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

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2015-11-30 00:00:00 Getting Smart About Beta by Sponsored Content from Invesco (Article)

Due to its simplicity, market-cap weighting has long been a popular means of calculating the value of market indexes. But as an investment strategy, market-cap weighting has limitations – frequently resulting in outsized proportions of overvalued stocks, and less-than-optimal exposure to undervalued stocks. Smart beta solutions seek to expand investors’ options by providing exposure to objective, rules-based methodologies that harvest returns from specific investment factors or deliver broad market exposure through alternative weighting strategies.

2015-11-27 00:00:00 ECRI Weekly Leading Index: Fractional Increase from Previous Week by Jill Mislinski (Article)

ECRI's latest weekly data point shows a fractional increase from the previous week's number and their latest feature commentary published earlier this week points key points on the current cyclical outlook.

2015-11-27 00:00:00 Diversification: A Hedge Against Market Uncertainty by Jeff Hussey of Russell Investments

Global CIO Jeff Hussey takes a look at three key diversification strategies to help hedge against volatility in 2015 and beyond.

2015-11-27 00:00:00 Why Argentina's New Leader Is Good for Latin America and Global Investors by Frank Holmes of U.S. Global Investors

This week, Argentina said no, gracias to further leftist rule when it elected conservative businessman and two-term Buenos Aires mayor Mauricio Macri to succeed Cristina Fernández de Kirchner as president. It was an upset victory for the people of Argentina, who have seen their once-prosperous nation deteriorate under decades of Marxist policies. It was also a strong win for investors around the globe. Not since Narendra Modi's election last year has a leader's entry on the world stage inspired such bullishness.

2015-11-25 00:00:00 The "Real" Goods on the October Durable Goods Data by Jill Mislinski (Article)

Earlier today the Census Bureau posted the Advance Report on October Durable Goods New Orders. This series dates from 1992 and is not adjusted for either population growth or inflation. Let's now review Durable Goods data with two adjustments. In the charts below the gray line shows the goods orders divided by the Census Bureau's monthly population data, giving us durable goods orders per capita. The blue line goes a step further and adjusts for inflation based on the Producer Price Index for All Commodities, chained in today's dollar value.

2015-11-25 00:00:00 Surveying The Commodity Carnage by Doug Ramsey of Leuthold Weeden Capital Management

Commodities and commodity stocks have been a disaster in recent years, but fortunately one that our Group Selection (GS) Scores managed to avoid. Underperformance in both the Energy and Materials sectors during the last 12 months in particular (Chart 1) is so severe that any contrarian with a pulse probably can’t help but take a peek. We’ll admit the wreckage is beginning to look interesting, and—what with our cautious stance on the stock market—it would be fun to be bullish about something. But both our GS Scores and our intuition suggest it’s still too early.

2015-11-25 00:00:00 Happy Holidays for Risk Assets by Scott Minerd of Guggenheim Partners

Risk assets—particularly high-yield bonds and bank loans—are well positioned to enjoy a prosperous road ahead.

2015-11-25 00:00:00 China’s Macro Disconnect by Stephen Roach of Project Syndicate

China has been highly successful in transforming the industrial structure of its economy from manufacturing to services, but it has made far less progress in boosting private consumption. The country now has no choice but to address the causes of households' high precautionary saving and low discretionary spending.

2015-11-25 00:00:00 To Be Continued … the Fed Drama and Its Implications by David Robertson of Arete Asset Management

The Fed has strung investors along for quite a while in anticipation of the first rate increase in nearly a decade. What would happen if low rates were to become a permanent fixture of the investment landscape?

2015-11-25 00:00:00 Technically Speaking: The Real Value Of Cash by Lance Roberts of Streettalk Live

With the "inmates running the asylum" during a holiday-shortened trading week, the upward bias to the market is set to continue.

2015-11-25 00:00:00 How Should an Asset Allocator Think About The Royce Funds Today? by (Article)

Portfolio Manager Steve Lipper talks with Co-CIO Francis Gannon about why an important ingredient in any recipe for asset allocation is measured by one’s view of the economy. This is why in The Royce Funds, we not only emphasize consistency, discipline, and risk awareness in how we operate, but also offer distinctive strategies designed to perform differently in different market environments.

2015-11-24 00:00:00 Understanding the Two Chinas by Stuart Rae, Hayden Briscoe of AllianceBernstein

Our view that China may be heading for a mild cyclical upswing next year needs to be set against the background of the broader economy, which is changing rapidly. We think that it makes sense to view the economy as consisting of two parts: old and new.

2015-11-24 00:00:00 The Back-and-Forth Continues as Equities Gain Ground by Robert Doll of Nuveen Asset Management

U.S. equities climbed sharply last week, with the S&P 500 Index advancing 3.3%, essentially erasing losses from the prior week.1 Somewhat surprisingly, investors did not focus on the terrorist attacks in Paris, paying more attention to the positives. The October Federal Reserve minutes seemed to strike the right balance between raising expectations for a December rate liftoff and maintaining a measured pace. Merger and acquisition headlines were also in the news and there were some bright spots on the corporate earnings calendar.

2015-11-24 00:00:00 Putin and Flight 9268 by Bill O’Grady of Confluence Investment Management

On October 31, Russian Flight 9268 took off from Sharm el-Sheikh, Egypt, en route to St. Petersburg, Russia. Within 25 minutes, the aircraft had reached its cruising altitude and disappeared from radar over central Sinai. Shortly thereafter, airplane debris was reported over the area. All 224 passengers and crew were lost, making it the worst Russian civilian air disaster in history. In this report, we examine the potential causes of this event. Given that a terrorist group may be the culprit, we discuss the most likely perpetrator and analyze how Russian President Putin will likely react.

2015-11-23 00:00:00 The Long-Term Investing Impact of the Paris Attacks by Russ Koesterich of BlackRock

Russ explains how the tragedy in Paris could impact the global economy and markets going forward.

2015-11-23 00:00:00 Quantitative Tightening by Ritesh Jain, Abhishek Sonthalia of Tata Asset Management

In the last 15 years, emerging economy central banks have been busy accumulating forex reserves to build a buffer against external shocks after having learnt their lessons in the Asian financial crisis, adding more than $10tn in this period. The swing in global foreign exchange reserves is one key measure of the global liquidity tap flow. However, we are witnessing a reversal of reserve accumulation, something last seen at the height of the global financial crisis for a brief while.

2015-11-23 00:00:00 Asian Market Update by (Article)

China’s evolving economic conditions may affect Asian market CEF strategies, says Rennie McConnochie of Aberdeen Asset Management.

2015-11-23 00:00:00 The U.S. Consumer: What Are Their Latest Spending Trends? by Mari Shor of Columbia Threadneedle Investments

Consumers are increasingly spending on experiences over things, while spending on durables continues to take share from non-durables. Traditional retailers are likely to remain under pressure for the foreseeable future although there are several categories which are bucking the trend. Given these pronounced shifts in consumer discretionary spend, it is increasingly important to identify categories and brands that are poised to outperform.

2015-11-23 00:00:00 On My Radar: Global Recession a High Probability by Steve Blumenthal of CMG Capital Management Group

“I have long made the claim that the transnational nature of Europe cannot be sustained. The divergent economic interests of EU countries, some with unemployment over 20 percent, some with it under 5 percent, meant that it was impossible for all of them to live not only under the same monetary regime, but under the same trade regime, which we cannot call free trade with agriculture, among other things, being protected. This would lead to a focus on national interest and on a resurrected nation-state.” -George Friedman

2015-11-22 00:00:00 US Equity And Economic Review: A Narrowing Rally, Edition by Hale Stewart of Hale Stewart

The Conference Board reported the LEIs and CEIs this week: LEIs increased .6% while CEIs rose .2%. The only negative LEI component was the ISM manufacturing new orders index, which subtracted .05% from the total number. But two other leading manufacturing numbers were positive. Perhaps best of all, the average workweek of production workers added to the number. Three of four CEI components expanded; only industrial production contracted.

2015-11-21 00:00:00 What We’re Paying Attention to Following the Paris Attacks by Frank Holmes of U.S. Global Investors

A week ago today, 129 lives were brutally cut short when assailants affiliated with the terrorist group ISIS, also known as the Islamic State, stormed Paris in a series of coordinated attacks. Along with the rest of the world, we were shocked and saddened as the tragic news unfolded, worsening as the night progressed. Our thoughts are with the victims’ families and friends.

2015-11-21 00:00:00 Lessons from Australia and New Zealand on Debt, Immigration, and Food by Carl Tannenbaum of Northern Trust

The arc traced by Australian and New Zealand home prices is a source of broad concern. Property values in Sydney, in particular, have risen by 50% over the past 5 years. Observers from near and far fret that the line between fair value and market excess was crossed some time ago.

2015-11-21 00:00:00 Realism Returns by Liz Ann Sonders, Brad Sorensen & Jeffrey Kleintop of Charles Schwab

Stocks have pulled back after their rip higher in October, which we believe is healthy and in keeping with our expectation of continued volatility. The US economic picture is mixed, but the recent robust labor report boosted the odds of a December Fed rate hike. Finally, while difficult to think about financial matters in the face of such horrific events as the Paris attack, the resilience of both people and economies around the world should give us all hope for the future.

2015-11-20 00:00:00 Stop “QE” Insanity by Don Schreiber, Jr of WBI Investments

In response to the 2008 Financial Crisis, governments around the world led by the U.S. Federal Reserve developed a series of monetary policy tools to try to stabilize the financial system. The two primary policy tools they have employed are a zero interest rate policy (ZIRP) and quantitative easing (QE). We believe that these policies have created a high-risk paradigm for investors who have come to believe that easy monetary policy can drive asset prices higher, forever.

2015-11-20 00:00:00 Waiting for the Fed by Anthony Valeri of LPL Financial

The inverse correlation between stocks and high-quality bonds failed to hold over the past week, after holding for October 2015, suggesting other forces are at work. The answer to the bond market’s indifference to risk asset performance may lie in market fixation over a possible Federal Reserve (Fed) rate hike in December 2015. According to fed fund futures pricing, market expectations for the timing of the Fed’s first rate were essentially unchanged, with the probability of a December rate hike marginally lower on the week to 64% from 70%.

2015-11-20 00:00:00 South Korea 2.0 by Michael Oh of Matthews Asia

Some key differences between Korea’s older companies and its newer “2.0 firms.” include their target demographics, regional reach and branding tied to rising interests in Korean pop culture, or K-pop. Whereas the products of Korea’s more traditional and longer-standing exporters were geared toward developed economies, its newer cultural exports are a hit with more developing countries. This month Asia Insight explores such cultural exports, including those from industries as travel & leisure and entertainment, which are growing even faster than Korea’s overall export growth.

2015-11-19 00:00:00 Political Turmoil in Portugal by Kaisa Stucke of Confluence Investment Management

Portugal held parliamentary elections in which the incumbent center-right Social Democratic Party received the most votes but fell short of an outright majority. The president tasked the party with forming a government. However, the center-left opposition party and some far-left parties have formed a coalition, together garnering a majority of votes and currently awaiting presidential approval to form a government and take control from the center-right party. This week, we look at Portugal’s current political environment, election results, change in coalition powers and path going forward.

2015-11-19 00:00:00 Global Economic Perspective: November by Franklin Templeton Fixed Income Group of Franklin Templeton Investments

While China’s manufacturing sector—which drove China’s rise to its place as the world’s second-largest economy—has been losing steam, it is being supplanted by a domestic, consumer-led economy propelled by a rising middle class with growing income. Other Asian countries are on a similar trajectory.

2015-11-19 00:00:00 Tragedy In Paris by Burt White of LPL Financial

Our thoughts are with the victims of Friday’s terrorist attacks in Paris. Events like this stir up many powerful emotions, including anger, fear, sadness, confusion, and regret, and these emotions are not easily suppressed. It is difficult to shift our attention away from this tragedy and toward the financial markets in times like this, but it is our responsibility to do so. Here we look at the potential stock market impact of Friday’s tragedy.

2015-11-19 00:00:00 Economy Is Improving, Yet Most Americans Are Pessimistic by Gary Halbert of Halbert Wealth Management

Today we tackle several issues. We start with the fact that several new surveys show that most Americans remain pessimistic about the economy and the direction the country is headed. This is despite the fact that the economy has been growing for the last five years, the unemployment rate is the lowest in seven years and the stock market has more than tripled since 2009.

2015-11-19 00:00:00 Newsletter Volume 8, No. 5 - November 2015 by Harold Evensky of Evensky & Katz / Foldes Financial Wealth Management

AMAZING AND VERY COOL! From my friend Peter: The French restaurant «Le Petit Chef» (The Little Chef) came up with an original way to entertain guests while waiting for their orders — using a projector on the ceiling, animation appears on the table.

2015-11-18 00:00:00 The Dollar Is Peaking Out To A 146-Month High by Eric Bush of GaveKal Capital

It took about a year of consolidation but it looks like the dollar could be on the verge of another breakout higher. After trading in a fairly tight range since the beginning of this year, the nominal trade-weighted dollar (major currencies) has poked out to its highest level since 9/4/2003.

2015-11-17 00:00:00 The Paris Attacks by Bob Veres (Article)

Here is a letter you can send to clients in response to the Paris attacks.

2015-11-17 00:00:00 A New Challenge to Factor-Based Investing by Robert Huebscher (Article)

Disciples of factor-based investing need to respond to a new challenge. According to Mark Kritzman, investors will be better served by a strategy based solely on allocating to asset classes.

2015-11-17 00:00:00 Equities Decline, But Long-Term Trends Look Positive by Robert Doll of Nuveen Asset Management

U.S. equities came under pressure last week, with the S&P 500 Index falling 3.6%, its largest pullback since late August. A number of issues contributed to the decline, including valuation concerns driven by the recent price rally and struggling earnings. Some negative earnings results from department stores and ongoing unease over Fed policy also contributed to souring sentiment. For the week, utilities was the only sector to advance, while energy, technology and consumer discretionary led the way lower.

2015-11-17 00:00:00 Yield: One Commodity That’s Still Hot by Russ Koesterich of BlackRock

BlackRock Chief Investment Strategist Russ Koesterich discusses investors’ quest for ample sources of income

2015-11-17 00:00:00 Rising Rates? How About Some Inflation First? by Jeffrey Baker of HiddenLevers

Some pundits have expressed surprise the Fed did not raise rates in September, citing low unemployment and improving GDP numbers as evidence the Fed has gone too far with its dovish policies. Unfortunately, many market commentators gloss over the relationship between interest rates and inflation. HiddenLevers examined the effects of inflation in our End of Inflation webinar, and we have summarized some of our takeaways below.

2015-11-17 00:00:00 Weighing the Week Ahead: What is the Message from Falling Commodity Prices? by Jeffrey Miller of NewArc Investments, Inc.

Attention quickly shifted from the perceived strength in the monthly employment report to the stock market decline. While some blamed this on the expectation of higher interest rates, there was also plenty of focus on the commodity markets. I expect this interest to continue in the week ahead.

2015-11-17 00:00:00 Gasoline and Coffee Fuel Our Daily Lives. Can Commodities Also Fuel Our Investment Portfolios? by Bransby Whitton, Klaus Thuerbach, Kate Botting of PIMCO

Commodities are a tangible part of our daily lives. They are the food we eat, the energy that powers our cars and heats our homes, the metals that go into our electrical wiring and our jewelry. Yet investing in commodities can seem elusive.

2015-11-17 00:00:00 Why We Believe Emerging-Markets Stocks are Attractive by Rajat Jain of Litman Gregory

There is certainly no arguing that over the short term, investing in emerging-markets stocks can be a bumpy ride. This is especially true if you invested in the asset class during the crisis-prone years of the late 1990s and early 2000s. When asked why we believe in investing in the asset class, we point to our overarching belief that emerging markets' macroeconomic fundamentals are much better now than they were during those crisis-prone years. In this update, we provide further background on our analysis.

2015-11-17 00:00:00 Are We Heading into a Rising Rate Environment? Historically, High Yield Bonds Have Done Well by Steve Rumsey of Optimus Advisory Group

As the Federal Reserve inches closer to raising interest rates, many fixed income investors are becoming increasingly worried about an expected negative impact on their portfolios. With cash rates at zero and the stock market looking tenuous at best, conservative investors have no place to go other than to look for the areas of the bond market that might survive a series of Fed rate hikes.

2015-11-17 00:00:00 Deconstructing the Consumer Price Index by Jill Mislinski (Article)

Let's do some analysis of the Consumer Price Index, the best known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart below illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U, which I'll refer to hereafter as the CPI.

2015-11-16 00:00:00 Volatility Takes Center Stage in 2015 by Clas Olsson of Invesco Blog

Looking back over the last three to four years, global market performance has been driven mainly by quantitative easing, with little to no profit growth internationally. This, in turn, has led to significant multiple expansion. Market leadership has been driven by defensive stocks, such as consumer staples, as pricing power and emerging market demand for products and services helped them sustain growth.

2015-11-16 00:00:00 A December Rate Hike Would Not Be the Fed's First Act of Tightening by Alex Christensen of Columbia Threadneedle Investments

Investors preparing for the shock on risk-on assets as a result of Fed tightening may be surprised to realize that they have already been feeling these shocks. The impact of a single 25 basis point hike as a part of a slow, years-long rate-rise cycle will likely be modest compared to the impact of the end of QE3. Now that panic has retreated following August and September’s volatility, the view that a rate hike is not a death knell for portfolios, whether risky or not, is emerging once again.

2015-11-16 00:00:00 Are Emerging Markets Turning a Corner? by Mark Mobius of Franklin Templeton Investments

We consider many of the factors driving recent volatility in emerging markets to be temporary in nature and compounded by typically low summer liquidity—thus we believe we have grounds to be optimistic longer term.

2015-11-16 00:00:00 How to Invest in a Slowing China World by Bryce Coward of GaveKal Capital

The obvious question is then how one positions their portfolio in a world where China is on a structurally slowing growth trajectory. In an effort to not over-complicate things, let’s look at China from the 30,000 foot view. From this perspective we observe two things that will unfold over the next decade.

2015-11-16 00:00:00 The Bubble Right In Front Of Our Faces by John Hussman of Hussman Funds

Investors have a habit of pointing to past bubbles as if they have actually learned something, even when they are in the midst of another one.

2015-11-16 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

After rising 6 weeks in a row, equities fell hard this week. SPY has returned to the bottom of its former trading range. NDX, which is leading, closed an important open gap that should now provide initial support. So far, no foul for either. A number of studies suggest an upside edge in the short term. Overall, however, risk is rising, as the market now has a potentially bearish technical pattern that it didn't have in August.

2015-11-14 00:00:00 The Gig Economy Is the New Normal by John Mauldin of Mauldin Economics

It’s not just Uber driving or AirBnB. There are literally scores of websites and apps where you can advertise your services, get temporary or part-time work, and do so from anywhere you happen to be. Some “gigs” actually pay pretty good money, but they are for people with specialized skills who prefer to live a somewhat different lifestyle than the typical 9-to-5’er does.

2015-11-13 00:00:00 A New Era Begins, and Not Just for China by Hayden Briscoe of AllianceBernstein

As we approach the end of 2016, we’re increasingly of the view that we’re nearing the end of one investment era and the beginning of another. We expect this global trend to be positive for China, but it might have a downside for some risk assets.

2015-11-13 00:00:00 The Bullish Case for Aussie Gold by Frank Holmes of U.S. Global Investors

There’s a gold bear market here in North America, where the yellow metal has plunged to a six-year low of $1,083 per ounce on the strong U.S. dollar. But when priced in the weaker Aussie dollar, the precious metal is sitting at $1,520. As recently as last month, it touched $1,642.

2015-11-13 00:00:00 APViewpoint Events presents: A Live Debate: Should the Fed Raise Interest Rates? by APViewpoint (Article)

Two industry thought leaders face off on the most contentious economic issue confronting advisors and investors today: the Fed’s stance on interest rates. In this live, Munk-style debate moderated by Larry Siegel, John and Frank will take opposing sides.John and Frank will answer attendees’ questions during the webinar and will also be available to continue the discussion on APViewpoint. Attendees can also vote on the proposition both before and after the debate. Results for both votes will be compared to determine the “winner.”

2015-11-13 00:00:00 Gasoline and Coffee Fuel Our Daily Lives. Can Commodities Also Fuel Our Investment Portfolios? by Bransby Whitton, Klaus Thuerbach, Kate Botting of PIMCO

Commodities are a tangible part of our daily lives. They are the food we eat, the energy that powers our cars and heats our homes, the metals that go into our electrical wiring and our jewelry. Yet investing in commodities can seem elusive.

2015-11-13 00:00:00 Do You Believe that China is “Fixed” as Copper Plunges to New Lows? by Bryce Coward of GaveKal Capital

The last two days have been met with the usual monthly slue of Chinese economic statistics including retail sales (+10.4% YoY), auto sales (+11.8% YoY), industrial production (+5.6 YoY), fixed asset (infrastructure) investment (+10.1% YoY), and bank loans (+15.6% YoY), among others.

2015-11-13 00:00:00 A Decisive Monetary Policy Approach Is About More Than Economics by John Beck of Franklin Templeton Investments

With monetary policy divergence between the developed world’s three most influential central banks set to continue, it seems clear to us that the need for a decisiveness of approach extends beyond a simple economic argument.

2015-11-12 00:00:00 On Why Emerging Market Funds Are Ill Equipped to Capitalize on a Rebalancing China by Bryce Coward of GaveKal Capital

We’ve hashed out the arguments for a persistently slowing China in this blog many times, so we won’t go there again today. Instead, we want to focus on a different aspect of the slowing China reality: the fact that most investment products that focus on emerging markets are overweight exactly the wrong economic sectors. In the scenario of a slowing and rebalancing China, the areas of the economy that are likely to benefit the most are different from the areas that gained from the infrastructure build out since 2000.

2015-11-12 00:00:00 How to Fly in Turbulent Emerging Markets by Sammy Suzuki of AllianceBernstein

Emerging markets may be stormier these days, but they’re still brimming with opportunities. You just need to know how to find them. That’s going to take some skillful piloting—and highly sensitive downside-risk radar.

2015-11-12 00:00:00 The End of Fiscal Obstruction by Joachim Fels of PIMCO

Fiscal policy in the U.S., eurozone and Japan looks set to become (mildly) supportive for growth.

2015-11-12 00:00:00 3 Unusual Aspects of the Current Market by (Article)

Co-CIO Francis Gannon talks about how abnormally high returns are unsustainable, why the fundamental laws of capitalism will once again reward profitable companies, and how investor preferences for lower quality and more speculative growth over the past several years have given the kinds of companies we want to own for the long term favorable valuations.

2015-11-11 00:00:00 What Would It Take for the Prime U.S. Workforce to Fully Recover? by Jill Mislinski (Article)

The reaction in the popular financial press to last week's Employment Report for October was one of surprise. The unemployment rate dropped to 5.0% and the number of new nonfarm jobs (a relatively volatile number subject to extensive revisions) jumped to 271K. The popular consensus was that the surprising number of new jobs was an outlier and that new jobs will continue to improve, but not at the rate for October.

2015-11-11 00:00:00 It's Groundhog Day for the Markets by Mark Burgess of Columbia Threadneedle Investments

The likelihood of subdued economic growth means that interest rates will be lower for longer. There will no longer be a rising tide of U.S.-led QE that lifts all boats. We think that a selective approach in equities will pay off as investors focus more on valuations and fundamentals.

2015-11-11 00:00:00 High Yield Energy: Paths of Valuation and Correlated Effects by David Kleinberg of Universal Orbit

An observer may rightly state the bull case for oil and related investment thesis is not one of prescience but only precarious sentiment. True a simple wager on the directional valuation of commodity pricing may set the course, perhaps even amplified by modest use of leverage. In the Energy sector, valuating macroeconomic drivers consistent with the permutations of effects on corporate performance is measurable in degree though often variable in the most desired performance metric—timing.

2015-11-11 00:00:00 Technically Speaking: Short-Term Bull Or Bearish Top by Lance Roberts of Streettalk Live

Over the last couple of weeks, I have discussed the entrance of the markets into the seasonally strong period of the year and the potential to increase equity exposure in portfolios on a "short-term" basis.

2015-11-11 00:00:00 ETFs: Before You Buy, Read the Warning Label by Peter Kraus of AllianceBernstein

We don’t hate ETFs. In fact, we use them ourselves and are considering managing client assets in the active ETF space. When used properly, these instruments can be a useful component in a well-diversified portfolio. But ETFs aren’t perfect, and relying heavily on them without understanding their imperfections is risky.

2015-11-10 00:00:00 Sticking with Your Asset Allocation by Seth Masters of AllianceBernstein

An investment plan will work only if an investor has the emotional fortitude to stick with it. That’s easier said than done, particularly with a more aggressive portfolio, when market conditions are rough.

2015-11-10 00:00:00 Japan: The Quest for Growth and Inflation by Michael Hasenstab of Franklin Templeton Investments

Abenomics [in Japan] constitutes a true regime change and has already had a significant impact—but the road to sustainably higher growth and inflation is still long.

2015-11-09 00:00:00 Weighing the Week Ahead: What Will Higher Interest Rates Mean for Financial Markets? by Jeffrey Miller of NewArc Investments, Inc.

Friday’s employment report, rightly or wrongly, confirmed expectations for a December shift in Fed policy. There will be a parade of Fed speakers. We can expect daily discussion about the implications. The punditry will be asking: What will higher rates mean for financial markets?

2015-11-09 00:00:00 Psychological Whiplash by John Hussman of Hussman Funds

Investors have experienced a great deal of whiplash in recent months. After a rapid but relatively contained retreat in August and September, the stock market has rebounded to within 2% of its May record high. Only weeks ago, investors were concerned about economic deterioration. As of Friday, strength in nonfarm payrolls has suddenly convinced investors that a December rate hike by the Fed is all but certain.

2015-11-09 00:00:00 CEF Market Update by (Article)

As relatively wide discounts persist, the closed-end fund market presents potential opportunities to investors, says John Cole Scott of CEF Advisors.

2015-11-09 00:00:00 Emerging Markets Winners and Losers: Q3 2015 by Jackie Lafferty of Loomis Sayles

Investor risk aversion battered emerging market (EM) assets during the third quarter. Local currency and hard currency markets both posted negative gains and EM equities posted double digit losses.

2015-11-09 00:00:00 On My Radar: Resolve To Keep Happy by Steve Blumenthal of CMG Capital Management Group

“U.S. interest rates are already zero. Japanese interest rates are zero also. European interest rates are negative. All of these central banks have printed trillions of dollars in their respective currencies under various QE programs. They are at the point where they simply cannot print trillions more without risking political backlash or the collapse of confidence in their currencies.” – James Rickards

2015-11-07 00:00:00 Get Ready for Commodity Liftoff: Global Manufacturing Just Made a HUGE Move! by Frank Holmes of U.S. Global Investors

As Donald Trump might say: This is going to be huge.

2015-11-07 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

Equities have risen strongly after the first sell off of more than 10% in 3 years. They are doing so into the seasonally strongest months of the year for equities. Sentiment has not yet become overly bullish. Macro is supportive. Normally, this combination would be a set up for higher prices ahead. That said, after a 12% gain in one month, the normal pattern is for at least a minor retrace. Post-NFP and into the often soft mid-month period, that pattern might well be next.

2015-11-07 00:00:00 Bad News Is Good News, Once Again by Scott Minerd of Guggenheim Partners

Central banks’ aversion to any downturn should support the current rebound in risk assets through the end of the year.

2015-11-07 00:00:00 The October Jobs Report Gives the Fed a Green Light by Carl Tannenbaum of Northern Trust

The first Friday of each month is filled with tension for those in my line of work. The U.S. employment data, arguably the most important international economic release that we receive, comes out on those days.

2015-11-06 00:00:00 Prepare for a More Volatile Market Now by Harin de Silva of Analytic Investors, Sub-Advisor of 361 Capital

Q&A with Harin de Silva, President of Analytic Investors. He has seen his share of market selloffs over the years. Yet, with the end of the latest bull market likely nearing, he’s not worried about increased volatility—and investors don’t have to be either, he says.

2015-11-05 00:00:00 EU Migrant Crisis: Focus on Hungary by Kaisa Stucke of Confluence Investment Management

It is fairly evident that the EU was not prepared to deal with the current magnitude of migrant movement into the region. This crisis presents a political dilemma for Europe and may lead to the re-establishment of border controls, intensify internal schisms over the extent of sovereign/EU authority and possibly sow the seeds of the dissolution of the EU. This week, we look at how Hungary is handling the migrant crisis and what its actions may signal for other European countries. We start with Hungary’s history, which has shaped it into a country that often directs a changing tide for Europe.

2015-11-05 00:00:00 Are We In The Final Run To Lower Lows – Or Will The Market Offer Another Fake Out? by Avi Gilburt of

The only reason someone believes the rest of the market is delusional is because the market is moving in the opposite manner in which they believe the market should move. And, anyone that thinks we need to listen to what the Fed says in order to understand the appropriate directional moves of the metals market was clearly not listening to the Fed in 2012-2015, or was simply on the wrong side of the market.

2015-11-05 00:00:00 Are We In The Final Run To Lower Lows – Or Will The Market Offer Another Fake Out? by Avi Gilburt of

The only reason someone believes the rest of the market is delusional is because the market is moving in the opposite manner in which they believe the market should move. And, anyone that thinks we need to listen to what the Fed says in order to understand the appropriate directional moves of the metals market was clearly not listening to the Fed in 2012-2015, or was simply on the wrong side of the market.

2015-11-05 00:00:00 Despite emerging market declines, long-term outlook bright by John Kearney of Cedar Hill Associates

While emerging market equities were among the strongest-performing assets in the wake of the global recession, their returns have languished over the last few years, underperforming domestic and international developed markets. Below, Senior Research Analyst John Kearney explains the recent challenges affecting emerging markets and why Cedar Hill believes this asset class should continue to have a spot in client portfolios.

2015-11-04 00:00:00 QE’s Creeping Communism by Peter Schiff of Euro Pacific Capital

Most economists and investors readily acknowledge that the current period of central bank activism, characterized by extended bouts of quantitative easing and zero percent interest rates, is a newly-blazed trail in economic history. And while these policies strike some as counterintuitive, open-ended, and unimaginably expensive, most express comfort that our extremely educated, data-dependent, central bankers have a pretty good idea as to where the trail is going and how to keep the wagons together during the journey.

2015-11-03 00:00:00 Three Keys for Advisors When Implementing Alternatives by Sponsored Content from Invesco (Article)

• For almost 25 years, I’ve worked with financial advisors regarding the use of alternative investments. • I’ve found three common traits among advisors who have the greatest success, i.e., satisfied clients who understand their investments and their results.

2015-11-03 00:00:00 Global Growth Should Strengthen Next Year, Lifting Equities by Robert Doll of Nuveen Asset Management

Markets were mixed last week, but the S&P 500 Index was up 0.2%, posting its fifth consecutive weekly gain. Last week’s highlight was Wednesday’s Federal Reserve meeting. The central bank left rates unchanged, but indicated the possibility of an increase in December. Corporate earnings were also in the news, with several companies posting positive results. The health care sector made a notable turnaround to become the best performing last week while utilities lagged.

2015-11-03 00:00:00 Tech Stocks: Brace for a Bursting Bubble? by Milton Ezrati of Lord Abbett

Any potential downturn in the tech sector might cause pain for some investors, but it likely would pose little danger to the overall U.S. economy.

2015-11-03 00:00:00 6 Reasons To Be Bullish (or Not) On Stocks by Lance Roberts of Streettalk Live

In between inspecting my kids candy cache for "safety reasons," which is parent code for eating the Snickers bars, I read an interesting piece by Simon Constable via U.S. News.

2015-11-03 00:00:00 Market Remains Overvalued, But Off Its Interim High by Jill Mislinski (Article)

Here is a summary of the four market valuation indicators we update on a monthly basis.

  • The Crestmont Research P/E Ratio
  • The cyclical P/E ratio using the trailing 10-year earnings as the divisor
  • The Q Ratio, which is the total price of the market divided by its replacement cost
  • The relationship of the S&P Composite price to a regression trendline

2015-11-02 00:00:00 Should FIFAA Be Red-Carded? by Niels Jensen of Absolute Return Partners

No, I haven’t gone bonkers – the focus of the Absolute Return Letter has not all of a sudden switched to football. Nor have I lost the ability to spell correctly, although I am sure that there are one or two like-minded readers out there who would also like to see the rear side of Sepp Blatter one final time.

2015-11-02 00:00:00 How European Insurance Portfolios Can Benefit From Alternatives by Tom Collier, Matthieu Louanges, Jeroen Van Bezoouen of PIMCO

Adding alternatives may not only make economic sense, but it also has the potential to improve European insurers’ return on capital.

2015-11-02 00:00:00 Last Gasp Saloon by John Hussman of Hussman Funds

Historically, when the stock market has deteriorated internally following a recent period of overvalued, overbought, overbullish conditions, we know that market outcomes have been negative on average. But what if the S&P 500 Index falls below its 200-day moving average, and then recovers above it again? Doesn’t that recovery signal a resumption of the bull market? The answer largely depends on market internals.

2015-11-02 00:00:00 Chuck Royce on the Current State of the Small-Cap Market by (Article)

The small-cap market finished 3Q15 with a double-digit decline, in many ways similar to the correction investors saw around this same time last year. CEO Chuck Royce sits down with Co-CIO Francis Gannon to discuss why he believes corrections are a sign of healthy market behavior, the importance of risk management in the small-cap space, and why he thinks a new market cycle will favor companies with earnings.

2015-11-02 00:00:00 In China and Brazil, Macro Headwinds Reveal Stock Opportunities by Mark Jason of Invesco Blog

The third quarter was one of the most difficult quarters I can remember for Asia and Latin America, as stocks and currencies tumbled. However, markets can change quickly, and the Invesco International and Global Growth team believes the fall in valuations has made our markets more attractive for long-term investors now than they were just three months ago.

2015-11-02 00:00:00 Economic Review and Outlook by John Calamos, John Hillenbrand, David Kalis, Nick Niziolek, Eli Pars of Calamos Investments

The third quarter proved difficult for investors as apprehension about slowing global growth and monetary and fiscal policies converged. Volatility soared while equities declined sharply and commodities plummeted. Heading into the final months of the year, our positioning is cautious but reflects our view that the markets offer many opportunities, particularly among growth-oriented equities and convertibles, along with high yield.

2015-11-02 00:00:00 Crestmont Market Valuation Update by Jill Mislinski (Article)

Quick take: Based on the October S&P 500 average of daily closes, the Crestmont P/E is 87% above its arithmetic mean and at the 97th percentile of this fourteen-plus-decade monthly metric.

2015-11-01 00:00:00 A Look at Secular Bull and Bear Markets by Doug Short (Article)

Was the March 2009 low the end of a secular bear market and the beginning of a secular bull? At this point, six years later, the S&P 500 has set an inflation-adjusted record high.

Let's examine the past to broaden our understanding of the range of historical trends in market performance. An obvious feature of this inflation-adjusted series is the pattern of long-term alternations between up-and down-trends.

2015-11-01 00:00:00 US Bond Market Week in Review: Using Last Year's Model For This Year's Problem, Edition by Hale Stewart of Hale Stewart

The problems inherent in the Fed’s reasoning makes it look more and more that they’re using last year’s ideas for this year’s problems. It appears more and more that central bankers need to drastically rethink their models and assumptions.

2015-11-01 00:00:00 US Equity and Economic Review: Where's the Revenue Growth? Edition by Hale Stewart of Hale Stewart

If the SPYs hit a record high, I don’t see it lasting, barring a change in the underlying fundamentals.

2015-11-01 00:00:00 International Economic Week in Review: It's A Brave New Policy World, Edition by Hale Stewart of Hale Stewart

From a policy perspective, the decline in Chinese demand and the relative over-supply of commodities within China adds downward pressure to a variety of commodities. This situation is likely to continue.

2015-10-30 00:00:00 Henderson Geneva: Overview & Investment Philosophy by (Article)

In this latest video update, Michelle Picard, CFA, Portfolio Manager, provides an overview on Henderson Geneva’s history and the investment team. Picard highlights the time-tested investment philosophy where the team engages in bottom-up, fundamental analysis to identify high quality companies. Further, she explains why she believes investing in such proven, high quality companies can lead to competitive returns with below average risk over the market cycle.

2015-10-30 00:00:00 Have Commodities Reached an Inflection Point? by Frank Holmes of U.S. Global Investors

This week the Federal Reserve announced that it would delay the interest rate liftoff yet again, but while everyone seems concerned about nominal rates—the federal funds rate, in this case—real rates have already risen about 5 percent since August 2011. This “invisible” rate hike is much more impactful to commodity prices and emerging markets than a nominal rate hike, which is simply the “tip of the iceberg.”

2015-10-29 00:00:00 On U.S. Growth: Near-Term Concern, Long-Term Optimism by Dr. Brian Jacobsen, CFA, and John Manley, CFA of Wells Fargo Asset Management

The global economic landscape raises near-term concern, but long-term optimism. Wells Fargo’s Dr. Brian Jacobsen, CFA, and John Manley, CFA discuss growth obstacles and prospects, as well as portfolio positioning.

2015-10-29 00:00:00 Corporate Beige Book by Burt White of LPL Financial

According to our new Corporate Beige Book, China has been a popular subject of discussion among corporate management teams this earnings season. Similar to the Federal Reserve’s (Fed) Beige Book, a qualitative assessment of the U.S. economy and each of the 12 Fed districts, conference call transcripts for third quarter 2015 company earnings reports can be used to create a Corporate Beige Book—a window into corporate America.

2015-10-29 00:00:00 Emerging Markets Equity Commentary: September 2015 by Team of Thomas White International

Emerging market equity prices declined further in September, as fears about slower global economic growth persisted. External trade data from China was weaker than expected and accentuated investor concerns that the world’s second largest economy could miss current growth targets. Nevertheless, retail sales in China continued to expand at a healthy pace in August as the central bank’s interest rate cuts and other policy measures lifted domestic consumer sentiment.

2015-10-29 00:00:00 Equity Investment Outlook October 2015: Global Growth Scare: Is it Warranted? by John Osterweis, Matt Berler of Osterweis Capital Management

During the third quarter, global markets were roiled by heightened investor uncertainty and downright fear that China’s slowing economic growth might tip the global economy into recession. The selling pressure that took hold in mid-August had all the elements of a mini panic. The only assets that held their value or posted gains were cash and investment grade bonds. The further out one looked on the risk spectrum, the worse the decline.

2015-10-29 00:00:00 Seeing the Forest for the Trees: The Role of Investment Yield in a Portfolio by Marc Odo of Swan Global Investments

Chasing Investment Yield or Total Return - How investors may be missing the big picture when chasing yield from fixed income in a low yield world.

2015-10-28 00:00:00 The Inherent Problem Of Eternal Bullishness by Lance Roberts of Streettalk Live

This past weekend, Akin Oyedele penned an article via Business Insider entitled "I went to a seminar with one of the world's largest banks and almost everything said there was really bearish." Akin seems genuinely shocked the data suggests economic growth may not be on the cusp of surging and stocks might fail to deliver double-digit returns. However, since I was long ago excised by the media for allowing the "data to speak," let me clarify, for both you and Akin, why HSBC is likely correct in their analysis.

2015-10-28 00:00:00 4Q 2015 Outlook: Key Issues Have Not Changed Much This Year by Michael Avery, Cynthia Prince-Fox, Chace Brundige of Ivy Investment Management Company

As the final quarter of 2015 begins, we are reminded of several topics of focus from the start of the year: concerns that global central bankers are stuck with their current monetary policies because the global economy now depends on them; market acceptance that higher U.S. interest rates are inevitable, even if they rise only slightly; and favorable prospects for U.S. consumers, who benefit from a stronger labor market and lower energy prices. If the topics sound familiar now, it is because little has changed in these areas while global risks have increased for several reasons.

2015-10-28 00:00:00 Six Key Signals for the U.S. Economy by Milton Ezrati of Lord Abbett

Good news and bad news: Here are four reasons why an economic downturn now is unlikely—and two reasons why a sudden pickup is equally unlikely.

2015-10-28 00:00:00 The Obama Doctrine: Moneyball America by Bill O’Grady of Confluence Investment Management

Over the past three years, we have witnessed what appears to be a steady erosion of American power. In this report, we will examine President Obama’s foreign policy, using the construct of Ian Bremmer’s recent book, Superpower. After discussing President Obama’s foreign policy and the potential effects, we will examine how the next president may shift from the current policy. As always, we will conclude with potential market ramifications.

2015-10-28 00:00:00 Under the Tuscan Sun by Jeffrey Saut of Raymond James

Obviously we are back, back from two weeks in Tuscany with 32 of our best and dearest friends. The group included industrialists, the heads of European operations for two of the largest clothing/shoe companies in the world, an L.A.-based reality TV producer, tax attorneys, the CEO of a large title insurance company . . . well, you get the idea.

2015-10-28 00:00:00 On My Radar: I’m Rooting For Ray by Steve Blumenthal of CMG Capital Management Group

There is a great deal of research around investor behavior. For example, our brains notice when a group provides an answer that is different from ours, the disparity is unpleasant. For many, aligning with the group is more rewarding for the brain than being independent and correct.

2015-10-28 00:00:00 Is Now a Good Time to Buy REITs? by Wilson Magee of Franklin Templeton Investments

Investors in US REIT stocks may use a variety of valuation methodologies in making investment decisions, but we think one of the most important of those considers the underlying value of properties using transactional evidence in the real estate investment market itself.

2015-10-26 00:00:00 How Market Cycles Are Completed by John Hussman of Hussman Funds

Wide market cycles have been a central feature of the stock market across history. Even a run-of-the-mill bear market decline typically wipes out more than half the gain of the preceding bull market.

2015-10-26 00:00:00 Q: Is the Chinese Rate Cut a Silver Bullet? A: No! by Bryce Coward of GaveKal Capital

Today the Peoples Bank of China cut the benchmark interest rate by .25% and lowered banks’ reserve requirements by .5%. The measure is supposed to spur growth and make life a little easier on debt-ridden Chinese companies. In the immediate term it may give a slight boost to the economy, but there is no chance this measure, or others like it, will keep the Chinese economy from slowing much further in the years ahead. Let us explain.

2015-10-26 00:00:00 Weighing the Week Ahead: Will the Fed Put the Brakes on the Breakout? by Jeffrey Miller of NewArc Investments, Inc.

The week ahead is loaded with data reports and earnings news. The FOMC has another meeting and rate decision. It occurs in the context of a nice stock rebound. The punditry will be asking: Will the Fed put the brakes on the breakout?

2015-10-26 00:00:00 International Economic Week in Review: Analysts Converge, Edition by Hale Stewart of Hale Stewart

Normally, analysts’ projections diverge somewhat around a statistical norm. That is, it’s usual for a group of 40 analysts to project the upcoming quarterly GDP growth rate between 1% and 3%. Currently, however, there is a fair degree of uniformity among analysts regarding the outlook. And that’s not a good sign.

2015-10-26 00:00:00 The Four Totally Bad Bear Recoveries: Where Is Today's Market? by Doug Short (Article)

This chart series features an overlay of the Four Bad Bears in U.S. history since the market peak in 1929. They are:

  1. The Crash of 1929
  2. The Oil Embargo of 1973
  3. The 2000 Tech Bubble bust and,
  4. The Financial Bubble and Crisis.

2015-10-24 00:00:00 Someone Is Spending Your Pension Money by John Mauldin of Mauldin Economics

We are going to talk about the slow-motion train wreck now taking shape in pension funds that is going to put pressure on many people who think they have retirement covered. Please feel free to forward this to those who might be expecting their pension funds to cover them for the next 30 or 40 years. Cutting to the chase, US pension funds are seriously underfunded and may need an extra $10 trillion in 20 years. This is a somewhat controversial letter, but I like to think I’m being realistic. Or at least I’m trying.

2015-10-23 00:00:00 If the Buck Stops Here by Colin McWey of Heartland Advisors

If the dollar continues to weaken, it could provide support for some attractively valued cyclical areas of the market.

2015-10-23 00:00:00 Global Growth Forecast - Q4 (Infographic) by Rick Harrell of Loomis Sayles

The global economy is in the midst of a major rebalancing, and many themes we have tracked since the start of the year intensified during the third quarter. Every quarter, we update our forecast map. Read on for our global highlights.

2015-10-23 00:00:00 Momentum Strategies: Knowing When to Leave the Party by Scott Bennett of Russell Investments

Understanding how momentum may help to diversify a portfolio is a lot like knowing when to leave a party: it helps to have a clear eyed partner who understands trends and their potential impact.

2015-10-23 00:00:00 Indexing the Past by Bob Rice of Neuberger Berman

Today’s financial world disputes many of the most basic assumptions of yesteryear’s investing “truths.” Globalization, the rise of a “winner take all” digital economy and markets led by policymakers have redrawn the investing map in profound ways.

2015-10-23 00:00:00 The SP-500 200-day average “Goodbye Kiss” by Dwaine Van Vuuren of

The SP-500 today has met back with its 200-day moving average after spending a “protracted period” of 46 trading days below it. Contrary to popular belief, history since 1972 shows this to be a bearish event, with more downside likely.

2015-10-23 00:00:00 Fixed Income Perspective: Fed Challenges and EM Dynamics by (Article)

In this latest video update, Phil Apel, CFA, Head of Fixed Income, James McAlevey, CFA, Portfolio Manager, Steve Drew, Head of Emerging Market Credit and Stephen Thariyan, Global Head of Credit examine recent market volatility and share their views on what it means for investors going forward. Apel comments on the drivers of volatility and contrasting returns in market sub sectors. McAlevey and Drew discuss the sensitivity that the Fed and emerging markets have felt with recent market volatility, while Thariyan highlights where to find value in the credit markets.

2015-10-23 00:00:00 Global Economic Perspective: October by Franklin Templeton Fixed Income Group of Franklin Templeton Investments

Overall, while there are plenty of ‘problem children’ in the emerging-market space, there are undoubtedly assets and currencies being beaten down by broad-brush assessments of economic prospects that merit renewed attention.

2015-10-23 00:00:00 Inspiration from the World of Sports by Howard Marks of Oaktree Capital Management

An angle on the investing/sports analogy has occurred to me: an investment career can feel like a basketball or football game with an unlimited number of quarters. We may be nearing December 31 with a substantial year-to-date return or a big lead over our benchmarks or competitors, but when January 1 rolls around, we have to tackle another year. Our record isn’t finalized until we leave the playing field for good. Or as Yogi Berra put it, “It ain’t over till it’s over.” It was Yogi’s passing in late September that inspired this memo.

2015-10-23 00:00:00 Follow the Leaders: Learning from ETFs, BCA and the New PM by Frank Holmes of U.S. Global Investors

Yesterday I had the pleasure of attending an intensive daylong ETF conference in Austin, just up the road from our office in San Antonio. Hosted by Cantor Fitzgerald, the conference was designed for institutional investors.

2015-10-22 00:00:00 Four Strategies for Navigating the Equity Environment Ahead by Andrew Pyne of PIMCO

Recent market turmoil suggests we could be at a turning point for equities. After several years of high returns and low volatility as the market rebounded off the lows of 2009, supported by unprecedented monetary policies, investors are faced with broadly full valuations, global growth that is still uneven and the prospect of rising rates in the U.S. In this environment we suggest four simple approaches that could enhance returns while potentially reducing risk.

2015-10-21 00:00:00 The TPP by Bill O’Grady of Confluence Investment Management

On October 6, trade negotiators announced a final agreement for the Trans-Pacific Partnership (TPP), a multilateral trade deal between 12 Pacific Rim nations in both the eastern and western hemispheres. In this report, we will begin by discussing the nations involved. We will examine some of the details of the treaty. An analysis of the geopolitics will follow along with a look at specific political factors surrounding the treaty. As always, we will conclude with potential market ramifications.

2015-10-21 00:00:00 U.S. Labor: A Slow-Working Recovery by Milton Ezrati of Lord Abbett

The pace of improvement is nowhere near as rapid as in past rebounds. Here’s a look behind the numbers.

2015-10-21 00:00:00 An Important Rebalancing Milestone by Andy Rothman of Matthews Asia

Third quarter macroeconomic data shows that Chinese consumers shrugged off the A-share market fall, with a small acceleration in spending. While many headlines may declare that China’s 6.9% GDP growth was the slowest since 2009, it should be noted that this pace of growth was on a base that is about 300% bigger than it was a decade ago (when GDP growth was 10%), meaning that the incremental expansion in China’s economy this year is about 60% bigger than it was back in the day.

2015-10-21 00:00:00 On My Radar: Lucy, Charlie Brown and the Fed by Steve Blumenthal of CMG Capital Management Group

All over the world, all eyes are zeroed in on the Fed. No pun intended.

2015-10-20 00:00:00 Moving a Little Too Fast by Christian Thwaites of Brouwer & Janachowski

The markets remain Fed led. The theme this week was that we will not see a rate increase until 2016. Why? Well, Federal Reserve board members rarely speak with uniformity. But on Monday, a closed day for the bond market, Governor Brainard delivered a stinging rebuff to the “December, when the economy is at full employment” position with a clear description of the asymmetric risk of lifting rates too soon versus too late.

2015-10-20 00:00:00 Risk-Adjusted Return: A Better Small-Cap Measure by Stephen Grant of Value Line Funds

For most investors, the first step in evaluating a mutual fund is to look at its historical performance despite mutual fund disclosure that “past performance is no guarantee of future results.” The second step likely would be to look at a fund’s rating by a financial data company such as Morningstar or Lipper, but these ratings are primarily derived from past performance, so the investor returns to square one.

2015-10-20 00:00:00 Will Gold Finish 2015 with a Gain? by Frank Holmes of U.S. Global Investors

After its stellar performance last week, gold might do something it hasn’t done since 2012—that is, end the year in positive territory. You can see past returns for yourself in our perennially popular Periodic Table of Commodities Return.

2015-10-20 00:00:00 Four Takeaways on Alternative Opportunities Today by Marc Gamsin, Greg Outcalt of AllianceBernstein

Dispersion among asset classes and individual stocks and bonds will likely increase, and that’s only one trend reshaping the landscape and redefining alternative investing opportunities. Here are four things investors should consider.

2015-10-20 00:00:00 European Deleveraging Continues: Alternatives Investment Themes for 2016 by Joshua Anderson of PIMCO

With European bank deleveraging expected to continue for the foreseeable future, there are several developing opportunities to look to take advantage of.

2015-10-20 00:00:00 Why Job Productivity Numbers are a Good Economic Indicator by Russ Koesterich of BlackRock

Current readings of this important, but often ignored, U.S. economic number suggest a more difficult macro landscape ahead. Russ explains.

2015-10-20 00:00:00 Back to the Present by Jeffrey Saut of Raymond James

On Wednesday of this week (10/21/15), residents of Hill Valley, California are warned to be on the lookout for a flying DeLorean driven by a guy in a white lab coat with crazy hair, and a squeaky-voiced “teen” wearing several layers of out-of-style clothes. If these two are spotted, it is HIGHLY advised that you do not interact with them at all, as doing so could ultimately unravel the very fabric of the space-time continuum. More specifically, whatever you do, please refrain from relinquishing any copy of the Gray’s Sports Almanac (1950-2000 Edition) that you may possess.

2015-10-19 00:00:00 The Hinge by John Hussman of Hussman Funds

One of the central themes I’ve emphasized over the past year is the critical importance of using market internals as a gauge of investor risk-seeking and risk-aversion. Over the long-term, investment returns are driven by valuations – particularly on a 10-12 year horizon. Over shorter horizons, and more limited portions of the market cycle, the primary driver of investment returns is the preference of investors to seek or avoid risk.

2015-10-19 00:00:00 Where to Look for Outperforming Active Managers by Bob Veres (Article)

Not all stock-pickers are winners, and winning funds tend to be scattered all over the various sectors of the market. Is there a way to analyze the different segments of the global opportunity set, and determine the best places to look for those outperforming managers?

2015-10-19 00:00:00 Venerated Voices™ for Q3 of 2015 by Jill Mislinski (Article)

Here are our Venerated Voices awards for articles published in the third quarter of 2015. Rankings were issued in three categories: The Top 25 Venerated Voices by Firm, The Top 25 Venerated Voices by Author and The Top 10 Venerated Voices by Commentary.

2015-10-17 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

Equities have risen 8% off their lows. Price is now near the prior trading range from which the waterfall collapse began in August. It would be normal to see selling pressure increase, as trapped longs finally achieve breakeven. But fund managers are overweight cash; they’ll want to be more fully invested before year-end. Upward momentum is therefore likely to prevail in the months ahead.

2015-10-17 00:00:00 Will Gold Finish 2015 with a Gain? by Frank Holmes of U.S. Global Investors

After its stellar performance this week, gold might do something it hasn’t done since 2012—that is, end the year in positive territory. You can see past returns for yourself in our perennially popular Periodic Table of Commodities Return.

2015-10-16 00:00:00 The Slowdown In Global Trade In 6 Charts by Eric Bush of GaveKal Capital

The last two US recessions have severely damaged the growth rate in global trade. In each case, the trend growth rate of trade since 1991 (which is when the CPB World Trade Monitor data begins) was effectively cut by at least a percent. Emerging markets have helped to keep global trade afloat especially relative to developed markets, however, even in emerging markets we have seen a step down in the growth rate of trade.

2015-10-16 00:00:00 Market Overview Q315 by David Robertson of Arete Asset Management

Turmoil in the third quarter signaled some important changes that are going to require investors adopt new playbooks in order to succeed.

2015-10-16 00:00:00 Hoisington Quarterly Review and Outlook – 3Q2015 by Van Hoisington, Lacy Hunt of Hoisington Investment Management

Future business activity will reflect two economic realities: 1) the over-indebted state of the U.S. economy and the world; and 2) the inability of the Federal Reserve to initiate policies to promote growth in this environment.

2015-10-15 00:00:00 South Africa’s Sporting and Economic Scorecard by Johan Meyer of Franklin Templeton Investments

Dubbed the “rainbow nation” after the end of apartheid in 1994, South Africa had much to be hopeful about. In 2010, it achieved heightened recognition among investors when it became the fifth member of the “BRICS” grouping of emerging market economies, along with Brazil, Russia, India and China. While its economy and demographics differ from other BRIC countries, it has one thing in common with Brazil, Russia and China: It has hosted major global sporting events over the years. South Africa hosted the FIFA World Cup five years ago, and it hosted and won the Rugby World Cup 20 years ago

2015-10-15 00:00:00 83 Attractive Dividend Growth Stocks for Your Retirement Portfolios: Part 2A by Chuck Carnevale of F.A.S.T. Graphs

I recently completed a 3 part series of articles offered to assist retired investors in designing the equity portion of their retirement portfolios. In part 1 of this series found here I presented Peter Lynch’s 6 broad categories of stocks (businesses) that he wrote about in his best-selling book “One Up On Wall Street.” The primary objective of this first article was simply to provide the reader a general idea of the various categories of common stocks that were generally available to choose among.

2015-10-15 00:00:00 3rd Quarter Commentary by John Prichard, Miles Yourman of Knightsbridge Asset Management

The third quarter produced the worst return for the S&P 500 Index in four years, wiping out the prior year’s gains. Peak to trough declines from 2014-15 index highs to recent lows were even greater.

2015-10-14 00:00:00 Emerging Market Debt: An End to the Agony? by Jim Cielinski of Columbia Threadneedle Investments

Capitulation by many EMD investors has created opportunities in many of the more resilient countries. We favor countries moving down the reform path and where there is significant impetus to reign in excessive government spending. Valuations have reached the extremes that allow a selective approach to EM to now represent a key part of an income-oriented portfolio.

2015-10-14 00:00:00 Catalonia, a New State within Europe? by Kaisa Stucke of Confluence Investment Management

“Catalonia, a new state within Europe” is the slogan of the pro-independence movement in the Spanish region of Catalonia. The federal government has made it clear that it will not hold secession negotiations and, in fact, even holding an independence referendum is considered unconstitutional. This week, we look at the separatist movement in Catalonia, starting with a brief overview of the region’s history and politics. We explore the probability of independence, the potential future relationship between the region and the central government, and the roles of the EU and the Eurozone.

2015-10-14 00:00:00 Upcoming Debt Ceiling Fight Could Get Really Ugly by Gary Halbert of Halbert Wealth Management

Here we go again – another debt ceiling battle will play out between now and November 5 when the Treasury says it will run out of “extraordinary measures” to fund the government without exceeding the current debt limit of just over $18 trillion. If the debt ceiling is not increased, the US government will default on its debt.

2015-10-14 00:00:00 Is the Sky Really Falling? by Richard Bernstein of Richard Bernstein Advisors

While most investors remain hesitant to make a move, the recent market correction created a great entry for savvy investors. One must ask themselves if this is the beginning of the end or merely a bump in the road of a continued bull market.

2015-10-13 00:00:00 US Bond Market Week in Review: When Doves Cry, Edition by Hale Stewart of Hale Stewart

The latest Fed Minutes noted the US is still in fairly good shape. The US consumer continues spending, unemployment is low, retail sales are expanding moderately, and purchases of durables goods (vehicles and houses) are positive. The primary negative is weak wage growth. But the strong dollar, weak overseas economies and slowdown in the oil patch is hurting the manufacturing sector.

2015-10-13 00:00:00 3Q 2015 Smead Capital Management Quarterly Newsletter: The Red, Green, and Beige Room by William Smead of Smead Capital Management

One of the great investing books of the last 40 years was David Dreman’s, Contrarian Investment Strategy. He started it by telling of a hypothetical gaming casino with two separate, but adjoining, rooms: the red room and the green room. The red room was packed with people and excitement and almost every day someone hit a huge jackpot setting the building on fire with electricity. Every seat was packed, others waited their turn to play and the anticipation was palpable.

2015-10-13 00:00:00 Stocks Push Higher, But Earnings May Be a Roadblock by Russ Koesterich of BlackRock

BlackRock Global Chief Investment Strategist Russ Koesterich discusses the catalysts for last week's stock rally, the specter of weak earnings ahead, and asset classes we favor.

2015-10-13 00:00:00 4 Warnings And Why You Should Pay Attention by Lance Roberts of Streettalk Live

When I was growing up my father, probably much like yours, had pearls of wisdom that he would drop along the way. It wasn't until much later in life that I learned that such knowledge did not come from books, but through experience.

2015-10-13 00:00:00 U.S. Economy: Have We Defused the Debt Bomb? by Milton Ezrati of Lord Abbett

Governments, businesses, and consumers have had some success in deleveraging since the 2008–09 financial crisis, but the improvement has been uneven.

2015-10-12 00:00:00 Another Look at the Total Return Roller Coaster by Doug Short (Article)

Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $18,100 for an annualized real return of 11.92%.

2015-10-12 00:00:00 International Economic Week in Review: Now the IMF Lowers Growth Projections, Edition by Hale Stewart of Hale Stewart

This week, it was the IMFs turn to downgrade their global growth projections, which they did on October 6: The IMF’s latest World Economic Outlook (WEO) foresees lower global growth compared to last year, with modest pickup in advanced economies and a slowing in emerging markets, primarily reflecting weakness in some large emerging economies and oil-exporting countries.

2015-10-12 00:00:00 Not The Time To Be Bubble-Tolerant by John Hussman of Hussman Funds

One of the important investment distinctions brought out by the speculative episode of recent years is the difference between the behavior of an overvalued market when investors are risk-seeking, and the behavior of an overvalued market when investors shift to risk aversion. The time to be tolerant of bubbles is when the uniformity of market internals provides clear evidence of risk-seeking among investors.

2015-10-10 00:00:00 How these 12 TPP Nations Could Forever Change Global Growth by Frank Holmes of U.S. Global Investors

The current members include Canada, the United States, Mexico, Peru, Chile, Japan, Vietnam, Malaysia, Brunei, Singapore, Australia and New Zealand.After nearly seven years of negotiations, the TPP promises to deliver unprecedented free and fair global trade among the 12 participant nations.

2015-10-10 00:00:00 Europe's Immigrants May Solve Native Problems by Carl Tannenbaum of Northern Trust

The aging of Europe's postwar generation has placed the working-age population on a downward trajectory.

2015-10-09 00:00:00 Hasenstab Sees Once-in-a-Multi-Decade Opportunities by Michael Hasenstab of Franklin Templeton Investments

There are a handful of countries that are being caught up in the current market turmoil that we think are the diamonds in the rough—multi-decade opportunities, once-in-the-history of some of these countries—opportunities.

2015-10-09 00:00:00 Q3 — a Stark Reminder Why Portfolio Resilience Matters by Jeffrey Knight of Columbia Threadneedle Investments

Now is a good time to review strategies for improving overall portfolio efficiency and reducing or truncating downside risk. There are several strategies that are particularly well-suited for truncating downside risk. The third quarter reminds us that thinking about stability and resilience can be just as important as thinking about opportunity and profit.

2015-10-09 00:00:00 Investing versus Flipping by Chris Brightman of Research Affiliates

Newport Beach may be known as home to PIMCO (and, of course, Research Affiliates). Locally, however, the business of Newport Beach is real estate finance. Many of my local friends have made a bundle in recent years flipping houses in Orange County (the OC). I have also purchased some houses over recent years, but as an investment rather than as a flip. In this article, I explain the difference between investing and speculating by sharing my personal experience investing in residential real estate.

2015-10-08 00:00:00 Chart of the Week: Is It Time to Enjoy High Equity Risk Premiums? by Richard Skaggs, Craig Burelle of Loomis Sayles

The global average equity risk premium (ERP)–is 6.5%.This is good news for equity investors. With current low inflation across developed markets, the expected return from a portfolio of equities appears very attractive because earnings retention plus dividend yield is far above the sovereign bond yields, and also far above inflation in most markets.

