-25 How Far is Gold Off Course? by Frank Holmes of U.S. Global Investors

Gold has been in extremely oversold territory lately despite drivers for the metal remaining in place.

2013-07-25 No Bargains in the Consumer Discretionary Aisle by Russ Koesterich of iShares Blog

Russ has long advocated that investors remain cautious on consumer discretionary stocks. After last week’s weak economic data, he updates the case for this call.

2013-07-24 Bursting of the Bond Bubble by Clyde Kendzierski of Financial Solutions Group

Our April newsletter focused on the extreme overvaluation in the bond market. I argued that money market funds (or cash) were likely to outperform bonds and bond funds over the next decade. In May I applied the same logic to US stock prices and the inherent fallacy in the prevailing TINA (“there is no alternative” to stocks) hypothesis. Although stocks are likely to outperform bonds over the next decade, both asset classes remain seriously overvalued. In a world of overvalued assets, zero return looks much better than large potential losses even when that means foregoing transitory

2013-07-24 Earnings Acceleration Likely Needed for Next Upturn in Stocks by Bob Doll of Nuveen Asset Management

U.S. equities finished mostly higher last week. For a fourth straight week, the S&P 500 and Dow Jones Industrials were up (returning 0.73% and 0.57% respectively for the week), while the NASDAQ underperformed at -0.34%. It was a busy start for second quarter earnings. More than 70% of the 100 S&P 500 companies that have reported earnings have beaten consensus earnings per share expectations by approximately 3% in aggregate.

2013-07-24 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

This past week, total assets in the active ETF space increased by over $60 million. The top 3 categories (“Global Bond”, “Short Term Bond” and “Foreign Bond”) all saw increases in AUM. The “Alternative Income” category fell in AUM, after weeks of only going up.

2013-07-24 D-Day +1 by Jeffrey Saut of Raymond James

I have termed last Friday (7/19/13) as D-Day because for the past few months my work has targeted that date as a potential turning point for the equity markets. Given the upside stampede, my sense was/is that “turn” would be to the downside for the first meaningful pullback of the year. In past missives I have elaborated on the reasons and clearly the media has “listened.”

2013-07-23 Fantasy versus Factors by Michael Nairne (Article)

Investors who wish to earn market-beating returns have a choice. They can indulge in the fantastical quest for “alpha” via high-cost active managers or they can construct factor tilts in their equity allocations via low-cost exchange traded or enhanced index funds. It doesn’t take a PhD in mathematics to determine which route is more likely to take an investor to higher performance.

2013-07-23 Taper Protection: Where to Go when Rates Rise by Casey Frazier, CFA (Article)

I have fielded a number of questions from advisors about the effects of rising interest rates on real estate values. The negative effect of rising rates is predictable for fixed incomes, but real estate returns vary and are dependent on a number of factors. I will start with a historical analysis that demonstrates the strength of real estate returns during periods of rising rates. Then I’ll outline the factors that drive changes in real estate values in a rising-interest-rate environment.

2013-07-23 Emerging Europe: Regional Economic Review Q2 2013 by Team of Thomas White International

Trimming its forecast for global growth, the International Monetary Fund’s mid-year assessment of the world economy highlighted the slowdown in emerging economies such as Russia and recessionary conditions in the Euro-zone. Still, the recent surge in factory production and rise in new orders brought a whiff of optimism to emerging European markets such as Poland, the Czech Republic, and Hungary, which have been reeling under a prolonged downturn due to weak demand from the Euro-zone.

2013-07-23 And That's the Week That Was by Ron Brounes of Brounes & Associates

Well, at least, the Tigers are leading the AL Central. The city of Detroit filed for Chapter 9 bankruptcy protection this week and pension owners and creditors are lining up to ask for pennies on the dollars on unpaid moneys owed. Detroit officially becomes the largest city in US history to file for such protection as it continues to suffer from a falling tax base after losing 250k residents between 2000 and 2010.

2013-07-23 Emerging Markets: Undervalued or Value Trap? by Chris Maxey, Ryan Davis of Fortigent

In the first quarter, we explored the divergence of emerging market equities from the US. We noted that a combination of factors likely drove the 12% performance differential, including investor risk appetites, inflationary pressures in developing markets, and reduced commodity price expectations.

2013-07-23 Time to Kick the “Ick” Factor for Energy and Materials by Scott Colyer of Advisors Asset Management

Basic materials have been the “biggest loser” of an asset class for 2012 as well as thus far in 2013. Everything tangible, from gold and copper to coal and steel, has acquired an “ick” factor that makes the asset class nearly uninvestable. Shares of companies in these categories are trading at values not seen since 2009 market lows. We are beginning to see some very important developments that might make the group more palatable. In fact, we believe that metals, mining and energy could again become Wall Street darlings.