2015-10-08 00:00:00 Third Quarter 2015 Newsletter - Corrected Market! by Jim Tillar, Steve Wenstrup of Tillar-Wenstrup Advisors

The US stock market finally succumbed to selling pressure that has been affecting financial markets across the globe. For over a year volatility has been a feature of the world's currency, credit and commodity markets. In addition, many world stock markets have been in correction mode, especially emerging markets. Financial markets are interconnected so as poor economic news piled up last quarter all stock markets headed lower.

2015-10-08 00:00:00 Technically Speaking: The Real Correction Is Still Coming by Lance Roberts of Streettalk Live

In last week's update, I discussed the short-term oversold condition that existed at that time. To wit: "As you will notice, the reflexive rally, and subsequent failure, have tracked the original predictions very closely up to the point. With the market once again very oversold on a short-term basis, it is likely that the markets could manage a weak rally attempt over the next few days."

2015-10-08 00:00:00 September Jobs & Manufacturing Reports Disappoint Again by Gary Halbert of Halbert Wealth Management

As is becoming increasingly frequent, we will touch on several bases today, given that there’s so much going on these days. (Speaking of bases, How ‘bout them Texas Rangers!!) Hitting several topics in a single E-Letter makes it more interesting and fast-paced for me, and I hope the same is true for you. After all, YOU are what this is all about. That’s why I always value your input, positive or negative, so much.

2015-10-08 00:00:00 A Very British Recovery by Mike Amey of PIMCO

The UK appears to be experiencing a typical British recovery, but needs further improvement to tolerate rising interest rates.

2015-10-07 00:00:00 Investing Through Volatility: Finding Opportunities in a Slow-Growth Environment by John Calamos, Sr. of Calamos Investments

We continue to believe the U.S. stock market is in a reset period, as investors contemplate the prospect of slowing global economic growth, mixed messages from the Fed (potential tightening) and the continued easing from other central banks (Japan, China and the ECB). Market participants seem concerned about the central banks’ inability to manufacture inflation after several years of near-zero interest rates. These concerns have resulted in higher volatility, catching many investors off guard.

2015-10-07 00:00:00 Putin and Syria by Bill O’Grady of Confluence Investment Management

Last month, Russia moved a significant amount of military hardware into areas of Syria controlled by the Assad regime. The action caught the Obama administration by surprise and raises questions about what Russian President Putin is trying to accomplish. In this report, we will examine Russia’s short-term geostrategic goals and the tactics Putin is using to achieve these aims. As always, we will conclude with potential market ramifications.

2015-10-07 00:00:00 Where's the Capital Spending Recovery? by Milton Ezrati of Lord Abbett

Companies, awash in cash, remain reluctant to invest in new plants and equipment. That could hamper long-term U.S. economic growth.

2015-10-07 00:00:00 On My Radar: Defaults Will Breach the Historical High Next Year – The Fed is the “Wild Card” by Steve Blumenthal of CMG Capital Management Group

“The Fed is the “wild card” that has the power to determine how quickly the current credit cycle ends.” – Ed Altman

2015-10-07 00:00:00 Mom and Investment Underdogs by Jerry Wagner of Flexible Plan Investments

I was talking with a friend the other day about troubles in his family. At one point he remarked, “A mother is only as happy as her saddest child.” It’s a saying that has been attributed to Jackie Kennedy (and that is certainly understandable), but I think it goes much further back in time. My wife said her mother used to say it when she was growing up.

2015-10-06 00:00:00 Money Glut: More to Come, Still Effective by Joachim Fels of PIMCO

Given global lowflation pressures, the central-bank-fueled money glut is likely to increase further before year-end.

2015-10-06 00:00:00 Under Pressure: Earnings Recession Warning; Economic Recession Watch by Liz Ann Sonders of Charles Schwab

Many of the questions I’ve been getting recently at client events are around earnings, and whether the expected move into negative territory for earnings growth is a signal of a pending economic recession.

2015-10-05 00:00:00 Rethinking 'Safe Haven' Assets in a Multi-Asset Portfolio by Sponsored Content from Invesco (Article)

• Correlations have risen between perceived ‘safe haven’ assets and equities • Volatility has been a positive performer in falling equity markets, and we see it as a diversification tool in multi-asset portfolios • We look for areas where we think the markets' implied relative risk is an opportunity

2015-10-05 00:00:00 Does Wells Fargo Add Value for Investors? by Larry Swedroe (Article)

Assets in actively managed mutual funds have been a consistent source of revenue growth for Wall Street banks. But would investors have been better off in passively managed funds? I’ll answer that question for Wells Fargo and then for the group consisting of the four largest banks.

2015-10-05 00:00:00 A Growing Risk of Recession by John Hussman of Hussman Funds

With the S&P 500 within about 8% of its highest level in history, with historically reliable valuation measures at obscene levels, implying near-zero 10-12 year S&P 500 nominal total returns; with an extended period of extreme overvalued, overbought, overbullish conditions replaced by deterioration in market internals that signal a clear shift toward risk-aversion among investors; with credit spreads on low-grade debt blowing out to multi-year highs; and with leading economic measures deteriorating rapidly...

2015-10-05 00:00:00 Evaluating Sustainable Competitive Advantages: Entry and Exit Barriers by Baijnath Ramraika, CFA and Prashant Trivedi, CFA (Article)

This article is the first in a series discussing an assessment process for existence or absence of sustainable competitive advantages. In this article, we discuss the basic building blocks of an investment process designed to identify high-quality businesses: the entry and exit barriers.

2015-10-05 00:00:00 September 2015 Market Commentary by Joe Becker, Adam Schenck, Jeff Greco of Milliman Financial Risk Management

In the second half of Q3, higher volatility was the rule rather than the exception as markets wrestled with the implications of a global economy in flux.

2015-10-05 00:00:00 The Bull Market Still Lives by Brian Wesbury, Robert Stein of First Trust Advisors

Stock market corrections (usually defined as 10% pullbacks) are hard to understand. Often they happen in the midst of long-term bull markets. But why? Is it like getting the flu? Is it just emotion? Or, are corrections a necessary cleansing out of excess optimism? Our answer: we don't really know.

2015-10-05 00:00:00 US Bond Market Week in Review; Did the Window Close, Edition? by Hale Stewart of Hale Stewart

A rate hike of at least 25 basis points was a done deal a few months ago. But recent global and domestic events have greatly lowered that possibility. It began with the Chinese equity sell-off followed by the surprise yuan devaluation. Recent Chinese manufacturing weakness adds to the mix. Although some recent US news has been positive, continued price weakness, lower industrial production and a recent employment slowdown show the US is not immune to the slowing international environment.

2015-10-05 00:00:00 Green Shoots in China? by Nick Niziolek of Calamos Investments

Over the next weeks, there will be a great deal more data for us to evaluate, including foreign reserves data on October 6. Signs of stabilization in foreign reserves and savings deposits would point to a reduced risk of capital flight, which would give us more confidence in a gradual depreciation of the renminbi. We’ll also be watching for mid-month data on imports. If these green shoots begin to take hold and the markets can become comfortable that a hard landing is off the table for the near term, we wouldn’t rule out a fourth quarter rally in Chinese and global equity markets.

2015-10-04 00:00:00 Recession Watch by John Mauldin of Mauldin Economics

If recovery from a banking crisis can take ten years and we are only seven years in, I expect (barring aliens) that we have a few more years to go. A slow, muddle-through recovery may not be exciting – but it’s better than the alternatives. As I noted at the beginning, I am quite worried about the possibility of a recession in our slow-growth, barely limping along at stall speed economy.

2015-10-03 00:00:00 International Economic Week in Review for Sept. 28-Oct.2; Japan Flashing Yellow, Edition by Urban Carmel of Hale Stewart

Overall, the tone of news continues to lean negative. China continues to slow. Japan is clearly having problems regaining momentum after last year’s sales tax increase and Canada just missed being in a technical recession. The EU and UK are growing moderately, but not impressively. And it appears even the US is starting to import some of the global weakness.

2015-10-03 00:00:00 The 10 Most Competitive Countries in the World by Frank Holmes of U.S. Global Investors

No new countries have entered or exited this exalted list, and there was very little rank-shuffling. For the seventh consecutive year, Switzerland is the most competitive country. For the fifth straight year, Singapore is number two. The U.S. comes in at number three for the second year. And so on.

2015-10-03 00:00:00 Better Times are Ahead by Byron Wien of Blackstone

The best recent period for investing in equities may have been 1982–1999, but I still think reasonable risk-adjusted returns for equities are likely in the years ahead, and that Treasurys and high-quality corporate bonds are less attractive.

2015-10-02 00:00:00 The Real Burden of Low Interest Rates by Niels Jensen of Absolute Return Partners

Almost the entire world is concerned about the high levels of debt, should interest rates begin to rise again, but we are not. Don't get us wrong; a meaningful increase in debt service burdens could do substantial damage to a global economy so loaded with debt. We just don't think it is going to happen. Economic growth and inflation are likely to stay comparatively low for many years to come, and so are interest rates, but that raises another question. What damage can very low interest rates for an extended period of time actually be expected to do?

2015-10-01 00:00:00 Small, but Noticeable Divergence Opening Up Between EM and DM by Bryce Coward of GaveKal Capital

We certainly haven’t been shy about identifying the rout in EM stocks and the very emotional selloff that took place in August. At the time we showed that the emotion at the August low was commensurate with the 2011 and 2008-2009 panics, both of which happened to be good buy spots for EM stocks.

2015-10-01 00:00:00 A Fragile Transition Supported by (Further) Policy Accommodation by Adam Bowe, Isaac Meng, Tadashi Kakuchi of PIMCO

n the following interview, Portfolio Managers Adam Bowe, Isaac Meng and Tadashi Kakuchi discuss conclusions from PIMCO’s quarterly Cyclical Forum, in which the company’s investment professionals debated the outlook for global economies and markets. They share our views on economies and investment implications across the Asia-Pacific region over the next 12 months.

2015-10-01 00:00:00 Have Commodities Bottomed? by Russ Koesterich of BlackRock

Though commodities have been the worst performing asset class of 2015, Russ explains why it’s still too early to call a bottom.

2015-10-01 00:00:00 It Ain't Over 'Til It's Over by Burt White of LPL Financial

Yogi Berra passed away last week at the age of 90. One of the greatest baseball players of all time, Berra was probably known more for his funny sayings (so-called “Yogi-isms”) than he was for his impressive career as a New York Yankee that lasted from 1946 until 1963 and included 3 MVP awards and 10 World Series championships. Some of these Yogi-isms are relevant for investors, including: 1) it ain’t over ‘til it’s over, 2) déjà vu all over again, and 3) the future ain’t what it used to be. Berra also famously once said, “Make a game plan you can stick to…unless it’s not w

2015-09-30 00:00:00 Liquid Alternatives: Considerations for Portfolio Implementation by Justin Blesy, Ashish Tiwari of PIMCO

Since the financial crisis, investors have poured nearly half a trillion dollars into liquid alternative strategies – typically mutual funds and ETFs that deploy non-traditional strategies once reserved for large institutional investors.i These vehicles offer the potential for diversification, downside risk mitigation and attractive risk-adjusted returns with the transparency and daily liquidity many investors desire. Liquid alternatives have been a democratizing force for investors, and we believe today’s market environment arguably has only made them more attractive.

2015-09-30 00:00:00 Forget “Active vs. Passive”: It’s All About Factors by Adam Butler, Michael Philbrick, Rodrigo Gordillo of ReSolve Asset Management

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.

2015-09-30 00:00:00 El Niño Update by Kaisa Stucke of Confluence Investment Management

Meteorologists have been calling for an El Niño event since last year. Current forecasts place the likelihood of an El Niño this winter at over 90%. Water temperatures in the Pacific, one of the first signs of a looming El Niño, have measured much higher than normal. In fact, water temperatures have been on par with the most severe El Niño event from the past 30 years. This report looks at how an El Niño develops and its possible climate, economic and geopolitical effects on the global economy. As always, we outline the potential investment implications of this event.

2015-09-30 00:00:00 Active Versus Passive – Understanding the Debate – Part 3 by Charles Batchelor of Cleary Gull

Last season, the Green Bay Packers started the season 1-2. Some fans panicked, to put it mildly. Conspiracy theories surfaced for why Green Bay’s quarterback Aaron Rodgers didn’t seem to be playing well and most people formed an opinion on who was to blame. It was at this point, following the team’s second loss, Rodgers found himself being peppered with questions from reporters attempting to figure out what was “wrong” with him and/or the team. Rodgers’ response was, “R…E…L…A…X.”

2015-09-30 00:00:00 Choose Wisely: Six Tips for Selecting Alternative Managers by Marc Gamsin, Greg Outcalt of AllianceBernstein

Alternative investments have delivered over the long term, but individual strategies can be as different as the day is long. We have some ideas on how to cut through the clutter.

2015-09-29 00:00:00 Annual Outlook by Mary Ellen Stanek of Baird Advisors

In an environment of low rates and heightened uncertainty, the U.S. has experienced sub-par growth during this economic cycle relative to past expansions. But compared to the rest of the world, the U.S. has been a strong performer. And even with only moderate growth, the U.S. economy has experienced healthy job creation – 11 million jobs since the bottom of the recession, 3 million created last year, the highest since 1999, and 2.5 million this year.

2015-09-29 00:00:00 On My Radar: It’s Déjà vu All Over Again by Steve Blumenthal of CMG Capital Management Group

What scares me, or what worries me, is what the next downturn in the economy looks like, with asset prices where they are and a lesser ability of central banks to ease monetary policy.” – Ray Dalio with Bloomberg’s Tom Keene

2015-09-29 00:00:00 What’s the Market's Biggest Risk? by William Smead of Smead Capital Management

When meeting with clients throughout the country, investors ask if we are worried about various well-vetted and well-known negatives. The list includes what the Federal Reserve Board might or might not do, China's slowdown, emerging market struggles, plummeting commodities, dollar strength and the uncertainty over who will become President of the U.S. in 2017. We think investors are really asking us, “what’s the market’s biggest risk?”

2015-09-29 00:00:00 In 2015, Volatility from a Phantom Rate Hike by Tony Crescenzi of PIMCO

Many investors are familiar with the adage, “they don’t ring a bell,” to warn when it is time to get in or out of an investment. Well, sometimes they do, or so the famed scientist Ivan Pavlov would likely contend. The physiologist trained dogs to salivate at the sound of a bell, having conditioned them to associate the bell with the delivery of food. Pavlov discovered that he didn’t actually have to deliver the food to get the canines to salivate in anticipation.

2015-09-28 00:00:00 Staley Cates on Why Active Management Wins in the Long Term by Robert Huebscher (Article)

Staley Cates is president and chief investment officer of Southeastern Asset Management, manager of the Longleaf funds. In this interview, he says, “the passive movement is not just a big trend. It is a bubble.” He explains why passive investing has made it hard for value investors to outperform.

2015-09-28 00:00:00 The ABCs of Impact Investing by John Appleby (Article)

Impact investing is a small but growing segment of the financial landscape. It is coming to the fore as individual investors seek to “do good while doing good.” Groups from wealthy entrepreneurs to the G8, the UN and the Pope are talking about the subject. Here’s what advisors need to know if they want to serve clients who strive for “impact” with their investing.

2015-09-28 00:00:00 Valuations Not Only Mean-Revert; They Mean-Invert by John Hussman of Hussman Funds

Risk-seeking among investors can often defer the immediate consequences of extreme valuations, while vertical losses can suddenly emerge when extreme overvaluation is joined by increasing risk-aversion among investors (as evidenced by deterioration in broad market internals). In any event, investors should expect market overvaluation or undervaluation to be reliably “worked off” within a period of about 12 years, on average.

2015-09-28 00:00:00 Is China “Fixed”? Short Answer: Financial Markets Say No by Bryce Coward of GaveKal Capital

The rally in stocks off of the August low has in some respects alleviated worst case fears about the fate of the Chinese economy. After all, in hindsight it is pretty clear that the selloff was driven by a simultaneous rerating of Chinese growth expectations by market participants combined with the possibility of higher short rates in the US to boot. These fears resulted in vast under performance of growth sensitive asset prices throughout the correction and then a sharp rally in those assets in the days following its terminus.

2015-09-28 00:00:00 The Hidden Cost of Zero Interest Rate Policies by Laurence B. Siegel and Thomas S. Coleman (Article)

Zero interest rates are a massive transfer of wealth from investors and savers to governments and other borrowers around the world. We’ll show how big the scale of the transfer is.

2015-09-28 00:00:00 Describing Liquid Alts: Global Macro and Tactical Asset-Allocation Strategies by Michael Breitenbach of Larkin Point Investment Advisors LLC

Several types of strategy groups invest across multiple asset classes, dynamically adjusting relative exposures at the discretion of the manager. Two commonly offered dynamic asset-allocation strategies are tactical and global macro.

2015-09-28 00:00:00 Cars, Drugs and Risk by Christian Thwaites of Brouwer & Janachowski

Last week, two company stories showed that markets are not always about GDP, growth, inflation and macro economic indicators people (including us) like to talk about. First, Volkswagen (mission statement “…to offer… safe and environmentally sound vehicles”) admitted that well, yes, it had duped emission testers with some clever software. VW employs half a million people and accounts for 4% of the German stock market.

2015-09-28 00:00:00 Equities May Remain Trendless Until More Clarity Emerges by Robert Doll of Nuveen Asset Management

Sentiment was negative for most of last week, as investors focused on continued uncertainty over Federal Reserve policy, slowing growth in China and emerging markets and ongoing weakness in commodities. Stock prices bounced on Friday following comments from Fed Chair Janet Yellen that a rate increase was looking more likely in 2015. Nevertheless, equities finished in negative territory, with the S&P 500 Index falling 1.4%. The health care, materials and industrials sectors came under pressure, while utilities, consumer staples and financials finished higher.

2015-09-26 00:00:00 International Economic Week in Review: The Commodity Super-Cycle Explained, Edition by Hale Stewart of Hale Stewart

Despite recent financial turmoil, no one has provided a concise explanation of the commodity super-cycle, one of the primary macro-economic forces causing recent volatility. That is, until now. In a September 21 speech, Bank of Canada Governor Stephen Poloz offered the following explanation:”

2015-09-26 00:00:00 Balloons in Search of Needles by John Mauldin of Mauldin Economics

It would be hard to miss an analogy to the stock market. Everything’s peaceful and calm, you’re drinking some fabulous wine, eating some fantastic fresh game and fish, looking at all the beautiful animals as you drift easily with the current. Anybody can steer the boat in a bull market. Until the rapids hit and the bottom falls out.

2015-09-25 00:00:00 Staying Level-Headed in the Face of Fed Uncertainty by John Calamos, Sr. of Calamos Investments

As we know, uncertainty about the Fed’s plans for raising short-term rates remains a key driver of market volatility. It’s understandable that investors are afraid to be in the markets and at the same time, afraid to be out. Whenever rates do rise (probably before the end of the year), there’s every reason to expect continued heightened equity market volatility. Even so, I view a more normal interest-rate environment as long-term positive—for the economy and for the equity market.

2015-09-25 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

The first drop in equities was more than a month ago, yet price has not come within even 2% of the original low since then. Despite this, bearish sentiment continues to rise as if new lows were being formed. This is a strong positive. The infamous month of October arrives this week: volatility is likely to remain high, but our view is the risk/reward of buying sell-offs is very attractive on a year-end basis.

2015-09-25 00:00:00 Are the Bulls Regaining Their Footing? by Liz Ann Sonders, Brad Sorensen & Jeffrey Kleintop of Charles Schwab

Uncertainty surrounding the Federal Reserve continues after its punt of rate hikes at its most recent meeting. But as the market gets more clarity on monetary policy and given a still-growing US economy, the bull market should slowly reestablish itself, albeit with bouts of volatility. Further support should come from global growth in areas that are net beneficiaries of the plunge in commodity prices.

2015-09-25 00:00:00 How Will These Leaders of 4 Billion People Change the World? by Frank Holmes of U.S. Global Investors

This week the U.S. played host to three prominent and illustrious leaders to billions of people: Chinese President Xi Jinping, Indian Prime Minister Narendra Modi and Pope Francis. Among them, they lead—either politically or spiritually—nearly 4 billion people worldwide, more than half of everyone living on the planet right now.

2015-09-25 00:00:00 Yes, and No by John Canally of LPL Financial

The title of this commentary is our answer to the question: Does the Fed know something we don’t know? Many market participants and pundits were asking this question late last week after the Federal Reserve’s (Fed) policymaking arm, the Federal Open Market Committee (FOMC), decided not to raise interest rates at the conclusion of its two-day policy meeting on Thursday, September 17, 2015. Market participants were asking the question although they had priced in just a 30% chance of a rate hike prior to the meeting.

2015-09-25 00:00:00 China, Commodities, and Crisis: What’s Next for Emerging Markets by Zachary Karabell of Envestnet

China’s growth story fueled global markets for years, and the recent market rout raises concerns that the spigot may be tapping out. But is it really? Emerging markets, currently out of favor with investors, are showing signs of domestic economic growth driven by an expanding middle class. Could these economies, along with China, re-emerge as bright spots in the global markets?

2015-09-24 00:00:00 It’s Not Easy by Howard Marks of Oaktree Capital Management

In 2011, as I was putting the finishing touches on my book The Most Important Thing, I was fortunate to have one of my occasional lunches with Charlie Munger. As it ended and I got up to go, he said something about investing that I keep going back to: “It’s not supposed to be easy. Anyone who finds it easy is stupid.”

2015-09-24 00:00:00 Is Another Bear Market Ahead? by Russ Koesterich of BlackRock

Russ updates his outlook for U.S. stocks in 2015 and beyond.

2015-09-24 00:00:00 Fed Implications by Burt White of LPL Financial

The Federal Reserve’s (Fed) decision not to raise interest rates at its September 17 policy meeting was undoubtedly the biggest event of last week. Although not a big surprise, besides Donald Trump (and perhaps China), the Fed is all that anyone is talking about these days. This week we share some of our perspective on what the Fed’s decision may mean for the stock market and offer some investment ideas.

2015-09-23 00:00:00 Does a Quarter Point Really Matter? by Jerry Wagner of Flexible Plan Investments

Actually, on at least one aspect of the Federal Open Market Committee’s (FOMC) seemingly inevitable move to hike interest rates, there is considerable agreement: The first 0.25%, or 0.50%, or even 0.75% move(s) in the federal funds rate will not make a material difference to US and global economies.

2015-09-23 00:00:00 Balancing Risks and Opportunities in the Multi-Speed World by Richard Clarida, Andrew Balls of PIMCO

Read our global economic outlook for the near term and implications for asset classes.

2015-09-22 00:00:00 On My Radar: “Dammit Janet” by Steve Blumenthal of CMG Capital Management Group

Whatever you can do, or dream you can… begin it; boldness has genius, power and magic in it.” – Johann Wolfgang von Goethe

2015-09-22 00:00:00 Activate Your Portfolio by Edward Perkin of Eaton Vance

As the bull market ages and bouts of extreme volatility return, now may be the time for actively managed equity strategies.

2015-09-22 00:00:00 The Unique Benefits of Mortgage-Backed Securities by Jason Mandinach of PIMCO

MBS have potential to outperform U.S. Treasuries with high liquidity and low correlation to risk assets.

2015-09-22 00:00:00 Meet Jeremy Corbyn by Bill O’Grady of Confluence Investment Management

On September 12, Jeremy Corbyn, a longtime Member of Parliament, was elected as the new leader of the UK’s Labour Party. In this report, we begin with a short biography of Corbyn followed by a description of how he won his party’s leadership role. With this background, we explore Corbyn’s long held policy positions and their potential impact on UK policy. We offer our reflections on Corbyn’s win, including an examination within the context of other political developments in the West. As always, we conclude with potential market ramifications.

2015-09-22 00:00:00 US High Yield: Energy Is Lagging, but Consumers Are Set to Spend by Scott Roberts and Rahim Shad of Invesco Blog

Weak commodity prices have made this year’s US high yield story a “tale of two markets.” Year-to-date returns for the overall high yield market were a meager three basis points (0.03%) through Aug. 31. However, if you peel back energy and metals and mining, the rest of the asset class delivered a respectable 2.6% total return over the same period.

2015-09-22 00:00:00 Market Segments to Consider While the Fed Holds by Russ Koesterich of BlackRock

After last week’s Fed news, investors may want to review their exposure to these two market segments.

2015-09-21 00:00:00 Weighing the Week Ahead: Has the Fed Assumed a Third Mandate? by Jeff Miller of NewArc Investments, Inc.

Despite many signs of economic improvement, the Fed chose to maintain policy accommodation at emergency levels. In a week that is light on data and long on speeches, this news will be enough to keep Fed policy at the forefront.

2015-09-21 00:00:00 When an Easy Fed Doesn't Help Stocks (and When It Does) by John Hussman of Hussman Funds

Investors who wonder why the stock market failed to advance on the Fed’s decision to leave interest rates unchanged would do well to understand that the market is following a script that has played out repeatedly across a century of market history. The short explanation is straightforward. When investors are risk-seeking (which we infer from the behavior of market internals), Fed easing tends to be very favorable for the stock market, because risk-free, low-interest liquidity is a hot potato to risk-seeking speculators.

2015-09-21 00:00:00 Federal Reserve Kicks the Can on Interest Rates by Christopher Molumphy of Franklin Templeton Investments

We were a little disappointed the Fed didn’t take action, primarily because we think the longer the Fed stays on hold the longer we will have uncertainty in the marketplace.

2015-09-19 00:00:00 Here Are Two Ways Investors Can Take Advantage of the Fed's Uncertainty by Frank Holmes of U.S. Global Investors

Although interest rates could still be hiked in one of the two remaining times the Federal Open Market Committee (FOMC) meets this year, I’m inclined to think they’ll stay near zero until at least 2016. The decision is a welcome one for both gold demand and new home purchases. When rates rise, gold becomes less attractive for some investors, who are encouraged to exchange their no-yielding gold for income-producing assets.

2015-09-19 00:00:00 Upon Further Review: More Reflections on the Fed by Carl Tannenbaum of Northern Trust

The Federal Reserve has typically downplayed market expectations of inflation. These indicators emerge from trading in Treasury Inflation-Protected Securities (TIPS), which can be influenced by many things.

2015-09-19 00:00:00 Annual Outlook Address by Mary Ellen Stanek of Baird Advisors

The uncertainty caused by speculating on when the Fed will raise rates is almost worse that the move itself. We think the Fed needs to forecast where the U.S. economy will be in terms of full employment and inflation a year or two down the road given the long and variable lags of the impact of their policy changes. We think they have been too optimistic in terms of the expected growth of the economy.

2015-09-18 00:00:00 A Fed Move Could Be Good News for Emerging Markets by Mark Mobius of Franklin Templeton Investments

If in coming months the Fed feels confident enough in the US economy to raise interest rates, it could be viewed as positive news for emerging markets, particularly those with export ties that benefit from a strengthening US economy.

2015-09-18 00:00:00 Looking At A Decade Of US Equity Valuations by Eric Bush of GaveKal Capital

Expensive stocks can always get more expensive and cheap stocks can always be cheaper. Consequently, making short-term market calls based on valuations is a fool’s errand. However, valuations end up always mattering in the long-run even if they are usually usurped in the short-run by investor sentiment. Therefore, we thought it would be a worthy exercise to take a look at how US equity valuations by industry group look today relative to the past decade.

2015-09-18 00:00:00 When Doves Cry … Yeah! Fed Punts and Keeps Rates Unchanged by Liz Ann Sonders of Charles Schwab

The Fed opted to stall on raising rates for the first time since 2006; primarily citing global turmoil and still-restrained inflation for its decision. In addition, the accompanying Federal Open Market Committee (FOMC) statement was not as hawkish as many expected (meaning, those who had been expecting no hike, were also expecting a more hawkish statement).

2015-09-18 00:00:00 Fed Leaves Interest Rates Unchanged: 4 Insights from Loomis Sayles by Orla O'Brien of Loomis Sayles

The FOMC signaled that plans for interest rate normalization are deferred but not yet derailed. It's difficult to categorize this outcome as a genuine surprise. While the rate decision and accompanying policy statement were no doubt dovish relative to expectations, the so called 'dot plot' reveals that the median Fed member sees that interest rate normalization, once begun, is expected to proceed at the same pace as was expected in June.

2015-09-18 00:00:00 Japan Then and Now by Kenichi Amaki of Matthews Asia

Late in 2006, Matthews Asia was wrapping up a special report titled “Japan Reawakens.” The timing of that AsiaNow publication, just ahead of the Global Financial Crisis, was unfortunate to say the least. With the ensuing economic turmoil, Japan fell asleep again, sliding off the radar screens of many investors. But as interest in Japan has more recently re-emerged, I thought it would be important for us to take a look back and consider what we previously published. Has Japan evolved the way we had envisioned? What’s changed and what hasn’t?

2015-09-18 00:00:00 Should Emerging Market Investors Fight the Fed? by Burt White of LPL Financial

Emerging market stocks have not won much lately, but the Fed may be a winnable fight. The Federal Reserve, which announces its policy decision on September 17, 2015, is on the verge of starting a rate hike cycle for the first time in more than 10 years. We have previously written that the start of Fed rate hikes has not marked an impending end to bull markets for U.S. stocks (despite the popular Wall Street adage “don’t fight the Fed.”) In reality, the first rate hike has told us we are about halfway through the cycle as discussed in our Weekly Market Commentary of August 25, 2014.

2015-09-18 00:00:00 The China Syndrome: Lessons from the A-Shares Bubble by Jason Hsu of Research Affiliates

The rapid rise and sharp decline of the A-shares market represents a massive redistribution of wealth, especially painful to uninformed investors who bought hot stocks near the peak. What should the Chinese government do now?

2015-09-17 00:00:00 Empirical Finance: Meeting Fiduciary Standards Through Skepticism, not Cynicism by Adam Butler, Michael Philbrick, Rodrigo Gordillo of ReSolve Asset Management

Michael Edesses is out with a scathing article lambasting the field of empirical finance. He draws inspiration from Harvey, Liu and Zhu’s (HLZ) recent article, entitled “…and the Cross Section of Expected Returns”, but extends HLZ’s conclusions to an absurd limit. In this article, we discuss why we embrace the framework of healthy skepticism described by HLZ, but in the context of a more optimistic and constructive view of empirical finance.

2015-09-16 00:00:00 New Study: We're Nowhere Near Peak Coal Use in China and India by Frank Holmes of U.S. Global Investors

Resource investors, take note: By 2025, just 10 years from now, energy consumption in Asia will increase a whopping 31 percent. A whole two-thirds of that demand, driven largely by China and India, will be for fossil fuels, most notably coal.

2015-09-16 00:00:00 Technically Speaking: DeJa Vu All Over Again by Lance Roberts of Streettalk Live

In yesterday's missive "It All Comes Down To This," I discussed the upcoming Federal Reserve meeting and the expectation that the Fed once again delays hiking rates due to global economic and market weakness. With markets oversold on a short-term basis combined with a spike in volatility and bearish sentiment, a "punt" by the FOMC will likely spark a short-term rally in the market. Such an outcome would NOT be surprising by any means since the market has rallied the week of an FOMC "no hike" meeting since 2013.

2015-09-16 00:00:00 China, Commodities, and Crisis: What's Next for Emerging Markets? by (Article)

China’s growth fueled global markets for years, and recent events raise concerns about other emerging markets, heavily dependent on Chinese demand and already out of favor with investors. This month, we consider "China, Commodities, and Crisis: What’s Next for Emerging Markets?"

2015-09-15 00:00:00 Gundlach on Donald Trump, China and Fed Policy by Robert Huebscher (Article)

Despite grabbing most of the headlines and leading in many of the polls, Donald Trump is not expected to win the Republican nomination. But Jeffrey Gundlach said that Trump has done the electorate a “big favor by bringing up issues that have been conveniently buried for quite some time.”

2015-09-15 00:00:00 On My Radar: Valuations, Forward Returns and Recession by Steve Blumenthal of CMG Capital Management Group

Of the nine market declines associated with recessions that started with valuations above the mean, the average decline was -42.8%. Of the four declines that began with valuations below the mean, the average was -19.9%”– Doug Short

2015-09-15 00:00:00 China: Double, Double Toil and Trouble/Fire Burn, and Cauldron Bubble? by Andy Rothman of Matthews Asia

Many argue that China’s economy is descending into policy chaos and a witches’ brew, otherwise known as a hard landing. But perhaps tellingly, even during the recent A-share fall, Chinese consumers seemed to shrug off the drama and continued to spend. China’s recent economic developments can be seen as stumbles along the path toward growth rates that are continuing to decelerate (but are still quite fast) from an economy that is increasingly “rebalanced.” This latest issue of Sinology explores the thinking behind this non-consensus conclusion.

2015-09-15 00:00:00 Market Unease May Continue for Some Time by Robert Doll of Nuveen Asset Management

Markets calmed last week relative to recent turmoil, but investor sentiment remains fragile. The focus on Federal Reserve policy, weakness in China and concerns about economic growth continued to drive sentiment. The S&P 500 Index gained 2.1%, commodities were flat and bond yields rose. Technology and health care posted the best results, while energy lagged.

2015-09-15 00:00:00 Active Versus Passive – Understanding the Debate Part 2: Passive Investing by Charles Batchelor of Cleary Gull

In this next post, I’m going to focus on passive investments and passive investing. If it looks like I just repeated myself, I didn’t. Passive investments are much different than following a passive investment strategy for portfolio management. As a reminder, a passive investment is a style of management where a predetermined basket of securities are purchased and automatic adjustments are made with no personal judgement or forecasting.

2015-09-14 00:00:00 The Beauty of Truth and the Beast of Dogma by John Hussman of Hussman Funds

When you examine historical data and estimate actual correlations and effect sizes, the dogmatic belief that the Fed can “fine tune” anything in the economy is utter hogwash. Truth, on the other hand, is beautiful. Economic relationships that are supported in real-world data are a sight to behold.

2015-09-14 00:00:00 Early Cyclicals Moved to New Relative Highs During Recent Market Turmoil by Jennifer Thomson of GaveKal Capital

Regular readers are familiar with our reliance on ‘baskets’ of stocks in order to gain a high-level perspective on general market trends.

2015-09-14 00:00:00 Investing for Income: Meeting the Challenges of a Low Yield Environment by Paul Reisz, Tina Adatia, Tanya Sanwal of PIMCO

For many investors, generating a high and sustainable income stream is challenging in the current secular landscape, which PIMCO calls The New Neutral. Over the next three to five years, we expect to see global economies converging to modest trend growth rates as central banks are constrained to set policy rates at levels well below those that prevailed before the financial crisis.

2015-09-14 00:00:00 Are You Investing in Tomorrow's Dividend Growers? by Clint Harris of Invesco Blog

Some 420 companies in the S&P 500 Index pay dividends. If you own a fund that invests in dividend-paying companies, it’s critical for you to understand your fund’s selection criteria. Does it look for increasing dividends? Stable dividends? High dividend yields? These differences can matter greatly to your results.

2015-09-14 00:00:00 Designing the Appropriate Common Stock Retirement Portfolio: Stock Selection Options Part 1 by Chuck Carnevale of F.A.S.T. Graphs

What is the best way to design or construct a common stock portfolio? This is a question I am often asked and my short answer is always the same - it depends. The truth is, there is no perfect method or strategy for designing a stock portfolio that is right for every individual investor. However, there are principles of sound investing that every investor can follow and apply when designing a common stock portfolio that’s just right for them.

2015-09-14 00:00:00 A Turn of the Tide Revisited by Martin Pring of Pring Turner Capital Group

US equities reached a major inflexion point in the year 2000. It was historic because it represented both a secular and primary reversal. A primary trend revolves around the business cycle and typically lasts 2-3 years, whereas a secular one lasts much longer and embraces several cycles. Our objective here is to revisit an article published earlier this year in which we pointed out some ominous signs for US equities. At that time some trend reversal signals, such as negative long-term moving average crossovers, were required as confirmation.

2015-09-12 00:00:00 International Economic Week in Review For Sept. 7-11 by Hale Stewart of Hale Stewart

There has been a slight but important shift in news coverage over the last few months. It started with the wild gyrations of the Chinese stock market, which, in retrospect, granted journalists permission to write more negative stories about the global economy. Since then, we’re seen more discussion about EM capital flight, the fiscal troubles of Brazil and the potential issues related to Russia. The news is hardly catastrophic; it simply represents the natural ripples flowing out from China’s attempt to change its economic model and the potential Fed rate hike coming down the pike.

2015-09-12 00:00:00 Life Is Uncertain and So Are Interest Rates by Frank Holmes of U.S. Global Investors

Right now, a lot of investors are wondering about the uncertainty of rising interest rates—the causes, effects and possible ramifications. Many people have been saying for weeks and months now that a rate hike is imminent and that September is the anticipated takeoff. I’ve been skeptical of this, and now a chart from highly-respected market analyst Jeff deGraaf confirms my skepticism.

2015-09-12 00:00:00 Active Versus Passive – Understanding the Debate by Charles Batchelor of Cleary Gull

The purpose of this series of blog posts is not to add to the already massive number of studies, whitepapers, presentations, academic papers, blogs, etc. that attempt to prove which overriding type of investment product, “active” or “passive,” is “better.” Furthermore, I am not going to give you my opinion on which product type is superior. Rather, my primary goals are to better define what is being debated, spend time on what I do not believe has been discussed nearly enough during the “active vs. passive” debate.

2015-09-12 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

It's never perfect in equity markets; when price patterns and breadth look healthy, sentiment is overly bullish and further appreciation becomes limited. When price falls, the price pattern looks scary and breadth looks terrible but sentiment becomes too bearish. These are when longer term lows form. More likely than not, that is where equity markets are now.

2015-09-11 00:00:00 Closed End Funds versus Exchange Traded Funds by Heather Rupp of AdvisorShares

There are currently a number of fund-based options available to investors looking for yield. In addition to traditional open-ended mutual funds, investors are also turning toward closed end funds (CEFs) and exchange traded funds (ETFs) to generate yield, including in the high yield bond market. Both CEFs and ETFs have continuous trading and pricing throughout the day, making them very liquid options for investors. While CEFs tend to be actively managed, there are both index-based options and actively managed options in the ETF space.

2015-09-11 00:00:00 An Expert’s Guide to Market Volatility by Russ Koesterich of BlackRock

Russ shares three themes that have emerged from his conversations with numerous clients following the market drama in recent weeks.

2015-09-11 00:00:00 Global Economic Perspective: September by Franklin Templeton Fixed Income Group of Franklin Templeton Investments

While the [US] Fed is facing an extremely delicate task ... it is still our belief that the US economy remains sufficiently strong to be able to bear a gradual increase in short-term rates in the coming months.

2015-09-11 00:00:00 Protecting Against Inflation In a Deflationary World by Steven Malin Ph.D. of Allianz Global Investors

Powerful global deflationary forces will continue to put downward pressure on the prices of inputs and outputs for months, if not years, to come. Even if the US Federal Reserve and the Bank of England raise policy interest rates over the months ahead, inflation risk premiums built into market interest rates will remain small. In the absence of strong wage increases, unprecedented global growth in the supply of resources and outputs relative to demand will linger—and inflation will remain constrained.

2015-09-10 00:00:00 Describing Liquid Alts: Alternative-Asset Beta (FX, Commodities, MLPs and beyond) by Michael Breitenbach of Larkin Point Investment Advisors LLC

The alternative-asset beta family of related liquid alternative strategies invests in alternative assets such as foreign exchange, commodities, and energy infrastructure. Ideally, these investments will provide attractive risk-adjusted returns that are uncorrelated with traditional equity and fixed-income markets.

2015-09-10 00:00:00 Uncertainty = Opportunity® by Richard Bernstein of Richard Bernstein Advisors

While market volatility is currently making front-page headlines in the media, we argue that investors must look past the noise and objectively focus on the fundamentals. Before you decide on a drastic asset allocation shift, learn what opportunities we see in these uncertain markets.

2015-09-10 00:00:00 Analysts Haven’t Been this Negative on Emerging Markets Since... by Bryce Coward of GaveKal Capital

In simple terms, everyone has moved to the same side of the boat when it comes to expectations about the prospects of emerging market stocks. Not since the financial crisis nadir in stock prices have analysts of EM stocks been so bearish and quick to rerate expectations. Yet, amid all this negativity, there arises a fantastic opportunity for investors of EM stocks. As the famous Warren Buffet axiom states, “Be fearful when others are greedy and greedy when others are fearful”. To say that analysts are fearful would be an understatement.

2015-09-10 00:00:00 Equity Valuations, Recessions and Stock Market Declines by Doug Short (Article)

Note from Doug: In response to a request, I've updated the data in this article through the August month-end numbers.

Earlier this year I had a fascinating conversation with Neile Wolfe, of Wells Fargo Advisors, LLC. Based on the underlying data in the adjacent chart, Neile made some cogent observations about the historical relationships between equity valuations, recessions and market prices:

2015-09-09 00:00:00 Competing with the Alpha and the Omega by Cole Smead, CFA of Smead Capital Management

In the Bible, Jesus said, “I am the Alpha and the Omega, the first and the last, the beginning and the end.” While Jesus infers that he is at both the beginning and the end of time, we as investors can only operate in the present with a knowledge of what has come before. To better understand today's commodity market circumstances, we believe investors should examine the herd mentality and the psychological backing that may lead to contrarian investment opportunities.

2015-09-09 00:00:00 Markets Remain in Turmoil, but Should Stabilize Eventually by Robert Doll of Nuveen Asset Management

Global equity markets fell last week with the S&P 500 Index down 3.4% and some non-U.S. markets declining even more. The sell-off is a continuing reflection of the ongoing turmoil that started a few weeks ago when China devalued its currency on August 11.

2015-09-09 00:00:00 Technically Speaking: A Sucker's Rally? by Lance Roberts of Streettalk Live

In last week's technical review "The Mark Of A Bear," I stated: "The Bulls have remained firmly in charge of the markets as the reach for returns exceeded the grasp of the underlying risk. It now seems that has changed. For the first time since 2007, as we see initial markings of a potential bear market cycle." The problem in stating that we MAY be seeing the initial markings of a potential bear market cycle is that individuals assume this means the markets will crash immediately. When such an outcome does not occur, the analysis is presumed wrong.

2015-09-09 00:00:00 A Time to Take Stock – and Advantage of Pockets of Value by Russ Koesterich of BlackRock

Another week, another selloff. Stocks tumbled again last week with the S&P 500 Index falling 3.37% to 1,921 and the Dow Jones Industrial Average declining 3.25% to 16,102. The tech-heavy Nasdaq Composite Index struggled as well, down 3.00% to 4,683. Meanwhile, bond yields were relatively unchanged, with the yield on the 10-year Treasury slipping from 2.18% to 2.13%, as its price correspondingly rose.

2015-09-09 00:00:00 Dividend & Income Builder Celebrates 3-Year with 5 Stars by (Article)

Ben Lofthouse, Co-Portfolio Manager of the Dividend & Income Builder Fund, provides an update on the Fund’s performance and positioning and notes its recent 5-star Morningstar rating. Ben comments that the biggest driver of the Fund’s performance has been stock selection; they have seen improving economic growth from a low base in the US, UK and Europe. Ben notes they’ve seen good dividend growth; the team continues to focus on dividend growth and cash flow generation. The team believes they are well-positioned for medium term capital growth and importantly, income growth.

2015-09-09 00:00:00 Newsletter - September 2015 by Harold Evensky, of Evensky & Katz / Foldes Financial Wealth Management

Harold Evensky's quarterly letter to his readers.

2015-09-08 00:00:00 Making Sense of Market Volatility by Sponsored Content from Invesco (Article)

• On Aug. 21, the Dow Jones Industrial Average entered a correction and reminded investors what volatility looks like. • Several Invesco senior investment leaders discuss their views of market volatility. • They share how it affects, or doesn’t affect, the opportunities they see.

2015-09-08 00:00:00 That Was Not a Crash by John Hussman of Hussman Funds

To call the recent market retreat a “crash” is an offense to informed discussion of the financial markets. It was merely an air-pocket of the sort that typically emerges once overvalued, overbought, overbullish conditions are joined with deterioration in market internals. It was probably just a start.

2015-09-08 00:00:00 Betting on Japan, Inc.’s Recovery by Vadim Zlotnikov of AllianceBernstein

Japanese stocks have outperformed the past few years, and we don’t think their run is over. Policies to improve profitability, capital use and productivity should provide a stronger foundation for further gains.

2015-09-08 00:00:00 The 2 Keys to the Magic Formula for Long-Term Investment Success by Chuck Carnevale of F.A.S.T. Graphs

Investing in anything comes with a degree of uncertainty because all investing returns happen in the future. And even though the future is unpredictable, the future is what everyone that invests is investing for. These realities present important challenges that every investor must face and deal with in order to succeed.

2015-09-08 00:00:00 Curb Your Mind by Rick Lear of Lear Investment Management

With the recent events in China and Greece causing volatility in the global markets, we think it is more important than ever to take a moment to reflect on how capital markets function. People trade stocks; and an understanding of the human thought processes is at the foundation of markets. The recent gyration of the world’s markets reminds us how quickly greed can turn to fear and how investors can begin to make mistakes. We find that heightened emotions often lead to mistakes that can be easily avoided.

2015-09-08 00:00:00 On My Radar: A Bumpy Ride? How Bumpy? And For How Long? by Steve Blumenthal of CMG Capital Management Group

Volatility and uncertainty are nothing new in financial markets. QE4 may right the ship but that is the bet. No guarantees in this game.

2015-09-05 00:00:00 The Art of Capital Flight by Kenneth Rogoff of Project Syndicate

For emerging-market investors, art has become a critical tool for moving and hiding wealth, which has been a major factor in the spectacular rise in auction prices of the last several years. So, with emerging-market economies from Russia to Brazil mired in recession, and China slowing rapidly, is the art bubble about to burst?

2015-09-05 00:00:00 Meet QT; QE's Evil Twin by Peter Schiff of Euro Pacific Capital

There is a growing sense across the financial spectrum that the world is about to turn some type of economic page. Unfortunately no one in the mainstream is too sure what the last chapter was about, and fewer still have any clue as to what the next chapter will bring. There is some agreement however, that the age of ever easing monetary policy in the U.S. will be ending at the same time that the Chinese economy (that had powered the commodity and emerging market booms) will be finally running out of gas.

2015-09-04 00:00:00 A Hall of Fame Client by Francois Sicart of Tocqueville Asset Management

Over two or three decades, money-management has changed in the same way that medicine and law, for example, have changed. What used to be professions have become businesses, for the sake of cost-cutting, pooling of resources, growth, and operational leverage. In the process, whereas the main goal of professionals used to be to excel at the services they provided, with growth being ancillary, that goal has now been relegated to a spot behind the pressure to “meet the figures.”

2015-09-04 00:00:00 Here’s Your Guide to What the Influencers Are Saying about Commodities by Frank Holmes of U.S. Global Investors

A few legendary influencers in investing are making huge bets right now on commodities, an area that’s faced—and continues to face—some pretty strong headwinds. What are we to make of this?

2015-09-04 00:00:00 Unpopularity Contest by Herbert and Randall Abramson of Trapeze Asset Management

With central banks focused on growth and generating inflation, and their pedals to the metal, we believe the ultimate outcome will be inflationary growth, or even stagflation. But, inevitably, a boost for depressed commodities and the depressed share prices of their currently unpopular producers. A particular opportunity when the correction phase ends and the bull market resumes. Time to be contrarian. And patient value investors should clearly be rewarded.

2015-09-04 00:00:00 Unfazed by the Turmoil by Byron Wien of Blackstone

Overall, my sense of this year’s lunches is that the participants were still basically optimistic, as they generally are. I wonder if there were something big and negative brewing out there, whether the group would be able to anticipate it.

2015-09-04 00:00:00 International Economic Week in Review For Aug. 31-Sept. 4 by Hale Stewart of Hale Stewart

The potential negative impact of China’s slowdown is sinking into policy maker’s decision making process and trader’s analysis. Money is flowing from emerging to developed economies; emerging markets and currencies are underperformers relative to developed markets. The potential for China to export deflation is being discussed. And central bankers are acknowledging the slowdown by lowering growth forecasts and opening speculating about additional monetary stimulus. As we leave the summer doldrums and enter the last four months of trading, the environment has clearly changed.

2015-09-03 00:00:00 12 Questions for a 12% Correction by Burt White of LPL Financial

The recent market downdraft and related uncertainty in China have led to many investor questions. The strong 6.5% rebound in the S&P 500 over the last three trading sessions (August 26, 27, 28, 2015) has cut the S&P 500’s losses from the 2015 peak (2130 on May 21, 2015) to 6.7%. In response to the S&P 500’s recent 12% correction?—?the first decline of more than 10% since 2011?—?we answer 12 investor questions. Bottom line, we do not expect the latest correction and China uncertainty to lead to the end of the U.S. economic expansion or the end of the six-and-a-half-year old bull

2015-09-03 00:00:00 Commodities, China and Currencies Oh My! by Rudolph-Riad Younes of R Squared Capital Management

Recent market events confirm our big picture view. We are and have been bearish on commodities and emerging markets. The spike in commodity prices during the so-called supercycle and the ZIRP (zero interest rate period) in the U.S. created irrationally exuberant conditions in many emerging markets. We are moving from a virtuous circle to a vicious cycle.

2015-09-03 00:00:00 Weight of the Evidence Argues for Caution by William Delwiche of Robert W. Baird & Co.

At this point, cycle lows for the popular averages may well be in place. This is not yet supported by the weight of the evidence, however. Simply put, risks remain elevated and it is too early to sound an all clear.

2015-09-03 00:00:00 Look Out Below? by Jim McDonald of Northern Trust

Are we experiencing a healthy correction or something more? After a long-period of relative calm, risk assets sold off meaningfully in response to global growth concerns. Our Chief Investment Strategist analyzes the fundamental picture in the wake of the recent downturn and what investors should do now.

2015-09-03 00:00:00 Searching for Sustainable Growth in Malaysia by Dilip Badlani of The Royce Funds

As an active manager with a value orientation, Portfolio Manager Dilip Badlani seeks to locate inexpensive companies helmed by management teams that have demonstrated an ability to consistently execute plans to grow their business irrespective of economic conditions. Though not without its challenges, Malaysia's history of perseverance makes it an attractive market for disciplined and patient investors.

2015-09-03 00:00:00 The Next Financial Crisis May Be Already Unfolding by Stefan Gleason of Money Metals Exchange

Is an epic financial meltdown about to commence? Predictions that a crash will occur in the fall of 2015 have been gaining traction. They are bolstered by some of the market events of this summer, which suggest that something big is indeed unfolding.

2015-09-02 00:00:00 Equities Endure Intense Volatility, but the Bull Market Survives by Robert Doll of Nuveen Asset Management

U.S. equities experienced extreme volatility last week. Prices plummeted on Monday morning due to concerns over slowing growth in China as well as uncertainty surrounding Federal Reserve policy. The sell-off was likely exacerbated by trading halts, liquidity pressures and systematic investing programs. Markets recovered later in the week as investors viewed conditions as oversold, and as oil and other commodity prices stabilized and advanced. For the week, the S&P 500 Index gained 1.0%. The energy, technology and consumer discretionary sectors led the way while utilities sold off sharply.

2015-09-02 00:00:00 Bremmer’s Choices by Bill O'Grady of Confluence Investment Management

Last week, we wrote our first formal book review as a Weekly Geopolitical Report. The book, Superpower: Three Choices for America’s Role in the World, is a recently published book by Ian Bremmer in which he discusses three models for American foreign policy. In our closing comments last week, we promised to take a deeper look at Bremmer’s foreign policy models to examine their costs and benefits. In this report, we analyze his three models of exercising the superpower role, Indispensable America, Independent America and Moneyball America, and discuss which model is the most likely choice.

2015-09-02 00:00:00 The Smartphone Banking Revolution: Leaders of the Pack by Julian Wellesley of Loomis Sayles

By 2020 it is projected that 70% of the world’s population will own a smartphone - 1.2 billion smartphones were sold worldwide last year alone. Users increasingly rely on their smartphones for conducting a variety of daily activities including banking transactions. As retail banks respond to this shift toward mobile reliance, winners and losers are quickly emerging in the internet and app-based banking space.

2015-09-02 00:00:00 Market Reset, Not Recession by John Calamos of Calamos Investments

In our view: Neither the U.S. or global economy is headed for recession; instead, we are seeing a market reset that is not entirely unexpected. Markets are likely to be extremely choppy over these next months, and we may see additional corrections. Over the near term, energy and commodity prices will remain volatile, with global interest rates and currency turmoil adding to the headwinds. Market dislocations are providing us with select opportunities to establish and build positions in fundamentally strong companies, worldwide—including in emerging markets.

2015-09-02 00:00:00 August 2015 Commentary by Joe Becker of Milliman Financial Risk Management

As August wound down and families enjoyed the last few lazy days of summer, financial markets clearly had another idea in mind. After trading in a relatively tight range for most of the summer, the last two weeks of August were marked by volatility, the likes of which haven’t been seen since 2011. We attribute this heightened volatility to the confluence of global macro conditions with technical factors.

2015-09-01 00:00:00 China and the U.S. Stock Market by Brad McMillan of Commonwealth Financial Network

Now that things seem to have calmed down a bit, it’s a good time to discuss why the past week has been so turbulent. The usual explanations—the Chinese currency devaluation and stock market crash—are certainly valid, but there’s more to the story. Let's take a closer look at the connection between the news from China and U.S. stock prices.

2015-09-01 00:00:00 Investors Should Not "Buy the Dip" Because Macro and Market Risks Remain Elevated by Don Schreiber, Jr. of WBI Shares

The global market meltdown is turning into a rout as investors who ignored the warning signs of overvaluation, weakening earnings/revenue trends, and deteriorating internal market dynamics may now be heading for the exits. As advisors and investors try to rationalize asset allocation and equity market exposure, they may deem it appropriate to stick with investments in countries with the strongest economies. Reasoning, stronger eco-markets should behave better than markets in countries with economies under pressure.

2015-08-31 00:00:00 Making Sense of Market Volatility by Karen Dunn Kelley of Invesco Blog

On Aug. 21, the Dow Jones Industrial Average entered a correction, falling 10% from its most recent peak, and reminded investors what volatility looks like after almost four correction-free years. While volatility exposes weaknesses in the market, in my opinion it also reveals the strength of high conviction managers who are skillfully navigating the market. Active management and smart beta strategies seek to surpass the “market averages” offered by traditional benchmarks, providing the potential not only for higher returns, but also for a smoother ride.

2015-08-31 00:00:00 Vinson Walden on the Thornburg Global Opportunities Fund by Robert Huebscher (Article)

Vinson Walden is the co-portfolio manager, along with Brian McMahon, of the Thornburg Global Opportunities Fund (THOAX). Within Morningstar’s World Stock category, THOAX ranked among the top-performing funds over the last one, three and five years. I spoke with Vin about how he constructs the fund and his outlook for the future.

2015-08-31 00:00:00 If You Need to Reduce Risk, Do it Now by John P. Hussman of Hussman Funds

The single most important thing for investors to understand here is how current market conditions differ from those that existed through the majority of the market advance of recent years. The difference isn’t valuations. On measures that are best correlated with actual subsequent 10-year S&P 500 total returns, the market has advanced from strenuous, to extreme, to obscene overvaluation, largely without consequence. The difference is that investor risk-preferences have shifted from risk-seeking to risk-aversion.

2015-08-31 00:00:00 On My Radar: We Didn’t Start The Fire by Steve Blumenthal of CMG Capital Management Group

Risk is high. For equity exposure, hedge or raise cash on rallies and let your tactical and alternative strategies follow their processes. Put in place the processes. Now is the time.

2015-08-31 00:00:00 Markets Volatile, Economy Fine by Brian S. Wesbury and Robert Stein of First Trust Advisors

As you woke up this morning, US stock market futures were down again. They say it’s because the Chinese stock market fell, and in spite of this every summary of Fed intentions that we read suggests a rate hike this year (possibly in September) is still very much on the table.

2015-08-31 00:00:00 Dog Days Are Over: What a Week! by Liz Ann Sonders of Charles Schwab

Volatility … and the volatility of volatility … hit record levels last week. We believe this is just a correction; not the beginning of a new bear market. Weeks like last week provide valuable lessons for investors about crowd psychology and the benefits of diversification and rebalancing.

2015-08-30 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

Waterfall events like the current one tend to most often reverberate into the weeks ahead. Indices will often jump 10% or more higher and also attempt to retest the lows. Volatility will likely remain elevated for several months. But the fall in equity prices, which has knocked investor sentiment to its knees, opens up an attractive risk/reward opportunity for investors. Further weakness, which is quite possible, is an opportunity to accumulate with an eye toward year-end. However, a quick, uncorrected rally in the next week or two would likely fail.

2015-08-28 00:00:00 Why This Time Could Be Different by Lance Roberts of Streettalk Live

In yesterday's post, I discussed the current correction within the context of previous "bull market" corrections. Specifically, the corrections in 1987, 1998, 2010 and 2011. However, today, I want to look at the current correction in the context of previous starts to "bear markets" and subsequent recessions.

2015-08-28 00:00:00 Doodles from an Eventful Summer by Niels Jensen of Absolute Return Partners

This month's Absolute Return Letter is a little different. It was a very eventful summer with many incidents impacting financial markets and we have compiled all these topics into one letter. China is, not surprisingly, a core subject. If the Chinese economy is slowing (and it is), we don't think China is in for a hard landing. If anyone is in the near term - and this may surprise you - we think the U.S. and the euro zone are far more likely candidates.

2015-08-28 00:00:00 Don't Panic: Putting Market Turbulence in Context by Tom Fahey of Loomis Sayles

Sharp declines in China’s equity markets have heightened fears about the country’s economic prognosis and what it might mean for global growth. While concerns center on the emerging markets, the tumult has spilled across global financial markets. Our advice: don’t panic.

2015-08-28 00:00:00 Are You a "Ben Graham Defensive Investor"? by Charles Aram of Research Affiliates

Benjamin Graham’s well-reasoned, rules-based approach to security analysis remains, after more than 80 years, a cornerstone for building a strong, long-term investment program to meet investors’ financial goals.

2015-08-28 00:00:00 On Market Corrections, and Keeping a Calm Head by Mark Mobius of Franklin Templeton Investments

Despite recent market volatility, we consider the long-term outlook for China’s market and economy to be good. We don’t view this recent correction as the start of any sort of economic or market collapse underway, and it doesn’t change our view on investing there.

2015-08-28 00:00:00 12 Attractive Fast-Growing Dividend Growth Stocks for High Total Return by Chuck Carnevale of F.A.S.T. Graphs

The current market environment is presenting many challenges to the conservative retired investor in need of current income. Interest rates are near all-time lows and the valuations of many blue-chip dividend growth stocks have become extended. Consequently, it is becoming very difficult to find quality investment opportunities that can provide safety through sound valuation, attractive yield and the potential to fight inflation.

2015-08-28 00:00:00 Schwab’s Perspective on Recent Market Volatility by Team of Charles Schwab

Global markets may have swung wildly in recent days, but we think the recent selloff in stocks and commodities is not a sign of imminent global recession. However, it may prompt the Federal Reserve (Fed) to postpone raising U.S. interest rates for a while longer. In the meantime, the basics of successful investing remain the same: Sticking to your long-term investment plan and maintaining a well-diversified portfolio should help you weather the market storm.

2015-08-28 00:00:00 If China Lands Hard, It Won’t Be Alone by Carl Tannenbaum of Northern Trust

The news from China has been volatile and disconcerting. There is a general sense that the carnage would be far worse if not for active intervention from Chinese authorities.

2015-08-28 00:00:00 China’s Economy Is Undergoing a Huge Transformation That No One’s Talking About by Frank Holmes of U.S. Global Investors

Misconception and exaggeration are circling China’s economy right now like a flock of hungry buzzards. If you listen only to the popular media, you might believe that the Asian giant is teetering on the brink of economic disaster, with the Shanghai Composite Index’s recent correction and devaluation of the renminbi held up as “proof.”

2015-08-27 00:00:00 Solidifying a Case for Liquid Alternatives by David Saunders of Franklin Templeton Investments

Skeptics may be surprised to learn that the majority of hedge fund managers focus on providing capital appreciation with lower volatility than the broad markets.

2015-08-27 00:00:00 Superpower by Bill O’Grady of Confluence Investment Management

Our subject is a new book titled Superpower: Three Choices for America’s Role in the World, by Ian Bremmer, a political scientist who writes often on geopolitical issues. At some point, the US will need to select a workable foreign policy for the post-Cold War era and determine how to handle the superpower role. In this report, we review Bremmer’s book, starting with his premise that no president since the fall of the Berlin Wall has developed a coherent foreign policy.

2015-08-27 00:00:00 Trying to Restore Order by Carl Tannenbaum of Northern Trust

It has been an unsettling month for the financial markets. The challenges faced by China, which have been amplified by inconsistent responses from policy makers, have heightened uncertainty.

2015-08-27 00:00:00 Global Market Chaos Amidst Worries About China, Etc. by Gary Halbert of Halbert Wealth Management

There is so much to write about today it’s hard to know where to start. Equity markets around the world are plunging on worries about China, a possible Fed interest rate hike next month, the worsening bear market in commodities, economic and currency weakness in emerging markets, etc., etc.

2015-08-26 00:00:00 A Macro View of Recent Market Volatility by Michael Hasenstab and Sonal Desai of Franklin Templeton Investments

When we look at how much market panic there has been, you’d be under the impression China is headed full-speed into full-blown recession. That is not our call. We expect moderation in China’s growth and continue to see it as healthy.