2013-07-23 You Thought It Was Hot Outside... by Blaine Rollins of 361 Capital

You thought it was hot outside? Wait until you see the weekly cash inflows into U.S. Equities... Funds that hold only U.S. stocks gained $15.58 billion in new cash, the most since June 2008. ETFs that hold domestic equities attracted $12.45 billion of those gains.

2013-07-23 Dear Bernanke - You Can't Have Your Cake And Eat It Too by John Rothe of Riverbend Investment Management

The U.S. stock market continues its euphoric rise into record territory despite continuing weakness in economic data. Recent comments from Federal Reserve Board Chair, Ben Bernanke, indicating that the Fed does not have a predetermined plan to stop its stimulus plan has investors increasing their allocations to equities.

2013-07-22 Middle East/Africa: Regional Economic Review Q2 2013 by Team of Thomas White International

Moderate growth is anticipated in Middle-East and North Africa (MENA) region as the International Monetary Fund (IMF) notes that economic expansion in the oil exporting countries has slowed down due to subdued global oil demand. While oil importing countries are expected to make a slight recovery, nations in transition are facing complex socio-political issues, which could further delay their recovery.

2013-07-22 Can China Give Credit Where It's Due? by Milton Ezrati of Lord Abbett

June was a rough month for China’s economy and its financial markets. Old concerns about sustainable growth came to the fore, as reports surfaced and resurfaced, recounting liquidity shortages, misdirected and excessive credit growth, gyrating interest rates, and signs of weakness in manufacturing. Commentators and analysts alike voiced fears of a Chinese collapse on a par with America’s subprime crisis. For the second time in as many years, several in the global financial community have prophesized a “hard” landing for China’s economy.

2013-07-22 What the *&%! Just Happened? by Ben Inker of GMO

In a new quarterly letter to GMO’s institutional clients, head of asset allocation Ben Inker highlights the period from May 22 to June 24 characterized by "the universality of the declines" across asset classes.

2013-07-22 The Purgatory of Low Returns by James Montier of GMO

This might just be the cruelest time to be an asset allocator. Normally we find ourselves in situations in which at least something is cheap; for instance when large swathes of risk assets have been expensive, safe haven assets have generally been cheap, or at least reasonable (and vice versa). This was typified by the opportunity set we witnessed in 2007.

2013-07-22 4 Reasons to Consider Investing in Frontier Markets by Russ Koesterich of iShares Blog

At a time when investors are worried about Chinese banks and Brazilian riots, investing in the riskiest areas of the emerging world seems counterintuitive. But according to Russ, there are four reasons why many investors should consider having a small allocation to frontier markets.

2013-07-19 Fixed Income Outlook by Team of Osterweis Capital Management

The question we keep asking is “Will the real Fed mandate, please stand up?” The Federal Reserve (the Fed) traditionally is charged with keeping inflation in check, but it also has a second mandate to ensure full employment. This dual mandate can occasionally create general confusion as to what is the best policy at a given time and which policy goal the Fed is trying to achieve. Today, we are at a juncture where the Fed’s mandates may not clearly align with stated future monetary actions.

2013-07-19 Did Bernanke's Dovish Comments Please the Markets? by Sam Wardwell of Pioneer Investments

The key phrase: “About half of these participants indicated that it likely would be appropriate to end asset purchases late this year. Many other participants indicated that it likely would be appropriate to continue purchases into 2014.” Bonds rallied, suggesting that the sell-off of the past few weeks had exhausted itself or overshot (at least for now).

2013-07-19 Print the Legend by Peter Schiff of Euro Pacific Capital

The Trayvon Martin/George Zimmerman tragedy has become one of those transcendent events that dominates the national discourse and throws light on dimly lit aspects of our society. Obviously, the case touches most closely on issues of race relations, media culture, and the politicization of the justice system. It also reveals how preconceived emotional commitments to a narrative can consistently trump demonstrable facts. These tendencies are also present in the polarized discussion about the persistent weakness of the U.S. economy.

2013-07-19 European Equities: Beyond the Headlines by Philippe Brugere-Trelat of Franklin Templeton Investments

It’s fairly easy for investors to find reasons to shun European equities. While struggles in some Eurozone “periphery” countries continue to make eye-catching headlines, the broader story of Europe is far less fatalistic, according to Mutual Series Executive Vice President Philippe Brugere-Trelat, who manages the Mutual European Fund, Mutual Global Discovery Fund and Mutual International Fund. When it comes to Europe, he says one shouldn’t throw out the baby with the bathwater, so to speak.

2013-07-19 Brazilians Demonstrate Their Right to be Heard by Mark Mobius of Franklin Templeton Investments

Brazilians have demonstrated their right to be heard. The unprecedented chain of events that started with complaints about inflation (bus and subway tariffs) has led to mass protests over corruption, lack of public services, and taxes. As a result of the tension and uncertainty in the past few weeks, some investors have lost confidence in Brazil’s market. After talking with our analysts on the ground there I wanted to share some perspective on the situation.

2013-07-19 Is Inflation Really Gone Forever? by Jon Ruff of AllianceBernstein

Recent movements in asset prices suggest that markets have forsaken any possibility of an inflation outbreak in the next decade. We believe that view is far too sanguine.

2013-07-19 7 Things Investors Should Know Now by Russ Koesterich of iShares Blog

Can stocks move higher? What are the best opportunities now in stocks and fixed income? Russ answers these questions and others in an update to his mid-year outlook.

2013-07-19 Challenging a Long-Held Assumption about Commodities by Frank Holmes of U.S. Global Investors

It is widely accepted that China spurred higher commodity prices in the past decade. And if the country was the force behind the boom, then the assumption is that China’s lower, but still healthy growth will be a drag on commodity prices. But recent research challenges this assumption.

2013-07-19 Fixed Income Fed Insight: It's All About Employment by Christopher Molumphy of Franklin Templeton Investments

We can try to guess what the Fed is thinking, but ultimately the Fed is driven by inflation and the labor markets. With inflation seemingly under control, it’s really the labor markets that dominate. So if you want to know what the Fed’s going to be doing, look at the labor markets how many jobs we create each month and, most importantly, the unemployment rate.

2013-07-19 Opportunity in Europe by Team of Neuberger Berman

A striking feature of this year’s global stock market rally is that international markets have significantly trailed U.S. stocks. Nevertheless, Neuberger Berman’s Asset Allocation Committee (AAC) recently made the contrarian call of upgrading its view for international developed markets, particularly Europe. In this Strategic Spotlight, we provide an update on the European economy and lay out some reasons for optimism despite the dour growth outlook.

2013-07-18 ASEANSeeking Further Integration by In-Bok Song of Matthews Asia

Southeast Asia is pushing ahead with an economic initiative analogous to the E.U. called the ASEAN Economic Community (AEC). The 10-member bloc is striving to make this partnershipwhich envisions creating a single market and production base and developing closer economic ties both within the region and the broader global economya reality by 2015. In-Bok Song, takes a look at the benefits and hurdles that may be expected in this lengthy process for further integration of such aspects as liberalized trade, investment, skilled labor and free flow of capital.

2013-07-18 Submissions from Advisor Shares by AdvisorShares Team of AdvisorShares

Two submissions from the AdvisorShares team this week: Money Flowing into Savings Deposits and Money Market Funds by TrimTabs Asset Management and AdvisorShares Active ETF Market Share Update.

2013-07-18 A U.S. Stock Market Rally to Sell by Scott Minerd of Guggenheim Partners

The longer-term outlook for the U.S. stock market remains favorable, but moves in the NYSE advance/decline line suggest caution in the weeks and months ahead.

2013-07-18 Second Quarter 2013 Financial Market Commentary by Andrew Zimmerman of DT Investment Partners

To taper, or not to taper, that is the question that investors are currently grappling with.

2013-07-18 The Death of Disasterism by Steven Vincent of BullBear Trading

From late 2012 I have been gradually layering and developing the thesis that a secular bull market started in November of 2012 (with a possible revised start date of June 2012), ending the sideways secular bear market that started in 2000. Here are the basic components of that thesis through the last report.

2013-07-18 Closed-end Fund Review by Jeff Margolin of First Trust Advisors

Following a quarter in which the average closed-end fund was up 4.31%, the universe of 595 funds was lower by 5.60% on a share price total return basis during the second quarter (both figures from Morningstar). For many funds, most of the weakness occurred during the month of June (when the average fund was lower by 6.09% on a share price total return basis, according to Morningstar).

2013-07-18 What's Next for the U.S. Dollar? by Nic Pifer of Columbia Management

Global government bonds have performed poorly so far this year. Year to date through July 13, the Barclays Global Treasury Index, which covers 30 investment grade domestic government bond markets, is down 5.5% in unhedged U.S. dollar terms. The same index hedged back to U.S. dollars is down 0.6% year to date. This difference in returns highlights a key point.

2013-07-18 Powerful Case for Silver by Peter Schiff of Euro Pacific Precious Metals

I am a well-known "gold bug" because of my strongly voiced opinion that gold has been one of the best assets for protecting yourself from the US dollar’s prolonged decline.

2013-07-17 China's Curbs on Bank Lending: Implications for the World Economy? by Giordano Lombardo of Pioneer Investments

Banks are by far the top-weighted sector group in China, so there’s little chance for the broad market to buck the trend. Indeed the problem is sector-specific at first glance. Policy makers want to curb excess bank lending in an effort to make the industry better managed and more selective.