2015-08-26 00:00:00 China Commentary by John Calamos: Market Reset, Not Recession by John Calamos Sr. of Calamos Investments

The global market selloff of these past days has tested the mettle of many investors—particularly as the turmoil has followed an unusual period earlier this year, where equities delivered healthy advances with very little volatility. While we’ve gone on record saying that we expected volatility to persist (including in our most recent Outlook), we have been surprised by how severe the downturn has been. However, experience teaches that there can be many opportunities in volatile markets.

2015-08-26 00:00:00 Earnings Voids and the Emergence of Plausible Risk by Doug MacKay, Bill Hoover of Broadleaf Partners

We had put the finishing touches on a market update celebrating our first ten years in business, but were rudely interrupted by the first violence in the markets we’ve seen in nearly a year. Yes, a year.

2015-08-25 00:00:00 Building Corridors to the Future in Pakistan by Mark Mobius of Franklin Templeton Investments

We have been investing in Pakistan for a number of years, and see it as an overlooked investment destination with very attractive valuations due to negative macro sentiment.

2015-08-25 00:00:00 China and the Submerging Market Outlook by Scott Brown of Raymond James

China’s economic slowdown may not be much of a direct drag on U.S. growth. While U.S. exporters will have a tougher time, the drop in commodity prices should help consumers and domestic producers. However, the country’s difficulties need to be considered in the broader view of emerging market troubles.

2015-08-25 00:00:00 The Correction May Not Be Over, but the Bull Market Should Persist by Robert Doll of Nuveen Asset Management

The S&P 500 Index fell 5.7% last week, its biggest weekly pullback since September 2011. Equities have been under pressure for some time, and it appears that investors finally gave in.

2015-08-25 00:00:00 This Correction is Technical, Not Fundamental by Brian Wesbury, Robert Stein of First Trust Advisors

The only people more giddy with anticipation are the stock market pundits looking for The Big Short – II. It’s an eagerly anticipated sequel of the Panic of 2008. The S&P 500 is tumbling again today, more than 10% below the peak in May.

2015-08-25 00:00:00 On My Radar: An Optimist Sees The Opportunity In Every Difficulty by Steve Blumenthal of CMG Capital Management Group

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” – Winston Churchill

2015-08-24 00:00:00 Risk Turns Risky: Unpleasant Skew, Scale Dilation, and Broken Lines by John Hussman of Hussman Funds

Over the years, I’ve observed that overvalued, overbought, overbullish market conditions have historically been accompanied by what I call “unpleasant skew” – a succession of small but persistent marginal new highs, followed by a vertical collapse in which weeks or months of gains are wiped out in a handful of sessions.

2015-08-24 00:00:00 Equities: Enhancing Your Small Cap Allocation by Laura Schlockman, Steve Jones of PIMCO

Our New Neutral outlook is generally supportive of equities: Low discount rates, recovering but muted inflation and a drawn-out business cycle argue for positive equity performance. However, full valuations and uneven growth suggest returns may be significantly lower than long-term averages. This means that capturing equity alpha will be critical for investors to meet their return objectives.

2015-08-24 00:00:00 US Equity and Economic Review For August 17-22 by Hale Stewart of Hale Stewart

For the last several months, I have expressed three concerns regarding the markets. The high current and forward PEs of the major averages were the first. This was followed by the declining top line revenue of the S&P 500 companies. And third were deteriorating market technicals; a weakening advance/decline line, fewer stocks participating in rallies and various averages (the transports, IWCs and IWMs) declining. All of those factors came home to roost this week as the markets sold-off in a fairly sharp manner.

2015-08-24 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

Strong downward momentum usually has follow through. US indices are mostly within a few percent of significant support levels. The selling this week registered noteworthy extremes in breadth, volatility and sentiment. Friday probably will not mark the low, but risk/reward over the next month looks favorable.

2015-08-21 00:00:00 Shrugging Along by Brooks Ritchey of Franklin Templeton Investments

From our point of view, trying to predict market declines or rallies is not as important as preparing for incipient shocks smartly and strategically; it is about being vigilant.

2015-08-21 00:00:00 Gold Glimmers as Global Market Fear Grips Investors by Frank Holmes of U.S. Global Investors

Gold this week broke above its 50-day moving average as a fresh round of negative news from around the globe rekindled investors’ interest in the yellow metal as a safe haven. The Fear Trade, it seems, is in full force.

2015-08-21 00:00:00 Is a Stronger U.S. Dollar Really Bad News? Three Myths about Emerging Markets by Michele Mazzoleni of Research Affiliates

A strengthening U.S. dollar threatens emerging market economies—owes its plausibility to three myths. Let’s examine them.

2015-08-21 00:00:00 International Economic Week In Review For Aug. 17-22 by Hale Stewart of Hale Stewart

The most important overarching story of the week was the emerging market capital flight, which is occurring at startling pace.

2015-08-21 00:00:00 Schwab’s Perspective on Recent Market Volatility by Team of Charles Schwab

Global financial markets endured their worst week of the year this past week amid concerns over slowing economic growth and currency woes in China and other emerging markets, among other reasons. At times like these it is easy to start thinking short term, but keep in mind that the foundations of investing success are well established (have a plan, keep a close eye on expenses, stay diversified, and make sure your portfolio composition is lined up with your tolerance for risk and the timetable for when you’ll need to start drawing down the portfolio).

2015-08-20 00:00:00 Emerging Markets Equity Commentary: July 2015 by Team of Thomas White International

Emerging market equity prices declined further in July, as concerns about slower growth in China as well as lower energy and commodity prices hurt investor optimism. Chinese equity markets, which had seen significant gains over the last one year, corrected despite the government’s efforts to stabilize the market.

2015-08-20 00:00:00 Commodities: A Crude Awakening by Jim McDonald of Northern Trust

Commodities investors face numerous short-term challenges – falling demand, falling prices and a strong dollar – but this may present long-term opportunities for patient investors. Our Chief Investment Strategist, Jim McDonald, explains in his latest Investment Strategy Commentary: Commodities – A Crude Awakening.

2015-08-20 00:00:00 Unattractive ‘Glamour Stocks’ Lead the Way in Asia Pacific by Brent Bates of Invesco Blog

Economic growth continues to decelerate across the Asia Pacific region. Domestic economies have not been robust enough to offset weakness in commodities and exports, and both revenue and earnings expectations were adjusted downward by 1% during the second quarter. Because growth is scarce, investors have been crowding into the highest-growth and highest-quality stocks; within Asia and Japan, this group of stocks is now trading at the highest premium to the rest of the market that we’ve seen in the past 20 years.

2015-08-19 00:00:00 Global Economic Perspective: August by Franklin Templeton Fixed Income Group of Franklin Templeton Investments

We believe sound headline job creation figures point to rate increases by a [US] Fed that would like to begin to ‘normalize’ monetary policy when possible. The US economy is no longer in the emergency room, as it was in December 2008.

2015-08-19 00:00:00 The One Percent by Jeffrey Saut of Raymond James

I don’t need to defend Mr. Landry. Mr. Landry does just fine on his own. But coming from me – someone who is my own biggest critic as well as a critic of Wall Street – you best realize that Mr. Landry is in the top 1% of people on Wall Street. He is clear, he is concise, and he is right more than he is wrong. AND more importantly, when he is wrong he doesn’t just sit there and fight the tape. He adjusts unlike [many] of the bonehead strategists on Wall Street; stop reading and listening to him at your own risk.

2015-08-19 00:00:00 Global Economic Overview: July 2015 by Team of Thomas White International

While some of the emerging economies continue to face slow growth from lower commodity exports, the outlook for most developed economies has brightened in recent months. The U.S. slowdown during the first half of this year was not as bad as thought earlier, while economic trends from the Eurozone remain stable. Helped by sustained labor market gains, U.S. consumer sentiment is picking up again and should help aggregate growth during the second half of the year.

2015-08-19 00:00:00 Donald and Bernie by Bill O’Grady of Confluence Investment Management

In this report, we recap the economic and political factors that led us to conclude in previous reports from last year that the next presidential cycle could be unusually significant. From there, we look at the unlikely rise of Donald Trump and Bernie Sanders and what their success thus far signals about the electorate and the next presidential election. Finally, we analyze their potential impact on the election, including the possibility that each might mount an extra-party candidacy. As always, we conclude with market ramifications.

2015-08-19 00:00:00 Fundamental Truths by Scott Minerd of Guggenheim Partners

When policymakers tell you one thing and the data tell you something different, heed the data. Markets that are in the midst of transition do not behave according to script, despite the best efforts of policymakers to script them. Last week, China loosened control of its currency, resulting in its biggest one-day loss in two decades, compounded by additional losses over the following days. As of this writing, the renminbi (RMB) has depreciated by close to 3 percent since the start of last week.

2015-08-19 00:00:00 Strong Dollar: A Headwind for Trade by Milton Ezrati of Lord Abbett

A stronger U.S. currency likely will continue to weigh on exports and boost imports. What does this mean for future U.S. growth?

2015-08-19 00:00:00 One man’s weed... by Jerry Wagner of Flexible Plan Investments

I spent time at the Woodward Dream Cruise this week in my brother Charlie’s 1985 Ford Mustang convertible (his first new car which he bought and has maintained since that year). I think the Cruise is the largest annual assemblage of classic cars on the planet. What a great time for anyone who enjoys historical vehicles and the memories they bring back, especially here in the Motor City.

2015-08-19 00:00:00 Why the Yuan Devaluation Does Not Erode China’s Long-Term Investment Potential by Nick Niziolek of Calamos Investments

In his blog post, titled “Why the Yuan Devaluation Does Not Erode China’s Long-Term Investment Potential,” SVP and Senior Co-Portfolio Manager Nick Niziolek discusses the opportunities the Calamos team sees in China.

2015-08-18 00:00:00 Global Manufacturing Not Too Hot, Not Too Cold by Eric Bush of GaveKal Capital

Industrial production in the US in July surprised to the upside in the release today. IP rose 0.6% MoM (June was revised slightly lower, however) and is 1.3% higher YoY.

2015-08-18 00:00:00 International Economic Week in Review For Aug. 10-14 by Hale Stewart of Hale Stewart

This weekend was my summer vacation, when I (try) to completely unplug from news, internet and other variety of my daily routine. I was pretty successful at the task, although I did keep up with general events thanks to CNN. With the exception of China’s devaluation, there was little meaningful economic news, making my catch-up column a bit easier. But perhaps more importantly, when I returned I was struck just how little things had really changed in a 7 day period.

2015-08-18 00:00:00 China’s Currency Moves Spark Volatility and Uncertainty by Robert Doll of Nuveen Asset Management

U.S. equities endured high levels of volatility last week, dropping sharply in the first few days of trading before recovering to end the week slightly higher. The main focus was China’s surprising decision to devalue the yuan, which raised concerns about a weaker global growth backdrop, deflationary trends, the prospects of a currency war and what the move would mean for the U.S. Federal Reserve and U.S. monetary policy.

2015-08-18 00:00:00 China Surprise by Christian Thwaites of Brouwer & Janachowski

Ouch! August is often a month of surprises. In 2011, the S&P 500 lost nearly 7% at the height of the European debt crisis (yes, it’s been going on that long). In 2013, the NASDAQ closed for three hours sending stocks into a mini tailspin. This week’s “I didn’t see that coming” was the devaluation of the Chinese renminbi by nearly 3%.

2015-08-17 00:00:00 Chinese Yuan Depreciates Further: What is the Endgame? by Rob Waldner of Invesco Blog

After China’s surprise devaluation of the yuan by 1.9% last Tuesday, the Chinese currency was devalued by another 1.6% on Wednesday. Policymakers appear to be following a pattern of setting the daily fix, which sets the center point for trading during that day, with reference to the market price at the close of the previous day. Invesco Fixed Income believes that further devaluations are likely as the People’s Bank of China (PBoC), the country’s central bank, acquiesces to market pressure and price movements over time.

2015-08-17 00:00:00 Debt-Financed Buybacks Have Quietly Placed Investors On Margin by John Hussman of Hussman Funds

When corporations and even developing countries experience debt crises, one of the primary means of restructuring is the debt-equity swap. This sort of transaction involves canceling out debt of the company or government in return for equity of the company, or privatization of some of the assets of the country. Corporate debt-equity swaps typically result in severe dilution of the equity claims of existing shareholders, and in some cases, can wipe those claims out as creditors take control of the company.

2015-08-17 00:00:00 Charts for the Beach 2015 by Richard Bernstein of Richard Bernstein Advisors

We’ve put together five of our favorite non-consensus charts that are perfect reading material for a sunny day at the beach.

2015-08-17 00:00:00 On My Radar: China’s Surprise – Power To The Dollar by Steve Blumenthal of CMG Capital Management Group

“Something is deeply wrong if an economy is not growing, because it means these natural processes are impeded. That is why around the world, since the Dark Ages, lack of growth has been a signal of political oppression or instability. Absent such sickness, growth occurs.”– Adam Posen, “Debate: The Case for Slower Growth”

2015-08-17 00:00:00 Big Data Analytics: Investing in Technology Themes by Paul Meeks of Saturna Capital

With big data analytics we can quickly and efficiently comb through a mammoth store of data for many business insights that just keep coming.

2015-08-14 00:00:00 On the Winners and Losers of the Great Chinese Rebalance by Bryce Coward of GaveKal Capital

Change can be hard, but change can also be good. At this very moment we are living through one of the largest and potentially destabilizing periods of economic change in the last century. It is the mirror image and reversal of the last great economic paradigm shift. It is China’s shift from an investment driven growth model to a consumption driven growth model. For some it is painful. For others who are correctly positioned it is extremely lucrative. It is affecting all of us whether we know it or not. But most of all, it is inevitable.

2015-08-14 00:00:00 An Unsentimental Approach to Finding Value by Brad Evans of Heartland Advisors

Sentiment has been a driving force for investor returns the past few years, but we believe a focus on valuations, management and balance sheets is still the surest path to superior performance over a full market cycle.

2015-08-14 00:00:00 The Shot Not Heard Around the World by Peter Schiff of Euro Pacific Capital

China’s recent move to devalue the yuan has sent shock waves through the global financial markets and has convinced most observers that a new front in the global currency wars has begun. The move has caused...

2015-08-14 00:00:00 China Not Immune to Contagious Quantitative Easing and Massive Printing of Cheap Money by Frank Holmes of U.S. Global Investors

First it was the U.S. Federal Reserve. Then, in 2013, Japan launched what became known as Abenomics. The European Central Bank (ECB) followed suit in 2014. And now the People’s Bank of China has joined the parade. All of them in some way stimulated economic growth by initiating monetary quantitative easing (QE) programs.

2015-08-14 00:00:00 Three Steps to "Good Enough" - In Praise of Simplicity, Common Sense, and Stubbornness by Francois Sicart of Tocqueville Asset Management

The plain truth is that in the practice of investment, “good enough,” combined with a solid dose of common sense, usually beats precision and faith in mathematical models. So, if a careful analysis has given us a “good enough” idea of a company’s worth, we can assume that its market-traded shares will fluctuate – sometimes wildly – around that fundamental value. And that may be the value investor’s salvation.

2015-08-13 00:00:00 Exit from Wonderland: Change Is Now on the Horizon by Ed Easterling of Crestmont Research

Many investors and advisors are unsure about the current financial market environment. They have been wrestling with how to weight equities and whether to include alternative investments. Although equities have performed well in recent years, many alternatives have lagged expectations. This should not be surprising: the financial world is operating just as the Fed has intended.

2015-08-13 00:00:00 Putting Adaptability to Work by Roger Nusbaum of AdvisorShares

In our last post we looked at the importance of adaptability to overcome obstacles that impede retirement plans. This may also turn out to be especially important for portfolio management going forward, more so than in the past.

2015-08-13 00:00:00 How Smart Should Smart Beta Be? by Vadim Zlotnikov of AllianceBernstein

Smart beta strategies are growing in popularity, and investors have a lot of forms to choose from. One key question to ask is: How proactive should smart beta be in avoiding unintended risks?

2015-08-12 00:00:00 Turkey’s Predicament by Bill O’Grady of Confluence Investment Management

It is our view that over the next few decades Turkey is well positioned to return to its status as a dominant regional power; however, the situation is much less clear in the near term. Turkey has been trying to run a foreign policy of having “no problems” with its neighbors. This stance has become impossible to maintain. Unfortunately for President Erdogan, Turkey is encircled by instability and is struggling to develop a response.

2015-08-12 00:00:00 Walls are Not Perfect by Jerry Wagner of Flexible Plan Investments

I spent part of this summer on a family vacation in four of the six nations that were once republics of the socialist state of Yugoslavia. Many have asked me “Why,” and I simply replied that I had heard it was beautiful and had always wanted to go there. It didn’t hurt that my barber of 40 years and my employer during law school, Marv Esch, a congressman from Ann Arbor, MI, were both of Yugoslavian heritage.

2015-08-12 00:00:00 The Dollar Is Marching Higher Again And This Has Consequences by Eric Bush of GaveKal Capital

The real trade-weighted USD exchange rate (using a narrow and a broad definition) moved to 12.5-year highs in July after the exchange rate moved above March’s level. The more timely nominal trade-weighted USD exchange is basically at March’s high level as of 8/7 and given the currency moves of the last couple of days should be breaking out to a new multi-year high over the next several days.

2015-08-12 00:00:00 10 Dividend Growth Stocks for Your Retirement Portfolios Aggregate Yield 4.3%: Part 2 by Chuck Carnevale of F.A.S.T. Graphs

After an exhaustive search of the dividend growth stock universe I identified 20 dividend growth stocks that I felt were currently worthy of consideration for retirement portfolios based on valuation. In part 1 of this 2-part series found here I discussed the current level of the S&P 500, and offered some important principles about valuation. Additionally, I offered the first group of 10 of what I consider the highest quality members of the 20 screened research candidates I uncovered.

2015-08-11 00:00:00 Did Barron’s Number-One Ranked Fund Family Add Value for Its Investors? by Larry Swedroe (Article)

If any actively managed fund family were able to deliver superior results, surely it would be the one chosen by Barron’s as its top performer during the last decade. Thus, we clearly should expect to see Waddell & Reed’s funds outperform relative to passively managed alternatives.

2015-08-11 00:00:00 Why You Should Allocate to Value over Growth by John Alberg and Michael Seckler (Article)

The state of this current cycle supports a decision to move capital away from growth-oriented strategies and into value-focused investments.

2015-08-11 00:00:00 Commodities Remain a Valuable Portfolio Allocation by Bransby Whittion, Klaus Thuerbach, Kate Botting of PIMCO

While the last few years of commodity returns are not an aberration, they are also not the norm.

2015-08-11 00:00:00 The Idolatry of Interest Rates Part II: Financial Heresy by James Montier, Ben Inker of GMO

In many ways this is perhaps my most personal essay, not because I’m about to share some deep and dark personal revelation (I can almost hear the collective sigh of relief), but rather because this essay reflects my views and mine alone. Others at GMO should not be tarred with the brush of my beliefs, and I have no doubt that many will disavow any association with the views I express here. In fact, my colleague Ben Inker’s “rebuttal” follows this piece.

2015-08-10 00:00:00 An Alternative Asset Class You May Take for Granted, Part 2 by Darin Turner of Invesco Blog

Infrastructure is an integral part of your daily life. You drive on it, depend on it for electricity and water, and use it to communicate on your cell phone. But have you considered investing in it? Infrastructure investment can offer several potential benefits to an overall portfolio.

2015-08-10 00:00:00 Thin Slices from the Top of a Bubble by John Hussman of Hussman Funds

“You need to know very little to find the underlying signature of a complex phenomenon…. This is the gift of training and expertise – the ability to extract an enormous amount of meaningful information from the very thinnest slice of experience.” Malcolm Gladwell, Blink

2015-08-10 00:00:00 The Emerging Markets Best Positioned to Withstand a Fed Hike by Russ Koesterich of BlackRock

Russ explains why not all emerging markets are created equal when it comes to weathering capital outflows associated with higher U.S. interest rates.

2015-08-10 00:00:00 Is the Small-Cap Market Out of Joint? by Chuck Royce, Chris Clark, Francis Gannon of The Royce Funds

While results for most stocks in the first half were decidedly bullish, the primary drivers of performance continue to be unsettling—especially for those with an active, risk-conscious approach who’ve lagged in an environment that has often shown favor to highly levered, non-earning, and more speculative businesses. The question is—when will the speculative bubble burst?

2015-08-10 00:00:00 On My Radar: Margin Debt, Valuations and Vacation by Steve Blumenthal of CMG Capital Management Group

Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do, so throw off the bowlines, sail away from safe harbor, catch the trade winds in your sails. Explore, Dream, Discover.” – Mark Twain

2015-08-07 00:00:00 China’s Secret Gold Hoarding Strategy by Stefan Gleason of Money Metals Exchange

China’s recent stock market gyrations have some analysts now calling China the biggest bubble in history. But those who write off China because of market volatility are missing a more important long-term trend of Chinese geopolitical and monetary ascendancy. That trend shows no signs of abating.

2015-08-07 00:00:00 Closing the Sausage Factory by John Mauldin of Mauldin Economics

Anything you do attracts bureaucratic oversight now. We may laugh at “helicopter parents” hovering over their children at school, but we all have a helicopter government looking over our shoulders at work.

2015-08-07 00:00:00 20 Dividend Growth Stocks To Buy Today For Your Retirement Portfolios: Part 1 by Chuck Carnevale of F.A.S.T. Graphs

Assuming an equal investment in each of the 20 research candidates provides an average aggregate dividend yield of 3.66%. Although each candidate was primarily suggested based on the merit of fair or attractive valuation, the 10 research candidates in this article was primarily focused on quality. In part 2, the 10 candidates presented were focused primarily on either yield or total return.

2015-08-06 00:00:00 Global Growth Forecast - Q3 (Infographic) by Rick Harrell of Loomis Sayles

Every quarter, we update our forecast map. What's different this time? We have shaved our US GDP forecast down to 2.3% from 2.9%, mostly on account of weaker exports, a strong dollar and the decline in oil prices. In emerging markets, we still believe Asia Pacific is currently a bright spot - but we expect China to slow further as easing measures fail to gain traction.

2015-08-06 00:00:00 3 Warnings For Market Bulls by Lance Roberts of Streettalk Live

3 Things: Major strategist sees bull market coming to an end in 4-6 months, Tom McClellan sends a warning and M&A activity is sounding an alarm.

2015-08-06 00:00:00 The Three Gluts by Joachim Fels of PIMCO

While the global savings glut is likely the main secular force behind the global environment of low growth, lowflation and low interest rates, both the oil glut and the money glut should help lift demand growth, inflation and thus interest rates from their current depressed levels over the cyclical horizon.

2015-08-06 00:00:00 Are Frontier Markets the Emerging Markets of Tomorrow? by Mike DuCharme of Russell Investments

Russell Investments’ Mike DuCharme examines investment opportunities in frontier markets.

2015-08-05 00:00:00 How to Navigate Today’s Bond Markets by Russ Koesterich of BlackRock

Bond markets today present investors with multiple challenges, including lower yields and more risk than in the past. In this environment, these bond funds are worth considering, explains Russ.

2015-08-05 00:00:00 Reflections on the Iran Deal by Bill O’Grady of Confluence Investment Management

Last month, the P5+1 and Iran concluded negotiations on a nuclear deal. In this report, we will offer some reflections on the agreement, including why it occurred, and the major reason why the U.S. negotiated this agreement and the underlying issues. As always, we will conclude with market ramifications.

2015-08-05 00:00:00 Market Review by Rick Vollaro of Pinnacle Advisory Group

The summer heat has finally arrived, and it’s naturally coincided with lower volume markets that are prone to the rumor mill and news flow. The second quarter of 2015 was choppy, but included some reversals in behavior across asset classes. Domestic equity markets bounced around in a flat range, while broad emerging equity markets declined slightly on the quarter.

2015-08-05 00:00:00 The Case for Hedge Fund Strategies in a Rising-Rate Environment by Dr. Sudhir Krishnamurthi, Ronald van der Wouden, Kenneth LaPlace of Wells Fargo Asset Management

Dr. Sudhir Krishnamurthi, Ronald van der Wouden, and Kenneth LaPlace from The Rock Creek Group, LP explain why hedge funds may outperform traditional fixed-income investments in a rising-rate environment.

2015-08-04 00:00:00 What Drives Risk Tolerance by Daniel Solin (Article)

To be a successful advisor, you need to understand how risk affects the decisions investors make and what you can do to make those decisions more objective and responsible. Demonstrating value at a time when investments are becoming more of a commodity is a popular topic in advisor-industry circles.

2015-08-04 00:00:00 Reasons to Stay with an Equity-Focused Investment Stance by Robert Doll of Nuveen Asset Management

A number of issues garnered attention last week, including falling oil prices, a sell-off in Chinese equities, ongoing corporate deal activity and mixed economic and earnings data.

2015-08-04 00:00:00 On My Radar: The Fed – Between a Rock and a Hard Place by Steve Blumenthal of CMG Capital Management Group

Now look at them yo-yo’s that’s the way you do it.You play the guitar on the M.T.V. That ain’t workin’ that’s the way you do it. Money for nothin’ and your chicks for free.” Money For Nothing – Dire Straits

2015-08-04 00:00:00 China: Are You Missing The Opportunities In The Market Noise? by Team of Thomas White International

In March, spring was upon the Chinese equity markets — they soared with the promise of a summer of good cheer and bounty. But come June, the markets plunged, just as dramatically as they had surged less than two months back. And now, with the sell-off continuing, many investors are wondering if it is indeed the beginning of a long period of hibernation for Chinese stocks.

2015-08-04 00:00:00 Is This A Defensive-Led Market? Or A Knowledge-Led Market? by Eric Bush of GaveKal Capital

Much has been made of the fact that defensive sectors, or counter-cyclicals as we prefer to call them, have been leading the market higher. This is very much out of the norm for a bull market, even for a cyclical bull market within a structural bear market, as cyclicals tend to lead equity markets higher while counter-cyclicals help investors play defense when the market breaks lower.

2015-08-04 00:00:00 China’s Command Economy: The Gift That Keeps on Giving by William Smead of Smead Capital Management

With Beijing being selected to host the 2022 Winter Olympics, we at Smead Capital took a moment to reflect on China. We concluded that posturing against China’s attempt to defy business cycles could be one of the best decisions we have made and could be the gift that keeps on giving. Warren Buffett once observed that you get to make approximately 20 major business decisions in your life. As long-duration common stock pickers, we think what you avoid can be just as important as what you select.

2015-08-03 00:00:00 US Equity and Economic Review: Weaker Breadth Indicators, Edition by Hale Stewart of Hale Stewart

The Fed’s policy statement was the main economic event this week; its opening paragraph began, “Growth in household spending has been moderate and the housing sector has shown additional improvement; however, business fixed investment and net exports stayed soft.”

2015-08-03 00:00:00 Schwab Market Perspective: The Calm Between the Storms by Liz Ann Sonders, Brad Sorensen, Jeffrey Kleintop of Charles Schwab

Peak earnings season is behind us, Greece is not in imminent danger of exiting the euro, Europeans have headed out on vacation and the US Congress won’t be far behind. After a volatile start, the US market appears to be settling into a more typical summer pattern—for now.

2015-08-03 00:00:00 A Bad Equilibrium & How Speculative Distortion Ends by John Hussman of Hussman Funds

In economics, we often describe “equilibrium” as a condition where demand is equal to supply. Textbooks usually depict this as a single point where a demand curve and a supply curve intersect, and all is right with the world.

2015-08-03 00:00:00 Bridging the Gap in Global Infrastructure Funding, Part 1 by Darin Turner of Invesco Blog

Infrastructure is the backbone of every economy, providing essential public services such as water supply, energy and mobility. And for investors, infrastructure also has the potential to provide unique benefits.

2015-08-03 00:00:00 The End of U.S. Sovereign Debt as a Near Perfect Protection Asset by Michael Winchell of Larkin Point Investment Advisors LLC

For the past 30 years, the paradigm portfolio holding 60-percent stocks and 40-percent government debt seemed to exhibit a reasonable mix of both growth and protection, being a simple allocation the market beta of two very liquid asset classes with low (occasionally negative) correlation.

2015-08-02 00:00:00 International Economic Week in Review: Emerging Market Exodus, Edition by Hale Stewart of Hale Stewart

One of the biggest stories to emerge has been the decline in Emerging Market Currencies. The IMF noted this in their latest World Economic Outlook.

2015-08-02 00:00:00 Is Now the Time to be Bearish on China? by Andy Rothman of Matthews Asia

One of the world’s largest hedge funds has turned bearish on China, arguing that the recent stock market correction means ‘‘there are now no safe places to invest’’ in that country. I disagree. I respect Bridgewater as an investment house and their views require serious attention. But I think it worthwhile to explain some areas where my views differ.

2015-08-02 00:00:00 China's Dilemma: Is it 1987 or 1929? by Scott Minerd of Guggenheim Partners

If Chinese policymakers don’t alter course soon, the current Chinese equity market correction could turn into a stock market plunge similar to what happened in the United States in 1929.

2015-08-02 00:00:00 What’s Next For The Dollar? by Doug Ramsey of The Leuthold Group

The U.S. Dollar Index has recovered about half the losses from a two-month, -7% setback from the 12-year peak it established in March. We expect continued dollar strength over the next year as monetary policies in the rest of the developed world remain even looser than in the United States.

2015-08-02 00:00:00 When China Stopped Acting Chinese by John Mauldin of Mauldin Economics

Much of the world is focused on what is happening in Greece and Europe. A lot of people are paying attention to the Middle East and geopolitics. These are significant concerns, for sure; but what has been happening in China the past few months has more far-reaching global investment implications than Europe or the Middle East do. Most people are aware of the amazing run-up in the Shanghai stock index and the recent “crash.” The government intervened and for a time has halted the rapid drop in the markets.

2015-08-01 00:00:00 Gold on Sale, Says the Rational Investor by Frank Holmes of U.S. Global Investors

The leveraged gold futures derivatives market is knocking down the precious metal, yet in massive contrast, this drop has ignited a shopping frenzy according to gold coin dealers. I spoke with several friends and industry experts this week who confirmed the record sales numbers for the month. In fact, American Gold Eagle sales reached 161,500 ounces in July, the highest monthly figure since April 2013. What gives?

2015-07-31 00:00:00 Aligning Beliefs: 7 Tenets of Russell Investments Target Date Funds by John Greves of Russell Investments

Russell Investments’ John Greves examines 7 tenets in constructing target date funds.

2015-07-31 00:00:00 The Danger in "Debalancing" by John West, Brandon Kunz, Amie Ko of Research Affiliates

Eat a balanced diet. Drilled into our brains since preschool, this advice falls squarely in the “duh, everybody knows that” camp. But it’s not just kids who need reminding. Parents and grandparents, as role models and dietary enforcers, do too. Common sense alone tells us this universally applicable dictum is the right way to eat. Different foods have different nutritional and caloric values. If we eat a wide variety of food groups, or as a five-year-old child is taught, “Eat a rainbow,” good nutrition is likely to take care of itself.

2015-07-31 00:00:00 Say A Little Prayer by Bill Gross of Janus Capital Group

I’m not what you would call a “prayerful” type of guy. Even at 30,000 feet, when the air gets rough, I never invoke the “God” word, settling instead for promising myself that if I ever get back to terra firma, I will never fly again, which I promptly forget days or even hours later. It’s not that I’m a non-believer in prayer’s ultimate destination, but more of a cynical take on why the Lord would hand out party favors to everyone that asked, or to those that asked most intently.

2015-07-31 00:00:00 3 Questions to Check Yourself Before You Wreck Yourself by Adam Butler, Michael Philbrick, Rodrigo Gordillo of BPG & Associates

A few simple questions one should ask oneself before making any decisions in public markets.

2015-07-30 00:00:00 How Hemlines Affect The Market by Tyler Howard of Saturna Capital

George Taylor's "Hemline Index Theory" has persisted since 1926, but is it true? If you search long enough, or mine enough data, you are bound to find correlations that, while statistically robust, have no meaningful explanatory power.

2015-07-30 00:00:00 Minimum Wage Hikes: Fast Food for Thought by James Tierney, Jr. of AllianceBernstein

The minimum wage is rising across the US, and fast-food companies are feeling the pinch. In our view, watching how companies cope reinforces the importance of a selective approach to stockpicking.

2015-07-30 00:00:00 Greece and China: The New Not Ready For Primetime Players by Chris Richey of Neosho Capital

A paper on the present Greek and Chinese capital market crises, which have their roots in policies carefully crafted over the past two decades meant to bring about the integration of their respective economies into that of the wider world.

2015-07-30 00:00:00 Is it Time to Buy Commodities? by Russ Koesterich of BlackRock

Russ Koesterich explains what's behind the recent commodity rout and whether it represents an opportunity for investors.

2015-07-29 00:00:00 Price-Insensitive Sellers by Ben Inker of GMO

In a new quarterly letter to GMO's institutional clients, co-head of asset allocation Ben Inker examines the impact on a range of global asset classes of "price-insensitive market participants" who may "buy assets for reasons other than the expected returns those assets may deliver."

2015-07-29 00:00:00 Ten Quick Topics to Ruin Your Summer by Jeremy Grantham of GMO

Chief investment strategist Jeremy Grantham reviews "10 topics that really matter, at least in my opinion. They can all be viewed as problems: potential threats to our well-being"

2015-07-29 00:00:00 Laudato Sí by Bill O’Grady of Confluence Investment Management

Last week, the Vatican held a meeting of the mayors of some of the world’s largest cities to discuss climate change. This meeting was part of Pope Francis’s efforts to add to the discussion of climate change, which was the subject of a recent encyclical, Laudato Sí. In this report, we will begin with our position on climate change, discuss the encyclical and try to measure its potential impact on the direction of climate change policy. As always, we will conclude with market ramifications.

2015-07-28 00:00:00 Is Sovereign Debt Sacrosanct? by Paul DeNoon of AllianceBernstein

Many governments face large and seemingly insurmountable levels of debt. Headline mainstays Greece, Ukraine and Puerto Rico have recently been the subjects of debate over the necessity or suitability of receiving debt relief. Other governments may soon find themselves under the same spotlight.

2015-07-28 00:00:00 Greed and Genius?! by Jeffrey Saut of Raymond James

Greed is always hard to measure. Certainly we have seen some signs of it in the Big Bio-Bubble and the new issue market.

2015-07-28 00:00:00 The Song Remains the Same? Higher Rates Don’t Typically Kill Bull Markets by Liz Ann Sonders of Charles Schwab

Because we don’t anticipate any fireworks—or even notable news—out of the July Federal Reserve meeting, we are not publishing a dedicated report on the meeting or the accompanying statement. However, we are keenly aware of the attention on the Fed and the likelihood it begins raising short-term term interest rates this year. Our view remains that September is the most likely month, barring any significant change in the trajectory of job growth in the next two months.

2015-07-27 00:00:00 Screens vs. Windows: Why Choosing a Fund Manager Requires Both by Tracy Fielder of Invesco Blog

Choosing the right fund manager is an important decision for investors, and many rely on data screens to help them sift through mountains of performance numbers. But screens alone don’t tell you the whole story. To get a clear view of how a fund might fit into your portfolio, you also need a window into the mind of the manager.

2015-07-27 00:00:00 On My Radar: Grantham, HY and the Cyclical Bear in Gold by Steve Blumenthal of CMG Capital Management Group

If you’re young, take the whack [and] if you’re old, pray for the Fed to keep going.”– Jeremy Grantham

2015-07-26 00:00:00 Memorize This, Earn a Dollar by John Hussman of Hussman Funds

As a kid growing up in the 1960’s, I earned my allowance the usual way; cutting grass and raking leaves. When there was no grass to cut or other work to do, my parents – who deeply valued education – would give us things to commit to memory. I figure I squeezed more than 30 bucks out of memorizing the multiplication tables up to 12. My brothers were better at memorizing poetry, but I was pretty good at song lyrics, which put me in good position to learn the words to countless 70's songs (e.g. "This really blew my mind.

2015-07-25 00:00:00 International Economic Week in Review: IMF Lowers Growth Projections, Edition by Hale Stewart of Hale Stewart

At the macro level, the IMF lowered their global growth outlook. The first quarter slowdown in the developed world (largely the US but to a lesser extent Canada) led to decreased 2H15 projections, while the commodity slowdown will negatively impact the developing world. As further evidence of this, note that Latin American currencies are broadly selling off. Low inflation gives central banks plenty of policy room. The wild cards continue to be the cumulative impact of the Chinese slowdown along with certain geopolitical factors such as the Middle East turmoil and Greek situation.

2015-07-25 00:00:00 3 Reasons Why Gold Isn’t Behaving Like Gold Right Now by Frank Holmes of U.S. Global Investors

The last time the metal descended this quickly was 18 months ago, on January 6, 2014, when someone brought a massive gold sell order on the market before retracting it in a high-frequency trading tactic called “quote stuffing.”

2015-07-24 00:00:00 Don’t Let the Noise Keep You Up at Night by Carl Kaufman, Simon Lee, Bradley Kane of Osterweis Capital Management

Three subjects have concerned the markets recently: a Greek debt default and possible exit from the European Union (Grexit), the Federal Reserve’s (the Fed’s) normalization of interest rate policy and potential bond market illiquidity following a rise in interest rates. The first two are binary outcomes, which have been debated in the marketplace for years. While discussing these possible outcomes ad nauseam may be a palliative to some, in our view it doesn’t really provide much meaningful, incremental information until more definitive actions are taken.

2015-07-24 00:00:00 Sector Insights-Financial Services by Mark Dawson of Rainier Investment Management

The financial services sector is unique. Unlike other sectors, it is essentially the lifeblood of the economy. When it’s healthy, it provides businesses and consumers with access to the credit, capital and investments that are vital to a healthy and growing U.S. economy. But when it’s sick, as we saw during the financial crisis in 2008, it can weaken the whole system. Severely damaged in 2008, the U.S. financial system - in particular banks - have been healing. Now is a good time to seek out investment opportunities in financial stocks.

2015-07-23 00:00:00 Tocqueville Gold Strategy Investor Letter: Q2 2015 by John Hathaway of Tocqueville Asset Management

What is required to restore investor interest in gold? In our opinion, a prolonged bout of financial-market adversity would suffice. After all, the cornerstone of coordinated central-bank policy since 2008 has been the levitation of financial assets via Zero Interest-Rate Policy (ZIRP) and Quantitative Easing (QE) by forcing investors into risky assets. We believe that nothing would serve better to undermine confidence in central bankers than a bear market in bonds and equities. The roof above the dollar gold price has been built brick by brick from confidence in central bankers.

2015-07-23 00:00:00 Mid-Year Market Outlook - July 2015 by Team of Thomas White International

At the end of 2014, “why international?” was the prevailing investor sentiment. After all, foreign stocks had lagged U.S. equities yet again, underperforming four out of the five years between 2010 and 2014. The consensus outlook was that U.S. markets would outperform their foreign peers in any case, and so, would it really serve any purpose to hold international equities in a portfolio? Many investors followed the crowd.

2015-07-23 00:00:00 Summer Quarterly Commentary by John Prichard, Miles Yourman of Knightsbridge Asset Management

Greece is much in the headlines again. As we stated in our Spring 2013 letter, “The European debt crisis will not be over until either: 1) the debt goes away (read: default or substantial inflation) or 2) these governments start producing actual surpluses with which to pay the debt down.” So far, every subsequent deal has failed to produce either of these two scenarios, and so each time news media builds up another weekend summit or referendum, the running joke around here is, “Don’t worry, it will all be resolved this weekend.”

2015-07-23 00:00:00 Mid-Year Outlook: Global Economy Likely to Withstand China, Greece by John Calamos, Sr. of Calamos Investments

The global markets and economy should be able to move higher for the remainder of the year, with accommodative monetary policy and well-contained inflation providing tailwinds. The U.S. looks set to extend its not-too-hot, not-too-cold recovery, while Japan is benefiting from stimulus and pro-market reforms. Although economic conditions in Europe remain fragile and uneven, growth looks to be accelerating overall, and we believe the European Union has the tools to prevent a broader Europe contagion should the Greek bailout resolution fall apart.

2015-07-22 00:00:00 Are Stocks Overvalued? A Survey of Equity Valuation Models by Chris Brightman of Research Affiliates

In the latest piece from Research Affiliates, Chris Brightman, Chief Investment Officer, revisits the most commonly used equity valuation tools, comparing their respective strengths and weaknesses—and no metric is without its shortcomings. He explains Research Affiliates' approach to valuation, combining both absolute value and relative value. No matter the measurement, U.S. equity prices are high and long-term expected returns are low.

2015-07-22 00:00:00 Quarterly Review and Outlook Second Quarter 2015 by Van Hoisington, Lacy Hunt of Hoisington Investment Management

From the cyclical monthly high in interest rates in the 1990-91 recession through June of this year, the 30-year Treasury bond yield has dropped from 9% to 3%. This massive decline in long rates was hardly smooth with nine significant backups.

2015-07-22 00:00:00 Who's Right - Commodities Or Fed? by Lance Roberts of Streettalk Live

I have been suggesting for quite some time that the Federal Reserve is stuck in a "liquidity trap" which makes it very difficult for monetary policy to be effective. More importantly, beginning in January of this year, I have suggested that the Fed is being forced to choose between the "lesser of two evils."

2015-07-22 00:00:00 The Upside to Low Liquidity Bond Markets by Multisector Full Discretion Team of Loomis Sayles

As structural and cyclical factors reduce bond market liquidity, the Multisector Full Discretion team explains how they are positioning portfolios.

2015-07-21 00:00:00 Searching for Natural Hedges Against Interest-Rate Risk by Eric Takaha of Franklin Templeton Investments

We have found that historically over time, interest-rate moves don’t often play as large of a role in a broadly diversified fixed income portfolio as one might think.

2015-07-21 00:00:00 Secular Outlook: Implications for Asia-Pacific Investors? by Eric Mogelof, Alan Isenberg of PIMCO

We hope you have had the opportunity to review the summary from our secular forum in May: “The New Neutral Revisited,” written by PIMCO’s Group CIO Dan Ivascyn, Global Fixed Income CIO Andrew Balls an?d Global Strategic Advisor Rich Clarida. In this analysis, the authors identify the six key themes that emerged from our discussion, as well as six risks.

2015-07-20 00:00:00 Two-Tier Markets, Full-Cycle Investing, and the Benefits and Costs of Defense by John Hussman of Hussman Funds

“The Nifty Fifty appeared to rise up from the ocean; it was as though all of the U.S. but Nebraska had sunk into the sea. The two-tier market really consisted of one tier and a lot of rubble down below. What held the Nifty Fifty up? The same thing that held up tulip-bulb prices long ago in Holland - popular delusions and the madness of crowds. The delusion was that these companies were so good that it didn't matter what you paid for them; their inexorable growth would bail you out.” Forbes Magazine during the 50% market collapse of 1973-74

2015-07-20 00:00:00 US Equity and Economic Review For the Week of July 13-17; Earnings Season Begins, Edition by Hale Stewart of Hale Stewart

The Federal Reserve issued two important documents last week: the Beige Book and Chairperson Yellen’s latest Congressional testimony. The Beige Book was largely positive. Non-financial service growth is moderate. Real estate is growing and the employment picture was generally positive. Strong demand for autos sales helped increase consumer spending. The only negative was manufacturing which was uneven due to the strong dollar and weak energy sector.

2015-07-20 00:00:00 On My Radar: Black Widow Returns by Steve Blumenthal of CMG Capital Management Group

“When it does happen, it’s usually not the first-derivative event that people are caught off guard by. They’re caught off guard by the second, third and fourth derivative events. It’s ‘Oh yeah, when interest rates go up, that happens.”– Gary Cohn, Goldman Sachs’ President and COO

2015-07-20 00:00:00 Release the Condor! by Jeffrey Saut of Raymond James

A long time ago in a galaxy far, far away, there was an advertising company trying to come up with a video commercial to introduce Buick’s new car. After a number of the ad company’s proposals were turned down, they came up with the idea of the car cruising on a road down the side of a mountain with an eagle superimposed flying over it. Buick loved it! There was, however, one problem; you cannot capture, or tame, an eagle. Therefore it was decided to use a condor.

2015-07-20 00:00:00 Understanding “Liquidity” by Payson Swaffield of Eaton Vance

In the U.S., the consumer economy is strengthening, while the industrial economy continues to struggle. What does it mean for equities?

2015-07-17 00:00:00 Schwab Market Perspective: Slow Summer?! by Liz Ann Sonders, Brad Sorensen, Jeffrey Kleintop of Charles Schwab

Summer is supposed to be a time of slow trading, light news, and an opportunity for vacations. But the past several weeks have been anything but slow. Greece—a country representing 0.38% of the world economy based on gross domestic product (GDP), has dominated attention; China’s recent stock market plunge also dented sentiment among US investors. It’s meant the “running to stand still” characteristic of this year’s first half is persistent. In fact, the first half of the year saw the S&P 500 trade in its narrowest range in history.

2015-07-17 00:00:00 Crude Oil Is the Best-Performing Commodity of 2015 So Far by Frank Holmes of U.S. Global Investors

The widest expansion this year was made by none other than crude oil, the worst-performing commodity of 2014. As of June 30, oil posted gains of over 11 percent, rising to $59.47 per barrel. After falling more than 50 percent since last summer, though, it had little else to go but up. That oil claimed the top spot just highlights the reality that commodities are in a depressed state right now.

2015-07-17 00:00:00 International Economic Week in Review: Kicking the Greek Can Down the Road, Edition by Hale Stewart of Hale Stewart

Obviously, the big news this week was the Greek deal. This only delayed the inevitable. The plan calls for additional austerity measures, which have been completely ineffective. Greek unemployment is over 25%; the economy is in the middle of a depression, and the debt/GDP ratio increased from 105% in 2008 to 177% currently. The country will simply continue on this path for the foreseeable future, leading to another inevitable conflict with the lending troika. The ECB also issued its policy statement this week, which kept rates unchanged.

2015-07-17 00:00:00 Northern Trust Perspective by Jim McDonald of Northern Trust

Last month we said that the odds favored some sort of “kick the can down the road” agreement between Greece and its creditors, and it looks like that may be coming to pass. While there’s still much work to be done, the tone of the current agreement seems focused on avoiding a euro exit and debt write-downs, while ignoring growth-oriented policies. With the hard decisions yet again put off for another day, this should be euro-weakening, all else equal.

2015-07-17 00:00:00 China's Rebalancing Continues by Andy Rothman of Matthews Asia

The rebalancing of China’s economy continued in the second quarter of this year, as services and consumer spending drove more growth than industry and construction. The inevitable deceleration of most year-on-year (YoY) growth rates also continued, but a booming stock market provided a temporary lift to headline GDP growth.

2015-07-17 00:00:00 ECRI Weekly Leading Index: "Recoveries Remain Resilient" by Doug Short of Advisor Perspectives (

ECRI currently features an article suggesting that concern over negative trend growth is no reason to panic. Recession is not imminent as we are not yet in a "window of vulnerability." The article also discusses Spain's recent cyclical upturn and warns that one shouldn't assume that a cyclical upturn also means positive long-term trend growth. The overall message is not to "fret about recession just yet".

2015-07-16 00:00:00 U.S. Economy Slouches toward Recession as Eurozone Crisis Widens by Stefan Gleason of Money Metals Exchange

Federal Reserve chair Janet Yellen may have missed her window of opportunity to raise interest rates. The economic data no longer paint a picture of even a tepid recovery. Since the start of the year, key indicators for the economy began pointing toward recession.

2015-07-16 00:00:00 Sometimes Waterfalls Aren’t Beautiful by Jerry Wagner of Flexible Plan Investments

Over 25 years ago I took my family (my wife, Pat, and two sons, Michael and David) to the big island of Hawaii. It was a dream comes true. We’d been to Honolulu, Kauai, and Maui, but not to the Big Island. Our family spent two weeks in a car circumnavigating the isle on our own. It was a joy not to be forgotten. Early on in our trip, it became apparent that the major island attractions (after the live volcano that is) were the waterfalls. We seemed to race from one waterfall to another as we circled the island.

2015-07-16 00:00:00 Market Overview Q215 by David Robertson of Arete Asset Management

Massive interventions by central banks over the last several years have created a “game of Chicken” that has fundamentally changed investing into an exercise that more closely resembles gambling. Until the game resolves investors will do well to recognize this “game” as largely unwinnable and await better opportunities later.

2015-07-16 00:00:00 China: Searching for a New Equilibrium by Michael Hasenstab of Franklin Templeton Investments

Overall, based on our detailed analysis, we believe China will remain on course … while the economy shifts toward consumption, services and higher value-added manufacturing. This could have important implications for the global economy.

2015-07-15 00:00:00 China’s Market Correction in Three Easy Charts by Frank Holmes of U.S. Global Investors

The sheer size and importance of China’s equity markets cannot be overstated. Second in size only to the New York Stock Exchange, the combined value of the Asian country’s stock markets is $14 trillion and change. Or at least it was, before they fell 30 percent, wiping away nearly $2 trillion in value. To put this in perspective, the gross domestic product (GDP) of debt-troubled Greece is around $200 billion.

2015-07-14 00:00:00 GTAA Delivers Solid Returns at Lower Risk. Period. by Adam Butler, Michael Philbrick, Rodrigo Gordillo of BPG & Associates

We recently came across a couple of articles making the sensational claim that TAA is nothing more than a repackaged and dressed-up version of market timing. Both articles – and others, we’ve subsequently learned – point to a Morningstar study showing that TAA has underperformed the Vanguard U.S. 60/40 balanced fund over the past few years. We have several problems with the original study and the referencing posts, but it all boils down to these points of difference.

2015-07-14 00:00:00 Greece: Chaos or Orderly Resolution? by Brent Schutte of BMO Global Asset Management

Greece has found itself in dire financial straits for the last few years (its first bailout was back in 2010), but the situation has become critical in recent weeks. The impetus for this was the election in January 2015 of a radical left government that wished to reopen negotiations with creditors. Much of the response and commentary that we have seen from European politicians and central bankers has been political posturing that has masked the harsh reality: without significant debt restructuring, Greece will never be able to pay back its debts.

2015-07-14 00:00:00 Innovation – Too Much, or Too Little of a Good Thing? by Michael Lebowitz (Article)

New innovations save us a lot of time and effort but, believe it or not, they do little to generate sustainable economic growth. Sustainable economic growth depends on productivity. Despite these new innovations, domestic productivity is flat lining.

2015-07-14 00:00:00 How Likely is Hyperinflation in the U.S? Part Two by Seaborn Hall (Article)

My previous article covered hyperinflation's history, process, effects, definition, types and causes. Part Two answers the questions of how to gauge the likelihood of hyperinflation in the U.S., what the emerging dangers are, how it might happen here and how to prepare if it does.

2015-07-14 00:00:00 Risks from China Overtake Concerns About Greece by Robert Doll of Nuveen Asset Management

U.S. equity volatility spiked last week, driven by escalating concerns over Greece’s debt problems and a sharp volatility in Chinese equities. The Chinese stock market experienced a dramatic sell-off in recent weeks before staging a comeback toward the end of last week. Early last week, the possibility of additional Greek defaults and a potential messy exit from the eurozone intensified. By the end of the week, however, Greek officials and policymakers seemed to be approaching an agreement.

2015-07-13 00:00:00 Greece and the King of Asteroid 325 (and The One Lesson to Learn Before a Market Crash) by John Hussman of Hussman Funds

Last week, the price of Greek government debt soared on hopes of an 11th hour stick-save bailout by the European Union. Unfortunately, that price jump still left Greek bonds priced to reflect a default probability of 100% at every maturity. The jump only reflected an increase in the amount that bondholders evidently expect to recover in default, raising the implied recovery rate from the recent low near 30% to something closer to 50%. Put another way, the bond market has fully priced in the likelihood of a default coupled with a major haircut on Greek debt.

2015-07-13 00:00:00 US Equity and Economic Review For the Week of July 6-10: The Fed Speaks, Edition by Hale Stewart of Hale Stewart

Aside from two Federal Reserve releases, the only major news announcement was the ISM services index, which printed a very strong 56% headline number. New orders were a bullish 58.3 while employment was 52.7.

2015-07-13 00:00:00 54% of All EM Stocks Are In A Bear Market Even As The MSCI EM Index Is Off Only 7% by Eric Bush of GaveKal Capital

Two weeks ago we noted how more stocks than you might think are in a correction. At that time, 42% of the constituents in MSCI World Index were at least 10% off its 200-day high. As of yesterday, that number has increased to 57%.

2015-07-13 00:00:00 The Black Widow Returns by Richard Bernstein of Richard Bernstein Advisors

Strategies based on stretching for yield have a long history of surprising investors with unanticipated risks.

2015-07-13 00:00:00 On My Radar: High Probability of a Global Recession by Steve Blumenthal of CMG Capital Management Group

Economists have a number of different ways to measure over and under valuation. Most measures currently show an overvalued equity market. Let’s just say the market is expensively priced.

2015-07-11 00:00:00 It’s Not Over Till the Fat Lady Goes on a P/E Diet by John Mauldin of Mauldin Economics

The answer to the seemingly arcane question of whether we are in a secular bull or bear market makes a great difference in the proper positioning of your portfolios. And getting it wrong can have serious consequences.

2015-07-11 00:00:00 Global Investors: You Should Be Paying Attention to this Economic Indicator by Frank Holmes of U.S. Global Investors

In addition to our own macro models, BCA Research , a highly respected independent research company, pointed out that PMIs in developing economies have plunged to new lows. The International Monetary Fund also revised downward its global growth forecast for 2015. On this account, bad news is good news, as central bankers are scrambling to stimulate economic growth.

2015-07-11 00:00:00 China Market Update by Andy Rothman of Matthews Asia

China’s equity markets have steadily declined for weeks, raising a torrent of questions and concerns. Given that China accounts for more global growth than the U.S., Europe and Japan combined, this week Andy Rothman, Investment Strategist at Matthews Asia, answers some of your most pressing questions.

2015-07-10 00:00:00 More Evidence of China Slowing Permeating Asia by Bryce Coward of GaveKal Capital

Yesterday and today were host to a few more macro data points all signaling basically the same thing – a synchronized slowdown in Asia which appears to be driven by China. In the five charts below we show that Chinese CPI remains anemic while PPI just made a new cycle low, Australian unemployment ticked up, Japanese bank loans appear to be topping/rolling over, the Japanese economy watchers survey is rolling over, and Japanese machinery orders excluding ships keeps weakening.

2015-07-10 00:00:00 China Has Tools to Manage Stock Sell-Off by Anthony Chan, Stuart Rae of AllianceBernstein

Chinese equities are undergoing a sharp correction, and the volatility could last for some time. But we think policymakers have both the tools and the resolve to support the broader Chinese economy.

2015-07-10 00:00:00 Volatility as an ‘Opportunity Class’ by Rick Chan of PIMCO

Is volatility an asset class? It’s a question we often debate, internally and with clients. There’s no simple answer. Either way, though, it’s an academic point that matters less than our belief that volatility is an “opportunity class” – one with a variety of tactical and macro implications.

2015-07-10 00:00:00 China Market Update by Andy Rothman of Matthews Asia

China’s equity markets have been in steady decline for several weeks, raising a lot of questions about the potential impact on the world’s second-largest economy. Given that China accounts for more global growth than the U.S., Europe and Japan combined, this is an important topic for investors.

2015-07-10 00:00:00 What Do High-Yield Maturities Tell Us About Timing the Credit Cycle? Another Take on the Wall by Ara Lovitt of GMO

Not only did the maturity wall tell investors to be complacent right before the market was about to sell off, it told investors to be more cautious just as the market was about to rebound. The point is not that debt maturities are irrelevant. Rather, based on the experience of the last three credit cycles, there seems to have been much larger forces at work that ultimately caused the cycle to turn. From the perspective of an investor trying to formulate a high-yield outlook, it seems to GMO that focusing too much on the maturity wall is probably unhelpful.

2015-07-09 00:00:00 CIO Newsletter by Ritesh Jain of Tata Asset Management

In this edition of my newsletter, I have tried to address one of the most common questions that investors have been asking me these days; what to make of the noise surrounding us and how India is placed to weather this volatility. Let me tell you, it's not going to be a smooth ride. In the last 6 months, there has been too much going on worldwide.

2015-07-08 00:00:00 How We View the Big Picture by Team of Litman Gregory

We are regularly asked for our take on the broad macroeconomic topics of the day. Two of the more noteworthy big-picture subjects we have been asked about recently are the Greek debt crisis and the timing of the U.S. Federal Reserve rate hike. In most cases, we don’t believe we have new insights to add beyond the reams of commentary these topics typically inspire, and given the dynamic nature of these two topics, it is quite possible that new information will unfold as we publish this or shortly thereafter.

2015-07-08 00:00:00 Shareholder Activism Continues to Attract Assets and Boost Activity by Francis Gallagher, Peter Drippé of Visium Funds

While shareholder activism has been maligned in the past by the corporate world as a way to reap short-term gains at the expense of long-term shareholders, the practice is now enjoying an increasingly positive reputation. This change in perception is based on the beneficial long-term results of activist campaigns and the current view of activists as champions of shareholder value. Accordingly, the recent performance of activist-related investments, as well as their role in providing low-correlated returns has drawn significant interest from the institutional investment world.

2015-07-07 00:00:00 A First-Half Letter to Clients: Robert Shiller on the Valuation Quandary by Dan Richards (Article)

Since 2008, I have posted a template for a client letter each quarter as a starting point for advisors who want to send clients an overview of the period that just ended and some thoughts looking forward. This quarter’s letter addresses one of today’s most taxing questions for advisors and investors alike: How to deal with the quandary presented by today’s valuation levels on U.S. stocks.

2015-07-07 00:00:00 Asia Better Positioned to Handle a Hike by Sponsored Content from Invesco (Article)

It’s no surprise investors are concerned about whether a Fed rate hike will cause a replay of 2013’s taper tantrum meltdown in Asia. In our view, Asian markets are better positioned today to withstand short-term deterioration in global sentiment when the Fed decides to hike rates.

2015-07-07 00:00:00 Predicting The Future Is Difficult by Lance Roberts of Streettalk Live

Predictions of the future are indeed very difficult, and yet individuals are challenged every day with doing precisely that. For traders, it is what the market, or a particular investment, will do in the next few minutes to days. For longer-term investors, those predictions move out to months or years.

2015-07-07 00:00:00 Weighing the Week Ahead: Will FedSpeak Interrupt the Lazy, Hazy, Crazy Days of Summer? by Jeff Miller of NewArc Investments, Inc.

In one sense, the week ahead should be a quiet, dull semi-vacation. As Nat King Cole explained, the Lazy-Hazy-Crazy days of summer – pretzels, beer, and bikinis that never got wet. It is the lull before earnings and includes a light economic calendar. Will the A-Team need to return from the beach because of Greece? Or will it be a quiet week, disturbed only by an avalanche of FedSpeak and consequent punditry? One way or another, I think we will (finally) put the Greek drama behind us and resume the familiar debate about the Fed.

2015-07-07 00:00:00 Emerging-Market Stocks: Back on the Map by Milton Ezrati of Lord Abbett

After the volatility of the past few years, conditions once again appear favorable for this asset class.

2015-07-07 00:00:00 Historical Stock Market Analysis by Eric Bush of GaveKal Capital

According to our work, the US stock market is currently in the longest running cyclical bull market that has ever taken place in a structural bear market. We are currently in the 6th year of the cyclical bull market. No other cyclical bull in a structural bear has ever made it past five years (the prior longest was from October 2002 – October 2007).

2015-07-06 00:00:00 Judging the Future at a Speculative Peak by John Hussman of Hussman Funds

With valuations still extreme and deterioration in market action continuing to indicate a shift toward risk-aversion among investors, we are less concerned about specific factors such as Greece than about much more general pressures that threaten to force an upward spike in compressed risk-premiums. We’ve often noted that a market collapse is nothing other than that phenomenon: razor-thin risk premiums that are then pressed abruptly to higher levels.

2015-07-06 00:00:00 Exporting the “Bacon Genie” and Other Reasons to Be Bullish by Brooks Ritchey of Franklin Templeton Investments

From “Bacon Genies” to “Snuggies,” there’s little doubting Americans have a thirst for consumer goods, even those that don’t always appear to serve much practical purpose. Brooks Ritchey, Senior Managing Director at K2 Advisors®, Franklin Templeton Solutions®, explores how an evolving consumer culture is spreading throughout the globe, and how he and his team are positioning their portfolios with these types of macro considerations in mind.

2015-07-06 00:00:00 The Best Way to Judge Past Performance: Part Two by Chuck Carnevale of F.A.S.T. Graphs

On virtually every financial website on the planet there is a never-ending daily stream of stock tips and recommendations. Consequently, the investing public is literally flooded with information and advice regarding what stock to buy today or not to buy. Some of what is offered is supported by factual information and logic, but unfortunately, much of what is offered is merely based on the opinion of the author. This presents quite a challenge to the prudent prospective investor seeking sound advice or guidance.

2015-07-06 00:00:00 The Big Picture by Peter Schiff of Euro Pacific Capital

The past four years or so have been extremely frustrating for investors like me who have structured their portfolios around the belief that the current experiments in central bank stimulus, the anti-business drift in Washington, and America's mediocre economy and unresolved debt issues would push down the value of the dollar, push up commodity prices, and favor assets in economies with relatively low debt levels and higher GDP growth. But since the beginning of 2011, the Dow Jones Industrial Average has rallied 67% while the rest of the world has been largely stuck in the mud.

2015-07-06 00:00:00 Strategic Income: Positioning & Opportunities by (Article)

John Pattullo, Co-Head of Retail Fixed Income, discusses the Strategic Income Fund’s positioning and the current market environment. He notes the macro environment remains benign with some volatility spikes which can provide opportunities. John adds the deflation scare is broadly out of the way and Europe now in a better place with some growth coming through, which is encouraging.

2015-07-03 00:00:00 International Economic Week in Review For June 29-July 30; Greece and Canada Creating Problems, Edit by Hale Stewart of Hale Stewart

Greece is obviously the big wild card going into next week. And while the damage appears to be contained for now, there is no guarantee we won't see a negative feedback loop filter out into the market and EU economy. Canada's four months of GDP contraction are also getting a bit concerning. Even though we knew this was coming, it's still a most unwelcome development. However, other economies are at least holding their own for now.

2015-07-02 00:00:00 Investor Outlook: Trends are Looking Neutral by Andrew Pease of Russell Investments

Russell Investments’ Andrew Pease highlights insights from the investment strategists’ latest investor outlook and explains what may be in store for investors next quarter.

2015-07-02 00:00:00 Investors Take Shelter as Greek Referendum Nears by Frank Holmes of U.S. Global Investors

American industrialist J. Paul Getty once said: “If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” And when the amount is $1.73 billion, it’s everyone’s problem. Greece is officially in arrears for missing its scheduled payment Tuesday to the International Monetary Fund (IMF). Expecting this, American stocks had their largest one-day drop of 2015 on Monday. Market volatility, as measured by the VIX, spiked sharply.

2015-07-02 00:00:00 Eurozone Contagion Fears Flare as Greek Crisis Enters Crucial Phase by David Zahn of Franklin Templeton Investments

Whatever the outcome of the Greek referendum on Sunday (July 5), the result is likely to mean more uncertainty and possibly pain for the people of Greece. So far, according to David Zahn, head of European Fixed Income, Franklin Templeton Fixed Income Group, the economic fallout of the crisis appears to be mostly contained within Greece, and the likelihood of longer-term contagion to other eurozone economies seems to be limited.

2015-07-02 00:00:00 Looking for Income in All the Right Places by Morgan Harting, Martin Atkin of AllianceBernstein

Investors and advisors know they can’t depend solely on the old standbys—bonds, high-dividend stocks and cash—to produce income today, and they’re ready to try a new approach. But which one?

2015-07-02 00:00:00 Home of the Free, Land of the Entrepreneur by Frank Holmes of U.S. Global Investors

Where else but in America can a startup such as Uber be valued at $50 billion, higher than 80 percent of the companies in the S&P 500 Index, only six years after its founding? Where else but in America can someone reach billionaire status by inventing a new type of hosiery, as Sara Blakely did with Spanx? Before her now-ubiquitous undergarments were worn by women—and now men—all over the globe, Blakely was so broke that she had to write her own patent without the help of an attorney.

2015-07-01 00:00:00 The 2015 Mid-Year Geopolitical Outlook by Bill O’Grady of Confluence Investment Management

As is our custom, at mid-year, we update our geopolitical outlook for the rest of the year. 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 into year’s end. 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.

2015-07-01 00:00:00 Investing in Lake Wobegon: Where all the returns are above average by David Robertson of Arete Asset Management

The implicit assumption of many funds is that returns will be attractive over the investor's time horizon. Increasingly, this assumption appears to be invalid and many long term investors would be better served by taking an "absolute return" approach to investing.

2015-07-01 00:00:00 The Whole Story: Factors + Asset Classes by Jason Hsu of Research Affiliates

Every year we invite some of the investment industry’s most creative thinkers to speak about their work at the Research Affiliates’ Advisory Panel conference. Along with Nobel laureates Vernon Smith and Harry Markowitz, the speakers at our 14th annual meeting included Campbell Harvey, Richard Roll, Andrew Karolyi, Bradford Cornell, Andrew Ang, Charles Gave, Tim Jenkinson, and our very own Rob Arnott. The richness of the speakers’ presentations beggars any attempt to summarize them; I’ll limit myself to the points I found most intriguing and illuminating.

2015-07-01 00:00:00 Data Dependence Is Not a Monetary Policy, But Are the Dots? by Richard Clarida of PIMCO

At its June meeting, the Fed emphasized data dependence in setting monetary policy. Although a data-dependent Fed is one that appears to retain a great deal of optionality on the timing and pace of future rate moves, data dependence itself is not a monetary policy. The Fed’s reaction function to evolving data will likely determine the path of policy normalization. The “dot plot” provides some insight, but the dots alone don’t tell us how policy will play out if the macro data evolve differently from the baseline.

2015-07-01 00:00:00 A Return to Fundamentals? by Niels Jensen of Absolute Return Partners

June was a very eventful month, in particular here in Europe. Greece went from bad to worse, and the Greek people have now been asked to vote on their own destiny in a referendum scheduled for Sunday 5 July, which we expect to return in a 'Yes' vote. However, Greece is not the only subject in the July Absolute Return Letter. Financial markets have in many ways behaved oddly since the near meltdown in 2008. The objective of this month's letter is to look at whether we are finally beginning to see some sort of normalisation - as in a return to the conditions we had prior to 2008...

2015-07-01 00:00:00 More Volatility: A Positive Environment for Active Managers by Chuck Royce, Francis Gannon of The Royce Funds

Dating from the year-to-date low for the 10-Year Treasury on January 30 through the end of the first half, we have observed promising signs that the market may be taking greater strides toward normalization. CEO Chuck Royce and Co-CIO Francis Gannon discuss how higher rates might benefit bottom-up stock pickers, the potential for quality companies to regain leadership as volatility increases, the possible consequences of global economic recovery for both domestic and non-U.S. small-cap stocks, and the favorable landscape for consumers and its effect on our portfolio positioning.

2015-06-30 00:00:00 Greece Isn’t the Only Problem U.S. Stocks Face by Russ Koesterich of BlackRock

Several factors are dampening investor sentiment, including Greece and an emerging bear market in China. However, for U.S. markets, a longer-term problem may be one closer to home. Russ explains.

2015-06-30 00:00:00 Independence Day?: “Greferendum” on July 5 Rocks Markets by Liz Ann Sonders of Charles Schwab

“Greferendum”… the new “it” word of the day. In the United States, we celebrate Independence Day on July 4; but investors today are more interested in whether the following day will mark an independence day for Greece. As last week came to a close, Greek Prime Minister Alexis Tsipras walked away from talks with his country’s creditors and announced a referendum scheduled for July 5.

2015-06-30 00:00:00 It Never Rains in California by Bill Gross of Janus Capital Group

Ted Cruz recently suggested praying for rain in Texas, and apparently someone did a few weeks ago, producing a deluge resembling a modern day Noah’s Ark of sorts. California’s Governor Brown on the other hand, has taken a more secular approach. He believes that Mammon, not God, bears responsibility for the Golden State’s record drought and that I, we, all of us simple folk should cut back water usage by a minimum of 25%.

2015-06-30 00:00:00 A Mid-Year Assessment of Our Ten Predictions by Robert Doll of Nuveen Asset Management

We have described 2015 as the year when investors transition from disbelief to belief, or from skepticism to optimism. Sir John Templeton coined the phrase, “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” We believe we are entering the “optimism” phase.

2015-06-29 00:00:00 Durable Returns, Transient Returns by John Hussman of Hussman Funds

Over the course of three speculative bubbles in the past 15 years, I’ve often made the distinction between “durable” investment returns and transient ones. At any point in time, the cumulative long-term return of the stock market equals the gain that investors can reasonably assume will be durable (in that it is unlikely to be surrendered in the future), plus whatever market gain investors should assume will be entirely wiped out over the course of the present or future market cycles. As it turns out, those two components can be identified with surprising accuracy.

2015-06-29 00:00:00 Don’t be Surprised - Speech to CFA Society of Chicago by Stephen Romick of FPA Funds

I’m reminded of a gentleman who discovers a genie in a bottle. Granted one wish only – apparently even genies have pricing power – the man asks for peace in the Middle East. The genie backs away and says, “That’s way too difficult. Give me something easier.” The man ponders his options and asks the genie instead, to help him pick a good mutual fund. The genie quickly responds, “Let me get to work on the Middle East.”

2015-06-29 00:00:00 Grantham: Stocks Will Continue Upward until the Election by Justin Kermond of Advisor Perspectives

Jeremy Grantham says equity valuations are heading toward the “two-sigma” level that is the requisite threshold for a true bubble. At some point – which is not imminent – he says a “trigger” will precipitate the reversion back to mean levels. The market will continue to deliver positive returns until the next election, according to Grantham.

2015-06-29 00:00:00 Grantham: Stocks Will Continue Upward until the Election by Justin Kermond (Article)

Jeremy Grantham says equity valuations are heading toward the “two-sigma” level that is the requisite threshold for a true bubble. At some point – which is not imminent – he says a “trigger” will precipitate the reversion back to mean levels. The market will continue to deliver positive returns until the next election, according to Grantham.

2015-06-27 00:00:00 $8 Trillion Alternative Energy Boom Is a Win for Copper by Frank Holmes of U.S. Global Investors

As the world’s population continues to grow, and as more people in developing and emerging countries gain access to electricity, the role alternative energy sources such as wind, solar and geothermal play should skyrocket. Between now and 2040, a massive $8 trillion will be spent globally on renewables, about two thirds of all energy spending, according to Bloomberg New Energy Finance. Solar power alone is expected to draw $3.7 trillion.

2015-06-26 00:00:00 Shelter from the Storm in Europe by Mohamed El-Erian of Project Syndicate

To secure a prosperous future, Europe must confront three distinct challenges: the Greek crisis, Russia’s incursion in Ukraine, and the rise of populist political parties. While Europe could address each of these challenges individually with relatively little risk, all three must be addressed simultaneously.

2015-06-26 00:00:00 Time to Consider Municipal High Yield? by David Jurca of Russell Investments

David Jurca explains why investors may want to consider municipal high yield to help manage taxes, especially since it can offer strong tax equivalent yields at a historically attractive level of volatility.

2015-06-25 00:00:00 Unconstrained Global Investing in an Extraordinary Monetary Policy Enviornment by Michael Hasenstab of Franklin Templeton Investments

As we see it, it is only a matter of time before US wages start to rise to levels where inflation is triggered. Using the Fed’s own estimates, we are quite close to what’s considered to be full employment. To us, this does not justify 0% interest rates.

2015-06-25 00:00:00 Spectacular Bid, On the Grand Stage by Michael Kayes of Willingdon Wealth Management

Comparisons are central to our society, impacting just about everything we do. Does the current economic environment measure up?

2015-06-25 00:00:00 Batteries Not Included: Midyear Stock Market Outlook by Burt White, Jeffrey Buchbinder of LPL Financial

Expect the bull market to continue through 2015. In the stock market, 2015 has felt like déjà vu. In 2014, the year began with a tough first quarter and finished strong. After a weak start to the year, we believe that corporate America will provide a much needed boost for the second half and 2015 may also finish strong?—?providing the seventh year of positive returns, in the 5?–?9% range we forecast.

2015-06-25 00:00:00 Diversification: A Better Way to Avoid Portfolio Gridlock by Tracy Fielder of Invesco Blog

Every morning as I drive into the office, I see my fellow commuters darting from lane to lane, trying to choose the fastest one. The problem is, traffic in the “fast” lane inevitably slows down as cars crowd into it, and the slower lanes suddenly become the place to be. So in the long run, despite their risky maneuvers, these drivers don’t usually get much farther ahead than anybody else.

2015-06-25 00:00:00 Uncertainty Now; Opportunity Later: 2015 Economic & Stock Market Outlook, Mid-Year Update by Bruce Bittles, William Delwiche of Robert W. Baird & Co.

The message at mid-year is caution now, but opportunity later. It is not difficult to envision a more constructive environment as we move through the second half. If and when the Fed finally raises rates, conviction in a gradual tightening process could raise Fed policy back to bullish, and better seasonal patterns (and perhaps improved momentum) could be in store in the fourth quarter. On the other hand, a quick return of investor optimism and/or further breadth deterioration could add downside pressure in the near term.

2015-06-25 00:00:00 Invest in Tomorrow Today by Lewis Piantedosi, Yana Barton of Eaton Vance

In our view, some of the most attractive equity opportunities these days are tied to several compelling megatrends that are likely to persist over the coming years in the technology, healthcare and consumer sectors.

2015-06-25 00:00:00 “Ye Of Little Faith” What Has It Cost You? Part 1 by Chuck Carnevale of F.A.S.T. Graphs

I believe that one of the most important attributes that a successful investor must possess is optimism. Any serious student of financial history would recognize and acknowledge that economically speaking, things are good much more often than they are bad.

2015-06-23 00:00:00 Equities Gather Momentum on Positive Indicators by Robert Doll of Nuveen Asset Management

U.S. equities finished higher last week as the S&P 500 increased 0.8%, recording its highest weekly gain since April. The dovish message from Wednesday’s FOMC announcement boosted markets. Contagion from Greece appears relatively contained. The sell-off in equities in China did not impact global markets. The health care, consumer staples and utilities sectors rallied. Financials lagged as banking lost momentum and energy underperformed.

2015-06-23 00:00:00 Why VBINX is the Wrong Benchmark For Global Tactical Asset Allocation Strategies by Adam Butler, Michael Philbrick, Rodrigo Gordillo of BPG & Associates

We recently came across a couple of articles making the sensational claim that TAA is nothing more than a repackaged and dressed-up version of market timing. Both articles – and others, we’ve subsequently learned – point to a Morningstar study showing that TAA has underperformed the Vanguard U.S. 60/40 balanced fund over the past few years.

2015-06-23 00:00:00 Getting More from Low Market Volatility by Alex Barenboym of AllianceBernstein

Stocks still seem attractive, but it’s important to guard against a potential spike in market volatility. Today’s low-volatility environment happens to be a good time to shop for downside protection.

2015-06-23 00:00:00 Are Staples and Health Care Poised for More Outperformance? by Bryce Coward of GaveKal Capital

Today’s cyclical jolt aside, it appears from glancing at relative performance charts of growth counter-cyclicals (our code wording for the Consumer Staples and Health Care Sectors) that they could be poised for a relative performance breakout.

2015-06-22 00:00:00 Greece Implications for Global Carry by Alexander Giryavets of Dynamika Capital L.L.C.

At least some large money managers have been seriously concerned about possible Greece implications for global asset dynamics. We briefly present one counter-intuitive and contrarian point of view on possible Greece implications for Global Carry and possible hedges and tail-hedges based on recently emerged link of Global Carry and Dollar.

2015-06-22 00:00:00 Global Review and Equity Commentary: May 2015 by Team of Thomas White International

The decline in U.S. economic activity during the first quarter was more than earlier estimates, and appears to have weakened business sentiment in other parts of the world. Most of the fall in U.S. aggregate output was due to temporary factors such as adverse weather and port disruptions that led to delayed export shipments. The stronger dollar also reduced the earnings growth of large U.S. corporations with a global footprint.

2015-06-22 00:00:00 All Their Eggs in Janet's Basket by John Hussman of Hussman Funds

The financial markets are establishing an extreme that we expect investors will remember for the remainder of history, joining other memorable peers that include 1906, 1929, 1937, 1966, 1972, 2000 and 2007. The failure to recognize this moment as historic is largely because investors have been urged to believe things that aren’t true, have never been true, and can be demonstrated to be untrue across a century of history.

2015-06-22 00:00:00 On My Radar: Three-Way Asset Strategy by Steve Blumenthal of CMG Capital Management Group

“The probability of loss is no more measurable than the probability of rain. It can be modeled, and it can be estimated (and by experts pretty well), but it cannot be known.”– Howard Marks, Chairman, Oaktree Capital

2015-06-19 00:00:00 Global Economic Perspective: June by Team of Franklin Templeton Investments

In spite of lingering concerns about Greece’s fate, the European economy would appear to have hit a sweet spot marked by steadily improving growth and inflation figures along with declining unemployment.

2015-06-19 00:00:00 Gold and Health Care Stocks Get a Clean Bill of Health by Frank Holmes of U.S. Global Investors

Even though the Federal Reserve announced this week that it would wait a little longer to raise rates, spooked investors fled to gold bullion, helping to drive prices above $1,200 an ounce. It was the greatest single-session surge by percentage in nearly a month and a half for the yellow metal, widely seen as a safe-haven investment. As I told MarketWatch yesterday, $1,200 is an important threshold for gold miners because it helps increase profitability and spur production.

2015-06-19 00:00:00 ECRI: "Shifting Patterns in Recessions and Recoveries" by Doug Short of Advisor Perspectives (

ECRI's most recent article presents slides and notes from ECRI's Lakshman Achuthan talk at the Madrid Fund Forum conference. He discussed the relationship between lower trend growth and recessions. "ECRI believes that minimally we're returning to a period of more frequent recessions, as we saw in much of the twentieth century....Going back to at least the 1970s, growth has been stair-stepping down during each successive expansion."

2015-06-18 00:00:00 Picking U.S. Energy, Housing and Other Credit Sectors for the Long Haul by Mark Kiesel of PIMCO

Persistent trends in economies around the world are providing opportunities for focused, long-term investors in the credit markets. Mark Kiesel, Chief Investment Officer Global Credit, discusses promising themes PIMCO sees over the next three to five years, including the U.S. energy revolution, the rising Asian consumer, the ramifications of global banking regulation and latent demand in the U.S. housing market. PIMCO’s global investment professionals gathered in May at our annual Secular Forum to discuss our long-term, or secular, views of economies and markets around the world.

2015-06-18 00:00:00 Concerned About Rising Interest Rates? Consider These Four Alternative Investments by Walter Davis of Invesco Blog

As I travel across the country meeting with financial advisors and their clients, a common concern I hear voiced is “how can I position my portfolio for when the inevitable happens and interest rates start to rise?” In response, I state that certain types of alternative investments are well suited to help prepare portfolios for rising interest rates in the future, while also potentially adding value in the present.

2015-06-17 00:00:00 Weighing the Week Ahead: A Market Message for the Fed? by Jeffrey Miller of NewArc Investments, Inc.

While few expect a change in Fed policy at this week’s FOMC meeting, it will still be the center of attention. With last week’s interest rate jump, I expect the theme to be: Is the market sending the Fed a message?

2015-06-17 00:00:00 Managing Risk by Investing in Dividend-Paying Stocks by (Article)

Small-cap is an asset class that has historically been associated with increased volatility. We have always believed that dividends, plentiful in the small-cap space, can help mitigate some of that risk. But what are we looking for in the dividend-paying companies in which we invest? Portfolio Manager Jay Kaplan and Co-CIO Francis Gannon discuss.

2015-06-17 00:00:00 Concentrated Funds: Benefits of a Focused Approach by Stephen Grant, Cindy Starke of Value Line Funds

Since Value Line Funds launched its first mutual fund in 1950, the investment industry has evolved considerably. To meet the needs of today’s investor, the fund family line-up has retooled in recent years, including re-branding two equity funds as concentrated portfolios of 30-50 positions. In this paper, we highlight research demonstrating the benefits of the focused approach provided by concentrated funds.

2015-06-16 00:00:00 Mid-Year Investment Outlook: 10 Experts on What to Watch by Orla O'Brien of Loomis Sayles

We spoke with 10 Loomis Sayles investment experts about the most pressing issues and provocative investment themes for the remainder of 2015. What are they watching? Read on for their insights.

2015-06-16 00:00:00 Stay with Equities, but Prepare for Turbulence by Robert Doll of Nuveen Asset Management

U.S. equities were up fractionally last week, with the S&P 500 Index up 0.1% as seven out of ten sectors traded higher. Strong retail sales figures kept the focus on the Federal Reserve and the prospect of higher interest rates. Concerns over Greece’s debt problems pushed volatility levels higher. The banking industry performed well, while cyclical areas of the market such as transportation lagged.

2015-06-16 00:00:00 Rising Rates and the Rebirth of Global Stockpicking by John Remmert, Donald Hubert of Franklin Templeton Investments

Once the efforts of various central banks start to bear fruit and the global economy becomes healthier, we expect to see a potential reduction in the pursuit of unconventional monetary policies. That should enable equity markets to return to what we view as a more rational level of behavior.

2015-06-15 00:00:00 Credit Spreads Do Not Predict The Stock Market by Mark Ungewitter of Charter Trust Company

We keep hearing that deteriorating credit spreads are heralding an important stock market top. The chart below, covering nearly a century of market data, does not support this view. While it’s true that credit spreads have widened in 2015, this condition has occurred frequently during healthy bull markets. There are too many false positives to justify a negative outlook based on this indicator.

2015-06-15 00:00:00 Is the European Insurance Sector in a State of Emergency? by Matthieu Louanges of PIMCO

Europe’s insurance industry has responded to profound challenges with a high degree of agility and innovation on both sides of their balance sheets.

2015-06-15 00:00:00 June Economic Update by John Richards of Bronfman E.L. Rothschild

A drop in exports, poor weather, and shipping yard difficulties led the U.S. economy back into negative territory after GDP was revised downward to -0.7%. Many economists believe this is a similar situation to what we saw in 2014 with a drop in GDP during the first quarter, and a subsequent rebound in the following quarters. However, the strong dollar effect has continued into April and May and will continue to provide a headwind for GDP. The preference by consumers to save additional earnings instead of spend is also putting downward pressure on growth.

2015-06-15 00:00:00 On My Radar: Watch Out For Minus Two by Steve Blumenthal of CMG Capital Management Group

The three great essentials to achieve anything worthwhile are: hard work, stick-to-itiveness, and common sense.”– Thomas Edison

2015-06-14 00:00:00 When You Look Back On This Moment In History by John Hussman of Hussman Funds

There are moments in time when durable history is made; history that others observe much later, shaking their heads, at a loss to understand how the events that followed could not have been obvious at the time. When you look back on this moment in history, remember these things. When you look back on this moment in history, remember that spectacular extremes in reliable valuation measures already told you how the story would end.

2015-06-12 00:00:00 What The Great Recession Taught Me About Dividend Growth Investing by Chuck Carnevale of F.A.S.T. Graphs

Ever since I first got interested in investing in stocks circa 1965 I have been confronted with a constant and persistent admonition about the next pending market crash. In those early days I contributed much of the negativity toward stocks to a lingering overhang from the Great Depression. Many of the people I was talking with had been literally traumatized by stern warnings from their parents or grandparents about the risk of investing in the stock market. Stocks were too risky for prudent people to invest in and serious money should never be invested there.

2015-06-12 00:00:00 U.S. Economy Turns on the Afterburners-Is a Rate Hike Next? by Frank Holmes of U.S. Global Investors

So when will rates be raised again? Next Wednesday the world will tune in to see if Fed Chair Janet Yellen can answer that question. Though it's anyone's guess what she'll say, there's no denying that many of the economic indicators the Fed is keeping an eye on have sharply improved lately.

2015-06-12 00:00:00 Are We Mismeasuring the Economy? by Carl Tannenbaum of Northern Trust

The problem may not be with growth but rather the way we measure it.

2015-06-12 00:00:00 Tug of War by Liz Ann Sonders, Brad Sorensen & Jeffrey Kleintop of Charles Schwab

The current stalemate in the US market could continue for some time, with bouts of volatility and pullbacks expected as the market anticipates the initial rate hike. Be prepared by staying diversified and consider buying protection, but we would view such an event as the pause that refreshes and help set up the next sustainable bull run. Investors should also look overseas as the aggressive stimulus measures being taken by the ECB appear to be beneficially impacting the economy, and may help equities perform better in the coming months.

2015-06-11 00:00:00 Using Investment Manager Styles to Navigate Markets by Brian Andrew of Cleary Gull

Investment manager styles, like markets, move in cycles. So as investment advisors, we try to identify where we are in the market cycle to choose the best managers. Decision making should not be binary – “I like the market or I don’t like the market,” with a resulting buy or sell decision. In downturns, the normal reaction is to sell out of the market rather than looking at how to stay in the market and become more defensive. In fact, being out of the market negatively impacts results over time.

2015-06-11 00:00:00 When Following the Herd is Risky, Where is the Safety? by Zachary Karabell of Envestnet

Risk and safety. Safety and risk. In investing, as in life, balancing both is an ongoing challenge. We know intuitively that all of either one or the other rarely yields the results we want, but finding the right mix is easier said than done.

2015-06-10 00:00:00 Bears Gather Around the Goldilocks Eurozone by David Zahn of Franklin Templeton Investments

The eurozone is currently offering what we would regard as an ideal environment to generate growth, so we’d certainly be slightly concerned if the economy there was not growing.

2015-06-10 00:00:00 5 Investing Myths by Lance Roberts of Streettalk Live

One of the biggest myths perpetrated by Wall Street on investors is showing individuals the following chart and telling them over the “long-term” the stock market has generated a 10% annualized total return. The statement is not entirely false.

2015-06-09 00:00:00 In Defense of ‘Smart Beta’ by Keith Goddard (Article)

In a recent article, Why Smart Beta is Really Dumb, Michael Edesess encouraged investors to be skeptical of the growing number of factor-based investment strategies being marketed under the moniker of "smart beta." While I applaud Edesess' call for skepticism, I am compelled to play the role of public defender and cross-examine his accusations.

2015-06-09 00:00:00 Four Reasons Why We Do Not Hedge Against Currency Volatility by Sponsored Content from Invesco (Article)

Currency volatility has continued to be a clear theme so far in 2015. Our International Growth strategy doesn't hedge for currency exposure, and never has. In essence, the team is much more concerned with what company managements are doing than central bankers.

2015-06-09 00:00:00 Does It Make My Portfolio Better? by Roger Nusbaum of AdvisorShares

Cliff Asness posted a commentary a few days ago that includes the following; One of the most basic lessons of investing is to think about how each investment impacts your overall portfolio not just its characteristics stand alone. You don’t evaluate your other investment options based on, “Would I trade my whole portfolio for this?” but rather on, “Does it make my portfolio better?”

2015-06-09 00:00:00 Precision in Your Retirement Short Game by Glenn Dial of Allianz Global Investors

Getting the asset allocation right as plan participants close in on retirement is critical, writes Glenn Dial, Head of US Retirement Strategy at Allianz Global Investors. And professional advice can help them find that pinpoint accuracy.

2015-06-08 00:00:00 Why Stocks are Not "Cheap Relative to Bonds" by John Hussman of Hussman Funds

One of the constant refrains we hear at present is that while stocks may be richly valued on an absolute basis, they are “cheap relative to bonds.” At least one professor recently told students that valuations are meaningless because the P/E on cash is 100. Technically, with T-bill yields at just 0.01%, the P/E on cash is more like 10,000, but let’s not quibble. Using simple P/E ratios or inverted interest rates as a standard of value only makes sense if you have no appreciation for how securities are valued.

2015-06-08 00:00:00 Is the Air Getting Thin for Japanese Stocks? by Katsuaki Ogata, Masahide Ooka of AllianceBernstein

The rapid surge of Japanese equities in recent years has left many investors worried that they may have missed the bus. We believe big changes underway can support further profitability improvements and push the market higher.

2015-06-08 00:00:00 On My Radar: “Shine Your Light Bright” by Steve Blumenthal of CMG Capital Management Group

Today, let’s take a look at the current state of inflation and the direction of interest rates and peek at a few processes that may help us better navigate the rough waters ahead. My gut says it will be the bond market that jerks the Fed’s chain. We’ll see.

2015-06-08 00:00:00 As the Economy Grows, Bonds Struggle and Equities Tread Water by Robert Doll of Nuveen Asset Management

U.S. economic data last week seemed to confirm that the country is rebounding from a weak first quarter. Manufacturing, construction, sales figures and the labor market all showed signs of improvement.

2015-06-08 00:00:00 Risk Revisited Again by Howard Marks of Oaktree Capital Management

In April 2014, 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.

2015-06-08 00:00:00 Billions and Billions Pour into India and China by Frank Holmes of U.S. Global Investors

It’s been a little over a year since Narendra Modi took office in India, and so far the results have been mostly positive for the South Asian country and the surrounding region. Among other achievements, Modi’s government has managed to enact important policy reforms, increase public investments in infrastructure, lower food inflation and generally open India up to business on a global scale.

2015-06-05 00:00:00 Recovery Rallies, Is Six Years Enough by Craig Callahan of ICON Advisers, Inc.

Contrary to the bearish headlines, we at ICON believe that we are in the midst of a long-term recovery. With our valuation methodology as our guide, we believe there is enough value in the market to sustain a continued recovery. Furthermore, as we saw with the post 1987 market recovery, bull markets can last longer than 6 years. We believe there is still room for market growth in the current environment.

2015-06-05 00:00:00 Bond Tug-of-War by Anthony Valeri of LPL Financial

The bond market tried to end the month of May on a high note but did not quite make the mark. The last 10 days of May 2015 witnessed fairly steady improvement in high-quality bond prices after a difficult five weeks, but it was still not enough to offset losses for the month. The broad Barclays Aggregate Bond Index still finished 0.24% lower in May and posted consecutive monthly declines for the first time since the last two months of 2013.

2015-06-05 00:00:00 Two Sides of Risk Management by Michael Armitage of Milliman Financial Risk Management

Investment returns have always found a natural place in the spotlight. But volatility, and the impact it can have on a portfolio, is only now getting the attention it deserves.

2015-06-05 00:00:00 America Is Woefully Unprepared for Retirement by Carl Tannenbaum of Northern Trust

Solutions are elusive. We cannot turn back the clock and increase our saving rates or invest with the benefit of hindsight. But from here forward, we need to take a hard look at the structure of public and private retirement systems and reinforce financial literacy among beneficiaries.

2015-06-05 00:00:00 Employment, Wages and Housing Leading The Economy Higher by Urban Carmel of The Fat Pitch

The majority of US economic data points to strength. Employment growth is the best since the 1990s. Wages and compensation are growing at the highest rates since the recession ended. And housing, both new construction and sales, are the best in 8 years. The overall economic trend remains positive.

2015-06-05 00:00:00 Billions and Billions Pour into India and China by Frank Holmes of U.S. Global Investors

It’s been a little over a year since Narendra Modi took office in India, and so far the results have been mostly positive for the South Asian country and the surrounding region. Among other achievements, Modi’s government has managed to enact important policy reforms, increase public investments in infrastructure, lower food inflation and generally open India up to business on a global scale.

2015-06-04 00:00:00 Emerging Market Currencies: All About That Base by Esty Dwek of Loomis Sayles

The case for investing in emerging local currency debt over the long haul is well-documented: as developing countries improve productivity, their economies globalize and their currencies appreciate.But this is a long-term theory and the current reality may differ somewhat. Indeed, amid the current US dollar strength, many US dollar investors have been disappointed by EM local debt returns -- which have fallen more than 5% each year of the last two years. But what happens if we look at emerging market (EM) local debt returns through the lenses of different currencies?

2015-06-04 00:00:00 Why Oil Price Rally Isn’t a Surprise, but Iron Ore’s Price Should Stay Low by Tucker Scott of Franklin Templeton Investments

While oil has dealt with a relatively recent increase in supply, iron ore has been suffering through a long-term glut. And, based on our analysis of future supply/demand trends, we expect the abundance of iron ore to continue—and possibly increase.

2015-06-04 00:00:00 China in the Spotlight by Eswarie Subrahmanyam Balan of WisdomTree

While 2014 was a challenging year for emerging markets, the story in 2015 has been substantially different so far. At a country level, both China and Russia have been primary contributors to this recovery.

2015-06-03 00:00:00 Global Tactical Asset Allocation: Just the Facts (Part 1) by Adam Butler, Michael Philbrick, Rodrigo Gordillo of BPG & Associates

We recently came across a couple of articles making the sensational claim that TAA is nothing more than a repackaged and dressed-up version of market timing. Both articles – and others, we’ve subsequently learned – point to a Morningstar study showing that TAA has underperformed the Vanguard U.S. 60/40 balanced fund over the past few years.

2015-06-03 00:00:00 Faded Photographs: Obituary Of The Bull Market by Doug Ramsey of The Leuthold Group

We’re always impressed with those lengthy, and unnaturally eloquent, obituaries that pop up online within minutes of the passing of an elderly celebrity or public figure. Such an exercise might be fun when applied to another subject, specifically, the cyclical bull market in stocks (b. 2009—d. 20XX). How will today’s bull market be viewed through the eventual clarity and objectivity of hindsight? We’ve pulled together several still frames…to maximize the effect, run each page through a fax machine to produce the nicely faded, black-and-white images that might accompany an obituary.

2015-06-03 00:00:00 Global Carry Mechanics and Derailment by Alexander Giryavets of Dynamika Capital L.L.C.

Global Carry (a.k.a. Risk Parity) appears to be derailed, as we cautioned in February. We observe how that happened and how Global Carry is singularly linked to Bund and US Dollar. We also refresh and reflect on our US Leading Indicator and SPX fair value.

2015-06-03 00:00:00 Are You a Carousel or Coaster Investor? by Jerry Wagner of Flexible Plan Investments

Historically, in the Midwest and Northeast, Memorial Day weekend has been the kickoff for amusement park re-openings. From rollercoasters to merry-go-rounds, the plunges and whirls begin in earnest with the unofficial beginning of summer.

2015-06-02 00:00:00 State of Emerging Markets: All About Those [Central] Banks by Mark Mobius of Franklin Templeton Investments

Moving into the second quarter of 2015 and beyond, we believe a complex global background appears broadly favorable for emerging markets.

2015-06-02 00:00:00 Greece: An Update by Bill O’Grady of Confluence Investment Management

In February, we reported on the situation in Greece. Over the past few months, there has been no resolution to Greece’s debt problem, despite numerous deadlines and meetings. In our earlier report, we framed the conflict between Greece and the EU in terms of game theory. In this report, we will begin by recapping our earlier analysis. Using this framework, we will discuss how a third option has evolved which will likely force PM Tsipras to acquiesce to the EU. As always, we will conclude with potential market ramifications.

2015-06-02 00:00:00 Are Bond Investors Crying Wolf? by Niels Jensen of Absolute Return Partners

Since we last wrote to you there has been quite a dramatic increase in interest rates in most markets and in Germany in particular. In this letter we look into whether this is the beginning of something much bigger. For those of you with too little time on your hands we conclude that it is NOT. Economic growth will stay low for many years to come, and central banks have no intention of suddenly flooding the bond market with sell orders.

2015-06-01 00:00:00 Three Reasons Why We Like Brazil’s Prospects by Mark Jason of Invesco Blog

Strong headwinds in Brazil have recently blown its stock market off course. In the first quarter of 2015, Brazilian equities fell more than 15% in US dollar terms, as measured by the Bovespa Index. While current forecasts do not see these storms abating any time soon, our team finds reasons for optimism over the long term.

2015-06-01 00:00:00 Oil Prices: 4 Factors to Watch as Iran Increases Energy Exports by Saurabh Lele of Loomis Sayles

Iran eagerly awaits the opportunity to escalate its oil exports. A final agreement on the country's nuclear capabilities is expected this summer: sanctions will start to be peeled back and Iran will be able to increase production. Within 12 -18 months, they will likely be producing an additional one million barrels per day. It’s also likely that Saudi Arabia, now producing well above its quota, will be called on by OPEC members to reduce its production in order to accommodate Iran's higher output.

2015-06-01 00:00:00 Case for International Growth over Value Remains Strong by Team of Calamos Investments

We continue to believe investors should favor growth over value, given fundamentals, valuations and secular opportunities. International growth equities have generated higher revenue and earnings growth and delivered better capital efficiency, as reflected in a higher return on invested capital (ROIC) relative to value. Also, growth is inexpensive vs. value; growth companies are positioned to benefit from secular tailwinds; and international growth is underrepresented in stock assets.

2015-06-01 00:00:00 US Conundrum by Alexander Giryavets of Dynamika Capital L.L.C.

We observe that the US Conundrum Thesis is still in place with Global Business Cycle ongoing deceleration, European Subcycle recovery and Asian Subcycle muddling through.

2015-06-01 00:00:00 On My Radar: Inflation and The Big (Bigger) Short by Steve Blumenthal of CMG Capital Management Group

"Negative-yield bonds now account for some €1.5 trillion of debt issued by governments in the euro area, equivalent to almost 30% of the total outstanding. Many expect even more of the global bond market to fall into negative yield territory. Half of all government bonds in the world today yield less than 1%.”– John Mauldin

2015-05-31 00:00:00 The Liquidity Time Bomb by Nouriel Roubini of Project Syndicate

Advanced countries’ central banks have managed to keep interest rates low, reduce the volatility of bond markets, and lift many asset prices. But a series of recent shocks suggests that macro liquidity has become linked with severe market illiquidity.

2015-05-31 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

The trend in US equities remains higher. But momentum is very weak and breadth suggests the uptrend is running on fumes. This is the set up as we enter June, one of the weakest months of the year for equities.

2015-05-31 00:00:00 Behold the Power of Buybacks and Dividends by Frank Holmes of U.S. Global Investors

Buybacks and dividends. The mere mention of either one is often enough to make some investors’ hearts race with excitement and embolden them with confidence that company management is being a better steward of capital.

2015-05-31 00:00:00 When Paper Wealth Vanishes by John Hussman of Hussman Funds

As in equal or lesser speculative bubbles across history, there’s a common delusion that elevated stock prices represent wealth to their holders. That is a fallacy, and we can hardly believe that given the collapses that followed the 2000 and 2007 extremes, investors (and even Fed policymakers) would again fall for that fallacy so readily. The actual wealth is in the cash flows that are ultimately delivered into the hands of shareholders over time.

2015-05-29 00:00:00 Capital Sigma: The Sum of the Various Sources of Advisor-Created Value by Jianan Du, Yinsi Qi, Brandon Thomas, Janis Zvingelis of Envestnet

An ongoing debate among investment advisors and their clients centers on value: creating it, preserving it, and perpetuating it. Each faces a different challenge: Advisors are tasked with delivering worth to their clients, and clients need to understand what they can expect for the dollars they spend.

2015-05-29 00:00:00 Evolving Infrastructure Investing – Broader, Deeper, Global by Shundrawn Thomas, Northern Trust Asset Management, Head of Funds and Managed Accounts (Article)

Infrastructure offers an attractive combination of potential inflation hedging, income generation and long-term capital growth. In this video, Shundrawn Thomas, Global Head of ETFs, outlines the distinctive approach of FlexShares NFRA ETF.

2015-05-28 00:00:00 World War D—Deflation by John Mauldin of Mauldin Economics

Everywhere I go I’m asked, “Will there be inflation or deflation? Are we in a bull or bear market? Is the bond bulk market over and will interest rates rise?" The flippant answer to all those questions is “Yes.” And that can be the correct answer as well, but it depends on what your time frame is and what tools you use to measure the markets and inflation.

2015-05-28 00:00:00 How Much Should We Invest in Emerging Markets? by Dr. Burton Malkiel of WaveFront Capital Management

Investors today are significantly underexposed to emerging markets; fortunately, the opportunity to correct this flaw is the best in years.

2015-05-28 00:00:00 Is Now a Good Time to Add More Risk? by Alan Hartley of Black Cypress Capital Management

About this time in a market cycle, after several years of strong stock market returns, there is a tendency for investors to become more tolerant of risk. One may find his or herself questioning the reasoning behind their current asset allocation and strongly considering adding more stocks and other “risk” assets to their portfolio.

2015-05-28 00:00:00 Tantrum Potential at Home, Opportunity Overseas by Russ Koesterich of BlackRock

U.S. equities continue to climb, but BlackRock Global Chief Investment Strategist, Russ Koesterich, discusses why the best opportunities may reside outside the United States, which, in fact, has been the case so far this year.

2015-05-28 00:00:00 Yellen on Interest Rates and Equities, Grabs Attention by Paul Eitelman of Russell Investments

Paul Eitelman compares recent comments from Fed Chair Janet Yellen to historical commentary and also provides an update on Russell Investments’ outlook on the U.S. economy.

2015-05-28 00:00:00 Brexit Signs: Envisioning an EU Without the UK by David Zahn, Heather Arnold, Philippe Brugere-Trelat of Franklin Templeton Investments

In my view, the big risk for the United Kingdom of exiting the EU would be marginalization, not just economically, not just financially but also politically … I would even go so far as to suggest that the status of the United Kingdom as a large world financial center could be at risk if it were to leave the EU.

2015-05-28 00:00:00 Half Full or Half Empty by Herbert Abramson, Randall Abramson of Trapeze Asset Management

The ultimate question for investors. Is the glass half full, that is to say are economic backdrops improving to support attractive valuations, or to the contrary, half empty, deteriorating and threatening full valuations?

2015-05-27 00:00:00 The Market and U.S. Economy from a Small-Cap Perspective by (Article)

Portfolio Manager and Principal Jay Kaplan discusses current market and economic conditions and what he's hearing from company management teams, the effect energy prices are having on some of his holdings, and Royce's competitive advantage within the small-cap space.

2015-05-27 00:00:00 Macro Is Not the Markets: The Global Economy and the Resulting Investment Environment by Jeremy DeGroot of Litman Gregory

In a recent client Q&A event, Litman Gregory chief investment officer Jeremy DeGroot shared his thoughts on the global economy. He pointed out that, historically, macroeconomic cycles and financial-market cycles have not coincided, which has implications for asset allocation. Investors need to analyze the stock market separately from the economy.

2015-05-27 00:00:00 Global Economic Perspective: May by Team of Franklin Templeton Investments

Having come through 2015’s first quarter with virtually no growth, the US economy is generally expected to pick up during the rest of this year. Indeed, as we move into a new quarter and shake off the effects of a significant West Coast dock strike and severe winter weather, forward indicators have pointed toward better growth.

2015-05-27 00:00:00 The Uncorrelated by David Kleinberg of Universal Orbit

Once deemed uncorrelated, sovereign energy policies combine infrastructure development with corporate capital investment accounting for both scalability of renewable sources over the next 25 years and commodity strip pricing in the short-term. Reflecting continued private investment in public policy, simple audit of global multinational corporate profiles features integrated wind and solar operations—a dedication of business segments operations within industrial portfolios including oil and gas.

2015-05-27 00:00:00 Do Record Stock Highs Signal a Top? by Russ Koesterich of BlackRock

With the U.S. stock market hitting a new record high every week, are we close to the bull market's top? Russ and an investment strategist on his team, Kurt Reiman, weigh in.

2015-05-26 00:00:00 Disproving the Four Themes Behind Gold Bearishness by Trey Reik (Article)

The resurgent bear thesis for gold rests on four key assumptions. Because each of these assumptions is already in the process of being disproved, Western investment demand for gold will surge dramatically in coming years.

2015-05-25 00:00:00 Voting Machine, Weighing Machine by John Hussman of Hussman Funds

The fact is that valuations drive long-term returns, but over shorter horizons, stock prices are the result of whatever investors collectively believe, however reckless or detached from historical evidence those beliefs may be. As long as enough market participants are attached to the idea that risk is their friend (or enemy) regardless of the price, there is no natural limit to how overvalued (or undervalued) stocks can become. There is only one way to address this: measure investor risk preferences directly through observable market internals.

2015-05-23 00:00:00 Rate Hike Ahead? Here’s How to Get Your Portfolio Ready by Frank Holmes of U.S. Global Investors

Many experts and analysts believe a June rate hike seems very unlikely, but today, Federal Reserve Chairwoman Janet Yellen hinted that one might happen as soon as the end of this year.

2015-05-23 00:00:00 Can Emerging Markets Survive Lower Commodity Prices? by Carl Tannenbaum of Northern Trust

Can Emerging Markets Survive Lower Commodity Prices?; Some Central Banks Are Playing the Market; Australia – Real Estate Is Too Frothy for Regulator’s Tastes

2015-05-23 00:00:00 GDP Seasonal Adjustment: There's No Smoking Gun by Urban Carmel of The Fat Pitch

First quarter GDP growth was stronger than originally estimated. When adjusted for seasonality, the economy grew 1.8%, which is consistent with the average growth rate over the past three years. It is also consistent with a wide variety of economic data (employment, wages, housing, consumption) released in the past several months. And, finally, it is consistent with the message being sent by the treasury market.

2015-05-23 00:00:00 Investor Opinions Have Become Extremely Uniform, And That's Not Good by Urban Carmel of The Fat Pitch

Investor opinions have become extremely uniform. By some measures, they are the most uniform in 25 years. In the past, this has corresponded to a period where equities have lacked significant upside momentum. That appears to be a quite likely outcome until investors become more varied in their market outlook than they are today.

2015-05-23 00:00:00 Northern Trust Perspective by Jim McDonald of Northern Trust

Our monthly Perspective newsletter keeps you apprised of current market and economic conditions across an array of topics including: US, European and Asian markets, global real estate and commodities.

2015-05-21 00:00:00 Global Review and Equity Commentary: April 2015 by Team of Thomas White International

As expected, the global economy slowed during the first quarter but should gain momentum in the coming months. The U.S. economy almost came to a standstill during the first three months of the year as adverse winter weather limited activity. Consumer spending moderated and construction activity slowed, while lower oil prices discouraged businesses in that sector from capital investments. The stronger dollar and labor disputes at some of the seaports limited export gains, and led to a widening of the U.S. trade deficit.

2015-05-20 00:00:00 The Idolatry of Interest Rates Part I: Chasing Will-o’-the-Wisp by James Montier of GMO

First is the idolatry of the “equilibrium/natural/neutral” rate of interest displayed by central bankers around the world. The second idolatry is the modern-day belief in the world’s greatest con: that monetary policy matters.

2015-05-20 00:00:00 China is Choking on its Own Debt by Joseph Taylor of Loomis Sayles

We have it on good authority. And in this case that authority is an unlikely source – the People’s Bank of China (PBoC). It’s difficult to remember the last time so many paid so little attention to something so vitally important. The revelation came in the bank’s release of its 1Q 2015 Monetary Policy Report on 8 May 2015.

2015-05-20 00:00:00 Breakdowns in the Health Care Sector by Team of GaveKal Capital

Health care stocks have been the leadership sector in the MSCI World, and many (such as biotech) have reached some pretty elevated valuations. Most stocks in the sector have been in multi-year bull markets trends, outperforming the MSCI All Country World Index significantly.

2015-05-19 00:00:00 Do Goldman Sachs' Funds Add Value for Investors? by Larry Swedroe (Article)

Over the last few years, an expanding line of mutual funds created by commercial banks such as Goldman Sachs and JPMorgan Chase have been drawing billions of dollars from investors looking to earn a good return. While the fees these funds have generated are among the few consistent bright spots of growth on Wall Street, the question for investors is whether or not the active mutual funds managed by these banks actually have been good investment choices.

2015-05-19 00:00:00 Active Equities Don’t Have to Be Riskier by Kent Hargis, Chris Marx of AllianceBernstein

Many investors are throwing in the towel on active equity management in the name of evading risk. But being active doesn’t always mean accepting higher risk. Consider, for instance, the benefits of even-tempered stocks.

2015-05-19 00:00:00 Crescendo or Consolidation? by Jeffrey Saut of Raymond James

The S&P 500 (SPX/2122.73) has basically been locked in a trading range between 2040 and 2100 since early February of this year. Some technical analysts term the subsequent chart pattern a wedge and others call it a rising wedge. While pundits can debate the difference between the two, the important point is which way said chart pattern will be resolved with either an upside breakout, or a downside breakout.

2015-05-19 00:00:00 Devil Inside: Dissecting the Most Popular Valuation Metrics by Liz Ann Sonders of Charles Schwab

Given that first quarter earnings season is largely in the books—and since it’s been a couple of years since I wrote comprehensively about valuation—I am tackling it again this week.

2015-05-19 00:00:00 The U.K. Elections by Bill O’Grady of Confluence Investment Management

The recent UK elections shocked pollsters, who had predicted a hung parliament. Instead, the Conservatives (Tories) won an outright majority in the legislature, allowing the party, led by David Cameron, to form a government without a coalition. We begin by recapping the election results and discuss the campaigns and what they indicate for future U.K. policy. An examination of the impact of the election follows, beginning with an analysis of the geopolitics of Britain and ending with how the election affects the country’s geopolitical situation.

2015-05-18 00:00:00 The "New Era" is an Old Story by John Hussman of Hussman Funds

It’s not monetary easing, but the attitude of investors toward risk that distinguishes an overvalued market that continues higher from an overvalued market that is vulnerable to vertical losses. That window of vulnerability has been open for several months now, and the immediacy of our downside concerns would ease (despite obscene valuations) only if market internals and credit spreads were to shift back toward evidence of investor risk-seeking. Meanwhile, there’s no evidence to suggest that historically reliable valuation measures have somehow become irrelevant.

2015-05-18 00:00:00 Investor Sentiment Around the World by Mark Mobius of Franklin Templeton Investments

We certainly don’t want to jump to any conclusions about potential market performance based on investor sentiment (or any one indicator for that matter), but it reminds me of the late Sir John Templeton’s famous words: ‘Bull markets are born on pessimism, grow on skepticism and die on euphoria.

2015-05-18 00:00:00 Weighing the Week Ahead: Will the Interest Rate Spike Threaten Stock Prices? by Jeff Miller of New Arc Investments

This week’s economic calendar includes the most important housing data, but the market context will prove irresistible to the pundits. Stocks continue at the top of the trading range, and even broke through for a few minutes. Even more interesting is the bond market. Interest rates decisively broke their trading range and also showed a lot of volatility.

2015-05-18 00:00:00 Constructively Dissatisfied by Keith McCullough of Hedgeye Risk Management

Say I was constructively dissatisfied with how last week went for Global Macro markets. Constructive because I think we made the right research pivot on Dollar Down, Commodities Up. Dissatisfied because devaluing the Dollar isn’t the answer for America’s stagnating economy.

2015-05-18 00:00:00 Warning: Don’t Let Market Hype Cause You to Miss This Total Return Opportunity by Chuck Carnevale of F.A.S.T. Graphs

Since the Great Recession of 2008 came to an end, the stock market, as measured by the S&P 500, is almost midway through the 7th year of a strong bull run. This marks today’s bull market as the third longest in US history. Considering how traumatizing the Great Recession and the accompanying stock market collapse was for most investors, this should be good and comforting news. But unfortunately, the length and level of our current bull market seems to be conjuring up more worry and angst than comfort.

2015-05-16 00:00:00 Secular Versus Cyclical: Notes from SIC 2015 by John Mauldin of Mauldin Economics

The consensus I’m hearing and reading from the 500+ attendees at the recent Strategic Investment Conference is that this was the best ever. It was certainly intense, with more divergent views presented this year than at previous conferences. Plus, the range of topics was rather dramatic. This year I was able to listen to all but one of the presentations, and I want to share with you my notes and takeaway thoughts.

2015-05-16 00:00:00 Wall Street Underestimates the Great American Earnings Machine by Frank Holmes of U.S. Global Investors

With a little over 90 percent of S&P 500 companies having reported, it looks as if the index has risen a modest 2 percent for the first quarter. That might not seem significant, but as LP Financial Services Chief Investment Officer Burt White points out in a recent Barron’s piece, “given the steep uphill climb that corporate America faced due to the twin drags of the oil downturn and strong U.S. dollar, this is actually a good result.”

2015-05-16 00:00:00 Align the Design: Considering and Evaluating Target-Date Glide Paths by Stacy Schaus and Ying Gao of PIMCO

Few responsibilities are as important to defined contribution (DC) plan sponsors as selecting a default glide path that best maximizes a participant’s odds of retiring on time and with sufficient lifetime income. The goal, put simply, is to maximize asset returns while minimizing volatility relative to the retirement liability – precisely what Objective-Aligned Glide Paths aim to achieve.

2015-05-15 00:00:00 “Wrestling with Something Else”: Why this Gold Bear Market Is Different by Frank Holmes of U.S. Global Investors

Earlier this week, I had the pleasure to appear on Jim Puplava’s Financial Sense Newshour radio program and discuss the state of the gold market. Along with my peers John Doody of the Gold Stock Analyst and Ross Hansen of Northwest Territorial Mint, I shared my thoughts on how we arrived in the current bear market, what factors might help us get out of it and the role real interest rates play in prices.

2015-05-15 00:00:00 Taper Tantrum Redux by Anthony Valeri of LPL Financial

After a brief reprieve at the end of last week (May 4–8, 2015), the global bond sell-off resumed Monday, May 11, 2015, with 10- and 30-year Treasury yields rising to year-to-date highs of 2.28% and 3.04%, respectively. Treasury yields have now broken out of their recent ranges and have done so quickly.

2015-05-15 00:00:00 Diagnosing China's Debt Disease by Andy Rothman of Matthews Asia

China suffers from a serious case of “debt disease,” but the treatment and side effects may not be as severe as some expect, and dramatic credit tightening is very unlikely. Debt is concentrated among state-owned firms, while the private firms that generate most of China’s new jobs and investment have already deleveraged. The biggest risk is the high level of debt among real estate developers.

2015-05-15 00:00:00 Beyond the Active vs. Passive Debate by Robert Cron of Bronfman E.L. Rothschild

The active versus passive debate is a hot topic in the financial media. That’s no surprise given recent performance and a dramatic shift in investors’ preferences. For several years, the average passively managed fund has outperformed the average actively managed fund.

2015-05-14 00:00:00 The Momentum Mob by Keith McCullough of Hedgeye Risk Management

In markets, the momentum mob constantly cares about one thing – #charts. Lots and lots and lots of charts. The linear moving average ones are the simplest to scare you with.

2015-05-14 00:00:00 Risk Parity: Reducing Our Bond Exposure by Scott Wolle of Invesco Blog

Every month, the portfolio management team for the Invesco Balanced-Risk Allocation strategy examines the market’s signals for stocks, bonds and commodities, and makes tactical adjustments in an effort to enhance returns. In recent weeks, our tactical signals for government bonds have led us to substantially reduce our exposure and adopt an underweight position.

2015-05-13 00:00:00 The Next Generation by Bill O’Grady of Confluence Investment Management

Saudi King Salman recently announced a set of changes to his cabinet and the order of royal succession. We believe these changes are significant, perhaps the most critical since the first royal succession in 1953. In this report, we detail the changes announced by King Salman and provide a short history of the important succession plan that was established in 1964. With this background, we show how the king’s announcement represents the first change in the program and discuss how these changes could affect the future stability of the kingdom.

2015-05-13 00:00:00 Stocks Look Expensive…and Still Attractive by Ilya Figelman of AllianceBernstein

Developed-market equity valuations seem a bit expensive today—but we still think they’re worth an overweight in multi-asset strategies. A wider view shows that stocks remain attractive globally.

2015-05-13 00:00:00 Energy, Interest Rates, and Risk Management Today by (Article)

Chuck Royce discusses some of the events that helped shape the first quarter and the prospects for risk management in a more normalized environment.

2015-05-12 00:00:00 Louis-Vincent Gave: The World's Most Crowded Trade by Robert Huebscher (Article)

Investors are paid to adapt, not to forecast, according to Louis-Vincent Gave, and three changes are occurring globally that all portfolios must accommodate. One of them is a position that is missing from virtually every investor's allocation.

2015-05-12 00:00:00 Q1 Letter by Team of Grey Owl Capital Management

Grey Owl’s strategies all performed well in the first quarter. The good performance came despite US GDP growth of just 0.2%, continually lowered earnings expectations, and volatile equity and bond markets. Below we discuss the current environment including the now absolute fixation by investors on every Fed comment, our continued focus on an all-weather approach, and our best and worst performing securities during the quarter.

2015-05-12 00:00:00 The Dangerfield Recovery Or A Skousen Reality by Lance Roberts of Streettalk Live

During my morning reading I ran across this article by my friend Cullen Roche, via Pragmatic Capitalist, entitled "The Economic Recovery That Can't Get Any Respect," or more commonly known as the "Dangerfield Recovery."

2015-05-12 00:00:00 Time to look at South Korea by Richard Bernstein of Richard Bernstein Advisors

Our global investments continue to focus on the secondary effects of the deflating global credit bubble. The bubble’s deflation has left the world awash in capacity, and we expect countries to fight for market share as a result of that overcapacity.

2015-05-11 00:00:00 Recognizing the Risks to Financial Stability by John Hussman of Hussman Funds

Our hope is that Chair Yellen’s growing recognition of speculative risks will continue, and for the sake of the U.S. economy, that the rather baseless hope of manipulating a “Phillips Curve” or a “wealth effect” will fade. If one believes in these things, it is tempting to think that more monetary easing could be “good” for the economy. If the FOMC recognizes how weak those empirical relationships actually are, and how extreme the financial distortions have become, we might still avoid another financial crisis.

2015-05-11 00:00:00 Taming Longevity Risk by Patrick Drum of Saturna Capital

"In spite of the cost of living, it's still popular." - Kathleen Norris. These words offered by Kathleen Norris decades ago carry more weight than ever before, particularly within the realm of financial planning and saving for retirement.

2015-05-11 00:00:00 On My Radar: Life is Great! by Steve Blumenthal of CMG Capital Management Group

The primary need of investors is shifting and the risk dynamics has changed. Gone are those wonderful defined benefit plans. This is the first generation of retirees retiring with control of their financial assets. That’s good news for your advisory business, yet, with zero bond rates and 10-year forward returns for equities in the 2% to 4% range, the challenges loom large.

2015-05-11 00:00:00 Corporate Earnings and Inflation by Clyde Kendzierski of Financial Solutions Group

A few months ago our 2015 forecast emphasized several points we began making late last year. Taken together, those points differed dramatically from the prevailing wisdom of the time. As we begin May, they are falling into place.

2015-05-11 00:00:00 Roadblocks to Equity Gains May Start to Fade by Robert Doll of Nuveen Asset Management

Investors had a lot to react to last week, with the biggest story being a continued rise in global bond yields. The Conservative Party secured an unexpectedly decisive victory in the U.K. elections and Fed Chair Janet Yellen commented about higher equity valuations.

2015-05-08 00:00:00 Made In Europe by Anthony Valeri of LPL Financial

A weak finish to the month of April 2015 was “made in Europe” as expectations of better global growth weighed on bonds. On Monday, May 4, 2015, the 10-year German government bond yield closed at 0.45%, more than quadrupling over the past two weeks. European strength combined with a dovish Federal Reserve (Fed) meeting outcome continued to arrest U.S. dollar strength, a primary driver of the steady decline in inflation and investors’ inflation expectations from mid-2014 through the first quarter of 2015.

2015-05-08 00:00:00 Global Economic Overview and Equity Commentaries: March 2015 by Team of Thomas White International

The global economy is facing subdued growth in the short term, as adverse weather and a stronger currency have slowed the pace of U.S. expansion. Unusually severe winter weather on the U.S. East coast restricted business and consumer activity during the first three months of the year.

2015-05-08 00:00:00 Americans Take 3-Trillion-Mile Road Trip, Dollar Corrects and Commodities Rebound by Frank Holmes of U.S. Global Investors

The busy summer travel season is at our doorstep, starting this Mother’s Day weekend, and with that comes stronger fuel demand.

2015-05-08 00:00:00 Automation Can Inspire, But Also Intimidate by Carl Tannenbaum of Northern Trust

• Automation Can Inspire, But Also Intimidate • The United States Gets Back to Work • Disability Is Not a Refuge for the Unemployed

2015-05-08 00:00:00 Threats To Worry About, And Those To Ignore, In This Equity Market by Urban Carmel of The Fat Pitch

Understanding where headwinds lie is not academic. If macro or financials were the main headwinds, we would expect this bull market to be near an end. That it has more to do with sentiment and valuation implies that a reset in equity prices (lower) will likely set up the next leg higher in 2015 and 2016.

2015-05-07 00:00:00 Emerging Markets May Make a Good Draft Pick to Add to Portfolios by Burt White of LPL Financial

The evaluation process NFL football teams go through to prepare for the NFL draft, which took place this past weekend, is not unlike the investment decision-making process.

2015-05-07 00:00:00 Region Insights – Europe – Investment Opportunity in Europe is Compelling by Derrick Tzau of Rainier Funds

While Europe abounds in world-class companies, macro concerns in 2014 obscured compelling opportunities for price appreciation and earnings power that we believe will surprise to the upside in 2015. Investors have woken up to the opportunity in the first two months of 2015 and many European exchanges are off to a fast start. We think more gains are ahead, particularly in small- to mid-size companies in Europe.

2015-05-06 00:00:00 International Equities: Another Turn of the Wheel by David Ruff of Forward Investing

It’s a truism that markets move in cycles and that the ideal time to invest is right at or near the start of an upswing. Diversification is another key tenet of Investing 101. Yet inertia and the pull of the crowd often lead investors to concentrate assets in markets that may be nearing their peak while ignoring potentially more promising opportunities.

2015-05-06 00:00:00 The Mistake Eveyone Is Making About Fed Rate Hikes by Lance Roberts of Streettalk Live

With the Federal Reserve now indicating that they are "really serious" about raising interest rates, there have come numerous articles and analysis discussing the impact on asset prices. The general thesis is based on averages of historical tendencies as discussed recently by David Rosenberg in his daily commentary.

2015-05-06 00:00:00 The Credit Analysis Process: From In-Depth Company Research to Selecting the Right Instrument by Andreas Berndt, Charles Watford of PIMCO

Credit can offer a broad range of investment opportunities. But in today’s low yield environment, an active and integrated investment approach is critical.

2015-05-05 00:00:00 Sugar and Spice and Everything Nice: Buffett’s 50th Shareholder Meeting by William Smead of Smead Capital Management

The 50th annual meeting of Berkshire Hathaway with Warren Buffett as Chairman was filled with sugar and spice and everything nice. We at Smead Capital Management always look for three key takeaways from the annual meeting of Berkshire Hathaway. This year we think we can sum it up by using the 19th Century nursery rhyme.

2015-05-05 00:00:00 Too Late to Invest in EM? by Heidi Richardson of BlackRock

While emerging market stocks have had a good 2015 so far, this may still be an attractive time to invest for invest for investors who have been sitting on the EM sidelines.

2015-05-05 00:00:00 The Market Remains in Overvaluation Territory by Doug Short of Advisor Perspectives (

Here is a summary of the four market valuation indicators we update on a monthly basis.