2013-07-17 The Bernanke Guessing Game by David Wismer of Flexible Plan Investments

There can be little doubt that US equity markets have become more dependent than ever, at least in the short-term, on the every utterance of Fed Chairman Ben Bernanke and his fellow FOMC members.

2013-07-17 Second Quarter 2013 Newsletter by Steve Wenstrup, Jim Tillar of Tillar-Wenstrup

We wrote after the strong first quarter to expect volatility to increase with stocks remaining the preferred asset class and that is largely what happened in the second quarter. Almost all risk assets wobbled after the Federal Reserve (Fed) hinted at a possible tapering of quantitative easing later this year. Regardless, most domestic stocks did well in the quarter.

2013-07-17 Hopelessly Devoted To You by Bill Smead of Smead Capital Management

A journalist from Fortune magazine once asked Andy Grove, the former CEO of Intel, for the best business advice he’d ever been given. Grove provided a simple quote from a former professor at City College of New York: “When everybody knows that something is so, it means that nobody knows nothin’.”

2013-07-17 Fed's Gobbledygook - What Do They Really Mean? by Gary Halbert of Halbert Wealth Management

Recent communications from the Fed and comments by Chairman Bernanke cast a great deal of uncertainty on the equity and bond markets in late June. Specifically, Bernanke’s remarks in his press conference on June 19 where he discussed ending its program of quantitative easing prompted a huge global selloff in the stock and bond markets.

2013-07-17 Canadian Secular View: Into Darkness? by Ed Devlin of PIMCO

Many investors are buying Canadian federal government bonds, shorting Canadian bank stocks and selling Canadian dollars in anticipation of a prolonged downturn. While significant risks are clearly facing the Canadian economy, our baseline forecast does not justify positioning our portfolios for a prolonged Canadian downturn.

2013-07-17 Bubbles Forever by Robert Shiller of Project Syndicate

In 2006, the largest global real-estate bubble in history imploded, and the collapse of a major worldwide stock-market bubble a year later triggered the global financial crisis. Although one might think that we have been living in a "post-bubble" world since then, talk of new bubbles keeps reappearing.

2013-07-16 Nassim Nicholas Taleb: To Prevail in an Uncertain World, Get Convex by Laurence B. Siegel (Article)

Investment professionals know the value of a convex bond ? it gains more from falling rates than it loses from rising ones. According to Nassim Nicholas Taleb, people and institutions can and should position themselves to be convex. Indeed, they should be antifragile ? ready to gain from disorder or uncertainty.

2013-07-16 High Yield Market Overview June 2013 by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch High Yield Master II Constrained Index (the “Index”), was down 2.64% for the month of June. Yields moved sharply higher during the month as the high yield market experienced record retail outflows, quickly adjusting expectations around the Treasury market, and increased equity price volatility. Volatility spiked after a more hawkish message emanated from the Fed after the Federal Open Market Committee (FOMC) meeting on June 19th.

2013-07-16 Investment Bulletin: Global Equity Strategy July by Team of Bedlam Asset Management

For the first half of the year, the 17.7% gain by the portfolio was 390 basis points better than the index; during June, market panic over potential changes in Fed policy resulted in a 3.0% fall in the index, with the portfolio down by a similar amount. US bond funds suffered a record $58 billion outflow during the month, 2%of their assets.

2013-07-16 The Great Rotation Continues Forward... by Blaine Rollins of 361 Capital

Fed Chairman Ben Bernanke grabbed the mic on Wednesday and gave a performance that garnered a standing ovation from Stock, Bond, and Commodity investors. Only U.S. Dollar longs went home dragging their programs and spilling their popcorn. As a result, U.S. equity markets ended the week at all-time highs as stocks remained the darlings of the asset classes.

2013-07-16 Triangulating a Truer Course Through Emerging Markets by Tassos Stassopoulos of AllianceBernstein

Where can you find a car market which will double in size in the next five years? Brazil and Russia might be obvious places to look, but would you have expected Chile, Colombia, Ukraine and Vietnam? Picking the next big themes in emerging consumer markets is even harder than in the well-researched developed world. To get a better handle, we think, requires a triangular approach.

2013-07-16 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

After having had a tremendous first half of the year, what direction might the market take into the next few quarters? On the one hand, trend analysis has indeed turned “positive” and would suggest that the throttle is in full “go” mode. However, we know from historical and economic analysis that markets cannot sustain linear acceleration indefinitely, and that even the most robust trend is susceptible either to linear reversion or cyclical unraveling.

2013-07-16 Arc of a Diver: The Budget Deficit's Plunge by Liz Ann Sonders of Charles Schwab

The budget deficit has been cut by more than halffrom over 10% of GDP to less than 5% today. June saw a budget surplus! The health of the private sector (given its deleveraging since 2007) more than offsets the drag from public sector deleveraging.

2013-07-15 Investment Bulletin: Emerging Markets Equity by Team of Bedlam Asset Management

For the half year to end June the index was buffeted, falling 3.1%. In contrast, the portfolio managed a gain of 8.3%, more than 1,000 basis points better. During the month of June, the Emerging Market index was whacked by 6.4%; the portfolio’s value also fell, but by a lesser 6.2%. The relative year-to-date and longer term falls in some of the regional indices have been grim (Chart 1, p.4): for example, in the first six months of 2013, EM equities underperformed those in developed markets on a total return basis by 16%, and by 14% over the last 12 months.

2013-07-15 Mid-Year Outlook: Waiting to Move Beyond a Muddle-Through Economy by Bob Doll of Nuveen Asset Management

By focusing on current economic conditions while giving due importance to the uncertainty created by Fed actions we offer thoughts for consideration in evaluating “risk-on” investments.

2013-07-15 And That's the Week That Was by Ron Brounes of Brounes & Associates

After weeks of naysaying and fear-mongering about the Fed, investors finally embraced news from Bernanke and friends and equities moved back into record-setting territory. While most accept the fact that the Fed has entered the “beginning-of-the-end” of its bond-buying stimuli, the minutes from the latest policy meeting and a few “comforting” comments from Dr. B. himself helped calm the masses that the program would not end “yesterday.”

2013-07-13 The Bang! Moment Shock by John Mauldin of Millennium Wave Advisors

This week we resume our musings about Cyprus, to see what that tiny island can teach us about our own personal need to engage in ongoing critical analysis of our lives and investment portfolios. Cyprus is not Greece or France or Spain or Japan or the US or (pick a country). I get that. No two situations are the same, but there may be a rhyme or two here that is instructive.

2013-07-12 China's Very Relative Malaise by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at “China’s Very Relative Malaise”, an observation which he describes as “a vaguely uneasy feeling that seemed to be shared by most (Chinese) but not always for the same reasons.”

2013-07-12 Rising Rates: Time to Position, Not Panic by Douglas Peebles of AllianceBernstein

It finally happened. After endless discussion about the potential for rates to rise, they finally didin a big way. During May and June, the 10-year US Treasury yield soared by nearly one percent, and markets reeled. Instead of panicking, investors should make sure their portfolios are positioned effectively.

2013-07-12 Welcome Back Greece to the High-Potential World of Emerging Markets by Mark Mobius of Franklin Templeton Investments

In June, major international equity index provider MSCI confirmed Greece’s sojourn among the ranks of “developed markets” would end later this year as it will become the first-ever country to lose its “developed market” status in the MSCI universe. Interestingly, Greece was classified as emerging when I started with the Templeton Emerging Markets Group in 1987, and while the recent news might conjure up images of a significant turn for the worse for the country’s economic fortunes, MSCI’s explanation for Greece’s reclassification was actually mor

2013-07-12 Bond Yields Gone Wild? by Frank Holmes of U.S. Global Investors

With the Federal Reserve’s intention to taper its easing, yields have risen quickly, causing municipal bonds to experience their worst decline since September 2008. In the second quarter, the Barclays Capital Municipal Bond Index lost nearly 3 percent, with the long end of the yield curve receiving the biggest blow, as bonds maturing in 20 years fell more than 4 percent.

2013-07-12 Deregulating Korean Telecom by Soo Chang Lee of Matthews Asia

Renowned as the world’s most “wired” country, South Korea has been quick to adopt and distribute cutting edge communications technology when it comes to both wired and wireless Internet gadgets.

2013-07-12 Hasenstab: Emerging Out of the Consensus Trade by Michael Hasenstab of Franklin Templeton Investments

Just when is a potential long-term reward worth the short-term risk? Investors are often most focused on the short-term pain of a particular event (hard to blame them), losing sight of possible outcomes farther out into the future. That could partially explain what’s going on in the emerging markets right now, at least according to Michael Hasenstab, co-director of the International Bond Department, Franklin Templeton Fixed Income Group.

2013-07-12 Opportunity Knocks for Mortgage Investors by Matthew Bass of AllianceBernstein

We don’t usually think of rising rates as being good for homeowners. That may be because we’re accustomed to thinking of financing (and refinancing) as the key to reviving sagging housing markets. And it’s true that financing availability remains tight, at least by historical standards, and isn’t going to get looser with rising rates.

2013-07-12 Making Sense of the Bond Market by Phelps McIlvaine of Saturna Capital

The great challenge for investors and advisers today is to forecast where interest rates and bond prices will be once the influence of radical central bank intervention dissipates. Measures of inflation expectations are declining, and deflation remains the dominant influence on interest rates. In assessing whether to trim bond allocations, it is important to revisit the reasons for selecting a particular asset allocation before modifying or abandoning it.