2015-05-04 00:00:00 The Importance of Full Market Cycle Returns by Ryan Leggio, Steven Romick of FPA Fund

A full market cycle can be defined as a peak-to-peak period that contains a price decline of at least 15% from the previous market peak, followed by a rebound that establishes a new, higher peak.1 Few publications or data providers publish, let alone highlight, full market cycle returns, yet we believe understanding them can help the return of your portfolio over the long-term.

2015-05-04 00:00:00 A Sense of an Ending by Bill Gross of Janus Capital Group

Having turned the corner on my 70th year, like prize winning author Julian Barnes, I have a sense of an ending. Death frightens me and causes what Barnes calls great unrest, but for me it is not death but the dying that does so. After all, we each fade into unconsciousness every night, do we not?

2015-05-04 00:00:00 On My Radar: “The Rodney Dangerfield Expansion” by Steve Blumenthal of CMG Capital Management Group

"Earnings don't move the overall market; it’s the Federal Reserve board. And whatever you do, focus on the central banks and focus on the movement of liquidity. Most people in the market are looking for earnings and conventional measures. It's liquidity that moves markets." - Stan Druckenmiller

2015-05-04 00:00:00 Two Point Three Sigmas Above the Norm by John Hussman of Hussman Funds

If you’re waiting for stocks to become overvalued by 2 standard deviations, we’re already past that, and we would not be at all surprised to observe another decade of negative total returns on the S&P 500, as we observed the last time valuations were similar on the most reliable measures.

2015-05-03 00:00:00 Show Me the Stocks, Not the Cash, Say Optimistic CEOs by Frank Holmes of U.S. Global Investors

In early March, I made the case that there’s no greater vote of confidence in a company’s growth prospects than when its top officers put some skin in the game and buy their own company stock. Among the examples I used were Warren Buffett, who owns millions of shares in Berkshire Hathaway; Elon Musk, who purchased over $100 million worth of Tesla stock in 2013; and myself, the largest shareholder of U.S. Global Investors. Another example of how bullish an executive is on his own company is when he chooses to forego a base salary entirely and instead be compensated in company stock.

2015-05-01 00:00:00 High Yield Bonds: A Legislative History and the Opportunity Created by Tim Gramatovich, Heather Rupp of AdvisorShares

Throughout history of the high yield market there have been various legislative acts that have created and continue to create the market dislocation that allows investors an opportunity to produce what we see as attractive risk-adjusted returns.

2015-05-01 00:00:00 Greece: Stuck in the Middle by J. Brooks Ritchey of Franklin Templeton Investments

Opinion polls show that many Greek voters support Athens's tough negotiation tactics. But the polls also show that most Greeks want their country to remain in the eurozone—but to do so would require agreeing with the zone's austerity demands. I think this would be the definition of a pickle.

2015-05-01 00:00:00 After the Market Crisis: Does Diversification Still Work? by Russ Koesterich of BlackRock

Diversification may not have worked during the last market crisis, but this isn’t an argument for skipping exposure to international stocks.

2015-04-30 00:00:00 Analysts Love to Talk about China but Should Focus on South Korea by Jeremy Schwartz of WisdomTree

This week Professor Siegel and Jeremy Schwartz chatted with Jeff Weniger, Investment Strategist at BMO Global Asset Management. We spoke at length about the impact of the U.S. dollar on global markets. I found our conversation about the impact of easy monetary policy on economies such as China and South Korea particularly noteworthy.

2015-04-30 00:00:00 Finding Growth Amid Emerging-Market Slowdowns by Laurent Saltiel, Sergey Davalchenko of AllianceBernstein

Emerging markets have faced a significant economic slowdown in recent years. But there are still many industries and companies that are continuing to grow. We believe these are the places that investors should focus on to capture attractive return potential in developing-world equities.

2015-04-30 00:00:00 Celebrating Romania by Greg Konieczny of Franklin Templeton Investments

Ten years ago, Fondul Proprietatea (Fondul) was established to compensate Romanians whose properties were confiscated by the former communist government, and we were selected as its investment manager in September 2010. My colleague Grzegorz Konieczny, based in Bucharest, spearheaded the effort to list Fondul on the Bucharest Stock Exchange in 2011, and now Fondul is making its debut on the London Stock Exchange on April 29. In honor of the occasion, I’ve asked Greg to share his thoughts on investing in Romania today, and the exciting changes that have taken place there in the past few years

2015-04-30 00:00:00 Being There by Jeffrey Saut of Raymond James

Spring has definitely sprung here in Florida as pollen is in the air and raindrops fall on my tin roof with the sound of golf balls. “Tra la! It's May! The lusty month of May! That lovely month when ev'ryone goes blissfully astray,” to steal a line from the play Camelot. But many market pundits are worried about the softening economic reports, prompting me to dredge up my annual missive about the book “Being There” by author Jerzy Kosinski. The story revolves around a simple-minded man named Chance “the gardener,” who knows only gardening and what he sees on television.

2015-04-30 00:00:00 Carry Scares by Alexander Giryavets of Dynamika Capital L.L.C.

With Bill getting what he wants Bunds sell-off, and so does Global Carry (a.k.a. Risk Parity), as we warned last week, confirming that perfect correlation between the two is alive and well. Dollar unwind should not be surprise to anyone given now hardly arguable US deceleration at hands of which we warned all along, but the hidden Yen deleveraging that steepens US treasury yield curve is something to watch closely.

2015-04-30 00:00:00 The Ideology of IS by Bill O’Grady of Confluence Investment Management

Atlantic Magazine recently published an article about Islamic State (IS) that examined its theology and ideology. This article along with a paper from the Brookings Institute form the basis of our report. In our report this week, we examine the intellectual foundations of IS, showing how it evolved from two different sources of thought. We follow with an analysis of the concept of the Caliphate and the critical importance it has in Islamic theology, along with an examination of the eschatology of IS. We discuss the consequences of IS’s ideology and conclude with potential market ramification

2015-04-30 00:00:00 Finding Large Opportunities in Small-Cap Stocks by Jason Holzer of Invesco Blog

While the world’s expectations for US earnings growth have weakened into nearly single digits, Europe is finally seeing some positive developments after years of headwinds. At the same time, European valuations are about 40% cheaper than those in the US on the basis of the Schiller price-to-earnings ratio.1 As we survey the brightening landscape in Europe, looking for companies that meet our criteria for earnings, quality and valuations (EQV), an especially interesting area for us is in the small-cap market.

2015-04-29 00:00:00 Risk Marches On by Burt White of LPL Financial

The latest data releases pointing to weak U.S. new home sales and manufacturing Purchasing Managers’ Index (PMI) have investors guessing about the possible messaging coming out of this week’s Federal Open Market Committee (FOMC) meeting.

2015-04-29 00:00:00 The Pause in Capital Spending by Scott Brown of Raymond James

The Bureau of Economic Analysis will report its initial estimate of first quarter growth on April 29. There’s always a lot of uncertainty in the advance estimate, but that’s especially true for 1Q15. Of the key components of GDP, consumer spending is expected to have slowed to a more moderate pace – nothing terrible. However, business fixed investment should be soft. For business investment, as with manufacturing activity in general, it’s often difficult to distinguish a short-term slowdown from the beginning of a more significant downturn.

2015-04-29 00:00:00 Newsletter by Harold Evensky of Evensky & Katz

Harold Evensky presents his quarterly newsletter.

2015-04-28 00:00:00 Does Lipper's Best Overall Fund Company Beat a Passive Strategy? by Larry Swedroe (Article)

Lipper recently gave financial services firm TIAA-CREF the award for "Best Overall Large Fund Company", making 2015 the first time any fund family has won this honor for three consecutive years. Among its actively managed peers, TIAA-CREF's funds did exceptionally well. But does that mean your clients benefitted by owning its funds?

2015-04-28 00:00:00 Reasonable Expectations, Warren Buffett and Active Management by Michael Crook (Article)

According to the ongoing SPIVA analyses, most equity mutual fund managers have failed to keep up with their respective benchmarks recently. In fact, roughly 60% of domestic managers and 65-70% of international managers underperformed in 2014 - a phenomenon that most investors observed in their own portfolios. But that is not a reason to abandon active management, assuming you own active managers for the right reasons.

2015-04-28 00:00:00 Equities Should Push Higher Along a Bumpy Road by Robert Doll of Nuveen Asset Management

Investors mostly focused on the positives last week. Corporate earnings generally beat expectations and merger and acquisition activity remained solid. Despite disappointing economic data, this trend reinforced the perception that the Federal Reserve would hold off on rate hikes for the time being. The turmoil in Greece rattled investors, but remains relatively contained.

2015-04-28 00:00:00 M&A: Bubble Trouble Ahead? by Milton Ezrati of Lord Abbett

Talk of an unsustainable surge in mergers and acquisitions is premature. The current level of activity suggests that corporate managers will continue to buy rather than build.

2015-04-28 00:00:00 Mythbusters: Style Performance During Bear Markets by Doug Ramsey of Leuthold Weeden Capital Management

Will Rogers said, “It isn’t what we don’t know that gives us trouble, but what we know that ain’t so.” Investors have long “known” that Value stocks provide a safer place to hide than Growth stocks during a cyclical bear market, an assumption probably based on: (A) experience since the early 1970s; and (B) common sense, in that speculative investments with low price tags and low expectations should be expected to suffer less when animal spirits deflate.

2015-04-27 00:00:00 Fair Value on the S&P 500 Has Three Digits by John Hussman of Hussman Funds

We continue to classify market conditions among the most hostile expected return/risk profiles we identify. The current profile joins rich valuations with continued evidence of a subtle shift toward risk aversion among investors, which we infer from market internals (a variant of what we used to call “trend uniformity”), credit spreads, and other risk-sensitive measures.

2015-04-27 00:00:00 Spring Quarterly Commentary by John Prichard, Miles Yourman of Knightsbridge Asset Management

Charlie Munger, firmly ensconced in the investor hall of fame, remains, at age 91, one of our favorite purveyors of worldly wisdom on subjects investment related and otherwise. He is also known to be blunt and humorous, offering the above response to a question regarding money-printing, interest rates and unintended consequences at the Daily Journal shareholder meeting a few weeks ago. When a genius like Charlie is confused...then things indeed are confusing.

2015-04-27 00:00:00 Airlines Report on Q1 Earnings by Frank Holmes of U.S. Global Investors

A recent Deutsche Bank report projects a total airline industry first-quarter pretax profit of $3.5 billion, up from $700 million this time last year—a 400-percent improvement.

2015-04-27 00:00:00 Significant Slip—or Just a Blip—in Emerging Markets’ Foreign Exchange Reserves? by Mark Mobius of Franklin Templeton Investments

For those looking to invest in emerging markets, a steady growth in foreign exchange reserves—in many cases to higher levels than in most developed markets—has been a positive talking point for the past two decades. This reserve build-up has allowed emerging markets to be dominant buyers of US and European debt. However, a general decline in emerging market foreign reserves last year now has pundits pondering whether there is danger of more significant slippage with potentially ominous market implications.

2015-04-27 00:00:00 Growth Is Becoming More Valuable by Frank Caruso, Christopher Kotowicz of AllianceBernstein

Precious gems, Old Masters artwork and certain brands of scotch: scarcity makes them more desirable and adds to their value. The same can be said of organic growth. As the economic cycle matures, we expect the stocks of companies that have it—and can maintain it—to become increasingly prized.

2015-04-27 00:00:00 On My Radar: Recession Watch – Keep an Eye on This Chart by Steve Blumenthal of CMG Capital Management Group

Understanding when a recession might begin is important to our long-term financial health. Why? The stock market declines approximately 40% during recessions.

2015-04-27 00:00:00 Where's the Hyper-Inflation? by Brian Wesbury, Bob Stein of First Trust Advisors

If we had a dollar for every time we’ve heard about the threat of hyperinflation, we’d probably have enough money to never worry about it.

2015-04-24 00:00:00 Searching for Clarity Among the Dots by Carl Kaufman, Simon Lee, Bradley Kane of Osterweis Capital Management

In 1886 Georges Seurat finished his most famous painting, A Sunday Afternoon on the Island of La Grande Jatte. Seurat used a new technique, Pointillism, in which small dots of color are applied to the canvas to express an image. More recently, Janet Yellen and the Federal Open Market Committee (the FOMC) updated their own version of Pointillism to express an image called the dot plot – a graphical representation of each FOMC member’s forecast of future federal funds (fed funds) rates.

2015-04-24 00:00:00 BofA Is Confusing Liquidity Fueled And Secular Bull Markets by Lance Roberts of Streettalk Live

Over the past couple of years, there has been a growing chorus of individuals claiming that the financial markets have finally shaken the shackles of the secular bear market that began at the turn of the century. This, of course, suggests that the markets have now begun the next long-term secular bull market.

2015-04-24 00:00:00 Global Divergence, the Federal Reserve and the Impact on U.S. Insurers by David Braun, Scott Millimet of PIMCO

Insurance publication SNL Financial recently sat down with members of PIMCO’s Financial Institutions Group to discuss PIMCO’s latest views on global divergence, the Federal Reserve and the impact on U.S. insurers in their investment portfolio positioning.

2015-04-24 00:00:00 Sine of the Times by Scott Minerd of Guggenheim Partners

Powerful secular and fundamental forces at work signal that the risk to U.S. interest rates remains to the downside.

2015-04-24 00:00:00 Weekly Economic Commentary: The Eurozone Is Seeing Green Shoots but Isn’t Out of the Woods by Carl Tannenbaum of Northern Trust

The Eurozone Is Seeing Green Shoots but Isn't Out of the Woods; Gauging a Country's Potential for Growth; The Trans-Pacific Partnership Might Actually Happen

2015-04-24 00:00:00 Schwab Market Perspective: Heads, Bulls Win; Tails, Bears Lose? by Liz Ann Sonders, Brad Sorensen & Jeffrey Kleintop of Charles Schwab

The bears can’t seem to grab hold of this market, but that doesn’t mean full-speed ahead for the bulls either. Grinding generally higher with increased volatility seems to be the course for now, but the possibility of a correction still exists. Diversification, discipline and patience is required. International equity exposure should be part of most investors’ portfolios, to a level commiserate with risk tolerance. European risks related to Greece seem to have lessened, while the Chinese stock market doesn’t appear grossly overvalued, although a pullback from the recent run is possi

2015-04-23 00:00:00 Emerging Markets Winners and Losers: Q1 2015 by Jackie Lafferty of Loomis Sayles

2015 kicked off with a rocky start for emerging markets: pending US rate hikes, falling commodity prices, quantitative easing in Europe, and idiosyncratic country risks all soured investor sentiment and caused the US dollar to soar. This led to substantial weakness in emerging market (EM) foreign exchange, pummeling US-based investors in many local currency bond markets. Despite that pain, EM credit performed well, and along with EM sovereign debt, posted positive gains.

2015-04-22 00:00:00 Sizing Up Small Caps by Burt White of LPL Financial

The Russell 2000 Index hit a fresh all-time high last week (on tax day, April 15, 2015) and has outpaced large caps by 205 basis points (2.05%) year to date. Although valuations are on the high side, the factors that have driven recent small cap strength, in our view, remain largely intact. Small cap technicals appear bullish, with positive relative strength and an upward sloping 40-week moving average.

2015-04-22 00:00:00 Bill’s “Short of a Lifetime” by Alexander Giryavets of Dynamika Capital L.L.C.

According to Bill Gross “German 10yr Bunds = The short of a lifetime.” We just wanted to make it clear that the Bunds were perfectly co-moving with the Global Carry over the last six years and the Global Carry is the major source of returns behind US equities, bonds, the Risk Parity portfolios, and 60/40 for that matter.

2015-04-22 00:00:00 Gimme Shelter: The U.S. Dollar Trade and Its Risks by Michele Mazzoleni of Research Affiliates

By selling foreign currencies to take advantage of the dollar’s appreciation, U.S. investors are increasing their exposure to the risk of an economic slowdown at home.

2015-04-22 00:00:00 Uncertainty by Scott Brown of Raymond James

We live in an uncertain world. Policymakers have to sift through a wide range of data, much of which is subject to statistical error and measurement difficulties. Financial market participants deal with much of the same data, but also have to account for the uncertainty in how policymakers will interpret the data and respond. There are longer-term questions, which won’t be resolved anytime soon. So where do we stand now?

2015-04-21 00:00:00 Profit Margins - Is the Ladder Starting to Snap? by John Hussman of Hussman Funds

Since mid-2014, the broad market as measured by the NYSE Composite has been in a broad sideways distribution pattern, with an increasing tendency in recent months for advances to occur on weaker volume and declines to follow on a pickup in volume. While capitalization-weighted indices have done somewhat better since mid-2014, the S&P 500 Index is unchanged since late-December.

2015-04-21 00:00:00 Can Lumber Be Worth It's Weight in Gold? by Jerry Wagner of Flexible Plan Investments

Well, maybe not literally. But figuratively-speaking, one can make the case. And two very bright, young investment advisors have done just that.

2015-04-21 00:00:00 Pregnant Pause by Adam Bowe and Robert Mead of PIMCO

After re-engaging policy support in February following an 18-month hiatus, the Reserve Bank of Australia (RBA) wrong-footed many in the market by keeping policy on hold in the two subsequent board meetings. So was February's decision a "one-and-done" policy event or the start of a more aggressive easing cycle?

2015-04-21 00:00:00 The AIIB by Bill O’Grady of Confluence Investment Management

China has founded the Asian Infrastructure Investment Bank (AIIB) to compete with the World Bank and the Asian Development Bank. The U.S. has opposed the creation of this bank but, despite administration opposition, 57 nations have joined. A chorus of commentators have suggested that the founding of this bank may mark the end of U.S. hegemony. In this report, we describe the AIIB, including its members and capitalization. Next, we cover the conventional wisdom surrounding the bank, and follow up with our analysis of the real impact of the bank. We conclude with potential market ramifications.

2015-04-21 00:00:00 Stay Patient Against the Consensus Trade of 2015 by Kathleen Gaffney and Matt Hildebrandt of Eaton Vance

When making moves that are against a crowded trade, does it pay to be a patient, opportunistic income investor?

2015-04-21 00:00:00 Good Things To Life by Brian Andrew of Cleary Gull

Last Thursday, General Electric announced that they were selling a $26 billion real estate portfolio and substantially reducing the size of their financing arm, GE Capital. This announcement has a number of broader implications beyond GE’s own company and stock price. It may be an indication of what large multi-national companies must do at this point in the market cycle to show earnings growth.

2015-04-21 00:00:00 The Charge Of The Monetary Light Brigade - Neosho Capital On The European Central Bank And Negative by Chris Richey of Neosho Capital

A paper on European Monetary Easing, which we feel is a well-meaning, but misguided effort, to solve demographic, cultural, and political problems with massive monetary manipulations of exchange rates and securities markets.

2015-04-21 00:00:00 Has The US Dollar Topped Out, Or Headed Much Higher? by Gary D. Halbert of Halbert Wealth Management

The US dollar’s value has been on a tear since last summer, with the greenback’s value surging more than 20% against a basket of major foreign currencies.

2015-04-20 00:00:00 Pockets of Value in the Stock Market by Russ Koesterich of BlackRock

Given the headwinds facing U.S. stocks, investors may want to consider tilting their stock portfolios toward these sectors and geographies offering relative value.

2015-04-20 00:00:00 Market Rules to Remember by Mark Ungewitter of Charter Trust Company

A few years ago, I participated in a panel discussion at the 50th Annual Contrary Opinion Forum in Vermont. One of my fellow panelists, Walter Deemer of Deemer Technical Research Inc., has been a cornerstone of institutional market strategy since the early 1960’s and is this year’s recipient of the MTA’s prestigious annual award.

2015-04-20 00:00:00 Picking Stocks in the Tech Sector by Chaitanya Yaramada of Robert W. Baird & Co.

Technology is an important sector for growth portfolios - it carries a significant weight in major growth benchmarks, and more importantly, tends to be a ripe area for stock picking. The technology sector represents nearly 15% of the Russell Midcap Growth benchmark and 24% of the Russell 3000 Growth benchmark. The percentage is even higher when including Internet stocks that are categorized into the Consumer Discretionary sector.

2015-04-17 00:00:00 The Labor Market Recovery’s Missing Ingredient by Russ Koesterich of BlackRock

Why are so few Americans participating in the labor market even as jobs become more plentiful? Russ explains, noting two implications for investors.

2015-04-17 00:00:00 Hoisington Quarterly Review and Outlook – First Quarter 2015 by Lacy Hunt and Van Hoisington of Hoisington Investment Management

Over the more than two thousand years of economic history, a clear record emerges regarding the relationship between the level of indebtedness of a nation and its resultant pace of economic activity. The once flourishing and powerful Mesopotamian, Roman and Bourbon dynasties, as well as the British empire, ultimately lost their great economic vigor due to the inability to prosper under crushing debt levels.

2015-04-17 00:00:00 Greek Drama Extends Its Run by David Zahn of Franklin Templeton Investments

Greece’s debt problems have retaken center stage, as payment deadlines approach and negotiations with creditors continue. The money-strapped country and Syriza, its radical left-wing ruling party, are back in the headlines and on the minds of investors, as predictions that Greece could leave the eurozone abound. David Zahn, head of European Fixed Income, Franklin Templeton Fixed Income Group®, offers his perspective on Greece’s dramatic debt saga, as well as the orderly beginning of the European Central Bank’s quantitative easing program.

2015-04-17 00:00:00 Weekly Economic Commentary: Countries Can’t Devalue Their Way to Prosperity by Carl Tannenbaum of Northern Trust

Countries Can't Devalue Their Way to Prosperity; Central Banks Are Doing Some Interesting Rebalancing; Paying for the Energy Dividend

2015-04-16 00:00:00 Three Portfolio Moves to Consider Now by Russ Koesterich of BlackRock

While the first quarter largely played to script, there were a few surprises. Russ explains, noting three portfolio moves to consider as the second quarter kicks off.

2015-04-16 00:00:00 Finding Value in Declining Commodity Prices by Frank Holmes of U.S. Global Investors

I’m going to begin with a bit of good news. Below is our China Region Fund (USCOX). As you can see, not only has it broken above its 50- and 200-day moving averages, but it’s also trading at four-year highs. And since this chart was created early last week, the fund has climbed even higher, to $9.53 as of this writing.

2015-04-15 00:00:00 Emerging Markets of Tomorrow by Jeremy Schwartz of WisdomTree

This week Professor Siegel and Jeremy Schwartz chatted with Gavin Serkin, Emerging Markets (EM) Editor at Bloomberg News. They also spoke to Worth Wray, Chief Strategist at Mauldin Economics, whose current focus is also on EM and the implications of a stronger U.S. dollar.

2015-04-15 00:00:00 The Long-Term Outlook: Secular Stagnation or Not? by Scott Brown of Raymond James

The good news is that the output gap, the difference between real Gross Domestic Product and its potential, has narrowed. The bad news is that’s largely because potential GDP has declined. The big question now is whether the economy is on a permanently lower track. The answer is not so clear.

2015-04-14 00:00:00 Ukraine: Mass Corporate Debt Restructuring Looks Likely by Sponsored Content from Invesco (Article)

Ukraine's biggest economic problem is its deep recession. We expect gross domestic product to contract by about 7% this year, as the conflict with Russia has devastated Ukraine's vital industrial corridor in the east, interest rates and inflation are soaring, and its currency teeters on collapse.

2015-04-14 00:00:00 Stock Market Returns - The GDP Growth Rate Myth by Baijnath Ramraika, CFA® (Article)

The idea that nominal equity market returns approximate the country's GDP growth rate is historically uninformed and intellectually dishonest. If there were any merit to the idea that equity market returns should approximate GDP growth rate, we would see this in a tight relationship between the two variables across countries. But we don't.

2015-04-14 00:00:00 Tocqueville Gold Strategy Investor Letter by John Hathaway of Tocqueville Asset Management

John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), looks back at the performance of gold over the first quarter, noting that "Gold and gold mining shares appear to be as contrarian today as in 1999, before a decade?plus run in which bullion rose nearly seven?fold in US dollar terms."

2015-04-14 00:00:00 Not-So-Great Expectations: Why Real Interest Rates Won’t Soar by Shane Shepherd of Research Affiliates

In a recent piece from Research Affiliates, Shane Shepherd, Senior Vice President, Head of Macro Research, looks at the consensus on interest rates: they are set to fly. But if, as Research Affiliates expects, savings accelerate and real GDP grows slowly, then interest rates won’t rise very much anytime soon.

2015-04-14 00:00:00 Expect Further Divergence in Emerging Market Economies by Michael Gomez, Lupin Rahman of PIMCO

Each quarter, PIMCO investment professionals from around the world gather in Newport Beach to discuss the firm’s outlook for the global economy and financial markets. In the following interview, portfolio managers Michael Gomez and Lupin Rahman discuss PIMCO’s cyclical outlook for the emerging markets (EM).

2015-04-14 00:00:00 U.S. Labor: A Not-So-Great Participation Rate by Milton Ezrati of Lord Abbett

The percentage of Americans either working or looking for work is lower than pre-recession levels. Here’s what it could mean for the economy—and Fed policy.

2015-04-14 00:00:00 Bear Market Hibernation End is Nearing by Sean Butson of DC Capital Management

The S&P 500 continues to be overvalued and has become more so over the last 6 months. Based on 7 different valuation metrics, future 10 year compound annual returns are likely to be only about 6% vs. 9%-10% historically. While we are not expecting an imminent bear market, the specter of FED rate increases likely does indicate the beginning of the end of the current bull, as 12 out of 14 S&P 500 declines of at least 15% over the last 60 years have occurred within 3 years of FED tightening.

2015-04-14 00:00:00 The Active/Passive Debate: Others Weigh In by Roger Nusbaum of AdvisorShares

In the most recent AdvisorShares Alpha Call Josh Brown and Michael Batnick from Ritholtz Wealth Management discussed at length the importance finding the right strategy and then taking the time to understand the strengths and weaknesses of whatever you decide is the right strategy.

2015-04-14 00:00:00 Waiting for the Right Pitch by John Loesch, CFA of Diamond Hill Capital Management, Inc.

Patience is a virtue, both in life and in investing. As a long-term investor in a short-term focused world (and a father of three young children), I know that remaining patient is not always easy. At Diamond Hill, we keep the advice of both Warren Buffett and legendary hitter Ted Williams in mind and try to wait for the “right pitch.”

2015-04-14 00:00:00 Second Quarter Market Commentary 2015 by The CCR Wealth Management Investment Committee of CCR Wealth Management

Over a year ago in our January 2014 Outlook commentary, we cited European markets as attractively priced relative to the US equity markets. Most market observers at the time were expecting a nascent recovery from the 2012 EU recession to get a boost from the European Central Bank (ECB). We even boosted our non-US developed market (and European-specific) allocation—though cautiously—in anticipation. Please note that we still think these markets are most attractively valued.

2015-04-12 00:00:00 Are We Doomed to Weaker Growth by Hale Stewart of Hale Stewart

Any rally still faces strong headwinds. With a PE of 20.47, equities are already expensive. The strong dollar and weaker overseas economies are hampering general earnings growth while oil’s price drop is decimating the energy sector. And the percentage of NASDAQ and NYSE stocks about the 50 day EMA is approaching overbought levels. Without a meaningful change in either the earnings or valuation environment, any advance appears limited to at most 5%. That places a premium of stock picking and allocation.

2015-04-12 00:00:00 Weighing the Week Ahead: The Start of an Earnings Recession? by Jeff Miller of New Arc Investments

The year-over-year growth rate for forward earnings has once again turned positive. We can and should be on the watch for a true recession – the source of major earnings declines. The talk about an “earnings recession” should not be a source of worry.

2015-04-12 00:00:00 Valuation and Speculation: The Iron Laws by John Hussman of Hussman Funds

If you genuinely want to learn something from our experience during the recent half-cycle, it’s not to discard the Iron Law of Valuation, but to couple your awareness of valuation with an understanding of where investor preferences toward risk are from the standpoint of the Iron Law of Speculation. I had very vocal concerns about valuation during the tech bubble and the housing bubble, well before they burst.

2015-04-11 00:00:00 Finding Value in Declining Commodity Prices by Frank Holmes of U.S. Global Investors

So what’s the deal with Chinese equities right now? After all, China’s economic growth for the first quarter of the year cooled to a six-year low of 7 percent. The market surge is mostly attributable to monetary easing and government policy changes such as housing stimulus and modernization of the country’s financial structure. But there’s more at work.

2015-04-10 00:00:00 Combining Active and Passive: Three Issues to Consider for Risk-Averse Investors by Clint Harris of Invesco Blog

I was having a lively due diligence meeting with a retirement consultant the other day, discussing how our team manages Invesco Diversified Dividend Fund, and where we, as a conservative strategy, see opportunities and risks in the market today. Then came a moment of truth. The consultant sat back and said, “I really believe in what you all are doing, but many of my retirement plan committees just want passive index funds to bring down expenses.”

2015-04-10 00:00:00 An Open Letter to the Eurozone by Harley Bassman of PIMCO

As it has once again become fashionable to send an open letter to foreign dignitaries, now is certainly a propitious moment to help focus attention upon dissolving a perplexing financial impediment. For while limiting nuclear proliferation and reducing armed conflict are headline grabbers, the more mundane topic of cleansing the channels of global finance is in fact a public policy good that can create a positive social impact in real time. As such, I now respectfully offer my thoughts on ways to enhance the effectiveness of the current policy path.

2015-04-10 00:00:00 Buybacks Are Not Just an Accounting Trick by Joseph Paul of AllianceBernstein

As if on cue, news of record buyback authorizations earlier this year unleashed a torrent of media coverage denouncing them as nothing more than an accounting sleight of hand. We think the reaction has been pretty extreme.

2015-04-09 00:00:00 Supply-Side Yellenomics Is (Slowly) Losing Its Grip on Markets by Tony Crescenzi of PIMCO

Should investors worry about the possibility that the Federal Reserve might raise interest rates this year? How about the negative economic consequences of the rally in the U.S. dollar? “Hawkish” Fed mistakes?

2015-04-09 00:00:00 When Will the Bull Market End? by Russ Koesterich of BlackRock

Russ explains why the stock market rally can continue, at least for another year.

2015-04-08 00:00:00 The 'Perfect Storm' by Niels Jensen of Absolute Return Partners

This month's Absolute Return Letter is about the highly unusual set of circumstances which have underpinned the equity bull market of the last 35 years. Not one of the factors we identify did exceptionally well - they all did and, between them, they created the perfect breeding ground for exceptional equity performance. So far so good. Unfortunately a reality check is required as it is exceedingly unlikely that those circumstances will be repeated in our lifetime. We should prepare for more modest returns ahead.

2015-04-08 00:00:00 Equity Cyclical Outlook: Between Fed lift-off and living in the New Neutral by Virginie Maisonneuve, Mark Richards of PIMCO

Virginie Maisonneuve, PIMCO’s CIO Global Equities, and equity macroeconomic analyst Mark Richards provide an update on PIMCO’s views on equity markets.

2015-04-08 00:00:00 Policy Paranoia by Robert Stimpson of Oak Associates

The present version of policy paranoia encompasses concerns over impending interest rate hikes, the rapid appreciation of the US dollar, a bloated US government balance sheet, weak international economies and increased probability of a crisis in certain Latin American countries. While legitimate, we do not believe the current ghosts are any more imminently destructive today than over the past six years.

2015-04-08 00:00:00 U.S. and Canada: Continued Recovery With Some Potential for Headwinds by Ed Devlin, Mike Cudzil of PIMCO

?Each quarter, PIMCO investment professionals from around the world gather in Newport Beach to discuss the firm’s outlook for the global economy and financial markets. In the following interview, portfolio managers Ed Devlin and Mike Cudzil discuss PIMCO’s cyclical outlook for Canada and the U.S..

2015-04-08 00:00:00 Dalbar: Why Investors Suck And Tips For Advisors by Lance Roberts of Streettalk Live

Dalbar just recently released their 21st annual Quantitative Analysis Of Investor Behavior study which continues to show just how poorly investors perform relative to market benchmarks over time and the reasons for that underperformance.

2015-04-07 00:00:00 A Q1 Letter to Clients: Ben Bernanke on Interest Rates by Dan Richards (Article)

Every quarter since 2008, I have posted a template for a client letter. This letter can be used as a starting point to provide an overview of the period that just ended and thoughts looking forward. This quarter's letter addresses questions from clients about why interest rates are so low and when they are likely to rise.

2015-04-07 00:00:00 Bullseye: Abe and the Japanese Equity Market by Pamela Rosenau of HighTower Advisors

Earlier this year, I articulated my thesis in this publication discussing how the developed markets would outperform the developing markets for the foreseeable future. I have grown to believe that Japan is in the nascent stage of a massive multiyear bull run – the likes we haven’t seen since the US market climbed from the painful declines of 2008-2009.

2015-04-07 00:00:00 U.S. Economy: Getting the Jobs Recovery to Work Harder by Milton Ezrati of Lord Abbett

Even with the recent improvement, the pace of U.S. employment growth still lags earlier labor-market rebounds by a significant margin. What needs to be done to speed up the pace?

2015-04-06 00:00:00 Improving Growth Should Eventually Push Equities Higher by Robert Doll of Nuveen Asset Management

On the heels of a somewhat rough first quarter, many investors are questioning the state of economic growth and wondering if equities still hold value. Our view is that an improving global economy should (eventually) allow for a renewed upturn in earnings prospects, and in equity markets. As such, we believe investors should remain patient.

2015-04-06 00:00:00 Stock-Flow Accounting and the Coming $10 Trillion Loss in Paper Wealth by John Hussman of Hussman Funds

The failure to recognize that stock-flow consistency must hold in the economy and the financial markets is the basis for an enormous amount of misunderstanding in both fields. That omission of clear thinking about the link between economics and finance contributes to misguided policies that ignore the impact of financial distortions on the real economy, and invite speculation, malinvestment, and ultimately financial crisis.

2015-04-04 00:00:00 High-Yield Bonds: Equity-Like Returns Without Equity-Like Volatility by Michael Weilheimer, Steve Concannon, Will Reardon of Eaton Vance

Can an allocation to high-yield bonds help moderate the volatility in your portfolio without having to sacrifice return potential?

2015-04-03 00:00:00 Central Bank Dominance by Richard Michaud of New Frontier Advisors

The policies of the central banks are theoretically aligned in that they all have the objective of managing private economies with modern monetary macroeconomic principles. But, all four major economies are in different stages of recovery and disruptions are nearly inevitable. However, a positive view is that central banks are all focused on managing growth and that significant investment opportunities may be available for thoughtful investors and managers.

2015-04-02 00:00:00 The Perfect Storm for Risk-Conscious Active Managers by (Article)

Principal and Portfolio Manager Steve Lipper discusses three specific conditions that have shaped the current small-cap market and how, after five years, these developments all showed signs of reversing in the latter part of 2014.

2015-04-02 00:00:00 Optimism amid a global view of equities by Todd A. Bassion of Delaware Investments

The Organization for Economic Cooperation and Development (OECD) reported on Wednesday that it expects India’s economy to grow by 7.7% in 2015, making it the fastest-growing major economy in the world. This puts India in a position to possibly outpace China, where growth is slowing to the government’s official target of approximately 7%.

2015-04-02 00:00:00 Convertibles Address Multiple Investor Needs by John P. Calamos, Sr. of Calamos Investments

I began investing in convertible securities during the 1970s, and since then, I’ve seen an exciting evolution of the asset class—from little-known securities to a global asset class totaling approximately $342 billion USD today, including issues from household-name companies worldwide. Clearly, what began as an “alternative investment” has become much more mainstream.

2015-04-02 00:00:00 The Bull Market Turns Six by Doug Ramsey of Leuthold Weeden Capital Management

We cautioned investors during the current bull market’s initial blast-off not to expect a repeat of the prior bull market’s leadership—namely, Emerging Market equities and commodity-oriented equity sectors. Excesses built up during a sustained leadership cycle (i.e., equity valuations, production capacity) require a long period to be surged, generally resulting in the former leaders “skipping” a market cycle from a relative performance perspective. That view has been on the mark…

2015-04-01 00:00:00 March Madness by Bill Gross of Janus Capital Group

If there ever was an economic concept that currently is not a layup, it would be what the future average level of Fed Funds will be. No one really knows and unlike the gimme layup that Coach K provided for me, there are no “gimmes” when it comes to scoring a Fed Funds basket.

2015-04-01 00:00:00 Chuck Royce on 1Q15: Will Rising Rates Benefit Active Stock Pickers? by Chuck Royce of The Royce Funds

With a rise in interest rates on the horizon, and economic recovery firmly underway, CEO Chuck Royce believes the market may be on the cusp of rewarding disciplined and risk-conscious approaches.

2015-04-01 00:00:00 How Europe’s QE Could Be a Stimulus for U.S. based Investors by Heidi Richardson of BlackRock Investment Management

Heidi Richardson sees several catalysts that point to strong investment opportunities in Germany and the broader eurozone.

2015-04-01 00:00:00 Euphoria and Reality in European Stocks by Michele Patri of AllianceBernstein

Euro-area stock markets have rebounded as the ECB has launched its QE program. In our view, investors should take a pragmatic approach that aims to capture the gains—but with eyes wide open to reality.

2015-04-01 00:00:00 Why Fed Patience on Rate Hikes Is Likely to Continue by John P. Calamos, Sr. and Gary Black of Calamos Investments

John and Gary discuss how lackluster economic data and low inflation could influence the Fed’s timetable for raising short-term interest rates.

2015-03-31 00:00:00 The Final Say on Spending Rules by Laurence B. Siegel (Article)

After decades of focused research, why can't finance experts decide on a safe withdrawal rate for retirement? It is time to refocus this debate by asking a slightly different question: Is there a spending rule that retirees can use over a fixed time horizon? There is and I call it "the only spending rule you will ever need."

2015-03-31 00:00:00 Convertibles Address Multiple Investor Needs by John Calamos, Sr of Calamos Investments

I began investing in convertible securities during the 1970s, and since then, I’ve seen an exciting evolution of the asset class—from little-known securities to a global asset class totaling approximately $342 billion USD today, including issues from household-name companies worldwide. Clearly, what began as an “alternative investment” has become much more mainstream.

2015-03-31 00:00:00 Duration: To Hedge or Not to Hedge? by Jeroen van Bezooijen, Berdibek Ahmedov of PIMCO

Because duration tends to be an important component of the return profile in a bond portfolio, adjusting exposure rather than hedging it away may make sense for many investors. Low duration strategies may provide a level of interest-rate duration that provides a better trade-off between a full market beta (with interest-rate duration) and a fully duration-hedged beta.

2015-03-31 00:00:00 Should Liquid Alts Be Part of the Core Allocation? by Michael Winchell of Larkin Point Investment Advisors LLC

Many advisors may view alternative investments as diversifiers in portfolios: satellite investments added to a portfolio of stocks and bonds in an attempt to “hedge,” or counterbalance a specific risk the advisor believes is not completely addressed by the stock/bond core. For example, real assets such as gold and real estate are alternatives that may be added to portfolios for inflation protection because advisors expect real assets to rise in value with any overall increase in wages and prices.

2015-03-31 00:00:00 On My Radar: Going Forward with Great Purpose! by Steve Blumenthal of CMG Capital Management Group

The Fed tried to talk down the dollar last Wednesday. Essentially firing a warning shot (downgrading estimates for growth, inflation and short-term interest rates). The ultra-low rates in Germany and Japan vs. the U.S. favor the dollar. Anything that points to the Fed raising rates enhances the attractiveness of U.S. bonds and attracts further capital flows.

2015-03-31 00:00:00 Corporate Bonds Offer Opportunities in the Slowing Economy by Tracy Chin and Aaditya Thakur of PIMCO

Lack of corporate leveraging and investment among Australian companies may provide a macro headwind to economic growth and, hence, future prospects for equity investors, but from a creditor's perspective, this should keep credit metrics relatively healthy. PIMCO's bottom-up analysis has helped identify several opportunities, even within the resources sector, where strong balance sheets, competitive industry positions and sound management build a compelling case for credit investors despite the challenging period ahead.

2015-03-31 00:00:00 Fit & Focused by Mark R. Kiesel of PIMCO

Many powerful forces are driving markets and asset prices; chief among them are global monetary policy, technicals and fundamentals. We use rigorous top-down and bottom-up analysis to identify the best sectors and companies around the world. We see opportunities in the U.S. (cyclical consumer and housing sectors), Europe (equities, bank capital securities, high yield bonds and corporate hybrids), China (property, technology and Macau) and Japan (cyclical industries, exporters and financials).

2015-03-30 00:00:00 Dividend Value Investing: No Time for Suspension of Disbelief, Part 2 by Meggan Walsh of Invesco Blog

While investors may be riveted by Hollywood’s surprise endings and cliffhangers, they generally aren’t fond of unexpected plot twists in the market. So here’s a spoiler alert. The operating results of companies in the current cycle have been quite strong, and many investors expect this to continue. But we’ve seen enough plot twists over time to know this can be a risky assumption.

2015-03-30 00:00:00 Eating Our Seed Corn: The Causes of U.S. Economic Stagnation, and the Way Forward by John Hussman of Hussman Funds

The U.S. has become a nation preoccupied with eating its seed corn; placing consumption over investment, outsourcing its jobs, hollowing out its middle class, and accumulating increasing debt burdens to do so. What our nation needs most is to adopt fiscal policies that direct those seeds to productive soil, and to reject increasingly arbitrary monetary policies that encourage the nation to focus on what is paper instead of what is real.

2015-03-30 00:00:00 Should Liquid Alts Be Part of the Core Allocation? by Michael Winchell of Larkin Point Investment Advisors LLC

Many advisors may view alternative investments as diversifiers in portfolios: satellite investments added to a portfolio of stocks and bonds in an attempt to “hedge,” or counterbalance a specific risk the advisor believes is not completely addressed by the stock/bond core. For example, real assets such as gold and real estate are alternatives that may be added to portfolios for inflation protection because advisors expect real assets to rise in value with any overall increase in wages and prices.

2015-03-29 00:00:00 Weighing the Week Ahead: Time for an Economic Spring Thaw? by Jeff Miller of New Arc Investments

In the absence of real data it is easy and tempting to speculate. Unlike last week, the week ahead features an avalanche of data – more in both quantity and importance than we have seen in a month. With some recent significant reports showing economic improvement we expect a change of focus.

2015-03-29 00:00:00 US Equity Market Review For the Week of March 23-27; Hey, We're Still Consolidating, Edition by Hale Stewart of Hale Stewart

Writing about market consolidation is very difficult. There are no strong rallies, massive volume spikes or huge losses to get the reader excited. Instead, the entire analysis focuses on prices pin-balling between two trend lines, usually on decreasing volume and weakening technical indicators. So if you’re looking for an article the grabs your attention by telling a story of an incredibly strong surge in bullish price action, move elsewhere. Because this week we again have a market that is consolidating.

2015-03-27 00:00:00 Emerging Markets Equity Commentary: February 2015 by Team of Thomas White International

Emerging Market Equities Emerging market equity prices advanced during the month of February on signs of improvement in global economic trends as well as expectations about quantitative easing in Europe and Japan. Encouraged by reduced inflation risks after the oil price decline, some of the emerging market central banks have also lowered interest rates in recent months.

2015-03-27 00:00:00 Woe Betide the Value Investor by Jason Hsu, Vivek Viswanathan of Research Affiliates

The excess return earned by the average investor in value mutual funds was meaningfully negative over a 23-year period when the funds themselves outperformed the market. Why don’t all value investors benefit from the value premium?

2015-03-27 00:00:00 In a Challenging Environment, Policy Easing Sweeps Through Asia by Adam Bowe, Tomoya Masanao, Isaac Meng of PIMCO

The key change to our cyclical outlook for Asia: We have further downgraded our growth forecast for China to the low-6% range as real borrowing rates remain elevated. In Japan, we expect growth to recover from last year's technical recession, following the delay in the next value-added tax (VAT) hike and the increase in the Bank of Japan's easing program.

2015-03-27 00:00:00 Global Asset Allocation Shifts by Alexander Giryavets of Dynamika Capital L.L.C.

A couple of days ago BIS (Bank of International Settlements) released a seminal research piece “Global Asset Allocation Shifts” in which authors explain that weekly institutional and retail portfolio reallocations (not just fund flows) of U.S. investors are 90% driven by two factors easily identified as Yen (Risk On/Off) and Dollar factors hence reaffirming our Global Macro Framework. They also explore systematic predictability of these factors in great details.

2015-03-27 00:00:00 A Deeper Look at Smart Beta in Fixed Income by Sara Shores of BlackRock

While most tend to think of smart beta as a tool for stock portfolios, there are ways to apply it to bonds. Sara Shores shares a smart beta approach to balancing interest rate and credit risk.

2015-03-27 00:00:00 A Tale of Two Economies: Singapore and Cuba by Frank Holmes of U.S. Global Investors

It would be nearly impossible to find two world leaders in living memory whose influence is more inextricably linked to the countries they presided over than Cuba’s Fidel Castro and Singapore’s Lee Kuan Yew, who passed away this Monday at the age of 91.

2015-03-27 00:00:00 Will a Spring Thaw Lead to a Stock Surge? by Liz Ann Sonders, Brad Sorensen & Jeffrey Kleintop of Charles Schwab

US economic data has been soft, repeating a trend we’ve seen in recent first quarters. But we believe growth will again bounce back as some of the temporary weights drop off. US stocks should continue to grind generally higher—but with heightened volatility—aided by better data and a still-dovish Federal Reserve. But investors shouldn’t ignore international opportunities. Global growth generally appears to be improving and foreign central banks are largely easing monetary policy, potentially benefiting risk assets.

2015-03-27 00:00:00 In US Small-Caps, Quality Is on Sale by James MacGregor of AllianceBernstein

Investors who wanted safety and certainty last year mostly shunned smaller-cap US stocks. As a result, many high-quality names are now on sale. With US growth likely to accelerate in 2015, we think these domestically oriented smaller-cap companies may turn out to be a real bargain.

2015-03-26 00:00:00 Global Economic Overview: February 2015 by Team of Thomas White International

The global economic outlook improved in February, helped by encouraging data from some of the largest countries as well as supportive monetary policy measures. Monthly job additions in the U.S. exceeded expectations in February, continuing the robust trend from last year. Though wages are yet to see meaningful growth, the strengthening labor market should help the U.S. economy sustain the current pace of expansion.

2015-03-26 00:00:00 Latin America Is Blowing Up Your EM ETF Performance by Team of GaveKal Capital

On an equal-weighted, USD basis, the MSCI Emerging Markets Index is up just 0.99% YTD compared to MSCI World Index which is up 5.65%. So is this just a simple continuation of the trend of emerging market underperformance that has been in place over the last 4 years ? Yes, but with a caveat.

2015-03-26 00:00:00 The Labor Market Conundrum: The Cyclical and the Secular by Russ Koesterich of BlackRock

Low workforce participation and slow wage growth are structural issues that the strengthening U.S. labor market must overcome in the long run.

2015-03-26 00:00:00 Why This Airline Just Landed in the S&P 500 Index by Frank Holmes of U.S. Global Investors

For the first time in its 84-year history, American Airlines was cleared for landing in the S&P 500 Index.

2015-03-26 00:00:00 Breaking Up is Hard to Do by Anthony Valeri of LPL Financial

The high-yield energy sector has kept pace with the broader high-yield bond market in 2015 even as oil prices weakened, a notable difference from 2014. Although we don’t believe the high-yield bond market will return to the June 2014 peak, the current yield spread may still represent good value given still strong corporate fundamentals and low defaults.

2015-03-25 00:00:00 The Dollar Isn't the Peso Anymore (Part II) by Richard Bernstein of Eaton Vance

In May 2013, Richard wrote a report titled “The Dollar isn’t the Peso anymore.” He rebutted the argument that the U.S. dollar (USD) was weak. The data showed that the USD had actually troughed in the spring of 2008. For seven years now, the USD has been gaining strength and is today a standout among the world’s currencies.

2015-03-25 00:00:00 Can ECB Policy Heal Europe’s Ills? by Mike Amey, Andrew Bosomworth, Lorenzo Pagani of PIMCO

In this interview, Managing Directors Mike Amey, Andrew Bosomworth and Lorenzo Pagani discuss the conclusions from PIMCO’s quarterly Cyclical Forum in March 2015 and how they influence our European investment strategy. They also delve into the impact of the European Central Bank’s (ECB) balance sheet expansion on growth and inflation and reflect on Europe’s improving economic health.

2015-03-25 00:00:00 The Dollar's Ripple Effect by Burt White of LPL Financial

In technical analysis, “intermarket analysis” looks at the way in which various markets interact. Intermarket analysis primarily looks at four market sectors: currencies, commodities, bonds, and stocks. From a technical analyst’s perspective, focusing our attention on only one market without considering what’s happening in the others leaves us in danger of missing vital directional clues and potential profits. The dollar, which has appreciated 24.4% since June 30, 2014 (as of March 19, 2015), has had an unusually strong intermarket effect of late.

2015-03-25 00:00:00 Active vs. Passive Redux by Jeffrey Saut of Raymond James

Most of you know I spend my days gathering “thin reeds” and try to weave them into a favorable “investment bouquet.” As Yogi Berra said, “You can observe a lot by just watchin’!”

2015-03-25 00:00:00 Signs of a Normalizing Market by Chris Clark of The Royce Funds

In the wake of the 2008 financial crisis, the Fed's monetary stimulus programs had the unintended effect of suspending the historically typical functioning of capital markets in terms of the productive and destructive uses of capital. Today, the fiscal climate is beginning to change. President and Co-Chief Investment Officer Chris Clark takes a look at what's happening in the current market and talks about why our discipline could be rewarded in the foreseeable future.

2015-03-24 00:00:00 The Economic Outlook by George Mokrzan of Huntington National Bank

The United States forecast is for solid average annual economic growth of 3.1% in 2015 -- fastest in the economic recovery to date overall, although areas of the economy with high energy or international exposure will likely encounter headwinds. Strengthening employment conditions, continual improvements in consumer finances and steadily rising housing markets are likely to reestablish the consumer’s lead role in the U.S. economy in 2015.

2015-03-24 00:00:00 A New Playbook for Diversification by Chris Arthur of Eaton Vance

Is an active/passive/smart beta strategy the future of diversification? Chris Arthur, CFA, sees a growing need for a new approach and explains how this one works.

2015-03-24 00:00:00 Don't Fret Student Debt by Brian Wesbury, Robert Stein of First Trust Advisors

For the past six years, investors have faced one fear after another. One of those fears has been the more than $1 trillion of student loan debt outstanding. This debt is up 160% since the start of 2006 (and growing) while the share of student loans with payments 90 days late, or longer, has risen from 6.4% to 11.3%.

2015-03-24 00:00:00 A Relatively Dovish Fed Statement Helps Equities Recover Ground by Robert Doll of Nuveen Asset Management

Last week featured some disappointing economic data and further downward revisions of corporate earnings estimates, but investors focused heavily on last week’s Federal Reserve policy meeting. The Fed’s statement was more dovish than expected, and investors interpreted the comments as an indication that rate increases would not happen as soon as some anticipated.

2015-03-24 00:00:00 The New World Order: Part II by Bill O'Grady of Confluence Investment Management

In the second installment of our four-part series we focus on two themes. First, we examine the global public goods the superpower provides, and second, we analyze how the U.S. has done so. The global hegemon often faces tensions between the desires of domestic constituencies and its foreign obligations. Every superpower negotiates these pressures and each tends to have its own ways of meeting both objectives. However, no superpower can subjugate the goals and aspirations of its citizens indefinitely. If the cost of hegemony becomes too high, a nation may be unable to maintain the position.

2015-03-23 00:00:00 Monetary Policy and the Economy: The Case for Rules Versus Discretion by John Hussman of Hussman Funds

Deviations in monetary policy from what one would have predicted (using past non-monetary variables alone) have zero correlation or ability to explain subsequent GDP growth (versus the levels that would have been predicted by past non-monetary variables alone). In other words, once we allow for the component of monetary policy captured by a fixed linear rule (the Taylor Rule comes close – and currently indicates an appropriate Fed funds rate of about 3% here), one can find no evidence in the historical record that additional activist monetary policy is useful.

2015-03-21 00:00:00 The Fed -- Drunken Coxswain of the SS America by Paul Kasriel of Econtrarian, LLC

What if the Fed’s luck should change for the worse without its “smarts” changing for better? Well, that question now is relevant. After rebounding to a rate approximately equal to its long-run median, growth in total thin-air credit sharply decelerated in February, both on a year-over-year basis as well as a three-month basis.

2015-03-21 00:00:00 Optimism, Pessimism and Opportunity by Ed Perks of Franklin Templeton

Given that the S&P 500 has been on a tear since 2008, logging double-digit returns in five of the past six years, and US Treasury rates remain near historical low levels, many investors are questioning their prospects for long-term total return. Ed Perks, chief investment officer and portfolio manager, Franklin Equity Group®, offers his views on why he remains optimistic about the US market’s prospects, and where he’s looking for investment opportunities today.

2015-03-19 00:00:00 De-risking Goes Beyond Interest Rate Risk: The Case for Dynamic Asset Allocation in an LDI Solution by Catherine LeGraw of GMO

In this piece, we introduce a measure of valuation risk, and demonstrate how rotating growth assets into a valuation-aware dynamic strategy can help to reduce risk, improve long-term returns, and help improve funded status in the case of a reversion to the mean.

2015-03-19 00:00:00 Dollar Strength is a Symptom, Not a Cause by Burt White of LPL Financial

We do not think the strong U.S. dollar will derail the bull market. The dollar itself is not a key driver of market performance; it is a symptom.

2015-03-19 00:00:00 Could India “Run the Table” like China by Jeremy Schwartz of WisdomTree

Jeremy Schwartz had the opportunity to speak with Rob Lutts, CIO of Cabot Wealth Management, a client of WisdomTree, about a research trip to India he had just taken. India has been a standout among emerging market countries, and Lutts’ outlook is that India remains a very attractive place to allocate part of his growth portfolio capital.

2015-03-19 00:00:00 10 Investment Quotes To Live By by Lance Roberts of Streettalk Live

As markets hover near all-time highs, investors have become quite complacent that the current bull market trend will continue indefinitely. But why shouldn't they? After all, the Central Banks of the world have made it a primary mission to ensure that asset prices don't fall in order to keep extremely weak economies limping along.

2015-03-19 00:00:00 Proposed Changes to U.S. Bankruptcy Code Could Create Opportunities in Distressed Credit by Sai S. Devabhaktuni, Ethan Schwartz of PIMCO

The American Bankruptcy Institute's (ABI) proposals aim to balance the objectives of effective reorganization of debtors and the maximization of asset values for all creditors and stakeholders. The proposals seem to mark an effort to modify the positions of different creditor classes in bankruptcy, a move that could disadvantage both senior and junior creditors depending on the particular case.

2015-03-19 00:00:00 Riding a Wave of Accommodation by Richard Clarida, Andrew Balls of PIMCO

PIMCO’s quarterly Cyclical Forum was held earlier this month to evaluate and assess the state of the global economy, to reach consensus on the near-term macroeconomic outlook, and to explore the tail risks to that outlook.

2015-03-18 00:00:00 The Surging U.S. Dollar - Good For Some, Bad For Others by Gary Halbert of Halbert Wealth Management

The US dollar has been surging against most other currencies over the last year. The question is, is the rising US dollar good for the economy and the investment markets, or not? No doubt, the rising dollar has been buffeting the US equity and bond markets this year and is increasingly cited as the main culprit. That is what we will delve into today.

2015-03-18 00:00:00 Global Economic Perspective: March by Franklin Templeton Fixed Income Group® of Franklin Templeton Investments

IN THIS ISSUE: United States Prepares for Interest-Rate Hikes; But Much of the World Is Still in Monetary Easing Mode; European Outlook

2015-03-17 00:00:00 Do Liquid Alts Justify Their Costs? by Robert J. Martorana, CFA (Article)

Liquid alts are complex and expensive, so it is natural for advisors to ask if they worth the time and trouble. In this article, I answer this question. I evaluate returns with special emphasis on 2014, when managed futures (notably the AQR Managed Futures Strategy Fund - AQMIX) soared and the largest global macro fund, MainStay Marketfield (MFLDX), stumbled.

2015-03-17 00:00:00 Bounded Rationality, Unbounded Confidence by Baijnath Ramraika, CFA® and Prashant Trivedi, CFA® (Article)

Our rationality is limited by the information we have, the cognitive limitations of our minds and the finite amount of time we have to make a decision. Herbert A. Simon called that concept "bounded rationality." As a consequence of these limitations, our confidence becomes unbounded. We will discuss the implications of this phenomenon and how investors can overcome it.

2015-03-17 00:00:00 The New World Order: Part I by Bill O'Grady of Confluence Investment Management

We have focused for several years on the issue of the uncertainty surrounding America’s superpower role. It has been our position that the U.S. has lacked a coherent foreign policy since the Cold War ended in the early 1990s. Although we cannot definitely say that a new policy is in place, the trappings of one appear to be emerging. The focus of this paper is how policy seems to be evolving and why. This will be a four-part report. Part I begins with the evolution of U.S. foreign policy, focusing on the 25-year cycle pattern between the adaptations to new circumstances.

2015-03-17 00:00:00 The Airline Industry Ascended to New Records in 2014 by Frank Holmes of U.S. Global Investors

Just as the U.S. economy is in full-recovery mode, so too is the airline industry. It’s lately made an impressive about-face from only a decade ago and, in 2014, soared to several new benchmarks.

2015-03-16 00:00:00 Extremes in Every Pendulum by John Hussman of Hussman Funds

Whether or not it is fully appreciated, we are observing extremes in nearly every pendulum of the global financial markets. The situation is likely to be seen in hindsight as one of the broadest points of financial distortion in history.

2015-03-16 00:00:00 This Too Shall Pass by Scott Minerd of Guggenheim Partners

Behavioral finance reminds us that ignoring daily volatility roiling the market is wise. Instead, investors should focus on the positive, fundamental outlook for equities and fixed income.

2015-03-16 00:00:00 Brazil: Macro Headwinds Are Strengthening by Sean Newman of Invesco Blog

Invesco Fixed Income’s outlook on Brazil as a sovereign credit is deteriorating. Downside risks to growth have increased given the country’s deteriorating fiscal position, rising interest rates, lower commodity prices, global growth headwinds, water and electricity shortages, among other challenges. The key for markets, in our view, will be the administration’s ability to deliver on promised fiscal adjustments.

2015-03-14 00:00:00 The Airline Industry Ascended to New Records in 2014 by Frank Holmes of U.S. Global Investors

Just as the U.S. economy is in full-recovery mode, so too is the airline industry. It’s lately made an impressive about-face from only a decade ago and, in 2014, soared to several new benchmarks. This industry is flying high again.

2015-03-14 00:00:00 The U.S. Dollar: Is Strength a Weakness? by Jim McDonald of Northern Trust

The U.S. dollar has seen strong upward moves in the past 9 months. What would continued dollar strength mean for economic growth, earnings and asset class performance? Find out more in Jim McDonald's latest strategy piece.

2015-03-13 00:00:00 Prospect of U.S. Fed Hike & its Effect on Asian Assets, Part I by Gerald Hwang of Matthews Asia

How close are we to a U.S. Federal Reserve (Fed) rate hike? How would a hike affect Asian securities? These are the questions we explore in this two-part series of Asia Insight.

2015-03-13 00:00:00 Equities: Enhancing the Core/Satellite Framework by Sabrina Callin, Andrew Pyne of PIMCO

?In a lower-returning environment, investors may need to look beyond traditional active or passive approaches in order to capture equity alpha. The “building blocks” of equity alpha include high active share stock selection, smart beta-based strategies and portable alpha approaches. These complementary sources of alpha can be implemented in an enhanced core/satellite framework to allow investors to pursue the returns needed to meet their objectives.

2015-03-13 00:00:00 Charting The Winners And Losers Of The Latest Surge In The USD by Team of GaveKal Capital

On March 4th we wrote in The Dollar Is Breaking Out Again And What It Means For Stocks that "for a variety of cyclical and structural reasons...stocks in North America tend to be the relative beneficiary of USD strength while stocks in other regions generally, but not always, tend to underperform. The negative correlation is especially strong for European stocks." Well, since then the USD has surged another 6% so we thought we'd review how things have played out.

2015-03-13 00:00:00 Could the Search for Income Lead to Instability? by Daniel Loewy, Morgan Harting of AllianceBernstein

Years of quantitative easing has pushed yields on government bonds down to record lows, and income-starved investors are being pushed out the risk spectrum, forced to choose between more volatile assets to find income. Finding acceptable levels of income exposes portfolios to greater instability ahead—we believe a multi-asset approach can help.

2015-03-13 00:00:00 Keep it Short? The Limited-Term Fixed Income Market by Mark Otterstrom, Susan Regan of Ivy Investment Management Company

Concern about interests rates has made fixed income investors more aware of the potential for interest rate risk – or the risk that a rise in rates will reduce the value of their longer-maturity securities. This risk, which is often expressed as a bond or bond fund’s “duration,” has led some investors to consider investments believed to have less potential risk. These securities, which are considered to have a lower duration, are seen as less vulnerable to market volatility.

2015-03-12 00:00:00 Is a New U.S. Bear Market Hanging Over Our Head? by Robert Lamy of The Forecasting Advisor

The current bull stock market is now six years old and it will start its seventh year on March 9th. As of March 6th, the S&P 500 stock price index has risen by 206% from the last bear market through of March 9th, 2009. This gain implies that the current bull market recorded a larger increase and rose for a longer period than most of the previous bull markets over the past fifty years.

2015-03-12 00:00:00 Global Macro Framework by Alexander Giryavets of Dynamika Capital L.L.C.