2013-07-12 Weekly Economic Commentary by Team of Northern Trust

The view of Spain’s economy from the ground is no prettier than it is from distance. Not all forward guidance is created equal. China’s suspension of key economic data raises, not quells, concern.

2013-07-12 Commodities 2013 Halftime Report: A Time to Mine for Opportunity? by Frank Holmes of U.S. Global Investors

It was a challenging first half of the year for most commodities, with only two resources we track on our Periodic Table of Commodities Returns rising in value. Natural gas and oil rose 6.5 percent and 5 percent, respectively, while silver lost a third of its value and gold lost a quarter of its price from the beginning of the year.

2013-07-12 Global Markets at Mid-Year by Robert Isbitts of Sungarden Investment Research

Most investors based in the U.S. are walking around thinking “the market has gone way up this year.” They are rightif they are talking about certain indexes within a big wide world of markets, including stocks, bonds, currencies and commodities. But the disparity (i.e. lack of correlation) among markets has been striking. I think that the best way to convey this to you is to simply show you how a small group of market indexes have done for the year-to-date yesterday along with brief commentary, in bullet point form.

2013-07-12 Calming Downand Changing Focus by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Markets are calming and investors seem to be focusing on fundamentals againa nice change from recent history. The bar is relatively low for earnings season but focus will be on the commentary surrounding releases. We believe more sideways movement in both US equities and Treasury yields could prevail over the next couple of months, with summer months muting action; but remain optimistic about stocks longer-term. Likewise, Japan could tread water until new elections are held, but we believe the eurozone provides opportunities that should be looked into at the expense of investments in China.

2013-07-11 The Capital Flight from Safety: It is Not About Tapering it is About Growth by Scott Colyer of Advisors Asset Management

Since Ben Bernanke’s comments seemed to unleash the bond vigilantes on June 19, we have seen a reversal in money flows that have used the U.S. Treasury market and the gold market as a “flight to safety trade.”

2013-07-11 Turmoil and Transition in China by Scott Minerd of Guggenheim Partners

Tensions in Asia are rising, as China attempts to move toward a more market driven economy. This, combined with the ongoing ultra loose monetary conditions in Japan, has elevated the threat of a financial crisis in the region between now and the end of 2013.

2013-07-11 Pacific Basin Market Overview June 2013 by Team of Nomura Asset Management

Equity markets in Asia ended generally lower in the second quarter of 2013 due to concerns over the U.S. Federal Reserve’s apparent shift towards a more balanced monetary policy stance following Chairman Bernanke’s statements suggesting a “tapering” of its asset purchase program.

2013-07-11 The Taper by Richard Bernstein of Richard Bernstein Advisors

If SNL’s Emily Litella worked on Wall Street, she’d probably be asking “What’s all this hubbub about the Fed’s tapir? After all, it’s a fine animal that never hurt anyone on Wall Street.” It would then be pointed out to her that the word was “taper” and not “tapir”. She would politely end her commentary with her famous “Never mind.”

2013-07-10 Rising Rate: Challenge and Opportunity by Gibson Smith, Lindsay Bernum of Janus Capital Group

While the prospect of rising interest rates generally strikes fear into the hearts of fixed income investors, it’s important to remember that periods of rising rates are normal and can create opportunities for active bond managers. Since 1970 there have been 21 periods in which interest rates rose significantly. While each has had its own unique characteristics, over the past 20 years equities have rallied during these periods, which has tended to support corporate credit markets.

2013-07-10 Are You Financially Literate? Take the Test! by Gary Halbert of Halbert Wealth Management

For over a decade, numerous studies have found that most Americans are lacking in their basic knowledge regarding finance and investments. I first reported on this back in 2003 and have done so every few years since then. Unfortunately, things have not gotten better over the years, despite the fact that we went through a major financial crisis in 2008-2009.

2013-07-10 Remember Earnings? by Tom West of Columbia Management

With the ebbing of the quantitative easing taper debate, can we go back to our regularly scheduled programming of earnings driving the stocks? If so, where do we stand? There are certainly some areas where we think estimates are a little high and some where they are too low. But in order to get a better picture of earnings expectations and what is priced in, we need to look at both the earnings and the PE (price-to-earnings) ratio the market has placed on those earnings.

2013-07-10 Market Perspectives Q2 2013: Fed Fears by Richard Michaud of New Frontier Advisors

Investors have been hypersensitive to the inevitable reversal of the Federal Reserve’s bond purchasing economic stimulus program known as QE3. Signs of sustainable economic recovery have been closely monitored as a harbinger of a likely end of the program.

2013-07-10 3 Risks that Could Derail the Market Rally by Russ Koesterich of iShares Blog

Stocks can withstand moderate rate increases, as we saw last Friday when they rallied despite a sell-off in bonds. But Russ K warns that they may not withstand these three other scenarios.