Global Carry, Yen and Dollar are irrefragable drivers of Global Macro. As we explain equities and bonds are just derivatives of these factors. We expose how the big picture asset dynamics worked since the GFC, brief on what happened over the last year and conclude with comments on dollar blowout over the past week.

2015-03-11 00:00:00 A Patient Fed Considers Losing Patience by Peter Schiff of Euro Pacific Capital

I have always argued that quantitative easing and zero percent interest rates were misguided policies to combat economic weakness. But as the years went on, misguided turned into irresponsible, which led to ridiculous, and then turned into dangerous. But lately, the only word that comes to mind is "surreal." How should we react when central bankers begin to speak like Willie Wonka?

2015-03-11 00:00:00 Worries about the Looming Fed Hike Spill Over by Russ Koesterich of BlackRock

Many investors are anxious about a possible bubble in stock markets, but those fears seem overblown to us. The greater near-term danger may be a more aggressive Federal Reserve.

2015-03-11 00:00:00 Optimal Diversification Portfolio for Upcoming Interest Rate Environment by Chuck Self of iSectors

Historical patterns in interest rates leading to the current trend; Macroeconomic activity supporting future rising interest rates; Recommendations for optimizing client portfolios in such an environment

2015-03-10 00:00:00 Curiouser and Curiouser... by Sponsored Content from Legg Mason (Article)

Though historically low, U.S. interest rates are actually high in comparison to the rest of the developed world. U.S. bonds appear overpriced on domestic fundamentals, but they are a bargain based on global valuations.

2015-03-10 00:00:00 Stranded in NYC by Jeffrey Saut of Raymond James

The week began well enough as I arrived Sunday a week ago in Orlando for the 36th annual Raymond James Institutional Investors conference. As previously stated, there were more than 1,000 portfolio managers (PMs) and analysts there to listen to some 300 companies’ presentations. In addition to the PMs and their analysts, our analysts anchored the presentations by the CEOs and CFOs of those companies.

2015-03-10 00:00:00 On My Radar: Rut Ro Rastro by Steve Blumenthal of CMG Capital Management Group

At the beginning of each month, I like to look at a series of valuation metrics: Median PE, Price to Sales and Price to Operating Earnings. Let’s look at them today. The logic, of course, is simple. When expensively priced, reduce exposure and reduce return expectations. When inexpensively priced, overweight exposure and increase return expectations. Let’s also take a look at what has been driving the market higher. Some argue that individual investors are still on the sidelines. I don’t think so and I show evidence that they are almost as fully invested as they were at the 2000 and

2015-03-10 00:00:00 Stock and Bond Funds Grow with the Flows by Milton Ezrati of Lord Abbett

No redistribution here: Even as equity fund flows have turned positive, bond funds continue to see inflows. Here’s a closer look at the trend—and what it means for investors.

2015-03-10 00:00:00 Happy Birthday Bull Market by Burt White of LPL Financial

The current bull market celebrates its sixth birthday today (March 9, 2015). Bull markets do not die of old age, they die of excesses, and we do not see evidence of excesses emerging today. Some of our favorite leading indicators suggest the economic expansion and bull market may continue through the end of 2015.

2015-03-10 00:00:00 Good luck, Jonathan. Good luck, Nigeria. by Kaisa Stucke of Confluence Investment Management

This week we look at the upcoming Nigerian presidential election and how the persistent threat of the Boko Haram terrorist movement has complicated the democratic process. The election promises to be a close one between the incumbent, Goodluck Jonathan, and a former military leader, Muhammadu Buhari. In turn, we look back at the 2011 presidential election and analyze how that election facilitated the rapid spread of Boko Haram. Exacerbating matters further, the country suffers from a deepening divide between the Christian south and the Islamic north, which we discuss in detail in this report.

2015-03-10 00:00:00 Why Holding Cash May Mean Losing Money by Russ Koesterich of BlackRock

There are many reasons to hold cash in your portfolio, but sometimes it can be too much of a good thing. Russ Koesterich explains the risks of a large cash position and offers some alternatives.

2015-03-10 00:00:00 Never Smile at a Crocodile by John Mauldin of Mauldin Economics

We will briefly survey my worry closet today before resuming our series on debt, in which we’ll encounter Paul Krugman’s lament that “Nobody understands debt.”

2015-03-09 00:00:00 What Does That Difference Mean? by John Hussman of Hussman Funds

The difference between actual market returns over a given time period, and the returns that one would have projected earlier based on reliable valuation measures, is extremely informative about where current valuations stand, and about where future market returns are headed.

2015-03-09 00:00:00 The Stock-Bond Disconnect by Kenneth Rogoff of Project Syndicate

How should one understand the disconnect between the new highs reached by global equity indices and the new depths plumbed by real interest rates worldwide? Several competing explanations attempt to reconcile these trends, and getting it right is essential for calibrating monetary and fiscal policy appropriately.

2015-03-09 00:00:00 The Dollar isn’t the Peso anymore (Part II) by Richard Bernstein of Richard Bernstein Advisors

The US dollar rally is in its seventh year and we expect this trend to continue. Many observers, including the Fed, continue to worry about inflation. However, we think a strong USD and disinflation/deflation seem more likely than inflation so long as global overcapacity forces nations to fight for market share and depreciate their currencies.

2015-03-08 00:00:00 Weighing the Week Ahead: Is Good News Now Bad for Investors? by Jeff Miller of New Arc Investments

Anyone who wants to speculate on what the Fed is thinking must include some actual evidence from past transcripts. If, for example, you want to suggest that the Fed “wants a market correction” (you can’t make this stuff up) then you have to find at least one historical example where some participant raised that idea. Otherwise, shut up!

2015-03-06 00:00:00 Hot and Cold Bonds by Anthony Valeri of LPL Financial

January 2015 was the best month for high-quality bonds since December 2008. In February 2015, high-quality bonds posted their worst monthly performance since June 2013 and the taper tantrum sell-off. High-yield bonds experienced ups and downs thus far in 2015. After a muted January, high-yield bonds returned 2.4% in February, the largest single month gain since October 2013. After a wild first two months, we expect more muted returns over the remainder of 2015.

2015-03-06 00:00:00 On the Investment Process of a Global Generalist by Jason Brady of Thornburg Investment Management

The process and logic behind the security selection and the construction of portfolios is, in many ways, as complex as the markets themselves. A portfolio of 50 holdings culled from only 500 possible choices leads to: 500!/(50!*(450!)) or 2.31442 x 1069 potential portfolios! That’s a lot of potential outcomes, and this doesn’t even take into account the various possible weights of those choices.

2015-03-05 00:00:00 Don’t Audit It: Reign It In by Brian Wesbury of First Trust Advisors

Some in Congress want to “Audit the Fed.” But an audit, unless the word is used in a very broad sense, would be redundant and basically irrelevant. The Fed is already audited, by Deloitte & Touche LLP and it releases an annual report that includes the auditor’s opinion, each year.

2015-03-05 00:00:00 The Dollar Is Breaking Out Again And What That Means For Stocks by Team of GaveKal Capital

The ICE US dollar index looks to have broken out of what has been a rather short-lived consolidation after the massive move since the middle of 2014. If this is in fact the start of another round of dollar strength, then stock investors should carefully consider where in the world to deploy cash into stocks. For a variety of cyclical and structural reasons, certain regions of the world tend to outperform in periods of USD strength and others lag. We'll try to shed some light on that with the below charts.

2015-03-05 00:00:00 Searching for Yield Down Under by Russ Koesterich of BlackRock

The persistence of low yields has had investors searching for income high and low for a while now. Recently, investors are expanding their hunt to some less than obvious places.

2015-03-05 00:00:00 India the Best-Performing Emerging Market by Frank Holmes of U.S. Global Investors

India had an incredible banner year. The world’s largest democracy, home to 1.25 billion people, was the best-performing emerging market in 2014, delivering over 29 percent. It was followed by the Philippines in second place and Indonesia in third.

2015-03-04 00:00:00 Tigers in Africa by Niels Jensen of Absolute Return Partners

This month's Absolute Return Letter is about unrealistic expectations which is something we are all guilty of from time to time. We look at why it is unrealistic to expect equity returns to be in the double digit range over the next several years, why central banks are not printing money like many believe, plus a few other topics.

2015-03-03 00:00:00 Are DFA's Funds Active or Passive? by John Coumarianos (Article)

Larry Swedroe's recent critique of Graham and Dodd value investing mischaracterized DFA's value funds as "passive." Beyond that, he misread James Montier's discussion of "perfect" value investors, made unfair comparisons among funds and didn't measure risk properly.

2015-03-03 00:00:00 The Return of the Comeback: Is 2015 the Year for International Stocks? by Zachary Karabell of Envestnet

For several years, many professional investors and advisers have been bullish about the prospects for investing outside the United States. Calls to overweight European stocks or global stocks have been typical each January for the past years, and this year is no different.

2015-03-03 00:00:00 Yemen: A Land with a Rich Past and a Poor Present by Kaisa Stucke of Confluence Investment Management

The country of Yemen is slowly dissolving in the midst of an ongoing civil war. The Houthi movement has aggressively secured territories in the north, while al-Qaeda has widened its activities in the south. Outside powers are watching these developments closely. Yemen’s neighbor and U.S. ally, Saudi Arabia, would like to see the Houthi insurgency stopped as the group is widely viewed as a proxy for Iran. At the same time, the U.S. has been a partner to Yemen in fighting al-Qaeda in the Arabian Peninsula, but the fall of its government has left the U.S. without a formal partner.

2015-03-03 00:00:00 The Conference by Jeffrey Saut of Raymond James

Greetings from Orlando where the Raymond James 36th Annual Institutional Investors Conference is in full swing. At this year’s conference there will be more than 1,000 portfolio managers (PMs) and analysts, as well as more than 300 companies presenting. In a past life I used to attend many of Wall Street’s institutional investors conferences, but have come to like ours the best.

2015-03-02 00:00:00 The Most Important Number No One Is Talking About by Russ Koesterich of BlackRock

Economists are divided over the reasons behind the slowdown in U.S. productivity growth, but its effects on future economic growth are unquestionably negative.

2015-03-02 00:00:00 On My Radar: Equity Valuations, Recessions and Market Declines by Steve Blumenthal of CMG Capital Management Group

Today let’s take a look at the hard evidence signaling slowdown. My personal view is that slowdown would not be as much of a problem if valuation measures were low. They’re not: by just about every measure the market is overpriced, overbought and over believed. What can you do? I share a simple and disciplined rules based way for you to stay invested in the market’s primary trend.

2015-03-02 00:00:00 The Herd Can Be Blind by Peter Schiff of Euro Pacific Capital

Going into 2015 the economic outlook held by the U.S. investment establishment could not have been much more positive, and more unified. Pundits saw all the variables aligning to create the best of all investment worlds, a virtual "no-brainer" of optimism. Many believed that the 5.0% annualized growth in 3rd quarter would stay strong in the 4th Quarter and then usher in a strong 2015, which many believed would be the best economic year since the crash of 2008. The only question that divided most forecasters was how good the year would be.

2015-03-01 00:00:00 Weighing the Week Ahead: Will the Economic News Alter Fed Policy? by Jeff Miller of New Arc Investments

The exact timing of the first Fed rate increase does not matter. There is a difference between tight monetary policy and slightly less accommodative policy. Markets do quite well in the early stages of rising rates, especially when starting from a low initial point. This will be ignored by many who will invoke “Don’t fight the Fed.” This will be the fundamental battleground between traders and investors, bears and bulls, and various political types – perhaps lasting for years. The end of the business or stock market cycle is not imminent. Bull markets do not die of old age.

2015-03-01 00:00:00 Plan to Exit Stocks Within the Next 8 Years? Exit Now by John Hussman of Hussman Funds

Unless we observe a rather swift improvement in market internals and a further, material easing in credit spreads – neither which would relieve the present overvaluation of the market, but both which would defer our immediate concerns about downside risk – the present moment likely represents the best opportunity to reduce exposure to stock market risk that investors are likely to encounter in the coming 8 years.

2015-02-28 00:00:00 The Most Important Number No One Is Talking About by Russ Koesterich of BlackRock

Economists are divided over the reasons behind the slowdown in U.S. productivity growth, but its effects on future economic growth are unquestionably negative.

2015-02-28 00:00:00 The Fat Pitch Weekly Market Summary by Urban Carmel of The Fat Pitch

When SPY has risen 3 weeks in a row, it most often rises further for at least one more week. SPY has been up 3 weeks in a row 19 times in the past 4 years. In 17 of those 19 times (89%), it continued up at least one more week. In one of those 19 instances, SPY gave back half its gains before going higher (yellow arrow); and in just one instance, SPY gave back 100% of its gains (red arrow).

2015-02-27 00:00:00 Are Expectations Too High? by Burt White of LPL Financial

The market’s continued ascent has caused some to ask if the stock market reflects excessive optimism. The pace of economic surprises as measured by the Citigroup Economic Surprise Index suggests expectations remain reasonable. We view recent economic disappointments as largely temporary, and would expect the surprise index may reverse recent declines as expectations have come down, providing support for cyclical sectors.

2015-02-27 00:00:00 Recession is On the Way: Questioning One's Sanity; Beat the Crowd, Panic Now! by Mike "Mish" Shedlock of Sitka Pacific Capital

In 2006-2007 I called for a recession. We got a big one. I called for another one in 2011, as did the ECRI. That recession never happened. 50% is not a very good recession predicting track record except in comparison to consensus economic opinions that have never once in history predicted a recession. Consensus opinion is batting a perfect 0.00%

2015-02-27 00:00:00 Macro View Rate Hike Rally by Scott Minerd of Guggenheim Partners

The lead-up to the first rate hike by the Federal Reserve is historically a favorable environment for U.S. equities and credit.

2015-02-27 00:00:00 Could Apple Buy a Third of the World’s Gold? by Frank Holmes of U.S. Global Investors

So what’s Apple’s next trick? How about moving the world’s gold market?

2015-02-27 00:00:00 With the Bank of Canada, Is the Canadian Economy in Good Hands? by Ed Devlin of PIMCO

A disorderly decline in energy prices could spill over into consumer and business sentiment, which would worsen any drop in Canada's economic output. More rate cuts this year are likely a part of the Bank of Canada's base case scenario. Investors may be able to improve their returns by buying bonds with high-quality credit spreads, including Canadian bank senior debt and Ontario bonds.

2015-02-27 00:00:00 On the Long Bond and Why the Widow Maker is Alive and Well by Team of GaveKal

Perhaps one of the most important questions investors need to answer today is whether we've seen the low in the long bonds yields or whether the trend lower is firmly intact. The recent spike in the 10-year bond yields from 1.65% at the end of January to 2.14% just two weeks later has no doubt complicated the situation. In this piece we'll try to layout one case for lower yields still.

2015-02-27 00:00:00 Hasenstab on Global Growth: Headwinds or Tailwinds? by Michael Hasenstab of Franklin Templeton

While some forecasters predict gloomy global growth this year, the contrarian-minded Dr. Michael Hasenstab, chief investment officer, Templeton Global Macro Group (formerly known as Templeton Global Bond Group), has a different view. He aims to counter what he sees as “excessive pessimism” surrounding the global economy and outlines why he believes the recent plunge in oil prices could prove a tailwind, not only for economic growth in the United States, but also in Europe. He also offers his scorecard regarding Japan’s monetary policy experiment dubbed “Abenomics.”

2015-02-27 00:00:00 Rhyming…but not Repeating. by Liz Ann Sonders, Brad Sorensen & Jeffrey Kleintop of Charles Schwab

Stocks have recovered their January losses and have continued to move higher. While economic growth remains solid and we remain secular bulls, investors should be prepared for increased volatility and the potential for a near-term correction. Also, European stocks may be due for at least a pause and we suggest looking to add exposure to emerging market positions if needed. Staying well diversified and keeping an eye on rebalancing is the recommended strategy.

2015-02-26 00:00:00 Equity Valuations, Recessions and Stock Market Declines by Doug Short of Advisor Perspectives (

When I initiated the dshort web page in late 2005, one of my routine topics was equity valuations, initially inspired by Nobel laureate Robert Shiller's book, Irrational Exuberance, the second edition of which was published earlier that year. I gradually expanded my focus from his cyclically adjusted price-to-earnings ratio (CAPE) to include Ed Easterling's Crestmont P/E, Nobel laureate James Tobin's Q Ratio and my own monthly regression analysis of the S&P 500.

2015-02-26 00:00:00 Family-Owned Businesses: One More Reason Not to Neglect Emerging Markets by David Ruff of Forward Investing

At the end of a year in which the U.S. handily led the world’s equity markets, many dividend investors find it hard to rouse any interest in emerging markets at all. “Why even bother?” seems to be the prevailing sentiment.

2015-02-26 00:00:00 Gathering Thin Reeds? by Jeffrey Saut of Raymond James

Many of you know that I spend time gathering “thin reeds” and try to weave them into a favorable “investment bouquet.” This is a strategy Fidelity’s Peter Lynch took to its zenith in an era gone by. Recall the story Peter told about how he stumbled into Magellan Fund’s (FMAGX/$96.12) investment in Hanes, when he first heard his wife rave about a new product called pantyhose.

2015-02-26 00:00:00 Hedge Funds on the Comeback? by Roger Nusbaum of AdvisorShares

A few days ago I stumbled across a post from CIO titled Reports Of My Death Have Been Greatly Exaggerated that chronicles the outflows from hedge funds last year and posits whether a comeback might be around the corner but with generally lower fees. The lower fee angle of the article seemed to focus on negotiating a lower fee with the manager. Of course lower fees are available through the various exchange traded products that one way or another replicate the exposure but doing so without the so called ‘2 and 20’ fee structure.

2015-02-25 00:00:00 At a Standstill? - The Debate Over "Secular Stagnation" by Team of Northern Trust

During one particularly stormy day recently, I asked my daughter to unearth herself from the couch and help me clear the snow from the driveway. Unfortunately, the prospective reward of industry was no competition for the television remote, and I was left to fend for myself.

2015-02-25 00:00:00 Greece Clears First Hurdle: More to Come by Russ Koesterich of BlackRock

Early negotiations between Greece and its creditors brought about an extension to the bailout program, but talks could remain contentious. What should investors focus on during this time?

2015-02-24 00:00:00 On My Radar: A $9 Trillion Dollar Crisis by Steve Blumenthal of CMG Capital Management Group

Here is the main point of today’s OMR: According to the Bank of International Settlements, non-bank borrowers outside the U.S. have borrowed, in dollars, $9 trillion. This is an increase of $4.5 trillion since the financial crisis and it places that $9 trillion on the wrong side of the dollar bet. The dollar debt is an example of how the Fed’s tightening will impact the world economy. This is a pressure cooker and the pot is starting to boil.

2015-02-24 00:00:00 2015 Leadership: An Early Take by Doug Ramsey of Leuthold Weeden Capital Management

Last year’s economically defensive winners held their grip on stock market leadership in January. This action is consistent with our view that the bull market is an aged, overvalued one that has begun a final “distribution” process that will eventually erupt into a cyclical bear. Like every other facet of the topping process, though, defensive leadership can persist for an extended period—to the point that it’s ignored when there’s a genuine warning to be heard.

2015-02-24 00:00:00 U.S. Economy: Will Growth Be Roaring, or Boring? by Milton Ezrati of Lord Abbett

Here’s a look at key indicators—and what they signal for the pace of U.S. economic activity.

2015-02-24 00:00:00 Finally, At Least One Financial Media Person Gets It by Jerry Wagner of Flexible Plan Investments

I spent the last two weeks on a Caribbean island (as I always say: Timing is everything!). We rented a house and had lots of visitors from “Up North” (my wife will be there a month and during that time we will have had seventeen people staying in the house!).

2015-02-24 00:00:00 Détente with Iran: An Update by Bill O'Grady of Confluence Investment Management

This report is an update to a similarly titled piece we published in 2013. In this report, we delve further into what appears to be an evolving policy change by the U.S. with Iran, discussing the basic goals of the U.S. and Iran. With this background, we examine America’s alternatives to achieving our aims in the region, followed by a full examination of U.S. difficulties in making a historic policy change with Iran. We discuss the recent policy pattern in the region and how it supports the notion that improving relations with Iran is probably the reason for this pattern.

2015-02-23 00:00:00 Exploring for High Yield Energy Opportunities Amid Ailing Oil Prices by Scott Roberts of Invesco Blog

Energy is a popular topic of conversation in the high yield bond space, with many observers warning of a wave of defaults to come due to the plunge in oil prices. While there will likely be some defaults in the sector, we believe that the market’s pessimism has been overly broad, and we view energy as a potential source of opportunity in 2015. Having a clear understanding of macro drivers in energy, paired with careful security selection, will be key to successfully navigating this volatile space, in our view.

2015-02-23 00:00:00 When Volatility Rises, So Have Active Management Results by Team of The Royce Funds

For many investors, volatility is often synonymous with risk. We as value investors (and risk managers), on the other hand, have always viewed volatility as a crucial component of active stock selection. In our latest Royce Research piece, we explore the relationship between low- and high-volatility environments and the relative performance of active managers versus their respective benchmarks during these periods. This deep dive is especially important in a market that has recently seen more volatility and its largest correction in almost three years.

2015-02-23 00:00:00 Global Reflation Should Allow Equities to Push Higher by Robert Doll of Nuveen Asset Management

Financial markets reacted well to the provisional Greek bailout extension, but risks for Europe remain elevated. Wages appear to be starting to climb, which would increase pressure on the Fed to begin rate increases this summer. There is a valid bearish case to be made, but we think the positives for equities outweigh the negatives.

2015-02-21 00:00:00 Emerging Markets Equity Commentary: January 2015 by Team of Thomas White International

Emerging market equity prices outperformed in January on expectations that economic conditions in large Asian countries such as China and India could brighten this year. Fourth quarter GDP growth in China met expectations, helped by higher industrial production and consumer spending.

2015-02-20 00:00:00 The Case for Global Investing by Team of Litman Gregory

As U.S. stocks have outperformed developed international and emerging-markets stocks in recent years, we’re starting to hear more people question the benefit of investing outside of the United States. This is an important question, and we acknowledge that owning foreign stocks has been an unsatisfying experience over the past couple of years. Moreover, given some of the current economic and geopolitical forces, it can appear likely to continue this way.

2015-02-20 00:00:00 Global GDP Tracker by John Canally of LPL Financial

The top 25 global economies make up 90% of global gross domestic product (GDP). Through Friday, February 13, 2015, 13 of these economies (including countries and political unions) have already reported Q4 2014 GDP results, including the four largest economies (U.S., Eurozone, China, and India). As this commentary was being prepared for publication, Japan, the world’s fifth-largest economy, released Q4 GDP results.

2015-02-19 00:00:00 2015 Annual Forecast by Clyde Kendzierski of Financial Solutions Group

It’s already February, but for many readers this is the first communication of 2015 so, Happy New Year! It’s been a great 6 weeks so far and we’re looking forward to many more to come. Let’s get into it…

2015-02-19 00:00:00 Great Expectations for Small-Cap Active Management by Chuck Royce, Chris Clark, and Francis Gannon of The Royce Funds

Widening credit spreads, increasing volatility, and decreasing stock correlation should allow stock pickers the chance to emerge as performance leaders. We continue to see good times ahead for active managers who focus on business fundamentals.

2015-02-19 00:00:00 Brighter Days Ahead for the Global Economy? by Team of Thomas White International

After seven years of uneven growth trends following the 2008 financial crisis, we believe the global economy is likely to see a moderate acceleration in 2015. While several risks remain, we are reasonably confident that there are now enough growth drivers in place to help most major economies advance.

2015-02-19 00:00:00 Emerging Markets Equity Commentary: December 2014 by Team of Thomas White International

Emerging market equity prices corrected during the month on concerns that the steep fall in crude oil prices could hurt the outlook for select countries.

2015-02-18 00:00:00 On My Radar: Schumpeter’s Creative Destruction by Steve Blumenthal of CMG Capital Management Group

This week let’s take a look at debt around the globe. I share a great piece from McKinsey & Company that shows just how much more debt, county by country, has been piled on since the 2007 debt induced financial crisis. Evidence is apparent in the commodity market and I also share a few ideas how you may risk manage those allocations.

2015-02-18 00:00:00 Can Trees Really Grow to the Sky? by Jeffrey Saut of Raymond James

I stopped my rental car in the middle of a cluster of giant sequoia trees while driving to one of my speaking engagements in northern California last week. I have always been overwhelmed with these beautiful “beasts” and last week was no exception. As I lay supine at the base of the behemoth the visual fallacy actually made it look like this monster was indeed growing to the sky. The surreal sensation brought to mind the old stock market axiom, “Trees don’t grow to the sky!”

2015-02-18 00:00:00 Africa Could Mine Its Way to Prosperity if It Addressed Instability by Frank Holmes of U.S. Global Investors

Last week I attended the Investing in African Mining Indaba in Cape Town, South Africa, as both a presenter and a student seeking opportunities. One of the highlights of the conference was former Prime Minister Tony Blair’s keynote address, during which he offered some crucial advice to African governments: To attract and foster a robust mining sector, a commitment to fiscal stability must be made.

2015-02-18 00:00:00 Euro-Area Growth: Reasons to be Cheerful by Darren Williams of AllianceBernstein

There are good reasons to be concerned about the medium-term outlook for euro-area growth. But that doesn’t mean the business cycle is dead. We think the conditions for a cyclical rebound in regional growth are currently better than they’ve been at any time since the global financial crisis.

2015-02-17 00:00:00 Why We’re Cautious on Credit by Rob Waldner of Invesco Blog

In the current environment of rising global volatility and potentially weak US corporate earnings growth, Invesco Fixed Income is cautious on US and European credit. While European investment grade credit may be supported by the European Central Bank’s (ECB) program of quantitative easing (QE), we believe US investment grade would likely underperform US Treasuries in the current environment, although we would expect it to perform better than riskier assets.

2015-02-17 00:00:00 Gary Shilling - Why You Should Own Bonds by Robert Huebscher (Article)

If you followed Gary Shilling's advice for the last 30 years, you would be very wealthy. Since 1981, Shilling has consistently advocated owning long-dated Treasury securities. In a talk last week, he reiterated that advice as one piece of his three-part asset-allocation strategy for the coming year.

2015-02-17 00:00:00 Search for Strength: EM Downturn Puts Focus on Fundamentals by Sponsored Content by Invesco (Article)

  • Corporate earnings deterioration and a decline in return on capital have held back emerging market performance.
  • Reversing weak performance depends on a return to stronger corporate earnings.
  • Downside risks could lead to disappointing earnings growth, but positive fundamentals are unfolding.

2015-02-17 00:00:00 Extreme Overvaluation and the Inventory Problem by John Hussman of Hussman Funds

Current equity markets are no place for long-term investors, and even a resumption of risk-seeking investor preferences would demand a considerable safety net.

2015-02-17 00:00:00 Shut off the Noise, Hear the Risks by Gibson Smith of Janus Capital Group

Janus Fixed Income CIO Gibson Smith believes volatility in the fixed income market may represent a greater risk than a sustained increase in rates.

2015-02-17 00:00:00 EM Sector Featuring Ryan Paylor by (Article)

The emerging market sector, especially Latin America, presents potential opportunity to CEF investors, says Ryan Paylor, of Thomas J. Herzfeld Advisors.

2015-02-15 00:00:00 Weighing the Week Ahead: Will Energy Stocks Support the Market Breakout? by Jeff Miller of New Arc Investments

I do not know whether we have reached a bottom in energy prices, but I have identified two important themes.

2015-02-14 00:00:00 The Daily X-Change - 3 Things - Uncomfortable Facts, 25-54 Employment, Houston RE by Lance Roberts of Streettalk Live

While the media and mainstream analysts discount the negative economic impact of falling energy costs, I have personally witnessed it in the mid-80's, the late 90's and just prior to 2008. In all cases, the negative outcomes were far worse than predicted which left economists scratching their heads as to what went wrong with their models. Of course, considering the BLS only saw a loss of 1900 manufacturing (oil and gas) jobs in January when there were 26,000 layoffs may explain part of the problem.

2015-02-14 00:00:00 Alternate Current: The Power of Diverse Return Sources by Christine Johnson of AllianceBernstein

After a long period of calm, global markets now face tumbling oil prices, geopolitical risks and monetary policy changes. Investors looking for new ways to diversify in this uncertain environment should take a long look at investments that don’t take their cues from stock or bond market movements.

2015-02-14 00:00:00 When Patience Disappears by Scott Minerd of Guggenheim Partners

Advance notice of the timing of a rate hike by the Federal Reserve may hinge on the removal of just one word, warns St. Louis Fed President Bullard.

2015-02-13 00:00:00 Global Airline Stocks Soaring, and Not Just Because of Low Oil Prices by Frank Holmes of U.S. Global Investors

The airline industry is notoriously competitive. There’s even an old joke: If you want to make a million dollars in the airline business, you need to start with two million.

2015-02-12 00:00:00 President Obama's tax proposal: What equity investors need to know by Michael Allison of Eaton Vance

In this insight, Michael examines the potential for higher tax rates on long-term gains and dividends and makes the case for taking a tax-managed approach to equity investing.

2015-02-12 00:00:00 Sector Insights: Technology by Steve Jue of Rainier Investment Management

With cloud computing, mobile Internet, the “Internet of Things” and next-generation security, recent trends in technology are driving innovation and are creating attractive opportunities for investors.

2015-02-12 00:00:00 Scott Mather Discusses PIMCO’s Total Return Strategy by Scott Mather of PIMCO

Bonds have continued to rally so far this year, even as the Federal Reserve contemplates raising interest rates. In the following interview, Scott Mather, CIO U.S. Core Strategies, discusses recent developments in the bond markets, the outlook for the year ahead and the investment implications for PIMCO’s Total Return Strategy. Mather co-manages the strategy with Mark Kiesel, CIO Global Credit, and Mihir Worah, CIO Real Return and Asset Allocation.

2015-02-11 00:00:00 Will China’s Year of the Goat Bring Out the Market Bulls? by Eddie Chow of Franklin Templeton Investments

According to the Chinese calendar, 2015 is the Year of the Goat (or sheep), creatures that are typically peaceful in nature but can also be stubborn, while exhibiting herd-like behavior. I’ve invited my colleague Eddie Chow, senior executive vice president and managing director, Templeton Emerging Markets Group, to share his perspective on some key themes our team is watching in 2015 for China, and whether we think market bulls, bears or goats can be friends this year.

2015-02-11 00:00:00 China Just Crossed a Landmark Threshold by Frank Holmes of U.S. Global Investors

Back in July 2013, the think tank Heritage Foundation predicted that China’s outbound investment “could very well exceed $80 billion [by the end of the year] and is on course to breach $100 billion by about 2016.”

2015-02-11 00:00:00 The Sectors Now on Shaky Ground by Russ Koesterich of BlackRock

Bond yields surged last week, putting some dividend-rich stocks (utilities, REITs) in a very vulnerable position. Could this be the end of their rally?

2015-02-10 00:00:00 Mohamed El-Erian: Beware the Bubble in Liquidity by Robert Huebscher (Article)

In 2000, it was technology stocks. In 2007, it was real-estate prices. Among today's overvalued asset classes, which one will crash most spectacularly when the bubble bursts? Mohamed El-Erian, the chief economic advisor at Allianz, thinks he knows the answer.

2015-02-10 00:00:00 Weighing the Week Ahead: Time for “Risk On?” by Jeff Miller of New Arc Investments

With a modest schedule of data releases, we can expect more analysis of last week’s news. Trading in several markets changed course rather abruptly. With traders poised to spot any change in trend, the question will be whether this shift is for real.

2015-02-10 00:00:00 Greek Games by Bill O'Grady of Confluence Investment Management

After the Syriza party won 149 of the 300 seats in the Jan. 24th Greek elections, European markets have been roiled by worries over another crisis developing. In this report, we use game theory to describe the situation between Greece and the EU/Germany/ECB. This method shows how misunderstandings can develop and how catastrophic mistakes are made. Using this structure, we will outline the positions and perceptions of both sides and describe how this situation could lead to another crisis. As always, we will finish with market ramifications.

2015-02-10 00:00:00 Riding An Aging Bull (Market) by Rick Vollaro of Pinnacle Advisory Group

The year has begun in roller coaster fashion, and our team has been busy reading and digesting the many 2015 outlooks that come across our desks. But reading is the easy part, and now it’s our turn to distill the many facets of our process into a workable thesis that allows us to generate attractive risk-adjusted returns in this maturing market cycle.

2015-02-09 00:00:00 Surprises in 2014 and Expectations for 2015 by (Article)

Portfolio Manager and Principal Charlie Dreifus talks about the global slowdown in 2014 and its effects on interest rates in the U.S. and abroad, how data points for the U.S. economy and quantitative easing in the eurozone will play a big role in shaping the investment landscape in 2015, and how - with interest rates so low - wage inflation could have a positive impact on the markets.

2015-02-09 00:00:00 Bonds or Jeter? by Richard Bernstein of Richard Bernstein Advisors

In baseball, batters choose to either swing for the fences in hopes of a home run or go for more consistent base hits. These same principles are highly relevant to the current market environment and long-term investment success. So, see if you really want home run hitters in your portfolio?

2015-02-09 00:00:00 The International Ramifications of ECB QE by Andrew Bosomworth of PIMCO

By engaging in quantitative easing, the European Central Bank is pursuing its inflation mandate with a vengeance. Overall, we think the combination of quantitative easing, investment and lower oil prices will help eurozone growth reach approximately 1.3% in 2015. Global central bank balance sheets continue to expand: Although the Federal Reserve stopped purchasing assets in 2014, the Bank of Japan and now the ECB have stepped up buying bonds where the Fed left off.

2015-02-08 00:00:00 Expect a Decade of 1.7% Portfolio Returns from a Conventional Asset Mix by John Hussman of Hussman Funds

The problem for investors here is that risk premiums are compressed in equities at a time when bonds offer no way out. When risk premiums are compressed across the board, conventional asset allocations are very much like trying to squeeze water from a stone. We project a 10-year nominal annual portfolio total return averaging only about 1.7% annually for anything close to a standard portfolio mix of equities, bonds and cash, regardless of how much diversification one has within each of those asset classes.

2015-02-07 00:00:00 The Fat Pitch Weekly Market Summary by Urban Carmel of The Fat Pitch

SPX has now fallen 4 of the last 5 weeks, including this past one. For the week, SPX and DJIA each lost nearly 3% and NDX lost 0.8%.The indices and most of the sectors have fallen under their key moving averages. Many of these now have a declining slope. Over the past month, price has made lower highs. All of this suggests that the trend is down. Moreover, bullish set ups are failing, a warning that price has not reached an oversold level. Despite the sell off, breadth and longer term measurements of sentiment have not washed out to an extent that would suggest a low is in place.

2015-02-06 00:00:00 Fixed income macro and portfolio update by John Pattullo, Head of Retail Fixed Income (Article)

John Pattullo, Head of Retail Fixed Income, co-lead portfolio manager for the Henderson Strategic Income Fund (HFAAX) gives an appraisal of the macro environment and explains the current themes within the portfolio. John also shares his thoughts on recent announcement of quantitative easing (QE) made by the European Central Bank (ECB), the Greek vote and issues in the energy sector.

2015-02-06 00:00:00 Global Opportunities: The Next Leap Forward for Defined Contribution Investment Menus by Charles Roth of Thornburg Investment Management

Under ERISA, fiduciaries are obligated to ensure plan menus provide diverse investment options to help minimize the risk of long-term losses in account values. Global, non-traditional equity and fixed income options are sorely lacking in Defined Contribution (DC) plan menus. These op-tions can offer both lower correlation to U.S. markets and potentially strong returns, which par-ticipants increasingly need given the uncertainty surrounding Social Security’s future benefit levels.

2015-02-06 00:00:00 Quarterly Letter by Team of Grey Owl Capital Management

Over the past seven months the price of oil has plunged from a peak above $100/barrel to the mid-$40s today. This is just the most extreme version of the market volatility and divergence we began highlighting in our second quarter letter. A cautious investment stance remains the prudent choice.

2015-02-06 00:00:00 Key Questions for China Investors in 2015 by Andy Rothman of Matthews Asia

China raises many questions for investors. Last year, for example, GDP growth slowed to 7.4% from 7.7%, but China still accounted for almost one-third of global growth. Is this a healthy economy or an impending disaster? In the first of a three-part Sinology series, Andy Rothman, Matthews Asia Investment Strategist, addresses some key investor concerns.

2015-02-06 00:00:00 Should I Stay or Should I Go: Global Diversification Could be 2015’s Winner by Liz Ann Sonders of Charles Schwab

Last year ended on a weak note for US equities; and January continued the trend; Divergences will remain a theme and likely keep volatility elevated; US investors haven’t felt the need to diversify globally…they should

2015-02-06 00:00:00 After the Perfect Storm in US Smaller-Cap Stocks by Bruce Aronow of AllianceBernstein

Last year was a tough one for US small- and mid-cap stocks, but there’s reason to think 2015 may be different. For investors who trimmed their smaller-cap allocation last year, we think it may be time to consider taking it back to its long-term target.

2015-02-05 00:00:00 Macro View: Good Company, Bad Stock by Team of Guggenheim Partners

The U.S. economy is strong relative to other countries, but its equity valuations mean less upside potential for long-term investors than other areas of the world.

2015-02-05 00:00:00 The 2015 Economic Outlook: Opportunities and Risks by Derek Hamilton of Ivy Investment Management Company

In 2014, the global economy grew at roughly the same pace as the prior year. However, the composition was notably different. Developed market economies grew at a faster pace, while growth slowed in emerging market economies. The dollar strengthened and commodity prices weakened. Overall, we expect these trends to continue in 2015.

2015-02-05 00:00:00 Is the stock market sliding off an icy road? by Jerry Wagner of Flexible Plan Investments

As declines were registered in the major stock market indexes in December, the fear index certainly also increased among investors. Now with January, again, ending in the negative column, I imagine even more investors are beginning to fear that the bull market surge that began in 2009 may be coming to an end.

2015-02-05 00:00:00 What To Look For When The Price Of Oil Has Bottomed by Urban Carmel of The Fat Pitch

SPX has now fallen 4 of the last 5 weeks, including this past one. For the week, SPX and DJIA each lost nearly 3% and NDX lost 0.8%.

2015-02-05 00:00:00 Ditch the Good, Buy the Bad and the Ugly by Ben Inker of GMO

In a new quarterly letter to GMO's institutional clients, co-head of asset allocation Ben Inker provides background on why, "as the New Year begins, we in Asset Allocation find ourselves slowly selling down even our beloved U.S. quality stocks in favor of the various problem children of the investing world" ("Ditch the Good, Buy the Bad and the Ugly").

2015-02-04 00:00:00 The Absolute Return Letter - January 2015 by Team of Absolute Return Partners

In large parts of the financial community there is a strongly held belief that the problems which caused the credit crisis back in 2008-09 have never been properly addressed, causing many to suspect that it is only a matter of time before the ‘end game’ is upon us – the credit crisis Mk. II so to speak. I will in the following pages look at various ways the end game might unfold but, before I do so, I shall return to one of the subjects I discussed in the January letter – the end of cheap oil – which caused a flurry of comments and questions.

2015-02-04 00:00:00 What's Up? Quantitative Easing and Inflation by Chris Brightman of Research Affiliates

The Fed has ceased its program of quantitative easing (QE) and may soon begin to raise interest rates. Japan has embarked on an even more aggressive program of QE. The European Central Bank (ECB) has just begun QE. In a related development, the Swiss National Bank (SNB) recently stopped pegging the Swiss franc to the euro. Many investors are asking, “What does all this monetary turmoil mean?”

2015-02-04 00:00:00 Greek Drama by Chris Brightman of Research Affiliates

Alexis Tsipras, the new prime minister of Greece, was elected because he and the Greeks who voted for him oppose the austerity imposed by Greece’s creditors. Apparently, markets were shocked by this turn of events: Greek bond yields spiked and bank stock prices plunged as euros began flowing out of the country. But should this scene have been a surprise?

2015-02-04 00:00:00 There's Diversity in Value by Brent Leadbetter and John West of Research Affiliates

A portfolio comprising long positions in individual fundamentally weighted country indices and short positions in cap-weighted country indices might prove to be the Boris Diaw of a diversified portfolio. Investors would be unlikely to meet their return targets by concentrating all their assets in such a strategy. However, given its high Sharpe ratio and low correlation with widely used asset classes, it seems a suitable addition to a robust asset mix.

2015-02-03 00:00:00 Municipal Market Perspectives by Team of SMC Fixed Income Management

Pick your poison: weaker oil and copper prices; increasing gold demand; Swiss Franc and Canadian Dollar devaluations; another possible Greek tragedy; launch of European Central Bank (“ECB”) bond buying program; waning emerging markets; weakening U.S. stock prices; global deflation worries. It appears to us that the broadening global weakness could be beginning to negatively impact the U.S. expansion. Given the current state of global events, we see no reason for the Fed to prematurely move ahead with its rate normalization plan as many anticipate occurring by mid-year 2015.

2015-02-02 00:00:00 Perception vs Reality - Rates of Return by John Riley of Cornerstone Investment Services

What is the annual average rate of return for the market? 10.00%? 12.50%? 15.00%? This is one of those "facts" that investors hear from friends, the media and the investment industry, and it is usually wrong.

2015-02-02 00:00:00 Portfolio Strategies 2015: Investing in an Age of Divergence by John Mauldin of Mauldin Economics

Everyone is worried about being blindsided by a significant downdraft in the markets when maybe we should be thinking about making sure we don’t miss a bull market somewhere. These and several dozen other topics were on the table when the Mauldin Economics writing team gathered here in Dallas for 3½ days of intensive talk, interviews, and planning. Today we’ll go over a few of the highlights of this last week, and I’ll share a few reasons to be optimistic about 2015.

2015-02-01 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

SPX has now fallen 4 of the last 5 weeks, including this past one. For the week, SPX and DJIA each lost nearly 3% and NDX lost 0.8%. Tthe indices and most of the sectors have fallen under their key moving averages. Many of these now have a declining slope. Over the past month, price has made lower highs. All of this suggests that the trend is down. Moreover, bullish set ups are failing, a warning that price has not reached an oversold level. Despite the sell off, breadth and longer term measurements of sentiment have not washed out to an extent that would suggest a low is in place. Finally, th

2015-01-30 00:00:00 PIMCO Extends Its Dividend Suite With Two New Regional Strategies by Brad Kinkelaar, Adam Muller of PIMCO

As is the case with our other dividend strategies, we are unconstrained by benchmarks and focused on generating yield and capital appreciation by finding attractively valued companies that pay appealing dividends today and have an ability and willingness to grow dividends over time.

2015-01-30 00:00:00 The Great Complacency...Continued by Jeffrey Bronchick of Cove Street Capital

At this point last year, we were effusively cautious after a period of terrific performance. We suggested that while we considered a material number of portfolio stocks to represent "solid" values, their near-term appreciation was going to be limited after the big numbers of 2013.

2015-01-30 00:00:00 Is Dividend Investing Passe? by Yu Zhang of Matthews Asia

Dividends can be used as a lens through which we attempt to identify high-quality, financially healthy companies with prudent capital allocation policies.

2015-01-30 00:00:00 7 Things about Saudi Arabia You Need to Know by Frank Holmes of U.S. Global Investors

A week ago we learned that the king of Saudi Arabia, Abdullah bin Abdulaziz Al Saud, passed away at the age of 90. Following the announcement, crude oil immediately spiked 2.5 percent over uncertainty of how this might affect the Middle Eastern kingdom’s position on keeping oil production at current levels.

2015-01-30 00:00:00 Reforms in Asia Bring Big Potential for Small Companies by Team of Franklin Templeton Investments

At Templeton Emerging Markets Group, we believe Asia’s combination of rapid economic growth, generally strong national finances and economic fundamentals has created an attractive landscape for equity investors. Seismic changes have been taking place in Asia’s political arena over the past couple of years, including major elections, leadership transitions and even a military coup. These political shifts have economic reform implications as well.

2015-01-30 00:00:00 Opportunities and Risks for Investors After the Oil Price Slump? by Daniel Lacalle of PIMCO

What we are seeing now is that oil prices, when OPEC refuses to balance the market, test the marginal cost of production, and costs fall. Some of the costs of the largest components of oil projects – high-spec sixth-generation rigs, pressure pumping, seismic, completion – have fallen between 20% and 45% in the space of months as overcapacity became evident and capital expenditure was revised downward.

2015-01-29 00:00:00 The Unintended Consequences of "Sophisticated" Performance Measurement by Francois Sicart of Tocqueville Asset Management

Sicart believes a measure of investment success should encompass "several cycles, with bull and bear markets as well as many fads and fashions and their aftermaths." He notes that "economic events really progress at a near-tectonic pace," so "a quarter or even a year is almost always a totally irrelevant period."

2015-01-29 00:00:00 Commodity Outlook 2015: Watching the Supply Response Across Markets? by Nicholas Johnson, Greg Sharenow of PIMCO

Today?s low oil prices should allow for supply and demand to come back into alignment by year-end, led by a decline in the U.S. output growth rate and a modest increase in global demand. We expect continued oversupply to weigh on natural gas prices this year, but some semblance of balance may return to this market in 2016. Grain prices may experience pressure in 2015 as low oil prices pass through to corn prices, which may cause producers to switch to higher-priced crops. With production growth likely having peaked, we expect metals prices to stabilize this year.

2015-01-29 00:00:00 What's Up? Quantitative Easing and Inflation by Chris Brightman of Research Affiliates

In a recent piece from Research Affiliates, Chris Brightman, chief investment officer, provides "Central Banking 101," noting that just within the last several months the Fed has ceased its program of quantitative easing (QE) and may soon begin to raise interest rates, Japan has embarked on an even more aggressive program of QE and the European Central Bank (ECB) has just begun QE. In a related development, the Swiss National Bank (SNB) recently stopped pegging the Swiss franc to the euro. Many investors are asking, ?What does all this monetary turmoil mean??

2015-01-29 00:00:00 The Strange Case of the Current Small-Cap Cycle by Team of The Royce Funds

For much of the past five years, small-cap stocks have generated returns well above their monthly rolling five-year averages. In addition, lower-than-usual volatility within the asset class and a decline in the cost of capital spurred by the Fed?s monetary stimulus programs have created an unfriendly environment for active stock pickers such as ourselves. Our latest research, however, suggests that some of these conditions were abating late in 2014, which might benefit those investors who focus on fundamentals and try to use volatility to create longer-term opportunities.

2015-01-29 00:00:00 Municipal Market Update: What's Ahead in 2015 by Joseph Deane, Julie Callahan, Sean McCarthy of PIMCO

Municipal bonds ended 2014 as one of the best-performing asset classes - buoyed by investors’ search for yield in a low interest-rate environment. For 2015, we are positioned cautiously for greater volatility in the fixed income markets. We currently prefer revenue-backed bonds over most general obligation (GO) debt, as these sectors typically benefit from dedicated revenue streams and do not have the pension challenges that many state and local governments face.

2015-01-29 00:00:00 Momentum X 2: Unleashing the True Power of Momentum by Gordon Nelson of Keystone Wealth Advisors

Momentum is one of the most researched market anomalies and has become widely accepted and used in a variety of ways for investment management. When used in practice is it most commonly referred to as relative strength or relative momentum. What happens if we combine the power of relative momentum with absolute momentum?

2015-01-29 00:00:00 Contrarian View: A More Balanced Approach to Rate Risk in 2015 by Scott Eldridge of Invesco Blog

The threat of higher interest rates is dominating many 2015 outlooks for investors and professional forecasters alike. Consensus expectations call for the Federal Reserve (Fed) to begin tightening in the second half of the year, with market rates to rise in concert and bond prices to fall. But the changing composition of voting members on the Federal Open Market Committee (FOMC) is a looming variable that I believe will likely impact the pace and severity of Fed action.

2015-01-28 00:00:00 Sell-off in Corporate Credit Creates Income Opportunities for 2015 by Payson Swaffield of Eaton Vance

In this insight, Payson puts last year?s bond market volatility and performance in perspective and points out potential investment opportunities across market sectors in 2015.

2015-01-28 00:00:00 Thoughts on Energy by Doug Ramsey of Leuthold Weeden Capital Management

We?re not certain that the historic rout in the Energy sector is over, and even if we were our Group Selection (GS) Scores would likely prohibit us from loading up on Energy subgroups for at least a few more months. Last decade we frequently discussed the ?Three Act Play? then unfolding in commodities, with the terminal act producing a 2006-2008 surge in commodity-oriented equities and a commensurate binge in capital spending. While all of the commodity sector participated, Energy certainly played either a lead or a co-starring role.

2015-01-28 00:00:00 Black Cypress: Ignore the Bears; The Force(s) are with Us by Alan Hartley of Black Cypress Capital Management

The U.S. economy should continue to expand and that bodes well for stocks. The next bear market will likely start due to a recession or geo-political conflict and not from the start of Fed interest rate increases or time elapsed. The current economic landscape is favorable to growth. Stock markets are priced for low returns.

2015-01-28 00:00:00 European Central Bank Embraces QE, For Better Or Worse by Gary Halbert of Halbert Wealth Management

Last Thursday, European Central Bank (ECB) President Mario Draghi announced the much-anticipated launch of a sovereign bond buying program at the rate of ?60 billion ($70 billion) per month known as ?quantitative easing.? The amount of the monthly purchases was slightly higher than had been expected.

2015-01-28 00:00:00 Is There A Case For German Equities? by Team of GaveKal Capital

With the highest productivity in Europe, a sizeable current account surplus and rock bottom interest rates, is there a case to made for German equities? Germany's competitiveness, export performance and trade surplus should increase as the Euro weakens helping German exporters in markets outside of the Euro bloc.

2015-01-28 00:00:00 Global Economic Perspective: January by Christopher Molumphy, Michael Materasso, Roger Bayston, Michael Hasenstab, John Beck of Franklin Templeton Investments

After a much better-than-expected annualized growth rate of 5% in the third quarter of 2014, the stars would seem to be fairly much aligned for continued US growth in the months ahead. Job growth has continued apace, interest rates and energy prices have remained low, and consumer and business confidence has been buoyant. As we start the new year, the main areas of uncertainty would seem to be the pace of growth and the implications of recent price and employment trends for the timing of monetary tightening by the US Federal Reserve (Fed).

2015-01-27 00:00:00 Key Issues for 2015: The View from Western Asset by Sponsored Content from Legg Mason Investor Services LLC (Article)

The U.S. represents a bright spot in a global recovery best characterized as "two steps forward, one step back." Sector and issue selection remain crucial in this environment, but so do macroeconomic strategies, which may help provide ballast when the pace of recovery slows.

2015-01-27 00:00:00 What Happened to the Secular Bear Market in Equities? by Martin Pring of Pring Turner Capital Group

History shows that US equity prices have consistently alternated between secular bull and bear trends. These price movements typically average 15-20 years in length and embrace several different business cycles. In April 2003 we published an article posing the question, ?Whither the Secular Trend of Equities?? which laid out the case for the year 2000 being a secular or very long-term peak for the US stock market. Since the three previous secular bears averaged just over 18-years, our working hypothesis was for a weak market until sometime around 2018.

2015-01-27 00:00:00 Time to Get Off the Merry-Go-Round ?? by Jerome Schneider of PIMCO

In 2014, many investors de-risked their portfolios by moving into shorter-duration passive approaches but the potential for capital preservation from these strategies may face challenges. Passive benchmarks and strategies with pre-specified, structural interest rate exposure may have little to no flexibility around their positioning and may push investors into the heart of the proverbial storm. Active strategies not constrained by benchmark limitations may be optimal for investors as they can seek to manage exposure to interest rates.

2015-01-27 00:00:00 The Cacophony of Earnings Announcements by William Smead of Smead Capital Management

As long-duration common stock owners, we are always interested and entertained when the media covers company earnings. To understand why, we think you need to know the facts behind the intrinsic value of a company, what it means to be a business owner and what differentiates a good business from a great one. Our contention is that there is little or no correlation between short-term stock price movements at the time of earnings reports and long-term success in common stock investing.

2015-01-27 00:00:00 No Deflating the U.S. Dollar by Burt White of LPL Financial

The latest leg up for the U.S. dollar has been driven by anticipation and arrival of QE by the ECB. The dollar has been strong for a number of reasons, all of them good things. Though not the end all and be all, currency is an important consideration when determining asset allocation.

2015-01-26 00:00:00 Global macro update: Risks and opportunities for early 2015 by Matthew Beesley (Article)

Matthew Beesley provides an update on global risks and opportunities for early 2015. In general, a good environment for equities is often one in which corporate profitability is growing, and corporate profitability is likely to be growing when GDP growth is present in the world. With a forecast for 2015 of GDP growth globally at 3%, Matthew suggests there are many attractive companies that may deliver decent earnings growth; particularly those companies that have valuations priced for a more disappointing outlook. Matthew seeks to offset risks to the downside by selecting companies where that

2015-01-26 00:00:00 The Consumption of Davos by Scott Minerd of Guggenheim Partners

Europe?s central bank took bold action this week, consuming the conversation at the World Economic Forum?s Annual Meeting, but will it be enough?

2015-01-26 00:00:00 Rate Cut a Positive Jolt for India?s Growth Dynamics by Jack Deino of Invesco Blog

In a surprise move, the Reserve Bank of India (RBI) cut its policy rate for the first time in two years on Jan. 15 by 25 basis points (bps) to 7.75%. Encouraged by multiple anti-inflationary catalysts building up over the past few months - including lower commodity prices, a stable rupee, a favorable winter wheat crop and the government?s commitment to fiscal consolidation - the RBI instituted a rare inter-meeting rate cut.

2015-01-25 00:00:00 No Need to Fear Low Oil Prices by Russ Koesterich of BlackRock

Oil markets are starting 2015 in a very different position than a year ago. It may be time to review your portfolio as cheaper oil may change the investment landscape and become the new reality.

2015-01-25 00:00:00 There?s More to the Gold Rally than European Market Fears by Frank Holmes of U.S. Global Investors

Even though gold was down last year, it still ranked as the second-best-performing currency, following the U.S. dollar. The metal has risen about 10 percent year-to-date, and on Tuesday, for the first time since mid-August, it broke through the $1,300 mark.

2015-01-25 00:00:00 Equity Investment Outlook: More of the Same by Team of Osterweis Capital Management

We are of the view that the conditions for further gains in the bull market that began in early 2009 are still intact and that the conditions for a true bear market are not. The market could, of course, be subject to corrections ? it always is ? but we believe the trend is still upward.

2015-01-25 00:00:00 Fixed Income Investment Outlook: 2014 is Over. Long Live 2014! by Team of Osterweis Capital Management

We believe that at current yields there is no investment grade ?fat pitch? at this time. Our focus remains on keeping duration short and layering-in higher yielding paper, especially on sharp corrections in markets like we have seen recently. We believe that the appropriate time to take a swing at investment grade bonds will be when yields are much higher and the economy is teetering towards recession.

2015-01-25 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The ECB Faces Fact; United States: Federal Budget Check-Up; Are Risk Management Techniques Adding to Market Risk?

2015-01-25 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

It's safe to say that US indices have been acting very differently over the past two months than they have at any other time in the past 3 years. This oscillating pattern of sharp falls and rebounds suggests equities are searching for direction. In the past 5 years, this has been a prelude to a change in trend.

2015-01-25 00:00:00 Weighing the Week Ahead: Time to Focus on Europe? by Jeff Miller of New Arc Investments

This week?s potential themes all defy prediction. I do not know what will happen in Greece. I question the preliminary analysis of the ECB moves. The earnings stories have been a bit better than market forecasts, but with little reaction.

2015-01-23 00:00:00 ECB Review: Blowing on the Embers of a Reflationary Fire by Andrew Bosomworth of PIMCO

?Not to pursue our mandate would be illegal? is how Mario Draghi ended his last press conference of 2014. Mr. Draghi?s first press conference of 2015 began with the announcement of a quantitative easing (QE) programme that pursues the European Central Bank?s (ECB) inflation mandate with a vengeance. And rightly so, for the disinflationary trends in the eurozone had become all the more precarious as economic output and the price of oil continued to fall.

2015-01-23 00:00:00 Conference Board Leading Economic Index: About Those Benchmark Revisions by Doug Short (Article)

Today's release of the December Conference Board's Leading Economic Index included benchmark revisions in addition to the routine monthly revisions. Also the base year for the index was changed from 2004=100 to 2010=100. Today's press release included the following comment:

2015-01-21 00:00:00 Oversold Market Poised to Rebound by Gene Peroni of Advisors Asset Management

The distinction between ?bear market? and ?interruption? is important in understanding and assessing the ultimate upside potential of this cycle. The DJIA had a terrific advance between October 2002 and 2007 of nearly 100%, but when the advance resumed in March 2009 with much of the market?s longer term sector leadership still intact, it soon became apparent that the financial debacle had presented only an interruption of the bullish cycle that began in 2002.

2015-01-21 00:00:00 What We Are Hearing From Asia-Pacific Investors: Five Themes for 2015 by Eric Mogelof of PIMCO

Amid lower forward-looking returns, investors are focusing on multi-asset solutions, enhanced beta, income and alternatives in Asia-Pacific. PIMCO is prepared to address these themes, drawing upon our time-tested investment process that combines high-level macroeconomic views with thorough on-the-ground research.

2015-01-21 00:00:00 Saudi Succession by Bill O'Grady of Confluence Investment Management

King Abdullah of Saudi Arabia was recently hospitalized with pneumonia. In light of his advanced age and declining health, an analysis of royal succession in Saudi Arabia is in order. We will begin with a history of Saudi kings and follow with an examination of the current Saudi succession, focusing on the Crown Prince and who remains as potential kings among the ?second generation? of the Saudi Royal Family. We will analyze the challenges facing the kingdom and how the succession issue will likely complicate the way these issues are resolved, and conclude with potential market ram

2015-01-21 00:00:00 Tocqueville Gold Strategy Investor Letter: Year End 2014 by John Hathaway of Tocqueville Asset Management

John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), looks back at the performance of gold over 2014, noting that: "in dollar terms gold declined 1.7 percent, but?it posted solid gains against all other currencies," and that "the dollar?s strength relative to other currencies has camouflaged the strength of gold."

2015-01-20 00:00:00 A Year-End Letter to Clients: How the World's Wealthiest Families Invest by Dan Richards (Article)

Here are the components of the year-end letter for 2014: An overview of 2014 performance; Some context on market valuations and how wealthy families are investing today; and brief thoughts for the period ahead.

2015-01-20 00:00:00 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 2014.

2015-01-20 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

US equities have now fallen three weeks in a row. At its low on Friday, SPX was 5% off its high on December 29.

2015-01-20 00:00:00 Navigating the Oil Slick by Team of Calamos Investments

GDP growth for 2015 is likely to be 2.0%-2.5% globally and 2.5%-3.0% in the U.S. Oil prices may fall further but are likely to stabilize over the next several months. The ECB is likely to ramp up QE in the first quarter. These next months are likely to be volatile, but equities have more room to run. Low corporate borrowing costs and high dividend yields should encourage continued M&A and buyback activity, providing support to equity valuations. With the U.S. in the middle innings of the recovery, the case for secular and cyclical growth companies remains strong.

2015-01-20 00:00:00 What is a Deep Value Investor? by (Article)

Deep value investors have a long-term focus and are not fixated on quarterly earnings. They're looking for companies with the ability to compound wealth over time.

2015-01-20 00:00:00 Seeking Strong Int'l Growth Stocks Amid Mixed Macro Signals by Sponsored Content from Invesco (Article)

Previously stretched valuations have become reasonably constructive in Europe's stalled economy. China's structural reforms and corruption crackdown could be positive in the long term. The commodity cycle downturn hurts resource-dependent emerging markets but benefits net commodity importers.

2015-01-18 00:00:00 QE and the ECB: "Authorize" is a Slippery Word by John Hussman of Hussman Funds

The ECB will authorize a large QE program this week, but my impression is that the details will leave the ECB itself responsible for executing only a fraction of the announced program, with the remaining majority of the program (perhaps 60-75%) being nothing more than the option for each national central bank to purchase its own country?s government bonds, at its own discretion, and its own risk. Moreover, that option is likely to be limited to something on the order of 25% of the outstanding government debt of each respective country.

2015-01-17 00:00:00 Looking Ahead: What the ECB Might Do by Russ Koesterich of BlackRock

The next European Central Bank policy setting meeting could bring about a new quantitative easing program. Would it be able to keep the eurozone from falling into a deflationary trap?

2015-01-17 00:00:00 Palladium Was the Winner in 2014 by Frank Holmes of U.S. Global Investors

Palladium, 2014?s top commodity, performed relatively according to script. For the year it was up 11.35 percent, compared to its 10-year annualized returns of 14 percent. Much like nickel, palladium was spurred by extenuating circumstances. Between January and June, a labor strike in South Africa, the world?s second-largest producer of the metal following Russia, halted production, which depleted reserves and sent palladium to a three-year high of $850 an ounce.

2015-01-16 00:00:00 3 Things - Employment, Interest Rates & Retail Sales by Lance Roberts of Streettalk Live

There has been much discussion as of late about the "longest string of employment gains since the 90's." There is certainly no argument that employment has improved since the financial crisis, however, with the economy six years into a recovery we should certainly expect as much.

2015-01-16 00:00:00 QQE2: Japan?s Monetary Banzai Charge by Chris Richey of Neosho Capital

In this Age of Monetary Policy, it is impossible to ignore the macro. As much as we would like to focus only on individual enterprises, the mind-boggling scale of $5 trillion of monetary intervention in the U.S., Japan, and Europe renders such cloistered thinking imprudent. Not only must Benjamin Graham?s enterprising investor understand individual stocks, but they must also be keenly cognizant of the role the world?s largest central banks actively play in the value of currencies, bonds, stocks, ETFs, mutual funds, and derivatives of all kinds.