2013-07-09 The Five Best New Investment Ideas: New Age Paradigms for the Post-MPT World by Bob Veres (Article)

Over the past four years, I’ve been collecting the most tangible, concrete post-Modern Portfolio Theory insights offered by professional investors.

2013-07-09 Retirement Portfolios: Fears over Rising Rates are Overblown by Joe Tomlinson (Article)

The second quarter saw increases in interest rates, losses in every category of bonds and investors abandoning fixed-income markets. The distress has been particularly acute among retirement investors who considered bond funds to be safe. But are fears of bond losses overblown? I will make the case that the rise in interest rates is actually good for retirement portfolios. To see this, one has to look beyond the quarterly statement losses and focus on overall retirement outcomes.

2013-07-09 A Mid-Year Letter to Clients: A Positive Outlook on America by Dan Richards (Article)

Each quarter I’ve posted templates to serve as a starting point for advisors looking to send clients an overview of the three months that just ended and the outlook for the period ahead. This quarter’s letter focuses on why the U.S. is expected to be the leader among global economies.

2013-07-09 ENERGY MLPs: A Suitable and Sustainable Asset Class by Sponsored Content from ClearBridge Investments (Article)

Greater capitalization. More liquidity. The energy MLP market has grown steadily, with good reason: our constant demand for energy. While oil prices go up and down, volume has stayed consistent. Production is increasing. And the infrastructure is needed to support it. Add some risk, and you’ve got an investment which could fit in a diversified portfolio.

2013-07-09 Whitney George on 2Q13: Stocks Continue to Look More Appealing Than Fixed Income by Whitney George of The Royce Funds

In addition to detailing what sectors currently look attractive to him from a valuation standpoint, Co-CIO, Managing Director, and Portfolio Manager Whitney George discusses three stocks that exemplify his approach, the current case for active small-cap management, why stocks look more attractive than fixed income, and his opinions on the market’s decline in late June.

2013-07-09 The G8: Sorry, Maybe Next Time by Milton Ezrati of Lord Abbett

While the recent gathering of the Group of 8 industrialized nations addressed worthy topics such as Syria and tax avoidance, it failed to tackle essential economic and fiscal issues.

2013-07-08 AdvisorShares Active ETF Market Share Update Week Ending 6/28/2013 by AdvisorShares Research of AdvisorShares

Total AUM for “Global Bond” ETFs fell again last week by over $200 million, but “Short-Term Bond” Active ETFs continue to gain assets and passed the $4 billion mark this past week. AUM has also been shrinking in the “US Bond” and “Currency” categories, while it has risen in the “Alternative” and “Alternative Income” categories.

2013-07-08 Widening the Search for Income: Beyond Traditional Bonds by Team of Forward Management

Multisector bond market strategies may provide an opportunity to capitalize on differences in relative value. A more refined and global approach may generate yield with dividend-paying stocks. Emerging market (EM) corporate bonds feature attractive fundamentals and have increased in popularity as an asset class.

2013-07-08 Defaults, Growth, Philly Fed and a Collector's Addition by Gregg Bienstock of Lumesis

The first Friday has come and gone. Initial reports were seemingly positive and then, I think, people read the report or they simply were shaking off the cobwebs from their Independence Day celebration. As always, we await the more detailed State, county and city numbers to avoid revisions to data of up to 30%.

2013-07-08 Golden Slumbers by Kenneth Rogoff of Project Syndicate

From the onset of the global financial crisis, the price of gold has often been portrayed as a barometer of global economic insecurity. So, does the collapse in gold prices from a peak of $1,900 per ounce in August 2011 to under $1,250 at the beginning of July 2013 represent a vote of confidence in the global economy?

2013-07-08 Absolute Return Letter: Much Ado about Nothing by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners

A 300 bps rise in bond yields across the term structure would, according to their calculations, do substantial damage to financial institutions’ balance sheets. Holders of U.S. Treasuries alone would lose in excess of $1 trillion on such a move in rates, equal to 8% of U.S. GDP. Other countries would fare even worse. Losses on JGBs would equal 35% of the Japanese GDP, effectively wiping out its banking industry in the process. Holders of U.K. bonds wouldn’t do much better, losing the equivalent of 25% of U.K. GDP.

2013-07-08 Emerging Markets Debt Remains Fundamentally Strong by Claudia Calich, Jack Deino of Invesco Blog

June’s massive bond sell-off, prompted by fears that the Federal Reserve would wind down its bond-buying program, has had a negative trickle-down effect on emerging market debt-dedicated assets, which were hit hard as part of the record $14.45 billion in outflows seen in the overall bond market for the week ending June 12.