2015-01-16 00:00:00 Yesterday?s Gone: Year-End Capital Markets Commentary and Expectations by Chris Brightman, Jim Masturzo of Research Affiliates

With updated return expectations, we estimate that the performance of U.S. stocks and bonds over the next 10 years will be significantly lower than long-term historical averages. Other asset classes may produce moderately better returns.

2015-01-16 00:00:00 Managed Futures, Quantitative Easing and Volatility by Jack Rivkin of Altegris

Mark Melin, writing for ValueWalk, picked out some of the points in our Altegris Perspectives piece, ?What to Expect in 2015??. Mark asked some questions expanding on topics scattered throughout the piece, specifically relating to Managed Futures and the persistence of dispersion; Quantitative Easing (QE) and the lack of continuing discussion about it; and Volatility and its impact on relative values.

2015-01-15 00:00:00 Seizing Credit Opportunities When Oil Prices Are Sliding by Mark Kiesel, David Linton of PIMCO

?We believe we are moving into an extended period of lower oil prices, and we are actively managing our clients? energy exposure with an eye toward benefiting from recent events. Differentiation between the winners and losers across countries, sectors and individual companies is essential. We currently favor subsectors and companies with strong asset quality, high barriers to entry, solid production profiles and strong balance sheets and liquidity profiles.

2015-01-14 00:00:00 Are Macroeconomists Rebuilding a Wall of Worry? by William Smead of Smead Capital Management

Those of you who follow us at Smead Capital Management know that we believe in the idea that good markets die on too much affection and continue due to a lack of affection. You also know that we want to own wonderful companies for a long time and do so through regular stock market corrections/bear markets over the years. Since the stock market bottom in March of 2009, this secular bull market has climbed on a wall of worry and on a lack of optimism.

2015-01-14 00:00:00 Is The US Treasury Market Rigged? Some Say Yes by Gary Halbert of Halbert Wealth Management

The last time federal regulators took a hard look at how Wall Street banks and brokers trade US Treasury securities ? the largest bond market on the planet by a longshot ? a little company called Google Inc. was just starting out.

2015-01-14 00:00:00 Bond CEFs Featuring Robert Shaker by (Article)

Bond-focused closed-end funds may help your portfolio even in rising rate environments, says Robert Shaker of Shaker Financial Services.

2015-01-13 00:00:00 Estimating the Impact of Oil Prices and Interest Rates on the S&P 500 by Eric Stubbs (Article)

Two important developments in 2014 will affect U.S. equity markets in 2015: the precipitous decline in oil prices and increasing expectations that the Fed will begin raising short-term rates sooner rather than later. But how specifically will these affect our stock market? I report on the results of an econometric model that I developed to address these questions.

2015-01-13 00:00:00 "Divergent" Markets by Jim Tillar, Steve Wenstrup of Tillar-Wenstrup

We expressed some concern about financial markets in last quarter's client letter and stated the theme of the letter was volatility. That characteristic carried over into the fourth quarter and caused our concern to heighten considerably.

2015-01-13 00:00:00 European Populism by Bill O'Grady of Confluence Investment Management

In our 2015 Geopolitical Outlook, one of the risks we discussed was the rise of populism. In this week?s report, we will focus on European populism. The recent attack on the employees of Charlie Hebdo in France makes this a timely topic. In this report, we will define populism, examine why populism has developed in the West, note the particular characteristics of European populism and identify the effects it could have on general geopolitics in the future. As always, we will conclude with potential market ramifications.

2015-01-13 00:00:00 2015 - Fasten Your Seat Belts, This Could Be a Bumpy Ride by Chris Puplava of PFS Group

While higher stock prices are often cited as the biggest beneficiary of the Fed?s several rounds of quantitative easing (QE), a lesser cited beneficiary has been overall market volatility and the credit markets. With each round of QE and/or ?Operation Twist? we?ve seen measures of financial stress in the credit markets contract.

2015-01-13 00:00:00 Market Outlook 2015: Double Digit Gain...Thank You, May I Have Another? by K. Sean Clark of Clark Capital Management Group

The U.S. stock market finds itself in rare territory as we enter 2015. For only the sixth time in the past 150 years, the U.S. stock market has registered a double-digit gain for three consecutive calendar years from 2012 to 2014. We will try to answer the question: ?Can the U.S. stock market post a fourth year of double-digit gains??

2015-01-13 00:00:00 High-Yield and Bank Loan Outlook by Team of Guggenheim Partners

Investment-grade and high-yield spreads widen as energy plunges.

2015-01-12 00:00:00 Investing During Turbulent Markets by (Article)

Portfolio Manager Chris Flynn explains why volatility plays such an important role in our investment process.

2015-01-12 00:00:00 Equity Market Surprise in 2015? by (Article)

45-year industry veteran Thomas S. White, Jr. reveals what he feels will surprise investors in 2015.

2015-01-12 00:00:00 Emerging Markets Equity Commentary: November 2014 by Team of Thomas White International

Emerging market equity prices saw a moderate correction during the month as markets in Latin America and Europe slipped. Countries where exports are dominated by energy and commodities saw the worst declines as oil prices continued to tumble.

2015-01-12 00:00:00 Supply Shock and Awe by Scott Minerd of Guggenheim Partners

If the mid-80s? supply-driven oil crisis is a guide, we should expect further declines and a prolonged period where oil prices remain depressed.

2015-01-12 00:00:00 Bullish, For the Right Reasons by Brian Wesbury, Robert Stein of First Trust Advisors

Last week, we forecast the S&P 500 will hit 2,375 at the end of this year (link), so we?re obviously bullish on stocks. Our case is based on fundamentals, specifically, the long-term link between stocks, earnings, interest rates, and the economy as a whole. However, just because we?re bullish, doesn?t mean we agree with every bullish argument that?s out there.

2015-01-12 00:00:00 A Five-Year Global Financial Forecast: Tsunami Warning by John Mauldin of Mauldin Economics

It is the time of the year for forecasts; but rather than do an annual forecast, which is as much a guessing game as anything else (and I am bad at guessing games), I?m going to do a five-year forecast to take us to the end of the decade, which I think may be useful for longer-term investors.

2015-01-11 00:00:00 Weighing the Week Ahead: A Message from the Bond Market? by Jeff Miller of New Arc Investments

There are many reasons for some to own bonds, but the extremely low interest rates suggest something beyond that. I suggest a leveraged arbitrage with Europe and Japan. Please note: This is basically the opposite of the 1998 carry trade.

2015-01-11 00:00:00 A Better Lesson than "This Time is Different" by John Hussman of Hussman Funds

The near-term outcome of speculative, overvalued markets is conditional on investor preferences toward risk-seeking or risk-aversion, and those preferences can be largely inferred from observable market internals and credit spreads. The difference between an overvalued market that becomes more overvalued, and an overvalued market that crashes, has little to do with the level of valuation and everything to do with investor risk preferences. Yet long-term investment outcomes remain chiefly defined by those valuations.

2015-01-10 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

After hitting new all-time highs in the days after Christmas, US equities have now fallen two weeks in a row, an auspicious way to start the new year.

2015-01-10 00:00:00 Bad News Is Good News: A Contrarian View of China Investing by Frank Holmes of U.S. Global Investors

I asked Xian Liang, portfolio manager of our China Region Fund (USCOX), to outline a few of the most compelling cases to remain bullish on the Asian giant.

2015-01-09 00:00:00 Nonrandom Patterns by Keith McCullough of Hedgeye Risk Management

What an excellent start to 2015! It?s been years since I?ve seen so many great long and short ideas across the Global Macro universe. If your portfolio mandate is diversified and flexible (across asset classes), I think you can have a crusher of a year!

2015-01-09 00:00:00 Recovery Gaining Momentum? by Ed Devlin, Mike Cudzil, Lupin Rahman of PIMCO

U.S. growth will remain robust over the cyclical horizon due to increasing consumption driven by the narrowing unemployment gap and increase in disposable incomes. The Canadian recovery should continue, though divergent forces ? including the U.S. recovery and oil price declines ? could have significant implications for the economy. Growth will be muted across Latin America, with some economies benefitting from U.S. growth, and others dragged down by the slowdown in the eurozone and China.

2015-01-09 00:00:00 A Tale of Two Earnings Seasons by Burt White of LPL Financial

The fourth quarter of 2014 will be a tale of two earnings seasons: the best of times and the worst of times. Despite a substantial drag from the energy sector, we expect another good earnings season overall. We expect more winners from cheap oil than losers, although the energy sector faces significant challenges.

2015-01-09 00:00:00 Pie in the Sky? by Team of Absolute Return Partners

January each year brings with it a host of forecasts, many of which are 'pie in the sky' - silly predictions on equity markets, interest rates and currency movements. We are not in that game, but this is the first time we have written a letter in January. Why? Because we think investors should be focusing on longer term structural trends when analysing the future.

2015-01-08 00:00:00 Consensus Macro Memes by Keith McCullough of Hedgeye Risk Management

Do Global Macro Themes propagate themselves into consensus narratives? You bet your Madoff they do. But timing them matters. You really get paid by front-running them by 3-6 months.

2015-01-08 00:00:00 Global Economic Outlook by Team of Northern Trust

Re-entry to the workplace after the holiday season isn't exactly like a satellite descending from earth's orbit.

2015-01-08 00:00:00 All about that base by Jeffrey Saut of Raymond James

The transition from one year to the next is always accompanied by a whole host of traditions intended to help people celebrate this annual new beginning. The resolutions, parades, fireworks, football games, food, furniture sales ? they all seem to be experienced in a fresh, optimistic light, like an all-forgiving reset button was hit when that ball dropped on New Year?s Eve.

2015-01-08 00:00:00 Levitate: More Market Mood Swings in 2015? by Liz Ann Sonders of Charles Schwab

Secular bull market is likely intact, but 2015 could bring more volatility associated with Fed policy and/or global events. Longer-term sentiment suggests the ?wall of worry? is intact; but shorter-term sentiment is more troubling. Falling oil and rising dollar have generated loads of questions from clients ? history tells a generally positive story.

2015-01-08 00:00:00 Will Active Stock Picking Be More Relevant in 2015? by Charlie Dreifus of The Royce Funds

While active managers continued to struggle in 2014, we remain confident in our approach, which emphasizes discipline, patience, and absolute results. Portfolio Manager and Principal Charlie Dreifus discusses the performance of his small-cap portfolio, what sectors and industries he found most interesting at the end of 2014, conditions in place that may lead to a more robust M&A market in 2015, the state of the U.S. economy, and why he believes the value of active stock picking will increase in importance.

2015-01-08 00:00:00 Averages Won't Keep You Warm...or Wisely Invested by Jack Tierney of Invesco Blog

When investors build their portfolio allocations, they correctly look at long-term average returns for the asset classes they?re considering, such as stocks, bonds, real estate, cash and alternatives. After looking at the returns for asset classes below, though, an investor may be tempted to invest everything in emerging market securities and real estate investment trusts (REITs), as they have the highest average annual returns over the last 10 years.

2015-01-07 00:00:00 Action and Reaction by Team of Heartland Advisors

A summary of Newton?s third law may best describe the effects of the macro events that surrounded 2014 and brought it to a close: Nothing happens in a vacuum. The trick is to anticipate what the consequence of any action might be.

2015-01-07 00:00:00 A Quick Look at the World Economy by Russ Koesterich of BlackRock

An assessment of where the different world economies stand, including a look at the United States, Europe and Asia.

2015-01-07 00:00:00 Transition to the Cloud: Do-or-Die Time For Laggards by Paul Meeks of Saturna Capital

Saturna places considerable emphasis on technology, especially in growth strategies. Amana Growth and Sextant Growth Funds sport tech heavy allocations well in excess of their benchmarks.

2015-01-06 00:00:00 Evaluating the Arguments for the Dollar's Demise by Seaborn Hall (Article)

From the great financial crisis and the massive escalation of sovereign debt and QE to the threat of currency wars to cries from pundits to exit the dollar and buy gold, it requires a discerning advisor to sift through the din and decide whether the dollar's reserve status is slipping. Could the dollar look strong and still be in danger? Several recent books, and papers from the BIS, IMF and Fed delineate the noise from the reality.

2015-01-06 00:00:00 As We Enter 2015, "Bulls" Should Consider by Lance Roberts of Streettalk Live

As we enter into 2015, analyst calls for a continued "bull market" advance have never been louder. There have been a litany of articles written recently discussing how the stock market is set for a continued bull rally. The are some primary points that are common threads among each of these articles.

2015-01-06 00:00:00 Oil, Currencies, and the Fed by Richard Michaud of New Frontier Advisors

Fourth quarter headlines included volatility spikes, dramatic declines in oil prices, and positive views of the economy by the Fed. Oil declined 41% this quarter and 46% for the year. The dollar continued to gain against some major developed global currencies. For the year, the dollar gained 13.6% against the euro and 13.8% against the yen while gold was down 2%.

2015-01-06 00:00:00 Volatility May Bring Opportunity and Challenges by Burt White of LPL Financial

As the economic and market cycles progress, increased volatility[1] should be expected; however, none of our Five Forecasters show elevated reason for concern, indicating a recession is unlikely in 2015.

2015-01-06 00:00:00 Ides by William Gross of Janus Capital Group

Beware the Ides of March, or the Ides of any month in 2015 for that matter. When the year is done, there will be minus signs in front of returns for many asset classes. The good times are over.

2015-01-05 00:00:00 Tips for Navigating The Market in 2015 by Russ Koesterich of BlackRock

As the calendar turns to 2015, its time to assess the investing landscape and your investment portfolio to ensure youre well positioned for the New Year. The BlackRock List can help.

2015-01-05 00:00:00 Pills for Cognitive Dissonance in a Speculative Bubble by John Hussman of Hussman Funds

Several years of persistent yield-seeking speculation provoked by zero-interest rate monetary policies have created a fertile ground for cognitive dissonance.

2015-01-04 00:00:00 Why the World Needs the US Economy to Struggle by John Mauldin of Mauldin Economics

In this weeks letter, my associate Worth Wray explores what a rising dollar means for emerging markets and what central banks are likely to do in response. Can they smooth the ride, or will it be the worlds scariest roller coaster? This letter will print long because of the number of fabulous charts Worth provides. I might make a brief comment or two at the end. Heres Worth.

2015-01-03 00:00:00 Flying High in the Sky, Looking for Opportunities in 2015 by Frank Holmes of U.S. Global Investors

Savvy investors know to be patient with their holdings and not easily give in to the prevailing culture of instant gratification. Ive run multiple marathons over the years and am intimately familiar with the personal rewards of going the distance. A similar investing strategy can come with the same rewards.

2015-01-02 00:00:00 Chuck Royce on 4Q14: Positioning for a Normalizing Economy by Chuck Royce of The Royce Funds

Chief Executive Officer and Portfolio Manager Chuck Royce discusses the spread between large- and small-cap returns in 2014, the current case for active management in the small-cap space, the valuation picture as we enter 2015, and the impact lower energy prices are likely to have on stocks.

2014-12-31 00:00:00 2015 Global Market Outlook: Exploring the Growth Landscape by Simon Fennell, Olga Bitel of William Blair

For much of 2014, the financial press was filled with dire headlines warning of global stagnation and deflation. These demoralizing reports seemed to paralyze policy makers. The facts behind the headlines, however, suggested the reality was not nearly as gloomy or pessimistic as it seemed. This paper outlines a more optimistic outlook for 2015 where the world economy is expected to remain resilient and where the outlook for sustainable corporate returns remains strong.

2014-12-30 00:00:00 2015 Investment Outlook - Stay Tactical! by Stephen Blumenthal of CMG Capital Management Group

I wrote often throughout 2014 about the danger signals flashing from an excessive run up in debt and derivatives. We have a repeat of the scenario we suffered in 2008, only much worse. The budget recently passed by Congress put taxpayers on the hook for a 2008-like derivatives failure. The potential losses could exceed the previous financial meltdown as other world market conditions exacerbate a bad situation.

2014-12-29 00:00:00 Unsettling Interplay of Leading Indicators by Alexander Giryavets of Dynamika Capital L.L.C.

We review in details where we stand in terms of the US and World leading indicators and point to some of the unsettling recent developments which should be watched carefully over the coming months.

2014-12-29 00:00:00 The Coming Crash in 2015: Why there will be no Happy New Year before we see QE Reloaded by Franz Lischka of Franz Lischka

In September 2013 in my post How QE Alters Bond Yields (Or Rather How It Does Not) I wrote that historically the end of QE was associated with the following 4 events, which I expected to show up again after the end of the latest QE-programs (which in some cases was completely against the market consensus of that time).

2014-12-29 00:00:00 Adam Smith or Jerry Goodman by Jeffrey Saut of Raymond James

I met Jerry Goodman, whose nom de plume was Adam Smith, late in my career. He was working at my friend Craig Drills money management firm along with another icon in this business, from an era gone by, namely Al Wojnilower. I have had many conversations with all three of these Wall Street legends around the conference table at Drill Capital Management. Jerry wrote The Money Game (1968), Powers of Mind (1975), Paper Money (1981), and The Roaring 80s (1988), but unfortunately we lost his wisdom on January 3rd of this year .

2014-12-29 00:00:00 The Lessons of Oil by Howard Marks of Oaktree Capital

I want to provide a memo on this topic before I and hopefully many of my readers head out for year-end holidays. Ill be writing not with regard to the right price for oil about which I certainly have no unique insight but rather, as indicated by the title, about what we can learn from recent experience.

2014-12-28 00:00:00 The Line Between Rational Speculation and Market Collapse by John Hussman of Hussman Funds

Current equity valuations provide no margin of safety for long-term investors. One might as well be investing on a dare. If we observe an improvement in market internals and credit spreads, it would not make valuations any less obscene, but it would significantly ease our immediate concerns about market losses. A safety net would be required in any event, but there is a range of possible outlooks between hard-negative and constructive with a safety net.

2014-12-27 00:00:00 Epic Price Reversal for Commodities in 2014 by Frank Holmes of U.S. Global Investors

If you want to know what happened in 2014 with regard to gold and oil, it?s important to appreciate the inverse relationship between the U.S. dollar and commodities.

2014-12-27 00:00:00 Perspective on 2015: Maintain Yours by Zachary Karabell of Envestnet

In 2014, interest rates remained low, U.S. equities stayed strong, mid-year geopolitical events barely shook the markets, and a sudden, late-year drop in oil prices took many by surprise. What should investors expect in 2015?

2014-12-24 00:00:00 Early Look: Who is the Author? by Keith McCullough of Hedgeye Risk Management

While I can try to explain why the SP500 can drop 103 points in a straight line (in 7 days), then ramp 106 points in 4 days, I dont think thats where I add value. There are legions of pundits on the #OldWall that use 1-factor moving averages than can help you with that.

2014-12-24 00:00:00 10 Stock Market Questions for 2015? by Burt White of LPL Financial

With 2015 almost here, this week we pose and respond to 10 key stock market questions for 2015. Look for more on these and other topics throughout the year.

2014-12-24 00:00:00 2015 Outlook: Watching Our Overweights by Team of Northern Trust

Asset class returns were much more differentiated this year than last, with yield-oriented assets and U.S. equities being the standout performers. We entered 2014 overweight risk tactically, but made several changes as the year progressed.

2014-12-23 00:00:00 Convertible Bonds: The Rodney Dangerfield of Liquid Alts by Robert Martorana (Article)

Historical returns have been outstanding for convertible-bond strategies. Moreover, low drawdowns during bear markets give these products an attractive risk-return profile, especially when compared to other liquid alternatives.

2014-12-23 00:00:00 Has Diversification Lost Its Luster? by Patty Quinn McAuley, CFP of Clark Capital Management Group

One of the most basic tenets of investing has been the importance of diversification. Individual investors can quickly understand the concept of not putting all your eggs in one basket. However, the recent market environment has been punishing the prudent, diversified investor.

2014-12-23 00:00:00 Growth Headwinds Continue to Blow Through Asia in 2015 by Adam Bowe, Tomoya Masanao, Robert Mead of PIMCO

This commentary discusses the conclusions from PIMCOs quarterly Cyclical Forum in December 2014 and how they influence our Asian outlook and investment strategy.

2014-12-22 00:00:00 Weighing the Week Ahead: Time for the 2015 Pundit Forecasts! by Jeff Miller of New Arc Investments

With little fresh news during the holidays and many pros on vacation, I expect a time of reflection and prediction. Publications hungry for content and TV producers needing to fill slots will highlight forecasts of any and all flavors. This happens every year, but the mid-week holidays are pushing it a little earlier than usual,

2014-12-22 00:00:00 Completing the Alternative Investments Puzzle: Putting the Pieces Together by Walter Davis of Invesco Blog

In my previous blog, I discussed why I believe advisors and investors should approach alternative investments much like a jigsaw puzzle and offered an organizing framework that can help. When putting together a puzzle, the first step is to sort and organize all the pieces. For alternatives, the first step is to organize and align the various alternative strategies with specific investment objectives. This step is critical because it helps investors decide whether alternatives can help them meet their needs, and, therefore, whether they should invest in them.

2014-12-22 00:00:00 A Look Back at 2014 (and a 2015 Preview) by Robert Doll of Nuveen Asset Management

At the beginning of this year, we had three broad thoughts about what it would look like. First, we expected U.S. economic growth would accelerate moderately. Second, we believed Federal Reserve tapering would occur slowly and that global monetary policy would remain accommodative. And third, we forecasted that the U.S. equity market would grind higher due to central bank liquidity, modest economic acceleration, solid corporate earnings, contained inflation and an improving fiscal situation. These views formed the basis for the predictions we made in January. And at this point, we can offer a

2014-12-22 00:00:00 The US Dollar and the Cone of Uncertainty by John Mauldin of Mauldin Economics

For the past two letters weve been looking at the global scene and trying to figure out which issues will help us outline scenarios for 2015. We finish the series today by looking at the impact of the dollar bull market on the probabilities for various 2015 developments.

2014-12-21 00:00:00 2014 In Review: A Good Year to Avoid Performance Envy by Robert Isbitts of Sungarden Investment Research

2014 has been an odd year in many ways. Easy money has continued to be the rule for central governments across the world, and this has created false sense of security that is going on six years (following the end of the financial crisis-induced stock market decline that ended in March, 2009). To us, it was a year of waiting: for an end to the suppression of interest rates to aid retirees, for the U.S. Congress to do something productive, and for investors to start taking risk more seriously and stop falling for Wall Street come-ons.

2014-12-21 00:00:00 Iceberg at the Starboard Bow by John Hussman of Hussman Funds

Market history, including the series of bubbles and crashes over the past 15 years, does not teach that valuation is irrelevant, but instead that a key distinction affects whether stability or instability is likely to prevail. When rich valuations are coupled with tame credit spreads and uniform strength across a broad range of market internals and security types, one can infer that investors remain tolerant toward risk. In that environment, risk premiums may be low, but theres no particular pressure for them to normalize, even if the speculation is driven by mindless yield-seeking.

2014-12-20 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

I recently revisited the economic projections we made last January, as part of my performance appraisal. I dread the experience, as it tends to highlight my frailty as a forecaster. This year wasnt too bad, though. Allowing for the polar vortex, we got U.S. growth just about right. We had been skeptical about Europe, and thought that China would moderate. Our call on how the Federal Reserve would progress was spot on. However, a number of things that transpired during 2014 caught us quite by surprise. Here is our roster of the most unexpected events and trends of the year.

2014-12-20 00:00:00 The Lessons of Oil by Howard Marks of Oaktree Capital

I want to provide a memo on this topic before I and hopefully many of my readers head out for year-end holidays. Ill be writing not with regard to the right price for oil about which I certainly have no unique insight but rather, as indicated by the title, about what we can learn from recent experience.

2014-12-19 00:00:00 A Rising Tide Lifts Most Boats by Saumil Parikh, Daniel Ivascyn of PIMCO

PIMCO expects global growth to accelerate in 2015, reaching about +2.75% year-over-year, with the majority of this improvement due to the (predominantly supply-driven) decline in oil prices. However, there will be large differences in growth dynamics among countries. While fiscal and monetary policies in most developed countries will stimulate growth in 2015, the U.S. Federal Reserve will attempt to break from the pack.

2014-12-19 00:00:00 Testing the Limits of Monetary Policy Without Fiscal Union by Andrew Balls, Andrew Bosomworth, Lorenzo Pagani of PIMCO

Over the next 12 months, we expect eurozone growth to accelerate from the current annualised run rate of 0.5% to a still-very-weak pace of approximately 1%, while the ultra-low inflation tells us there is a demand problem. With the ECB set to expand its balance sheet over the cyclical horizon, the biggest risk to growth is if the ECB buys large quantities of government bonds but the governments do nothing. We expect to remain overweight European peripherals and overweight European corporate credit, with the focus on financials.

2014-12-19 00:00:00 Outlook for the Global Credit Markets in 2015 by Mark Kiesel of PIMCO

The combination of fundamentals, technicals, valuations and global central bank policies drives our overall constructive outlook for global credit in 2015. Economic growth dynamics, including an improving outlook in the U.S., along with likely changes in global central bank policies, continued energy price volatility and the potential for more shareholder-friendly actions by companies inform our credit views and strategies.

2014-12-18 00:00:00 2015 Investment Outlook: US Credit Cycle Tiptoes into Middle Age by Eric Takaha of Franklin Templeton Investments

Eric Takaha, SVP, Franklin Templeton Fixed Income Group, discusses how far the US economy is in the credit cycle and the potential effects of rising rates.

2014-12-18 00:00:00 Touching Base on the Commercial Real Estate Recovery by Ian Goltra of Forward

Considering the recent upswing in commercial real estate prices and traded real estate stocks, in what inning is the commercial real estate recovery? Could there be extra innings? Prior to the most recent decline in real estate, downturns in commercial real estate cycles have historically been caused by supply shocksdevelopers putting up new buildings until they (or their banks) ran out of money.

2014-12-18 00:00:00 2014 Year End Letter by John Osterweis, Matt Berler, Carl Kaufman of Osterweis Capital Management

As 2014 comes to a close, we want to provide an update on the energy sector. Energy has been making headlines as oil prices have reached unexpected lows. As discussed below, while the decline in oil prices is creating volatility in the energy sector, we believe that there continues to be opportunity in this sector and that the low oil prices should prove beneficial to U.S. and global economic growth.

2014-12-16 00:00:00 U.S. Housing: Still Room to Grow? by Milton Ezrati of Lord Abbett

Federal Reserve rate hikes or not, the fundamentals suggest the sectors slow, steady recovery likely will continue.

2014-12-16 00:00:00 Is the Grinch Stealing Investors Christmas? by Jerry Wagner of Flexible Plan Investments

It was 1957. My Mom settled down with my brothers, sister, and me and began to read. It was a book by one of my favorites, Dr. Seuss. Unless you have spent the time since then living in a van down by the river, youve either read the book (or had it read to you), seen the TV cartoon account (1966) or Jim Carrey in Ron Howards motion picture version (2000) of How the Grinch Stole Christmas! Even the song has been a hit!

2014-12-16 00:00:00 Allocating to Alternative Investment Strategies by Nathan Rowader of Forward

Following the market declines in 2008 and 2009, many investors have shown interest in alternative investment strategies such as hedge funds and mutual funds that employ hedge fund-like strategies. These types of strategies have been around a long time, but until recently their use among individual investors has been somewhat limited.

2014-12-16 00:00:00 Strategy Spotlight: An Update on PIMCO'S Fundamental Index-Based Product Suite by Sabrina Callin, Robert Arnott of PIMCO

The Fundamental IndexPLUS AR strategies combine the best of what passive indexing and active management aim to deliver: broadly representative, transparent equity exposure plus the potential for meaningful equity market outperformance.

2014-12-16 00:00:00 Oil Price: Looks Reasonable by Brian Wesbury, Robert Stein of Fortigent

A former economic colleague, and mentor, used to say: In the Bible, it says an ounce of gold will buy a fine suit of clothing. We have read the Bible, and we havent found this, although there could be some high-powered math, using talents, cubits, frankincense and myrrh that make it true.

2014-12-16 00:00:00 An Interest Rate Hike? Check Out Long Bonds, US Dollar Index, Demographics And Money Multiplier. by Sebastiao Buck Tocalino of SBTCapital Clube de Investimento

Inflation is out of sight in terms of Treasury bond yields, dollar exchange rates and demographic outlook lets not even mention energy costs! Much of the FEDs monetary base expansion did not flow into consumption or, more importantly, entrepreneurial productive investments! Money multiplier is more like a fractional now, since not even credit increased the money available for Main Street the way it used to.

2014-12-15 00:00:00 How to Approach the Alternative Investments Puzzle: Putting the Pieces Together by Walter Davis of Invesco Blog

Every summer my family and I go on a vacation to the beach. While there, my wife buys a big jigsaw puzzle for us to work on. Every year, we feel overwhelmed immediately after she dumps out all 1,000 pieces.

2014-12-15 00:00:00 A Sensible Proposal and a New Adjective by John Hussman of Hussman Funds

The FOMC is well-served by Richard Fishers proposal to consider terminating the current policy of reinvesting proceeds from Fed balance sheet holdings as those securities mature. That shift would not imply any rush to raise the federal funds rate or otherwise normalize policy rates.

2014-12-14 00:00:00 Weighing the Week Ahead: Will Crashing Oil Prices Change the Feds Course? by Jeff Miller of New Arc Investments

The investment conclusion is opportunity in non-energy cyclical stocks, including basic materials, technology, and consumer discretionary. There are also energy names that are part of the knee-jerk reaction, but which do not necessarily suffer from lower oil prices. These include refiners and some of the large integrated oil companies that need to replace reserves. (Barrons also suggests oil tanker stocks storage needed!)

2014-12-13 00:00:00 China Wants to Conduct the World's High-Speed Rail Market by Frank Holmes of U.S. Global Investors

The Chinese want to return to the railroad business. This time, however, they strive to become the world?s leading go-to provider of high-speed rail and exporter of mass transit technology.

2014-12-13 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The Fed prepares to take a "considerable" step. We could be in for another round of emerging market volatility.

2014-12-13 00:00:00 Bulls, Bears and Pigs by Robert Isbitts of Sungarden Investment Research

So, the global stock markets have your attention. Whether you are focused on declining economic prospects in Europe, Emerging Markets weakness or the recent slide in the U.S. stock market, we are all forced to contemplate something that may now be driving up beside us, not merely in the rear-view mirrora stock bear market.

2014-12-12 00:00:00 Oil, Roil, and Turmoil by Scott Minerd of Guggenheim Partners

The free fall in oil prices is roiling markets. There are near-term benefits of lower energy prices, but darker clouds are gathering for the global economy.

2014-12-12 00:00:00 5 Things To Ponder: Crude Oppositeness by Lance Roberts of Streettalk Live

This past week I have been inundated with questions regarding the dive in crude oil prices and the energy sector in general. Is this a fantastic buying opportunity, or is the bigger of something bigger? The answer depends on your time frame.

2014-12-12 00:00:00 Asia, Looking to 2015 and Beyond by Robert Horrocks of Matthews Asia

Over the next decade, I expect Asias econo-mies to continue to raise living standards and to narrow the income gap between its own citizens and those in the U.S. or Europe.

2014-12-12 00:00:00 Europe: Look for Value, Expect Volatility by Russ Koesterich of BlackRock

Greeces ruling coalition is at risk of losing its grip on power, which sent the countrys stocks and bonds dramatically down. Is this the beginning of another Greek crisis?

2014-12-12 00:00:00 5 Things To Ponder: Crude Oppositeness by Lance Roberts of Streettalk Live

This past week I have been inundated with questions regarding the dive in crude oil prices and the energy sector in general. Is this a fantastic buying opportunity, or is the bigger of something bigger? The answer depends on your time frame.

2014-12-11 00:00:00 10 Legendary Investment Rules From Legendary Investors by Lance Roberts of Streettalk Live

I live in Houston, which has been a huge economic beneficiary of the sustained increases in oil prices, drilling, refining and related processes. As such, the amount of wealth created in energy-related investments has been enormous and, not surprisingly, a vast majority of individuals have overweighted portfolios in energy with the expectations that "oil prices can only go up."

2014-12-11 00:00:00 Quote of the Week by Jeffrey Saut of Raymond James

As most of you know I was in New York City most of last week seeing institutional accounts, doing media and speaking at various events. One of the media appearances was to co-host CNBCs Closing Bell on Tuesday, with the sagacious Sara Eisen, who unsurprisingly gave me the quote of the week. The quote was, Think of it this way, lower oil prices are to America what lower labor costs were to the BRICs!

2014-12-11 00:00:00 Three Winning Arguments for Japan by Russ Koesterich of BlackRock

I travel to Japan every year, normally around early December. The more time I spend there, the more I come to realize what a uniquely distinct country it is. On my trip last week, one of my Japanese colleagues pointed out that Tokyo was starting to allow taller office buildings. I assumed the previous limitation was a function of Japans location in a geologically active part of the Pacific. My friend politely laughed. The injunction was due to the fact that no building was supposed to look down on the Imperial Palace.

2014-12-11 00:00:00 European Small-Caps: Focus on Companies, Not Countries by Liliana Castillo Dearth, Alan Connery of AllianceBernstein

Growth in the euro area has slowed sharply, but thats not true for all companies in the region. We think worries about Europes recovery may offer investors the chance to buy quality, small-cap stocks for less than they would pay for similar-caliber companies elsewhere.

2014-12-10 00:00:00 2015 Year Ahead: Continuing to Deflate the Global Credit Bubble by Richard Bernstein of Richard Bernstein Advisors

Stock market leadership virtually always changes when volatility significantly spikes, and the 2008 bear market was no exception. Credit-related asset classes led the markets for the decade prior to 2008 as the global credit bubble inflated. Since 2008?s bear market, however, leadership has significantly changed and credit-related asset classes have generally underperformed plain, old-fashioned stocks.

2014-12-10 00:00:00 Interest Rates Have Nowhere To Go But Up? by Lance Roberts of Streettalk Live

Earlier this week Daniel Druger and Liz McCormick wrote an article for Bloomberg entitled: "One Hundred Years Of Bond History Means Bears Destined To Lose." The premise here is simple. With interest rates near their lowest levels on record, they have nowhere to go from here "but up." This is the consensus of virtually all of the analysts and economists on Wall Street which currently suggests that rates will rise to 3.88% next year on the 30-year treasury.

2014-12-10 00:00:00 Dealing with Divergence by Russ Koesterich of BlackRock

From the Age of Recovery to the Age of Divergence, we look forward to 2015 with an overview of the investment world and explore the different themes that will matter in the New Year.

2014-12-10 00:00:00 Lessons Learned in 2014 by Seth Masters of AllianceBernstein

In 2014, US stocks forged ahead, international developed and emerging-market stocks lagged, bonds did better than expected, and the IRS took a bigger bite. Here are some lessons for US investors to carry forward into 2015.

2014-12-09 00:00:00 Germany and France: Looking for Quality in the Eurozone by Jim Harvey, Dilip Badlani of The Royce Funds

While concerns over economic growth in Europe have been escalating, Royce International Micro-Cap Fund Portfolio Managers Jim Harvey and Dilip Badlani are finding small-cap opportunities with long-term benefits.

2014-12-09 00:00:00 An Improving Economy Justifies a Pro-Growth Investment Stance by Robert Doll of Nuveen Asset Management

U.S. equities advanced again last week with the S&P 500 Index climbing 0.4%, extending its winning streak to seven weeks. Investors responded well to improving economic data and focused on the positive aspects of declining oil prices. In China, equities moved sharply higher and notched their best weekly performance in seven years as investors speculated that Chinese officials were on the verge on enacting additional policy support.

2014-12-09 00:00:00 Room to Run for the Stock Market by Steve Blumenthal of CMG Capital Management Group

Last week Bill Gross and the former co-CIO of PIMCO, Mohamed El-Erian, were advising clients to lighten up on stocks. You may agree that these are certainly two people with a passion for what they do. To that end, we all benefit.

2014-12-09 00:00:00 Hungary's PM: Madman or Geopolitical Genius? by Kaisa Stucke of Confluence Investment Management

Hungarys Prime Minister Viktor Orban is one of the first European leaders to turn friendly toward Russia, noting that geopolitics are changing and Eastern European countries should redefine their international policies according to these changes. This report explores the differences between the rules of the geopolitical game being played by Hungary, the West and Russia. We will describe the history of Hungarys balancing act between the powers of the East and West and how this history affects its current politics. We will discuss the most likely outcomes and their international si

2014-12-08 00:00:00 Portfolio Replenishing During Bull Markets by (Article)

Royce Opportunity Select and Opportunity Fund Portfolio Manager Bill Hench talks with Principal Dave Gruber about his buying and selling process, which—while more difficult to maintain during up-market periods—remains consistent regardless of market movements.

2014-12-08 00:00:00 Peaking Process by John Hussman of Hussman Funds

In my view, we are likely witnessing the peak of the third equity valuation bubble in the past 14 years, the first two which saw major indices plunge by at least 50%. Its important to recognize that market peaks are a process, not an event. Internal deterioration has actually been developing since early July, and became measurable in early August. This process has been quite like what we observed in 2007, when deterioration became measurable in July of that year. Despite an initial selloff, the major indices recovered to a marginal new high in October 2007 before continuing lower.

2014-12-07 00:00:00 Macroeconomics Finally Gets Interesting by John Mauldin of Mauldin Economics

2015 may be the year that macroeconomics really becomes interesting again, if it hasnt already. After a long period of relatively coordinated central bank policies and remarkably low volatility, the macro scene is becoming more dynamic. Thats great for those who live and die by dramatic long-term shifts in global markets, but it should be terrifying for emerging-market policymakers, currency carry traders, Texas oil men, and, frankly, the average investor. King Volatility is back on his throne.

2014-12-06 00:00:00 Dont Let Market Motion Sickness Keep You From Missing the Boat by Frank Holmes of U.S. Global Investors

Despite all of the good news, the recent threat of market volatility, which weve seen plenty of in commodities and emerging markets, seems to have pushed close-to-retirement folks away from equity securities. The August and October downturns, not to mention the decline in gold and oil prices, have understandably heightened consumer fears.

2014-12-06 00:00:00 Five Ways to Tackle Risk in Emerging Equities by Nelson Yu and Morgan C. Harting of AllianceBernstein

Emerging-market (EM) equities are far more turbulent than their developed-world peers. But there are several things investors can do to capture the attractive return potential while reducing volatility. Staying active is the lynchpin for success.

2014-12-06 00:00:00 Chinas Economy Gliding into Long Landing by Hayden Briscoe of AllianceBernstein

Chinas economy isnt headed for a hard or soft landinginstead, its more likely to be a long landing. Thats our perspective, based on our teams recent visit to China to get an up-close look at the economic landscape.

2014-12-06 00:00:00 Sources of Investment Power: Why Expertise Matters and What it Looks Like by David Robertson of Arete Asset Management

There is a wide dispersion of ability in the investment services industry which makes it difficult to identify expertise. This is a shame because expertise is a critical factor in making good decisions and in avoiding bad ones. As the investment landscape becomes more difficult, it will become progressively more important to identify and access expertise.

2014-12-06 00:00:00 Weighing the Week Ahead: Time for a Santa Claus Rally? by Jeff Miller of New Arc Investments

The schedule for data releases is lighter than usual. The calendar year is about to end. The market continues to set records. The stage is set for the annual question: Will there be a Santa Claus rally in stocks?

2014-12-05 00:00:00 Outlook 2015: Multi-Manager by Marcus Brookes, Robin McDonald of Schroders Investment Management

Investors need to prepare for lower returns in the next few years, with a focus on capital preservation appearing prudent in the current environment.

2014-12-05 00:00:00 Getting More From Your Equity and Bond Benchmarks by Ryan Blute of PIMCO

Benchmarks have long served as a starting point, or anchor, for investors, representing the neutral point for an investment decision. They serve as the basic ingredients that combine to form an investors asset allocation and result in a desired risk/return profile.

2014-12-05 00:00:00 2015? by Jeffrey Saut of Raymond James

Year-end letters are always difficult to write because there is a tendency to discuss the year gone by, or worse, try and predict what is going to happen in the New Year. I mean really, at this time last year who predicted Russia would invade Crimea, that ISIS would effectively take over a significant portion of Iraq, or the Republicans would sweep Congress.

2014-12-05 00:00:00 The Great Escape?? by Tony Crescenzi of PIMCO

Since the financial crisis, the Fed has engaged both conventional and unconventional tools in a colossal effort to smooth the deleveraging process, help put Americans back to work and boost wage growth. The Fed has achieved two out of three "escapes": 1) Escape from a liquidity trap: Get banks to lend. 2) Escape from quantitative easing: Stop the bond buying program. 3) Escape from the zero bound: Hike the policy rate above zero. Over the longer term, portfolios should be positioned for low policy rates not only in the U.S., but also in Europe and Japan.

2014-12-05 00:00:00 Are Oil Prices Ready to Break out of the Trough? by Frank Holmes of U.S. Global Investors

American business holds up the rest of the world.In ancient Greek mythology, the Titan Atlas was charged with holding up the world. Today, that task largely falls on the shoulders of American businesses.

2014-12-05 00:00:00 Emerging Markets Featuring Rennie McConnochie by (Article)

2014-12-04 00:00:00 Outlook 2015: Japanese Equities by Shogo Maeda of Schroders Investment Management

Strong corporate earnings growth and a weak yen should continue to provide support to Japanese equities in 2015.

2014-12-04 00:00:00 Exchange Rate 101: A Primer For International Investors by Bryce Fegley of Saturna Capital

A solid grasp of exchange rates and how they impact various asset classes can help international investors make better-informed decisions. The asset class most likely to be impacted negatively by a strengthening dollar is non-dollar fixed-rate bonds.

2014-12-04 00:00:00 OPEC Meeting Post-Mortem: All Eyes on U.S. Shale by Greg Sharenow of PIMCO

After averaging nearly $110 per barrel during the first half of 2014 and peaking at over $115 per barrel in June, Brent crude oil has fallen by over $40 in just a few short months.

2014-12-03 00:00:00 Unintended Consequences of Staying Early Termination Rights by William De Leon, Tracey Jordal, Libby Cantrill, Courtney Walker of PIMCO

The topic of too big to fail has been an intense area of focus for policymakers and market participants, and for good reason: Everyone has a vested interest in avoiding a repeat of the 2008 financial crisis and its corresponding aftershocks.

2014-12-03 00:00:00 Can Stocks Deliver the Goods in 2015? by Burt White of LPL Financial

We believe stocks will deliver mid- to high-single-digit returns in 2015. We expect earnings, and not valuations, to do the heavy lifting in producing potential stock market gains for investors in 2015. Monetary policy is in transit in 2015, when stocks will face a shift from the very loose monetary policy of the Federal Reserves (Fed) quantitative easing (QE) program to an environment in which the Fed begins to hike interest rates.

2014-12-03 00:00:00 A Brave New World by Niels Jensen of Absolute Return Partners

In the the last two Absolute Return Letters I have argued why one should expect global GDP growth to be below average over the next decade or so, why interest rates should, as a consequence, remain low and why equity returns should also disappoint. Not as in negative returns but below the levels we have grown accustomed to over the past 30 years. If you have read those two letters, none of this should come as a surprise.

2014-12-03 00:00:00 Outlook 2015: Convertible Bonds by Martin Kuehle of Schroders Investment Management

The equity market is likely to be the main driver of convertibles in 2015, when diligent research will once again be crucial.

2014-12-02 00:00:00 In Defense of John Hussman by David Horn (Article)

John Hussman is a polarizing figure. The performance of his Strategic Growth Fund (HSGFX) is in the fourth, fourth and seventh percentile in one-, three- and five-year rankings, respectively. Worse, he's actually experienced a drawdown over the past six years. Much of that criticism, however, is misguided.

2014-12-02 00:00:00 Oil - Just Another Price by Brian Wesbury, Robert Stein of First Trust Advisors

Dont take this the wrong way: energy is important. Oil prices are important. But, we believeth those involved in economic punditry often bloweth them out of proportioneth.

2014-12-02 00:00:00 Black Friday Hindenburg Omen Suggests Near-Term Caution by Chris Puplava of PFS Group

Given how extended the markets are and the near uninterrupted run since the mid-October lows, the recent Hindenburg Omen signals on the NASDAQ and Russell 2000 on Black Friday are likely warning of a coming pullback.

2014-12-02 00:00:00 The Evaluation of Common Stocks by Kendall Anderson of Anderson Griggs

I have met many financially secure families over the years. Most earned this financial security by working hard, while saving as much as possible, for a very long time. Some inherited a safety net, some married into wealth, and a few lucky people just did everything right at the right time. What I have not come across is anyone who gained financial security quickly in a short period by investing in the capital markets. I know there are a few of these wonder kids somewhere on the planet, but I havent met them.

2014-12-02 00:00:00 Making Sense of Dollar Strength by Bradley Krom of WisdomTree

Over the last several months, investors and economists alike have started to take note of the broad-based appreciation of the U.S. dollar. However, we believe the magnitude of this years move tells only a portion of the story. In our view, this summers rally does not represent a correction or near-term adjustment, but rather the continuation of a broader trend that started in the middle of 2011.

2014-12-02 00:00:00 The Worlds Dumbest Idea by James Montier of GMO

In a new white paper today, James Montier of GMO's asset allocation team "explor(es) the evidence that shareholder value maximization (SVM) has been an unmitigated failure and contributed to some very undesirable economic outcomes."

2014-12-01 00:00:00 Current Opportunities Built from Short-Term Headwinds by (Article)

As bottom-up stock pickers who pay close attention to risk and valuation, we often see negative headlines as an opportunity to reevaluate our holdings and build our exposure to companies with long-term value at attractive entry points. Portfolio Manager Lauren Romeo provides her perspective on macro headwinds and how they affect our investment approach.

2014-12-01 00:00:00 Is Bitcoin the Future? by John Mauldin of Mauldin Economics

Worth Wray has written this weeks letter as a summary of what we know about Bitcoin. Delving into its history and bringing us up to date, he also offers a glimpse of the future. At the end of the letter I offer a few of my own thoughts on the relationships among gold, fiat money, Bitcoin, and financial transactions. If nothing else, Bitcoin offers a provocative way to think of the future of money.

2014-12-01 00:00:00 As Oil Falls, Indian Equities May Rise by Christopher Gannatti of WisdomTree

We believe that, as the price of oil falls, Indias economic growth prospectsand by extension, equity market performancemay improve.

2014-12-01 00:00:00 Hard-Won Lessons and the Bird in the Hand by John Hussman of Hussman Funds

The S&P 500 is more than double its historical valuation norms on reliable measures (with about 90% correlation with actual subsequent 10-year market returns), sentiment is lopsided, and we observe dispersion across market internals, along with widening credit spreads. These and similar considerations present a coherent pattern that has been informative in market cycles across a century of history including the period since 2009. None of those considerations inform us that the U.S. stock market currently presents a desirable opportunity to accept risk.

2014-11-27 00:00:00 Pick and Mix: Fresh Ideas for Diversifying Bond Exposure by John Taylor of AllianceBernstein

Policy backdrops and growth trajectories around the world are showing increasing signs of divergence. Yet many bond investors continue to congregate in a few selected pockets of the fixed income universe. In our view, its a perfect time to reconsider diversification tactics.

2014-11-26 00:00:00 2014 U.S. Midterms: A Win for Stocks? by Zachary Karabell of Envestnet

With the 2014 U.S. midterm elections behind us, investors wonder what the political gridlock will mean for the markets. If we consider historical trends and recent earnings, we could actually see a prolonged bull equity market.

2014-11-25 00:00:00 Real Estate is Having a Moment by Christopher Gannatti of WisdomTree

Looking at equity market, one theme this year is that the U.S. has been outperforming global markets, both developed international and emerging markets. However, looking within the U.S., real estate has performed particularly well.

2014-11-25 00:00:00 3 Things to Think About, Including the Disconnect between Data And Surveys by Lance Roberts of Streettalk Live

Last Friday, I discussed the growing gap between economic reports particularly when they measure the same basic areas of the overall economy. For example, how can the Markit Manufacturing PMI Index be negative for three months while the ISM PMI has surged higher during the same period. Both cannot be right.

2014-11-25 00:00:00 Thanksgiving Recipe by Jeffrey Saut of Raymond James

Begin with a turkey chilling in a sink for a few hours. Mix in the Bank of Japans shock and awe announcement of a week ago. Add the U.S. unemployment claims that are at a 14-year low and stir well, include housing prices that are better by +6%, fold in the Leading Economic Indicators advancing by 7%, the ECB announcement by Draghi about a bazooka of Quantitative Easing (QE), and the Thanksgiving dinner result . . . new highs for equity prices!

2014-11-24 00:00:00 Finding Small-Cap Opportunities in Technology and Energy by (Article)

Despite the recent correction for small-caps, we have been finding compelling opportunities in those areas of the market not always discussed in the headlines. Portfolio Manager Jim Stoeffel sits down with Co-Chief Investment Officer Francis Gannon to talk about investment ideas that play on current trends but may be particularly interesting to value-oriented investors.

2014-11-24 00:00:00 A Most Important Distinction by John Hussman of Hussman Funds

Quantitative easing only works to the extent that default-free, low interest liquidity is viewed as an inferior holding. When investor psychology shifts toward increasing risk aversion which we can reasonably measure through the uniformity or dispersion of market internals, the variation of credit spreads between risky and safe debt, and investor sponsorship as reflected in price-volume behavior default-free, low interest liquidity is no longer considered inferior. Its actually desirable, so creating more of the stuff is not supportive to stock prices.

2014-11-24 00:00:00 Japan Dips into Recession as Japan, Inc. Profits Set New Highs by Jeremy Schwartz of WisdomTree

When investors buy Japanese equities, they dont really buy a slice of that economy; they buy shares in corporations that operate both in Japan and around the world. Japan, Inc. (i.e., Japanese corporations) is showing a profit picture that differs dramatically from the countrys economic growth rate.

2014-11-24 00:00:00 When 'Buy and Hold' Works, And When It Doesn't by Urban Carmel of The Fat Pitch

Imagine if you had invested in the S&P 500 in 1984 and held through the tech bubble and crash and then through the financial crisis and its recovery. How would you have done over those 30 years? As it turns out, very well. On a real basis (meaning, inflation-adjusted), your holdings would have appreciated by over 400%. A $100,000 investment in 1984 would now be worth more than $500,000.

2014-11-24 00:00:00 Emerging Markets Equity Commentary: October 2014 by Team of Thomas White International

Emerging market equity prices turned volatile during October as concerns about weak global growth and the impending close of bond purchases by the U.S. Federal Reserve unnerved investors. Still, some of the large emerging markets in Asia rebounded strongly during the second half of the month.

2014-11-24 00:00:00 Risk Parity: Comparing the Objections With Reality - Part 2 by Scott Wolle, Michael McHugh, David Gluch of Invesco Blog

As the use of risk parity has grown, so have criticisms against the approach. In this blog series, I look at objections Ive heard about risk parity, and explain why we believe they do not apply to our risk-parity approach - the Invesco Balanced-Risk Allocation strategy.

2014-11-24 00:00:00 Time to Look at Long Credit? by Mohit Mittal of PIMCO

?Tactical decisions regarding the scaling of an LDI allocation cannot be based solely on Treasury market dynamics. Given recent underperformance of long credit relative to intermediate credit, LDI investors should consider increasing long credit exposure. A structured approach that combines rigorous top-down macroeconomic-analysis to take views on duration and credit sectors with equally thorough bottom-up credit research to identify companies where fundamentals are improving may deliver alpha that can help clients reduce their funding mismatch over time.

2014-11-24 00:00:00 You Thought QE Was Over? by Lance Roberts of Streettalk Live

A couple of weeks ago in the weekly newsletter I discussed the series of events behind the decline of the market in October and the subsequent surge.

2014-11-23 00:00:00 Chinas Monetary-Policy Surprise by Stephen Roach of Project Syndicate

In economic policy, as in most other areas, actions speak louder than words. By cutting its policy benchmark interest rates, the Peoples Bank of China has underscored the tactical focus of Chinese governments stabilization policy: it aims to set a floor of around 7% on GDP growth.

2014-11-23 00:00:00 Weighing the Week Ahead: Are Investors Too Complacent? by Jeff Miller of New Arc Investments

There is no investment edge from repeating what you read in the morning paper. Here was my list still worth watching: Geo-political that is not on the current radar a true black swan. An increase in the PCE index that was not accompanied by strong economic growth. Wage increases that were not accompanied by strong economic growth. Declining profit margins that were not accompanied by strong economic growth and increased revenues. An increase in the chances for a business cycle peak (the official definition of a recession). Remote at this point. An increase in financial stress t

2014-11-21 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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?

2014-11-20 00:00:00 Outlook 2015: European Equities by Rory Bateman of Schroders Investment Management

Monetary policy remains loose in Europe but governments could do more to boost demand. Meanwhile, the weaker euro and stronger banking sector should help support European equities in the coming year.

2014-11-20 00:00:00 Will $2.50 Gasoline Catalyze U.S. Consumer Stocks? by William Smead of Smead Capital Management

A great deal has been written about how lower gasoline prices could stimulate discretionary purchases in the United States. RBOB gasoline futures peaked on June 20, 2014 at $3.12 per gallon and closed on November the 14th at $2.04. Those in the bearish camp like Randall Forsyth at Barrons argue that lower oil and gas prices will negate and ruin the economic benefit of the oil boom.

2014-11-20 00:00:00 The U.S. Labor Market - Show Me the Money by Marie Schofield of Columbia Management

The U.S. labor market data has improved in the last six months now that many measures have reached cyclical highs. For the Federal Reserve though, this is not enough. They want to see this data feed through to a broader rise in incomes and wages, and ultimately spending. This will be necessary to bend the economic trajectory toward sustainably higher growth.

2014-11-19 00:00:00 Crude Oil? by Jeffrey Saut of Raymond James

Integrity, Websters dictionary defines it as, The quality of being honest and having strong moral principles. Recently the voters of America sent the D.C. crowd a message that they want integrity back in government. Consequently, I viewed the midterm election as a turning point. And, a turning point approaches on December 21st of this year. Thats when the Winter Solstice arrives.

2014-11-19 00:00:00 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 00:00:00 Has Europes 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 20072009 global financial crisis and subsequent sovereign debt crisis, spurred by European Central Bank (ECB) President Mario Draghis 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 eurozones engine of growth- Germany - flirting with recession.

2014-11-18 00:00:00 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?

2014-11-17 00:00:00 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 00:00:00 These Go to Eleven by John Hussman of Hussman Funds

We have entered an environment in which extraordinarily thin risk premiums have been joined in recent weeks by a subtle shift toward increasing risk aversion. Present conditions couple every essential component of historically extreme and vulnerable market environments. The market has been dodging boomerangs, not bullets, and they are likely to come back harder for it.

2014-11-17 00:00:00 On My Radar: Stocks Remain Richly Valued by Steve Blumenthal of CMG Capital Management Group

Shortly after each month end (after the most recent reported earnings numbers are posted), I like to run through a few of my favorite valuation charts to gauge level, asses risk and to get a sense for what the probable forward return may be. Fortunately, there is a great deal of historical data that can help us.

2014-11-16 00:00:00 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 00:00:00 Reality Check by Bob Rodriquez of FPA Funds

As many of you know, and for those of you who dont, Ive been a harsh critic of the fiscal and monetary policies that have been deployed these past several years. Since returning from my 2010 sabbatical in 2011, Ive been very cautious about capital deployment, as many of my successors will confirm. In light of the stock markets astounding rise since 2009 and five years of near zero short-term rates, Ive reassessed and challenged my basic fundamental understanding of how the financial markets operate.

2014-11-15 00:00:00 Where You Finish Could Depend on Where You Start by Robert Isbitts of Sungarden Investment Research

It helps to be aware of the many possible outcomes and adjust your strategy to sync with the current record price highs in this popular market benchmark. Doing so can help you be more successful, regardless of what the next five years may bring. In this sense, it is not where you finish, its where you start.

2014-11-14 00:00:00 Investment Update October 2014 by James Klein of Meritage Portfolio Management

Coming off a strong second quarter, stocks turned in a mixed performance for the three months ending September 30. The fundamental backdrop for stocks remained relatively stable, with interest rates drifting slightly lower and generally supportive news flow around corporate earnings, economic growth, inflation and Fed policy. While this familiar combination of factors has been hospitable for stocks, this past quarter reflected a growing unease about the prospects of further upside.

2014-11-14 00:00:00 Mean-Reverting Profits and Other Things Worth Thinking About by Lance Roberts of Streettalk Live

Earlier this week I discussed the growing detachment between the stock market and the "real" underlying economy. One of the areas I touched on was corporate earnings that have been elevated by an immense amount of accounting gimmackry, cost cutting, and productivity increases. The problem, as I stated, is that historically earnings have grown 6% peak-to-peak before a reversion. Notice, I said peak-to-peak. The issue is that the majority of analysts now estimate that earnings will rise unabated for the next five years.

2014-11-14 00:00:00 Tired of Being Scared Yet? by Richard Bernstein of Richard Bernstein Advisors

Bull markets are based on climbing the proverbial wall of worry, and this cycle has been no different. We have consistently argued over the past five years that the current bull market could be one of the biggest of our careers. Both investors and corporations continue to act conservatively because of the uncertainty caused by a litany of issues. Uncertainty is typically the engine of bull markets.

2014-11-14 00:00:00 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 Ill call good vs. bad #deflation has not.

2014-11-13 00:00:00 Portfolio Effects of Holding Gold in Yen Terms by Ade Odunsi of AdvisorShares

Last week in Gold in Yen Calm in the Eye if the Storm we focused on the factors behind the significant outperformance of gold priced in yen versus gold priced in dollars, identifying the strength of the dollar as the primary factor pushing down the price of gold in dollars. While on the currency side, the strength of dollar resulted in significant weakness in the YEN/USD FX rate.

2014-11-12 00:00:00 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 00:00:00 Octobers 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 months history of big moves, it shouldnt 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 00:00:00 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 00:00:00 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.

2014-11-10 00:00:00 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 00:00:00 Do the Lessons of History No Longer Apply? by John Hussman of Hussman Funds

Without permanent changes in the way the world works, on valuation measures that are best correlated with actual subsequent market returns, stocks are wickedly overvalued here. Meanwhile, the stock market re-established overvalued, overbought, overbullish conditions last week that mirror some of the most precarious points in the historical record such as 1929, 1937, 1974, 1987, 2000 and 2007. Notably, that syndrome is now coupled with continued evidence of a subtle shift toward more risk-averse investor psychology, primarily reflected by internal dispersion and widening credit spreads.

2014-11-10 00:00:00 Emerging Markets Trends: Whats 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, were seeing a few bright spots start to emerge, and weve been able to add holdings that, in our view, became mispriced during market volatility.

2014-11-09 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

It's hard to argue that the price action of US equities is not bullish. SPX and DJIA ended the week at new highs. NDX stayed near the new highs it made last week, apparently digesting its gains. NDX was flat for the week while SPX and DJIA added another 1%. This is mostly reflected at the sector level as well. Financials, technology, industrials and transports are cyclical leaders all making new highs this week. But what is curious is that the market is being led more by defensives. Staples, utilities and healthcare are also at new highs. Since the September 19 top, SPX has added 1%, but defen

2014-11-08 00:00:00 And the Winner isInvestors? 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 00:00:00 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 00:00:00 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 00:00:00 Retirement Planning: Millennials vs. Boomers by Noah Beck of Research Affiliates

Rob Arnott and Lillian Wu recently wrote that young workers are more likely than older ones to lose their jobs in an economic downturn.They are also prone to draw on their 401(k) plan to meet basic living expenses while they are unemployed. Given these facts, the early-phase concentration in equitieswhose market prices are roughly correlated with the business cyclemakes target-date funds inordinately risky for young investors. In this article, Noah Beck considers TDFs in the broader context of workers total assets, including their own human capital.

2014-11-07 00:00:00 Reconsidering Asia's Currencies by Gerald Hwang of Matthews Asia

The Asian Financial Crisis of 1997-1998 looms like a ghost over any attention to Asian currency risk. But what new considerations are needed now? Given the robust performance of the regions currencies since 1999, Portfolio Manager Gerald Hwang, CFA, explores this topic in a modern context that takes into account the diverse monetary systems, business cycles and development stages of Asias economies.

2014-11-07 00:00:00 There is No U.S. Bear Stock Market in Sight by Robert Lamy of The Forecasting Advisor

After increasing by 15.5% between February 3rd, 2014 and September 18th, 2014, the U.S stock market began to decline on September 19th and during the following four weeks. The S&P 500 price index fell by 7.4% during that period and stood on October 15th at its lowest level in six months. This was the fourteenth correction of the index since the start of the current bull market in April 2009. The decline was followed by a strong rebound during the past three weeks.

2014-11-06 00:00:00 When Volatility Rises, So Have Active Management Relative Results by Team of The Royce Funds

For many investors, volatility is often synonymous with risk. We as value investors (and risk managers), on the other hand, have always viewed volatility as a crucial component of active stock selection. In our latest Royce Research piece, we explore the relationship between low- and high-volatility environments and the relative performance of active managers versus their respective benchmarks during these periods. This deep dive is especially important in a market that has recently seen more volatility and its largest correction in almost three years.

2014-11-06 00:00:00 Believing Anything by Keith McCullough of Hedgeye Risk Management

For those of you who didnt 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 00:00:00 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.

2014-11-04 00:00:00 Outrunning the Bear: An Active Managers Survival Guide by William Smead of Smead Capital Management

Two long-time friends go up in the mountains on a hunting trip. At 4:30 A.M. of the second day, one of the men wakes up at one end of the tent to find his buddy dressing and putting on his running shoes at the other end. He asks him what he is doing. His friend says, There is a bear outside our tent. The other guy exclaims, You cant outrun a bear! His friend replies, I dont have to outrun the bear, I just have to outrun you.