2013-07-05 Accessing Myanmar's Growth by Frank Holmes of U.S. Global Investors

Did you know that in the first half of the last century, Myanmar had twice the GDP per capita of China? What a difference a few decades and government policies make, as China is ten-fold the size of Myanmar today, according to UBS Research. The change in wealth between the two nations is a prime example of how government policies can have a tremendous effect on a country’s growth.

2013-07-05 Why Oil Has Proven Resilient by Russ Koesterich of iShares Blog

Crude oil has proven more resilient and less volatile this year (depending on which benchmark you use, it is either up or down in the single digits) than most other commodities. There are three main factors behind this.

2013-07-05 The Asian Giant Stampeding into Gold by Frank Holmes of U.S. Global Investors

In this environment, gold should remain attractive. However, as the West flees the precious metal, another set of gold buyers has come forward with the aim to preserve wealth. Take a look at the chart below which shows total gold production compared to the gold deliveries on the COMEX and the Shanghai Gold Exchange.

2013-07-04 The Free-Trade Charade by Joseph E. Stiglitz of Project Syndicate

The negotiations to create a free-trade area between the US and Europe, and another between the US and much of the Pacific (except for China), are not about establishing a true free-trade system. Instead, the goal is a managed trade regime managed, that is, to serve the special interests that have long dominated trade policy in the West.

2013-07-03 Getting Back to “Normal” by Douglas Cote of ING Investment Management

Though markets were whipsawed by the announcement, the Fed’s plan to step aside and allow normalization is a good thing. The primary risk to hedge is now economic growth and the strong equity returns it tends to produce not financial Armageddon. While risks in Europe and China persist, U.S. fundamentals look relatively strong. It’s not too late for investors to move away from defensive positioning and back toward a standard allocation.

2013-07-03 Long Train Running: Why Stocks Are Rebounding by Liz Ann Sonders of Charles Schwab

Why the June swoon occurred and why it might already be over. Fed’s move toward policy normalization may have a lot to do with pricking perceived asset bubbles; not a more hawkish economic stance. Sentiment has improved notably; but technical conditions may need a bit more repair.

2013-07-03 Investment Bulletin: Emerging Markets Equity by Team of Bedlam Asset Management

The portfolio performed very well in May, taking the year to date net gain to 15.0%, vs. 3.5% for the index. There were two causes for the good numbers: stock selection i.e. ignoring index weightings - and the avoidance of countries with deteriorating balance of payments and budget deficits, and with high government debt to GDP ratios, such as Hungary, Poland, India, Turkey and South Africa.

2013-07-03 Does China's Central Bank Matter More than The Fed? by Sam Wardwell of Pioneer Investments

I’m pleased to share with you the economic and market brief that I prepare for Pioneer’s investment professionals each week. It’s intended to be short but informative, and I hope you find it useful.

2013-07-03 Global PMI: Possible Opportunity for Mining Stocks by Frank Holmes of U.S. Global Investors

For the month of June, JP Morgan Global Manufacturing Purchasing Manager’s Index (PMI) showed a reading of 50.6 for global aggregate manufacturing around the world. A reading of this scale indicates no real change in the market, though the one-month reading brings potentially positive news for some investors.

2013-07-02 Gundlach’s One-Word Explanation for June’s Decline by Robert Huebscher (Article)

According to Doubleline’s Jeffrey Gundlach, a single word explains the declines global capital markets experienced in June.

2013-07-02 Avoiding the Interest Rate Freight Train with Individual Bonds by Stephen J. Huxley, Jeremy Fletcher and Brent Burns (Article)

For bond funds, rising rates mean that total return has to fight losses on the underlying portfolio. As a fund’s net asset value (NAV) declines, coupon interest may not be enough to overcome the price loss. Making the same fixed-income allocation to high-quality individual bonds instead and holding them to maturity is a superior strategy when rates rise.

2013-07-02 Recent Volatility ? Noise, not Signal by Keith C. Goddard, CFA (Article)

This spasm of volatility is a normal side effect when market participants adjust their positions to a new expectation for the future of monetary policy. Even though the policy adjustment being discussed at the Fed is minor ? i.e., a gradual tapering of quantitative easing (QE) ? the timing of the change was sooner than many investors expected, so trading volume jumped.

2013-07-02 The 2013 Mid-Year Geopolitical Update by Bill O'Grady of Confluence Investment Management

At mid-year, we customarily publish our geopolitical outlook for the second half of the year. This list is not designed to be exhaustive. As is often the case, a myriad of potential problems in the world could become issues in the second half of the year. The lineup listed below details, in our opinion, the issues most likely to have the greatest impact on the world. However, we do recognize the potential for surprises which we will discuss throughout the year in upcoming weekly reports.

2013-07-02 Do Dividend-Paying Stocks Have Staying Power? by Nanette Abuhoff Jacobson of Hartford Funds

The role of dividend-paying stocks in a diversified portfolio and the environment in which they are likely to outperform the broader equity market ar