2014-11-04 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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.

2014-11-03 00:00:00 Worried About the Unknown? Focus on the Business Cycle Instead by John Greenwood of Invesco Blog

Lately, Ive 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 00:00:00 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 Groups 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.

2014-11-02 00:00:00 Weighing the Week Ahead: What the End of QE Means for the Individual Investor by Jeff Miller of New Arc Investments

Pulling this all together, Abnormal Returns explains what the individual investor should do create a personal margin of safety. Tadas uses his broad knowledge and experience to pull together advice from several leading sources. If you had followed this approach over the last few years, you would have been able to stick with your program during the tough times. It will be of equal help in the future.

2014-11-01 00:00:00 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 00:00:00 Dont Be Spooked by Market VolatilityOpportunity Is Still Knocking! by Frank Holmes of U.S. Global Investors

One of the greatest fears this Octoberpossibly the most volatile month of the yearhas been the correlation between the S&P 500 Indexs ascent in the first three quarters of the year and the possible ramifications of the end of quantitative easing (QE).

2014-10-31 00:00:00 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 3a 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 00:00:00 Buyer Beware: A Notable Divergence by John Del Vecchio of AdvisorShares

As a short selling portfolio manager, we constantly monitor market relationships for positive or negative divergences in the broad equity market indexes. One of the most important relationships is that between price and volume. In a bullish scenario, one would want to see volume expand as price rises.

2014-10-31 00:00:00 Quick Hit on Q3 GDP: #QUAD4 Confirmed by Darius Dale of Hedgeye Risk Management

With this [soon-to-be-revised-down, pre-election Q3 GDP print], the U.S. economy is squarely in #Quad4 and should remain there throughout Q4

2014-10-31 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 On Top of the Market by Team of AMG Funds

The third quarters seventh straight gain for the S&P 500 did not come easy. Investors wrestled with geopolitical turmoil in Ukraine and the Middle East, and the eventual end of the Federal Reserves (the Fed) bond buying program. U.S. small-cap stocks were volatile and fell into negative territory, year-to-date.

2014-10-28 00:00:00 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 00:00:00 Third Quarter Review 2014 by Clark M. Blackman II (Article)

The following is a letter to clients that readers may adapt for their own use.

2014-10-28 00:00:00 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 00:00:00 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.

2014-10-28 00:00:00 The Math Of Loss by Lance Roberts of Streettalk Live

Business Insider recently published an article suggesting that if you missed the recent short covering rally then you made a classic mistake in investing.

2014-10-27 00:00:00 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 00:00:00 Fast, Furious, and Prone to Failure by John Hussman of Hussman Funds

Though we remain open to the potential for market internals to improve convincingly enough to at least defer our immediate concerns about market risk, we should also be mindful of the sequence common to the 1929, 1972, 1987, 2000 and 2007 episodes.

2014-10-27 00:00:00 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; weve been in an unusually quiet period that was due to end at some point and now has.

2014-10-27 00:00:00 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 00:00:00 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.

2014-10-26 00:00:00 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 00:00:00 Plot Twistor 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.

2014-10-26 00:00:00 Weekly Economic Commentary by Urban Carmel of The Fat Pitch

While equities have recently become volatile, the underlying fundamentals have not changed.

2014-10-25 00:00:00 As the Eurozone Stalls, China Cuts the Red Tape by Frank Holmes of U.S. Global Investors

France and Germanys 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 whats the solution? The EU would do well to look east, specifically to China.

2014-10-24 00:00:00 Steady as She Goes by John Osterweis, Matt Berler of Osterweis Capital Management

For some time now we have been making the case for a long-term bull market in U.S. equities. This has rested on the prediction of a gradual economic recovery devoid of inflationary pressures, played out against a very accommodative monetary backdrop. So far, this is exactly what has occurred. But as we all know, trees dont grow to heaven and nothing lasts forever. Therefore the relevant questions we ask ourselves every day are: (1) what could go wrong and (2) when should we start to worry? We shall devote this quarters Outlook to the things we worry about.

2014-10-23 00:00:00 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 00:00:00 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 00:00:00 Quarterly Review and Outlook by Team of Hoisington Investment Management

The U.S. economy continues to lose momentum despite the Federal Reserves 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 00:00:00 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 00:00:00 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 markets 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 00:00:00 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 00:00:00 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 00:00:00 Whats Next for the Indian Rupee? by Bradley Krom of WisdomTree

Even before the election results were fully counted in May, Indian currency and equity markets were reacting. After touching all-time lows last year, the rupee surged on the optimism that the reform-minded Modi would push through an agenda to improve Indian economic competitiveness.

2014-10-22 00:00:00 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 00:00:00 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 00:00:00 Loomis Sayles Core Plus Bond Fund: Navigating Dynamic Markets with Tactical Flexibility by Sponsored Content from Loomis Sayles (Article)

The global economic cycle is a perpetual force influencing interest rates, credit availability and capital markets. For core plus managers who seek to generate total return by balancing liquidity and risk, these undulations pose a clear challenge.

2014-10-21 00:00:00 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 00:00:00 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 companiesand 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 00:00:00 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.

2014-10-20 00:00:00 On the Tendency of Large Market Losses to Occur in Succession by John Hussman of Hussman Funds

We may wish to believe that a 25-30% market plunge has zero probability since we know that the probability of a one-day loss of several percent is quite low, making a whole series of them seemingly impossible. But that view overlooks the tendency of large losses to occur in succession. It also overlooks the tendency for monetary easing to support stocks only when low- or zero-interest risk-free assets are considered inferior holdings in comparison to risky ones.

2014-10-20 00:00:00 Japan: Small Change Clouds Big Picture by Mark Jason of Invesco Blog

We continue to believe that achieving real economic growth in Japan requires changes that are hard to come by. On a recent trip to Japan, it became clear to me that this next stage of Abenomics shorthand for Prime Minister Shinzo Abes three-arrow economic revitalization program of monetary easing, targeted financial support and structural reforms calls for corporate governance reform to take the spotlight as a core part of the important third arrow, particularly as regulatory reforms have made slow progress thus far.

2014-10-20 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 Weekly Market Summary by Urban Carmel of The Fat Pitch

After 27 months, SPX experienced its first 10% correction this week. As we have detailed many times, this was an exceptionally long and uncorrected rise. Since its last 10% correction in mid 2012, SPX has risen an exceptional 59%.

2014-10-17 00:00:00 Being Intelligent About Smart Beta by Chris Richey of Neosho Capital

Given the history of miracle cures, magic potions, sure things, and cant misses, you will forgive our skepticism as Smart Beta entered the financial lexicon over the past 3 years. Things promising to be smart often look very dumb in retrospect. But we were intrigued, if only because humility and competition demand an open mind.

2014-10-17 00:00:00 The Inequality Trifecta by Mohamed El-Erian of Project Syndicate

Perhaps the most striking disconnect at the annual IMF/World Bank meetings was the disparity between participants’ interest in discussions of inequality and the ongoing lack of a formal action plan for governments to address it. This represents a profound failure of policy imagination – one that must urgently be addressed.

2014-10-17 00:00:00 To Infinity and Beyond! by Colin Moore of Columbia Management

To infinity and beyond! is the catchphrase of Buzz Lightyear, the popular character from Disneys Toy Story franchise. The phrase is both whimsical and paradoxical. The character of Buzz was inspired by Apollo 11 astronaut Buzz Aldrin; but the phrase may be a tribute to Stanley Kubricks 2001: A Space Odyssey, in which the concept of Jupiter and beyond the infinite was introduced.

2014-10-17 00:00:00 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.

2014-10-16 00:00:00 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 companys annual report.

2014-10-16 00:00:00 Governments Need Inflation, Economies Don't by Peter Schiff of Euro Pacific Capital

In an article in the UK's Telegraph on October 10, veteran economic correspondent Ambrose Evans-Pritchard laid bare the essential truth of the nearly universal current embrace of inflation as an economic panacea. While politicians, CEOs and economists talk about demand stimulus and the avoidance of a deflationary trap, Evans-Pritchard reminds us that inflation is all, and always, about debt management.

2014-10-16 00:00:00 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.

2014-10-15 00:00:00 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 00:00:00 What Are We Doing to Our Young Investors? by Rob Arnott, Lillian Wu of Research Affiliates

In the latest piece from Research Affiliates, Rob Arnott, chairman and CEO, and Lillian Wu, researcher, look at the growing use of target date funds by young workers, and how their defined contribution (DC) portfolios are therefore increasingly concentrated in stocks. However, young workers are more likely to cash out their DC assets to meet living expenses during a recession or other hardship, and equity volatility could leave them in a bind. Arnott and Wu offer a potential solution: less risky starter portfolios.

2014-10-15 00:00:00 Is Smart Beta Smart Enough? by Richard Bernstein of Richard Bernstein Advisors

As smart as smart beta might be, it is not smart enough to answer the most important question in beta management. The key to successful beta management, regardless of whether the beta is smart or dumb, depends primarily on the choice and timing of beta. A strategy that focuses on smart beta without consideration for full beta management seems very likely to underperform.

2014-10-15 00:00:00 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 00:00:00 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 countrys current political and economic environment. We will briefly describe the recent political history of the country and look at the specifics of Brazils economic development. As usual, we will conclude with market ra

2014-10-14 00:00:00 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 00:00:00 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 00:00:00 Forecasting the Market: A Thought Experiment Revisited by Colonel Chris Turner of PIEH, LLC

With Q3-14 reported earnings just beginning, here is the latest update of my ongoing "thought experiment" for forecasting the S&P 500 price based on earnings fundamentals. The chart below is based on the latest trailing twelve-month earnings (TTM) data published on the Standard & Poor's website as of October 9th, 2014. The numbers are from the spreadsheet maintained by senior analyst Howard Silverblatt. See dshort's monthly valuation update for instructions on downloading the spreadsheet.

2014-10-13 00:00:00 Air-Pockets, Free-Falls, and Crashes by John Hussman of Hussman Funds

Once overvalued, overbought, overbullish extremes are joined by deterioration in market internals and trend-uniformity, one finds a narrow set comprising less than 5% of history that contains little but abrupt air-pockets, free-falls, and crashes.

2014-10-13 00:00:00 Is the UK Getting Back to Business as Usual?? by Mike Amey of PIMCO

In light of the generally buoyant economy, we may start to see more normal conditions returning to the UK labour market and, importantly, upward movement in wage growth over the cyclical horizon. In turn, these developments are critical for the conduct and timing of monetary policy and the behaviour of the Bank of England's (BOE) Monetary Policy Committee. We believe investors may want to treat the BOE's interest rate cycle with caution in shorter-maturity bonds, while valuations offer more protection in intermediate bonds given PIMCO's New Neutral thesis of secularly low real interest rates.

2014-10-12 00:00:00 Japan's Amazing 25-Year Post-Bubble Drama by Doug Short (Article)

It's been quite a while since my last look at secular Japanese market and bond data. We're now just a few months from the 25th anniversary of the Nikkei 225's bubble top in 1989. The latest cyclical rally in the index an interim high at the end of December 2013, up 99.6% from its interim low in November of 2011. Its latest interim high in late September was up 100.5% from that 2011 low. The steroid effect of massive monetary intervention has evolved into an ongoing drama of volatility.

2014-10-11 00:00:00 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, Europes slowdown cant 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.

2014-10-10 00:00:00 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 00:00:00 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 00:00:00 Divergent Returns by Jim Tillar, Steve Wenstrup of Tillar-Wenstrup

The theme for this newsletter is volatility. Not only are we seeing volatility in financial prices, but also in economic data and in some indicators we use to gauge the market's risk level.

2014-10-09 00:00:00 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 worlds reserve currency, represents an important change in capital market conditions.

2014-10-09 00:00:00 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 00:00:00 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 00:00:00 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 firms Annual Global Outlook from last December.

2014-10-09 00:00:00 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 00:00:00 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 00:00:00 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 todays 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 00:00:00 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.

2014-10-07 00:00:00 IMF Cuts Global Growth Forecast by Doug Short (Article)

Most weekends I post an update on world market performance with a focus on eight major world indexes denominated in their own currency. This morning my friend and master market technician Chris Kimble called attention to the IMF's report posted on their website: Global Growth Disappoints, Pace of Recovery Uneven and Country-Specific:

2014-10-07 00:00:00 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 00:00:00 Is Two for the Price of One always better? by Jerry Wagner of Flexible Plan Investments

I have to admit that I usually avoid shopping. Typical male behavior, I suppose, but even male shoppers stop and consider signs like Two for the Price of One! when they eventually choose to grace the shopping aisles.

2014-10-06 00:00:00 New Updates at Crestmont Research by Doug Short (Article)

Note from dshort: My friend Ed Easterling, whose Crestmont Research P/E valuation is a regular feature on this website, has published collection of periodic updates to his ongoing analysis. The commentary below is based on his latest distribution email to subscribers.

2014-10-06 00:00:00 Dancing Without a Floor by John Hussman of Hussman Funds

As I did in 2000 and 2007, I feel obligated to state an expectation that only seems like a bizarre assertion because the financial memory is just as short as the popular understanding of valuation is superficial: I view the stock market as likely to lose more than half of its value from its recent high to its ultimate low in this market cycle. In my view, speculators are dancing without a floor.

2014-10-06 00:00:00 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 arent 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.

2014-10-04 00:00:00 The Wayback Machine Birthday Tour by John Mauldin of Mauldin Economics

Ive 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 00:00:00 600 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 00:00:00 One Thing Leads to Another: From Dividends/Buybacks to Capex by Liz Ann Sonders of Charles Schwab

The final revision to second quarter real GDP showed a healthy contribution by capex. Tide may be turning away from returning cash to shareholders toward capex; pushed by activist investors.Capex's leading indicators point to further improvement.

2014-10-03 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 Voya Fixed Income Perspectives September 2014 by Christine Hurtsellers, Matt Toms of Voya Investment Management

Change is in the air, and its 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 00:00:00 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 00:00:00 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 00:00:00 Chuck Royce on 3Q14: Is Volatility Ushering in a New Market Phase? by Chuck Royce of The Royce Funds

Volatility shook the markets in the last three months, halting the bullishand placidpace of returns in a market that has not seen a significant correction since 2011. Chief Executive Officer Chuck Royce talks about market events from the third quarter, the growing disparity between small-cap and large-cap performance, the continuing strength of the economy, the prospects for higher interest rates, the current case for small-cap quality, and more.

2014-10-01 00:00:00 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 00:00:00 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 00:00:00 Myths: Past, Present, and Future by Jeffrey Saut of Raymond James

If you dont change your indicators for the changing causal relationships you are doomed!

2014-09-30 00:00:00 Bullish on the U.S. Manufacturing Renaissance and Cyclical Businesses by Francis Gannon and Steven McBoyle (Article)

Portfolio Manager Steven McBoyle and Co-Chief Investment Officer Francis Gannon discuss current opportunities rooted in the accelerating growth of the U.S. economy and the search for companies that are investing strategically.

2014-09-30 00:00:00 Asset Allocation in a Time of Complacency by Dimitri Balatsos of Tesseract Partners

Complacency is a dangerous mindset, especially for investors. Having been generously rewarded beyond their expectations, investors were coddled in the arms of complacency as 2013 drew to a close.

2014-09-30 00:00:00 How Might Stocks Take a Hike? by Milton Ezrati of Lord Abbett

Here's a look at what happened to equities during past periods when the Fed raised rates.

2014-09-30 00:00:00 Market Internals Continue To Weaken by Steve Rumsey of Optimus Advisory Group

The word "divergence" has crept back into the market vocabulary lately, so let's take a closer look to see what all the fuss is about. The chart below shows the percentage of stocks above their 200-day moving average peaked in the summer of 2013 and has been rolling over ever since.

2014-09-30 00:00:00 How Vulnerable Is Short-Duration Fixed Income to Fed Tightening? by Rick Harper, Bradley Krom of WisdomTree

In recent research released by the Federal Reserve Bank of San Francisco and echoed in statements by several Fed regional bank presidents, Fed officials have voiced concerns that the market is underestimating the probability and timing of a change in monetary policy.

2014-09-30 00:00:00 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.

2014-09-29 00:00:00 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 00:00:00 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).

2014-09-29 00:00:00 The Ingredients of a Market Crash by John Hussman of Hussman Funds

Market peaks often go through several months of top formation, so the near-term remains uncertain. Still, it has become urgent for investors to carefully examine all risk exposures. When extreme valuations on historically reliable measures, lopsided bullishness, and compressed risk premiums are joined by deteriorating market internals, widening credit spreads, and a breakdown in trend uniformity, its advisable to make certain that the long position you have is the long position you want over the remainder of the market cycle.

2014-09-27 00:00:00 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 00:00:00 Clear Sailingor 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 dont 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 00:00:00 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. Whats not so clear: when the Fed will actually raise short-term interest rates.

2014-09-25 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 The Largest Stocks Are Carrying The MSCI World Index by Team of GaveKal Capital

The 50 largest stocks in the MSCI World Index account for roughly 28% of the total market cap of the MSCI World Index. So for a market-cap weighted index such as the MSCI World, the movement of the largest 50 stocks (out of 1615 total stocks) can have an outsized effect on the performance of the index as a whole at certain times.

2014-09-25 00:00:00 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 00:00:00 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 Augusts 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 youre relieved others were off the mark.

2014-09-25 00:00:00 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 Ive been long overdue in addressing. Financial advisors have frequently asked about my approach to asset allocation, and Ive outlined my strategy for diversifying within the US equity space in my commentary, Harnessing the Markets Natural Rotation: An Asset Allocation Strategy. Here, Id like to provide a summary of my outlook, which remains unchanged from the previous month.

2014-09-24 00:00:00 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 isnt performing as well. Of course that is exactly what you are supposed to do and what rebalancing is all about.

2014-09-24 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 Jeremy Siegel vs. Zvi Bodie: Does Equity Risk Decrease Over Time? by David Blanchett, Michael Finke and Wade Pfau (Article)

Stocks should be the asset class of choice for the long run, according to Wharton Professor Jeremy Siegel - and he has provided the data to prove it. But that paradigm has been challenged by Boston University Professor Zvi Bodie and others, who have shown that stocks become riskier the longer one owns them. Either view has profound implications for whether equity allocations should increase or decrease over time. Using Monte Carlo simulations, we provide guidance for the advisory profession.

2014-09-23 00:00:00 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 00:00:00 The U.S. Dollar is Rising, Interest Rates Could Be Next by Rick Harper, Bradley Krom of WisdomTree

Since bottoming July 1, the U.S. dollar has mounted an impressive rally against virtually every major foreign currency. While many analysts have been predicting a secular appreciation in the U.S. dollar on account of stronger economic fundamentals, the current rally has caused even casual market participants to take notice.

2014-09-23 00:00:00 Sisyphus Succeeds! by Jeffrey Saut of Raymond James

I have been reminded of the Greek mythology character Sisyphus since mid-July as investors tried to roll an immense boulder up a hill, only to watch it roll back down. In this case the boulder in question has been the D-J Industrial Average (INDU/ 17279.74), which since late July has tried seven times to better its all-time high of 17138.20 made on July 16th of this year.

2014-09-22 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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."

2014-09-19 00:00:00 Finding Appropriate Investment Strategies for Client Portfolios by Chuck Self of iSectors

Financial advisors (FAs) utilizing outsourced investment management processes face a significant number of choices. Recently, there were 675 exchange-traded fund (ETF) investment strategists in Morningstars database. How does one narrow the list of choices for further investigation effectively?

2014-09-19 00:00:00 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 00:00:00 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 Russias annexation of Crimea. The continued complexity of the crisis in Ukraine now threatens to derail Europes 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 00:00:00 The Myth of Student Debt: Lies, Damned Lies and Statistics by Cole Smead of Smead Capital Management

As school season kicks off, we at Smead Capital Management have been perplexed by the logic and reasoning over the student debt debate in America. There is a consensus in the investment markets today believing that student debt is a major credit problem rivaling other credit problems that were disastrous over the last 30 years.

2014-09-18 00:00:00 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 00:00:00 “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.

2014-09-17 00:00:00 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.

2014-09-16 00:00:00 Cycling Through History by Willie Delwiche of Robert W. Baird

Certain seasonal adages will doubtless sound familiar. "As goes January, so goes the year" seems to be repeated as a rule sometime in early February, while "Sell in May and go away" reflects not only the conditioned expectation of summer weakness, but also a preference for sayings that rhyme. Perhaps the proliferation of these sayings partially explains why the actual timing of cyclical shifts can catch some investors off guard.

2014-09-16 00:00:00 Stocks vs. High Yield Munis by Richard Bernstein of Richard Bernstein Advisors

The track record of the so-called "Fed Model" is dubious at best. The relationship compares the S&P 500's earnings yield to the yield of the 10-year Treasury note, and there are many other indicators that have a better track record than does the Fed Model when attempting to predict twelve-month forward returns. Despite that caveat, we nonetheless thought it interesting to examine the yield relationships between stocks and a broader array of fixed-income categories. Among those categories, high yield municipal bonds can be the only fixed-income that is attractive relative to stock

2014-09-16 00:00:00 The Case for Predictable Growth Stocks by Team of Value Line Funds

When investors think of growth companies, high-flying, large tech stocks, such as Facebook, Google and Apple, often come to mind. By definition, growth stocks have faster earnings growth and, therefore, higher valuations, but many also offer a more predictable pattern of growth with less price volatility and smoother returns over time. Furthermore, many of these steady growth stocks have historically outperformed peers over the long term.

2014-09-16 00:00:00 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

2014-09-16 00:00:00 Is Profiting in the Stock Market Based on Illusions? by Jerry Wagner of Flexible Plan Investments

When I was a child, I was fascinated with magic and magicians. I read scores of books, learned loads of tricks, and put on magic shows (ten-cent admission) in our basement. My favorite part was the illusions (I once worked a part of a summer vacation mastering a very convincing floating wand).

2014-09-15 00:00:00 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 00:00:00 The U.S. Is Diverging From Other Developed Markets by Robert Doll of Nuveen Asset Management

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

2014-09-14 00:00:00 Whats on Your Radar Screen? by John Mauldin of Mauldin Economics

So lets look at whats 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 dont think with their economic brains, or at least most of them dont.

2014-09-13 00:00:00 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

2014-09-12 00:00:00 U.S. rates The Draghi floor by Zach Pandl of Columbia Management

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

2014-09-12 00:00:00 Conditions are right for the dollar to weigh on gold by Ade Odunsi of AdvisorShares

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

2014-09-12 00:00:00 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 00:00:00 Calm Down 2 by Jeffrey Saut of Raymond James

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

2014-09-10 00:00:00 Labor Force Participation Lowest in 36 Years - Why? by Gary Halbert of Halbert Wealth Management

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

2014-09-10 00:00:00 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.

2014-09-09 00:00:00 How Rare are Housing Bubbles? Understanding the Case-Shiller Index and its Counterparts by Cesar A. Orosco and Laurence B. Siegel (Article)

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

2014-09-09 00:00:00 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 00:00:00 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 sitesthough often across mainstream news outlets, or the business sections of Sunday newspapers as well.

2014-09-09 00:00:00 Xis 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 Chinas four stages of growth. We will conclude, as always, with market ramifications.

2014-09-09 00:00:00 Escape Fandango? by Paul McCulley of PIMCO

When I entered the Fed-watching business over three decades ago, a clichd 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.

2014-09-08 00:00:00 The Two Pillars of Full-Cycle Investing by John Hussman of Hussman Funds

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

2014-09-08 00:00:00 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 00:00:00 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.

2014-09-07 00:00:00 Europe Takes the QE Baton by John Mauldin of Mauldin Economics

This week well 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 well 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 worlds liquidity. And meanwhile, Japan just keeps plugging away.

2014-09-06 00:00:00 The New Challenges of Price Discovery by Frank Holmes of U.S. Global Investors

In the past few years, price discoveryor the act of finding the right price for a securityhas 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 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

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

2014-09-06 00:00:00 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

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

2014-09-06 00:00:00 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 00:00:00 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 00:00:00 Cyclicals: Early or Late by Team of GaveKal Capital

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

2014-09-04 00:00:00 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 00:00:00 Emerging Markets Equity Commentary: July, 2014 by Team of Thomas White International

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

2014-09-04 00:00:00 What's Next for the Dollar and Gold? by Axel Merk of Merk Investments

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

2014-09-04 00:00:00 U.S. Oil Industry, Economy Feel Effects of Shale Revolution by David Ginther of Ivy Investment Management Company

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

2014-09-04 00:00:00 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 Ive previously written on the topic.

2014-09-03 00:00:00 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 cant 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 00:00:00 International Developed and Emerging Markets by Riad Younes of R Squared Capital Management

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

2014-09-03 00:00:00 All Eyes on the ECB as Europes 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, Europes long-awaited recovery still remains fragile and imbalanced.

2014-09-02 00:00:00 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).

2014-08-31 00:00:00 Abenomics, European Style by Nouriel Roubini of Project Syndicate

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

2014-08-30 00:00:00 Anticipate Before You Participate: Patterns in Trading by Frank Holmes of U.S. Global Investors

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

2014-08-30 00:00:00 Sound Familiar? by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

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

2014-08-29 00:00:00 The Long-Term Value of Active Management in the Small-Cap Space by Chuck Royce of The Royce Funds

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

2014-08-29 00:00:00 Why 2K? by Robert Isbitts of Sungarden Investment Research

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

2014-08-28 00:00:00 Data Dilemma: When Final Isn't Final by John Canally of LPL Financial

Revisions to GDP dont often change the overall picture of the health, or lack thereof, of the economy. Despite cutbacks to congressional funding of data collection at the federal level in recent years, the GDP data are a lot more accurate than they used to be. About every five years, the BEA does a comprehensive revision to GDP, and at that point, GDP for any specific quarter is just about as final as it will get, as the BEA has 98% of the data it needs to calculate GDP.

2014-08-28 00:00:00 Brazil: A Ripe Market for Bottom-Up Stock Pickers by Jim Harvey, Dilip Badlani of The Royce Funds

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

2014-08-28 00:00:00 Market Internals—Breadth Weakness Troubling But Not Dire by Doug Ramsey of Leuthold Weeden Capital Management

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

2014-08-27 00:00:00 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 00:00:00 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.

2014-08-26 00:00:00 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 00:00:00 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 were 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 00:00:00 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 00:00:00 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 youre figuring out the right mix for you.

2014-08-25 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 One-Handed Guidance for Investors by Scott Minerd of Guggenheim Partners

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

2014-08-23 00:00:00 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

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

2014-08-22 00:00:00 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 00:00:00 Assessing Corporate Credit Risk in Asia by Satya Patel of Matthews Asia

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

2014-08-21 00:00:00 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 dont 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.

2014-08-20 00:00:00 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 00:00:00 Is a Big Equity Correction Imminent? Not Yet by Vadim Zlotnikov of AllianceBernstein

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

2014-08-20 00:00:00 Clarity in Emerging Markets: Indonesian Election Outcome by Team of Manning & Napier

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

2014-08-19 00:00:00 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 Portugals Esprito Santo bank, and its 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 00:00:00 Macro backdrop in Europe by Stephen Peak (Article)

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

2014-08-19 00:00:00 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 00:00:00 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 00:00:00 Share and Share Alike?? by Richard Clarida of PIMCO

Labor compensation as a share of national income fell sharply in 20092010 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 labors share that commenced during the expansion phase of the business cycle was not accompanied by a material rise in PCE inflation.

2014-08-18 00:00:00 Dimes on Black and Dynamite on Red by John Hussman of Hussman Funds

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

2014-08-18 00:00:00 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.

2014-08-16 00:00:00 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 00:00:00 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. Its exhilarating, and the pundits who populate the media outlets are bubbling over. Theres 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 00:00:00 Quick Thoughts 2 by Doug MacKay of Broadleaf Partners

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

2014-08-15 00:00:00 Small Cap Performance Suggests Another Leg Of Counter-Cyclical Leadership by Team of GaveKal Capital

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

2014-08-14 00:00:00 Winds of Change in Saudi Arabias 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 Authoritys announcement is a game-changer for the region.

2014-08-13 00:00:00 Theres No Place Like Home by William Smead of Smead Capital Management

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

2014-08-13 00:00:00 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 00:00:00 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 childs 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. Its 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.

2014-08-12 00:00:00 Global Macro Update and Outlook by Bill McQuaker (Article)

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

2014-08-12 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 A Strengthening Case for European Bonds by David Zahn of Franklin Templeton Investments

The pace of the eurozones 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 Europes economic recovery, but bring a highly favorable backdrop for European fixed income investments gene

2014-08-11 00:00:00 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.

2014-08-11 00:00:00 Low and Expanding Risk Premiums are the Root of Abrupt Market Losses by John Hussman of Hussman Funds

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

2014-08-09 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 Investor or Speculator? by Scott Minerd of Guggenheim Partners

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

2014-08-08 00:00:00 Finding Smart Beta in the Factor Zoo by Jason Hsu, Vitali Kalesnik of Research Affiliates

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

2014-08-08 00:00:00 Yellenization by Cliff Draughn of Excelsia Investment Advisors

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

2014-08-08 00:00:00 The Big Picture: Who’s Afraid of Shiller’s CAPE? by Erik Kobayashi-Solomon of YCharts, Inc.

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

2014-08-07 00:00:00 Banking on the Trends by Pamela Rosenau of HighTower Advisors

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

2014-08-07 00:00:00 Federal Reserve Tapering Part I: Emerging Market Currency Performance by Bradley Krom of WisdomTree

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

2014-08-07 00:00:00 With US Volatility on the Upswing, Take a Look at Asia by Russ Koesterich of BlackRock

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

2014-08-07 00:00:00 Detailing The European Correction by Team of GaveKal Capital

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

2014-08-07 00:00:00 A Mid-Year Crossroads for US Equities? by Don Taylor of Franklin Templeton Investments

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

2014-08-06 00:00:00 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 00:00:00 What Asset Class Rallied Last Week amid the Sell-Off? by Luciano Siracusano III of WisdomTree

Last Thursdays 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 00:00:00 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 00:00:00 Banco Espirito Santo: Opportunity for the ECB? by Ryan Davis, Brian Payne of Fortigent

Over the weekend, it was announced that Portugals 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 banks first-half loss of 3.58 billion.

2014-08-05 00:00:00 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 hikeand even a correctionwont be so bad.

2014-08-05 00:00:00 Numbness to Numbers by Matt Lloyd of Advisors Asset Management

Ive 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 00:00:00 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 00:00:00 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 00:00:00 Stock Market Valuations Suggest That This Bull Market Still Has Teeth by Team of LPL Financial

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

2014-08-04 00:00:00 US Stocks Make 31 Record Highs in 2014, But Investors Panic During 3% Selloff by David Edwards of Heron Financial

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

2014-08-04 00:00:00 A Hint of Advance Warning by John Hussman of Hussman Funds

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

2014-08-02 00:00:00 Index funds beat active 90% of the time. Really? by Robert Isbitts of Sungarden Investment Research

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

2014-08-01 00:00:00 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.

2014-07-31 00:00:00 Opportunities in Developed International Equities by Christopher Gannatti of WisdomTree

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

2014-07-31 00:00:00 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 reckoningwe 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 00:00:00 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 00:00:00 Expanding the Opportunity Set for Income Generation by Heather Rupp of AdvisorShares

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

2014-07-30 00:00:00 The Bank of Englands 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 economyparticularly relative to its Eurozone neighborshas 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 00:00:00 Fed's Janet Yellen To Continue Punishing Savers by Gary Halbert of Halbert Wealth Management

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

2014-07-30 00:00:00 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 00:00:00 Trains and Boats and Planes? by Jeffrey Saut of Raymond James

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

2014-07-29 00:00:00 Thomas White's 2014 Mid-Year Market Outlook by Thomas White (Article)

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

2014-07-29 00:00:00 Strengthening the Euros Governance Structure? by Andrew Bosomworth of PIMCO

?Todays relative tranquillity in eurozone financial markets owes largely to the ECBs willingness to hold the single currency together. However, history suggests the eurozones 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 00:00:00 Blowback: The Tragedy of Flight MH-17 by Bill O'Grady of Confluence Investment Management

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

2014-07-28 00:00:00 Desperately Seeking a Cheaper Kilowatt Hour by Frank Holmes of U.S. Global Investors

Lets 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.

2014-07-26 00:00:00 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 00:00:00 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 00:00:00 Consumption and Services Deliver Healthy Growth by Andy Rothman of Matthews Asia

Three interesting economic trends, each relevant to investors, are clear from Chinas first half macro data. First, economic growth has stabilized at a healthy pace despite a weak property sector. Second, driven by strong income growth, China remains the worlds best consumption story. Third, rebalancing continues, with consumption accounting for a larger share of GDP growth than investment, and with the services sector bigger than manufacturing and construction.

2014-07-25 00:00:00 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 00:00:00 The Hangover by Scott Minerd of Guggenheim Partners

The Feds not taking the punch bowl from the party, but investors should be wary of the hangover.

2014-07-25 00:00:00 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 00:00:00 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 00:00:00 More Volatility Ahead? by Russ Koesterich of BlackRock

Despite recent market swings, volatility is still very low by historic standards, suggesting that markets arent taking into account the prospect of bad news and that investors should prepare for more turbulence ahead.

2014-07-23 00:00:00 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 00:00:00 U.S. Stock Market on the “Edge of Tomorrow” by William Smead of Smead Capital Management

Recently we heard a market prognosticator declare that we could have a 30 percent decline in stock prices in the next 12 months. Presumably because investors fear starting over again, like many did at the market bottom in 2009, the talking head had ample emotion on which to make such a grandiose assertion. This fear of starting over reminded me of the recent Tom Cruise movie, "Edge of Tomorrow," where Tom Cruise plays a soldier forced to live the same day again and again in efforts to develop answers on how to defeat a force which would end the world. Hence, living on the "Edge

2014-07-23 00:00:00 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 00:00:00 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 00:00:00 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.

2014-07-22 00:00:00 Why Have We Been Focusing on Cyclical Growth? by Chris Clark and Chuck Royce (Article)

Chuck Royce and Co-Chief Investment Officer Chris Clark talk about our attraction to economically sensitive sectors and what we've been learning from our meetings with companies.

2014-07-22 00:00:00 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 00:00:00 2014 Another Ho Hum Year from Hedge Funds by Ryan Davis, Brian Payne of Fortigent

Through the first six months of the year, hedge funds have generated a positive, albeit somewhat modest return. According to data compiled by Hedge Fund Research, the Fund Weighted Composite of hedge funds in their universe had generated a 3.2% return, compared to the S&P 500s 7.1% gain. While not terrible on a standalone basis, many investors had greater hopes for the asset class following five straight calendar years of underperformance versus the broad equity markets.

2014-07-21 00:00:00 Optimism vs. Arithmetic by John Hussman of Hussman Funds

Current market conditions provide an ideal moment to highlight the distinction between investment and speculation.

2014-07-21 00:00:00 Mid-Year Review: Interest-Rate Sensitive Stocks May Correct With First Fed Rate Hike by Rick Golod of Invesco Blog

With the recent strength in the economy and decline in the unemployment rate, the probability that the Federal Reserve (Fed) increases rates in the first half of 2015 is rising, in my opinion. Given the volume of media noise about this, its understandable that many investors are still worried about the stock markets potential for correction.

2014-07-19 00:00:00 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 00:00:00 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 00:00:00 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

2014-07-18 00:00:00 Comparison of Rising Rates Strategies by Yung Lim of AdvisorShares

With the ultra low interest rate environment becoming more of a norm in many investors mind, complacency has driven portfolio managers to maintain the status quo and stick to traditional duration and asset allocation targets. Recent history of bond market behavior has also supported this view. On a forward looking basis, however, the important questions center around how risk/return profiles change under rising interest rate environments and what investors should consider in evaluating the risk of their current portfolio mix.

2014-07-18 00:00:00 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. Morgans (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 JPMs 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 00:00:00 Lack of Corporate Hubris Means Elongated Cycle by Richard Bernstein of Richard Bernstein Advisors

When we started Richard Bernstein Advisors roughly five years ago, we thought the US was entering one of the biggest bull markets of our careers. Today, we are likely in the midst of this long bull market. Despite the general consensus that a bear market is on the horizon and investors ongoing interest in protecting potential downside risk, we do not think the Fed, investors, or corporations are yet sowing the seeds for the next recession.

2014-07-18 00:00:00 Physics Envy by Matthew Page of Guinness Atkinson Asset Management

Economists have long sought to identify a deterministic "natural law" of markets in the same way that physicists have discovered natural laws such as gravity and electromagnetism. This is sometimes referred to as "physics envy". If economists could identify a deterministic natural law of markets then we would be able to make useful and accurate predictions. Sadly no such law exists. Human actions are not governed by simple predictable laws.

2014-07-18 00:00:00 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 00:00:00 Free Lunches and the Food Truck Revolution by Ben Inker of GMO

Over the past year or so, there has been a welcome change to the culinary landscape of the Boston financial district. After two decades of wandering to largely the same old haunts for lunch, I am now faced with a whole new set of inexpensive and tasty choices literally outside our door, changing daily as the food trucks perform their mysterious nightly dance.

2014-07-17 00:00:00 Trading Secrets: The Feds Maginot Line by Tad Rivelle of TCW Asset Management

It has been six years since the Fed zeroed out rates and still we wait for assisted growth to become real growth. Beginning with the recovery summer of 2010, the Fed has proclaimed that cheap money would rocket the economy to escape velocity, launching an organic, self-sustaining economic recovery. Instead, central bank policy has vaulted asset prices into the stratosphere even as wages wait their turn on the launch pad. Low rates have failed to deliver the goodies, but the Fed has its story and is sticking to it.

2014-07-17 00:00:00 Quick Thoughts by Doug MacKay of Broadleaf Partners

We made a final trip to Latvia to complete an adoption, had a graduation party for my high school senior, and attended orientation weekend at The Ohio State University. In between all that, we squeezed in no fewer than sixty baseball games for our three boys. I think I have a daughter too, but Im not entirely sure if she lives with us or her girlfriends. As much as I love summer ball, the season ends this weekend and Im hoping life will settle down to a more sustainable pace and not one reminiscent of a minor leaguer with four kids, a mortgage, and a full time business.

2014-07-16 00:00:00 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 00:00:00 U.S. Now Worlds Largest Producer of Oil & Gas by Gary Halbert of Halbert Wealth Management

Recent reports have confirmed that the US is now the worlds 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 00:00:00 Retirement Planning with Annual Available Spend by John Craig (Article)

Sound financial planning requires neither the determination of safe withdrawal rates nor the use of Monte Carlo simulations. Relying on the past to predict the future is unnecessary. Instead, one must focus on how much can be spent each year, given expected returns and inflation, and then consider how negative and worst-case scenarios would affect retirement planning. That is the basis for the annual available spend methodology I describe here.

2014-07-15 00:00:00 How To Make Better Hires by Beverly Flaxington (Article)

We just fired our fourth operations manager in six years. I find it tough to believe that filling a simple role like this can be so hard, but we've had no luck in keeping someone for the long haul. My partner thinks we need to hire an expensive recruiter. I don't agree. Can paying someone 30% of the salary plus bonus (the recruiter's fee) to identify the right person make a difference?

2014-07-15 00:00:00 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 dollars 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 00:00:00 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 00:00:00 Ockham's Razor and the Market Cycle by John Hussman of Hussman Funds

This time is different requires a lot of counterfactual assumptions. Ockhams razor would suggest a nice shave.

2014-07-14 00:00:00 Risk of European Counter-Cyclical Underperformance in 2H2014 by Team of GaveKal Capital

Last week, we noted the outperformance of European counter-cyclicals and the group's relationship to the German Bund (here). A quick look at sector performance in Europe so far this year shows the top three market leaders have indeed been the counter-cyclicals (with the exception of the Consumer Staples sector).

2014-07-14 00:00:00 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 00:00:00 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 00:00:00 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 investmentshigh 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 00:00:00 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 00:00:00 Dealing With Red-Hot Markets by Mark Ungewitter of Charter Trust Company

This summer the streets are sizzling… and so is the stock market. To the chagrin of value investors, US equities have not experienced a normal correction since May 2013. But what is “normal” and what is “hot”? This article discusses a behavioral measure of market extremity, the put/call ratio, and offers some basic advice for dealing with the current environment.

2014-07-09 00:00:00 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 00:00:00 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 00:00:00 Making a Market Call by Jeffrey Saut of Raymond James

In last Mondays strategy report I noted that the week before July 4th has an upward bias for the equity markets. On Tuesday I backed that up by writing, From 1950 to 2013 the market has delivered positive returns 72% of the time during the last two days of June and the first five days of July.

2014-07-08 00:00:00 GMO versus Blackrock: Divergent Views of Global Markets by Justin Kermond (Article)

GMO's Ben Inker says he wouldn't touch U.S. small-capitalization stocks "with a 10-foot pole" - and says he sees no asset class that is attractively priced. That isn't the way Blackrock, the world's largest asset manager, views things. Blackrock's Dennis Stattman likes Japanese equities and gold and isn't afraid of rising rates.

2014-07-08 00:00:00 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 00:00:00 Looking Closer at Morningstar Peer Groups for Fund Analysis by Gunjan Banati and Francis Gannon (Article)

Director of Risk Management Gunjan Banati sits down with Co-Chief Investment Officer Francis Gannon to discuss the results of her Morningstar peer group research whitepaper and suggests ways in which investors can compare funds within peer groups more effectively.

2014-07-08 00:00:00 Absolute Returns with Less Volatility: A Premise of Our Firm by Chris Clark and Chuck Royce (Article)

In stark contrast to last year's virtually correction-free bull market, 2014 has already seen two pullbacks large enough to give investors pause. Chuck Royce and Co-Chief Investment Officer Chris Clark discuss the current environment and how we as a firm have attempted to guard against the market's volatile behavior.

2014-07-08 00:00:00 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.

2014-07-07 00:00:00 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 00:00:00 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 todays date on them. Investors seem to have forgotten how that works.

2014-07-07 00:00:00 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 00:00:00 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 worlds largest countries, both in terms of economic stature and population. Were always listening for the proverbial shot heard around the world. As we approach Americas Independence Day, this belief rings especially true.

2014-07-05 00:00:00 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 Russells 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 dont see a reason yet to alter our year of validation call.

2014-07-03 00:00:00 Reality-Based Cost Of Living Index Tells The Real Reason Why So Many Americans Are Struggling by Steve Rumsey of Optimus Advisory Group

Ever wonder why rises in the Consumer Price Index ("CPI") seem low compared to your own personal experiences? Or why social security annual cost of living increases seem to get smaller and smaller? Or why inflation-adjusted pensions can't seem to keep up with general price increases? Or why the American worker gets such meager annual raises (if at all) that they seem to fall further behind year after year?

2014-07-03 00:00:00 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.

2014-07-01 00:00:00 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: Americas Strategic Drift, Chinese Maritime Expansion, The German Problem, and The Remaking of the Middle East.

2014-07-01 00:00:00 Fixed Income Markets Cruise - What's Next? by Chris Maxey, Brian Payne of Fortigent

For the better part of twelve months, fixed income markets have been in a rather benign state. After receiving a scare in early summer 2013 during the taper tantrum, volatility subsided, and normalcy returned to the world of fixed income. As money continues to pour into fixed income markets, there is growing concern that the investment opportunity is stretched and the time to rebalance is now.

2014-06-30 00:00:00 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 its still wise to be jumping into the market at this stage. Lisa Myers, executive vice president, Templeton Global Equity Group, thinks that a long-term investment horizon, supported by bottom-up analysis, can reveal hidden value.

2014-06-30 00:00:00 The Delusion of Perpetual Motion by John Hussman of Hussman Funds

The Federal Reserves promise to hold safe interest rates at zero for a very long period of time has not created a perpetual motion machine for stocks. No it has simply created an environment where investors have felt forced to speculate, to the point where stocks are now also priced to deliver zero total returns for a very long period of time. Put simply, we are already here. Investment decisions driven primarily by the question What other choice do I have? are likely to prove regrettable.

2014-06-28 00:00:00 Weekly Economic Commentary by Team of Northern Trust

The recovery which began in 2009 has been weak and uneven. Some have blamed scarring from the financial crisis: wounds to the balance sheets of households, banks, and governments are taking a long time to heal. Under this school of thought, returning to pre-crisis normalcy is simply a matter of time, with the mending promoted by accommodative monetary policy. If the strategy works, well eventually return to the 3% real growth that weve averaged over the past generation.

2014-06-28 00:00:00 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 00:00:00 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 00:00:00 Benefits of Optimizing Portfolio Capture Ratios by Don Schreiber, Jr., Craig French of WBI Investments

The world of investing has changed dramatically. Over the past decade, many investors have discovered that conventional passive growth stock approaches failed to meet their goals. Following a buy-and-hold approach, investors suffered losses of as much as 51% during the 2000 through 2013 period. We believe conventional portfolio theory regarding the benefits of diversification has been broadly misinterpreted to mean that market returns will bail you out, and so investors should not worry about short-term losses.

2014-06-26 00:00:00 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 00:00:00 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 00:00:00 The Signal and the Noise by Scott Minerd of Guggenheim Partners

U.S. Federal Reserve policymakers are dismissing as noise signs that inflation pressure is building, but perhaps they should be listening more closely.

2014-06-25 00:00:00 Approaching a Tipping Point by Mike Boyle of Advisors Asset Management

On Thursday, June 19, the S&P 500 made it 66th new high of this bull market and unfortunately, based on almost any metric available, one could argue that the U.S. equity markets are due for at least a mild correction or more.

2014-06-25 00:00:00 Truth or Consequences? by Jeffrey Saut of Raymond James

I am always trying to manage the risks inherent with investing (or trading), for as Benjamin Graham stated, The essence of investment management is the management of risks, not the management of returns. Well-managed portfolios start with this precept. And that, ladies and gentlemen, is why I often wait on an investment until its share price is at a point where if I am wrong, I will be wrong quickly, and the incidence of loss will be small and manageable.

2014-06-25 00:00:00 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. Thats 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 00:00:00 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 00:00:00 How Morningstar Category Flux Impacts Peer Group Analysis by Sponsored Content by The Royce Funds (Article)

Morningstar's mutual fund categories are among the most frequently cited for peer group performance and investment approach comparisons. Our study, however, has found that membership in a Morningstar category can evolve considerably over time.

2014-06-24 00:00:00 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 00:00:00 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 Japans 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 00:00:00 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 ISILs greatest weakness and the possibility of a broader sectarian confli

2014-06-24 00:00:00 Is The Fed Underestimating Inflation? by Robert Doll of Nuveen Asset Management

Following a week in which investors took pause and focused on the negatives, they reversed course last week and pushed equity prices higher. A number of factors seemed to contribute to the positive tone, not the least of which was an indication from the Federal Reserve (Fed) that there will be no near term change to its accommodative monetary policy.

2014-06-23 00:00:00 This Time is Different, Yet with the Same Ending by John Hussman of Hussman Funds

The Federal Reserves policy of quantitative easing has produced a historically prolonged period of speculative yield-seeking by investors starved for safe return. The problem with simply concluding that quantitative easing can do this forever is that even speculative assets have to compete with zero. When a safe zero return is above the medium or long-term return that one can estimate for a very risky asset, the rationale for continuing to hold the risky asset becomes purely dependent on expectations of immediate short-term price gains.

2014-06-21 00:00:00 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 00:00:00 Turkey Is the Big Winner Following the Crisis in Ukraine by Frank Holmes of U.S. Global Investors

Russias 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. Globals Director of Research John Derrick caught up with Gavin Graham of VoiceAmericas Emerging and Frontier Markets Investing program.

2014-06-20 00:00:00 Japan: Time to Give the Land of Falling Stocks Another Look? by Russ Koesterich of BlackRock

So far, 2014 has been the year of the falling stocks in Japan. But according to Russ, Japan still stands out as one of the few potential bargains in the developed world. He explains.

2014-06-20 00:00:00 A Contrarians View of Value: Pharmaceuticals by Kevin Holt of Invesco Blog

The pharmaceuticals industry is in the midst of a renaissance. Patent expiration concerns, pipeline disappointments and setbacks, and a highly uncertain regulatory backdrop have forced managements to rethink the way they have historically conducted business. In this environment, certain companies stand out to us as deep value opportunities businesses whose stock prices dont reflect our view of their long-term potential.

2014-06-18 00:00:00 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, well focus on the implications of a make-believe world comprised of ever-higher asset prices. Our caution: look out below!

2014-06-18 00:00:00 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 00:00:00 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.

2014-06-17 00:00:00 Long Term Parking by W. Ben Hunt of Salient Partners

Like the Soprano Family in 2002, the problem with the US economy in 2014 is not that there is too much private debt being created, but too little. The danger for US markets is not that there is some private debt bubble about to burst, but that markets have become disconnected from the natural cycle of debt and growth, a cycle which remains decidedly anemic.

2014-06-17 00:00:00 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 00:00:00 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 economys reliance on oil imports from the Middle East.

2014-06-17 00:00:00 Scaling Market Peaks by David Wismer of Flexible Plan Investments

In honor of Fathers Day this past Sunday, I wanted to reminisce on an activity I enjoyed with my father.

2014-06-17 00:00:00 Boko Haram by Kaisa Stucke and Bill O'Grady of Confluence Investment Management

On April 14, the Nigerian terrorist group Boko Haram kidnapped 276 girls from their school in the town of Chibok, Nigeria. Investor interest in African economies has been increasing over recent years, piquing an interest in the continents rising economic and demographic power, Nigeria. This week, we will take a look at the country of Nigeria, including its history and economy. We will then describe the evolution of the terrorist group Boko Haram and its strategic goals and leadership. We will conclude with items of importance when investing in Africa, in general, and Nigeria, specifical

2014-06-16 00:00:00 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 Cantors 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 00:00:00 Unconstrained Bond Investing in The New Neutral by Mohit Mittal, Saumil Parikh of PIMCO

At our recently concluded Secular Forum, PIMCO investment professionals from around the globe gathered in Newport Beach to discuss and debate the secular outlook for major world economies. With insight from guest speakers and new MBA/PhD hires, PIMCO coined the phrase The New Neutral to define its secular three- to five-year outlook for the world economies. In his most recent Investment Outlook, Bill Gross further elaborated on The New Neutral.

2014-06-16 00:00:00 Formula for Market Extremes by John Hussman of Hussman Funds

Market extremes generally share a common formula. One part reality is blended with one part misguided perception (typically extrapolating recent trends as if they are driven by some reliable and permanent mechanism), and often one part pure delusion (typically in the form of a colorful hallucination with elves, gnomes and dancing mushrooms all singing in harmony that reliable valuation measures no longer matter).

2014-06-14 00:00:00 The Good News In All The Bad Data by Adam Taggart of

We are at the rare moment in history, where probability is unusually high that a large move to the downside will happen in the financial markets in the relatively near future. This gives investors a degree of confidence in future price movement that they rarely enjoy. The importance of building dry powder and developing an actionable investment plan -- for before, during and after the coming price reset -- is of top priority:

2014-06-14 00:00:00 Stealthy, Silent…Sustainable? by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

US stocks should continue to move generally higher although activity may remain sluggish through the summer and the possibility of a correction is elevated as per both seasonal/election cycle tendencies and elevated optimistic sentiment. The U.S. economy should help support the market as signs are increasing that we may be entering the long-waited for self-sustaining expansion. The ECB's actions weren't game changing but are helpful and European equities look attractive, while we believe the worries over a Chinese slowdown are overblown.

2014-06-14 00:00:00 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 00:00:00 Is Opportunity Bubbling in Oil Pricing? by Vadim Zlotnikov of AllianceBernstein

Longer-dated oil futures contracts have been on the rise so far in 2014, and we think theres a good case to be made that theyve got further to go. The potential for an upside oil-price surprise may point to investment opportunity.

2014-06-13 00:00:00 Taking A “FUN” Look At Kimberly-Clark by Team of F.A.S.T. Graphs

Kimberly-Clark is a storied company and often a reasonable investment opportunity based on ordinary metrics. Frequently investors view these few basic metrics and come to an investment decision. With this article we would like to highlight additional fundamental data on this specific company that that might be useful.

2014-06-13 00:00:00 Trading the Last Third of a Move by Scott Minerd of Guggenheim Partners

When bull markets mature, investors fear a coming crisis and today there are plenty of candidates from Europe to China to Thailand. Still, some of the best profits may lie ahead.

2014-06-13 00:00:00 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 banks 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 00:00:00 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 00:00:00 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 eurozones 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 00:00:00 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. Wed like to provide our thoughts on the current market environment, our outlook, and as a result, how the Fund is positioned.

2014-06-13 00:00:00 A Contrarians View of Value: Energy by Kevin Holt of Invesco Blog

This is the second in a three-part series on sector opportunities as seen by a contrarian value investor Senior Portfolio Manager Kevin Holt. The previous post discussed financials.

2014-06-12 00:00:00 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 00:00:00 An Intriguing Six Point Three by Zach Pandl of Columbia Management

The latest jobs report may look pretty bland on the surface, but I can assure you that it will generate plenty of intrigue among close observers of the Fed. After falling sharply in April, the unemployment rate held at 6.3%, in contrast to expectations that it would partially reverse course.

2014-06-12 00:00:00 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 00:00:00 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 00:00:00 I'd Choose Emerging Markets, Wouldn't You? by Ryan Larson of Research Affiliates

Theres a lot of negativity about emerging market stocksso it makes sense for long-term, value-oriented investors to rebalance into the asset class. Heres why a systematically contrarian strategy like fundamentally weighted indexing might outperform.

2014-06-11 00:00:00 Disturbing Headlines, Strong Equity Markets: Why the Disconnect? by Russ Koesterich of BlackRock

Its hard not to see some disconnect between recent disturbing world news headlines and the markets 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 00:00:00 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 sectorsindicating a larger number of companies screening undervalued according to YCharts Value Score.

2014-06-10 00:00:00 Far Above Cayuga’s Waters by David Wismer of Flexible Plan Investments

Graduation season is in a bit of a hiatus, with most colleges now having completed their commencement ceremonies and high school commencements are in full swing.

2014-06-10 00:00:00 The Orphaned Bull Market by William Smead of Smead Capital Management

Howard Gold is an inquisitive writer for and we think has done us all a great favor in his latest column titled, Not even a bull market can interest people in stocks. He points out via the chart below thatdespite a huge rebound the last five years in US common stocksequity 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 00:00:00 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 00:00:00 Stocks' Correlation to Real Interest Rates was the Most Significant Factor Driving Returns Last Week by Team of GaveKal Capital

Real interest rates as measured by TIPS yields proved to be the most significant factor driving stock prices last week while other macro factors such as stocks' correlation to the Japanese yen and euro were also important. It is also noteworthy that the beta factor is making its way back to the top of the list after having been insignificant over the last one and three months. Below we show the top ten factors driving returns for each region.

2014-06-10 00:00:00 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 00:00:00 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 00:00:00 We Learn From History That We Do Not Learn From History by John P. Hussman of Hussman Funds

Market conditions presently match those that have repeatedly preceded either market crashes or extended losses approaching 50% or more. Such losses have not always occurred immediately, but they have typically been significant enough to wipe out years of prior market gains. Our present views are not built on the forecast that stocks must decline immediately, or that we wont go through some additional discomfort if the market pushes to a higher peak. Still, a century of history strongly warns that whatever transitory gains the market achieves from present levels will be wiped out in spad

2014-06-09 00:00:00 Why are bond yields and volatility so low? by Carl Tannenbaum and Asha Bangalore of Northern Trust

This years 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 doesnt return). A more vexing surprise, however, has been the steep decline in U.S. Treasury yields and the persistently low market volatility during the years first half.

2014-06-09 00:00:00 Jobs return to pre-recession peak by Ryan Davis and Brian Payne of Fortigent

Global equity markets cheered the European Central Banks (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 Europes peripheral countries with Italy (MSCI Italy) and Spain (MSCI Spain) gaining 3.4% and 2.6%, respectively.

2014-06-08 00:00:00 Can Central Planners Revive Chinas 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. Im going to turn it over to Worth and then follow up with a few final thoughts of my own.

2014-06-07 00:00:00 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

2014-06-06 00:00:00 Emerging Markets: PR is on the Upswing by Nick Niziolek of Calamos Investments

Since March, the tide has turned, and there has been a strong reversal in both news flows from and equity flows into EMs. Headlines have transitioned from "Currency Crisis" to "Modi Wins," and Russian equities have moved above the levels seen since before the Ukraine crisis began. Moreover, weve identified several near-term catalysts that could further support the equity breakout that is underway. Only in EM investing could a military coup be viewed as a potentially beneficial catalyst.

2014-06-06 00:00:00 A Contrarians View of Value: Financials by Kevin Holt of Invesco Blog

In the wake of the Great Recession, and significant regulatory changes, investors are concerned that large banks may not be able to generate the type of profits that they have in the past. We dont disagree with that assessment. However, we do disagree with the current equity valuations of the large banks we believe the market has priced in a too-pessimistic view of profitability.

2014-06-05 00:00:00 Q2 2014 Investment Letter by Sean Butson of DC Capital Management

The S&P 500 is now more than 5 years into the bull market that started on March 9, 2009 Historically, buying the S&P 500 at high valuations and low dividend yields has resulted in sub-par investment returns on average The S&P 500 is currently overvalued based on 7 different metrics, implying that future long-term returns are likely to be disappointing Overvaluation is not limited to the S&P 500, as a number of recent technology valuations are reminiscent of the late 1990s tech bubble We believe a bear market within the next few years is likely

2014-06-05 00:00:00 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 Ive failed to keep pace. I dont even own a cellphone. Still, it doesnt 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 1s and 0s, glued together to form a beating heart. Even so, Im sticking with live chirping as opposed to Angry Birds for now. Virtual reality seems just a tad UNreal to me.

2014-06-05 00:00:00 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.

2014-06-04 00:00:00 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 fathers market.

2014-06-03 00:00:00 The US Housing Market's Darkening Data by Brian Pretti of

Unlike past housing price cycles, the current environment is being driven not by natural household formation, but by a central bank-fueled investment cycle where institutional and foreign capital are the largest influence on the marginal price. This is unknown territory for homebuyers and certainly unsustainable at today's price levels. Brian Pretti shows how price mean reversion is inevitable; and urges homeowners (both residents and investors) to take steps not be as vulnerable as they were in 2008.

2014-06-03 00:00:00 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 00:00:00 Emerging Markets: What countries are now attractive? by (Article)

While many emerging market countries are facing headwinds, many developing markets, such as South Korea, China, Taiwan, Poland and Mexico, are posing robust opportunities. See why Tom White feels that throwing these babies out with the bathwater may not be a wise idea.

2014-06-02 00:00:00 Market Peaks are a Process by John Hussman of Hussman Funds

Market peaks are a process, not an event or an instant. Investors should be thinking very seriously about the extent of potential market losses over the completion of the present market cycle. It is the wrong question to ask where else am I going to put my money with short-term interest rates near zero? The problem with that question is that it carries the implicit assumption that the expected return on stocks is even positive or adequate given the prospective risks.

2014-06-02 00:00:00 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 00:00:00 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 00:00:00 Thai Coup: Business as Usual by Paul Chan, Jalil Rasheed of Invesco Blog

On May 22, Thailands military launched its 12th coup after a failed attempt to get the caretaker government and the opposition to resolve a seven-month political stalemate. While the military has seized temporary control, we believe the coup will have limited economic and investment impact.

2014-05-31 00:00:00 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 00:00:00 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 Chinas 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 protg 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 00:00:00 Small Cap Weakness Is Not A Market Death Knell by Doug Ramsey of Leuthold Weeden Capital Management

The celebration of the DJIAs new record high on April 30th was notable for its absence. Small Cap stocks, in fact, commemorated the event by falling to an 11-month relative strength low, and many technicians point to this divergence as evidence that a dangerous period of distribution is now underway. Were not so sure.

2014-05-30 00:00:00 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 00:00:00 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 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Reflections from a fortnight abroad;Last weekend's European elections will make cooperation more difficult

2014-05-28 00:00:00 Where’s Molly? by Jerry Wagner of Flexible Plan Investments

It was after midnight. While the sky was clear and the stars were sparkling, there was no moonlight as the moon was new. I walked briskly down the street, but after a long day of sales presentations and meetings, inside I was tired and dragging. On each side of me dark houses loomed. There were no street lights.

2014-05-28 00:00:00 Value Offers a Cushion: Why Last Years Winners Are Now Losers and Vice Versa by Russ of BlackRock

A trend in markets this year has been the poor performance of last years stock market winners, and the resilience of some of last years losers. Russ takes a look at whats behind this trend, specifically with retailers and emerging markets.

2014-05-27 00:00:00 Defensive Position Rotation: Achieving Financial Goals with Less Volatility by Dale W. Van Metre, Ph.D., CRPC®, APMASM (Article)

Defensive position rotation is an alternative to MPT. It is a portfolio-construction philosophy that adapts to changing market conditions and can increase risk-adjusted returns over time.

2014-05-27 00:00:00 Economy Begins to Accelerate While Equities Push Higher by Robert Doll of Nuveen Asset Management

U.S. equities finished higher last week as the S&P 500 advanced 1.3%, snapping a two-week losing streak and ending at a new record high. Markets seemed to lack conviction, but the path of least resistance appeared skewed to the upside as momentum for the economic recovery was positive.

2014-05-27 00:00:00 Emerging Markets: The Fragile Five and Beyond by (Article)

Indonesia, India, Turkey, South Africa, Brazil, as well as Thailand and Russia are the focus topics, as the challenges facing some emerging market countries are discussed against the overall perspective of the natural ebb and flows of the global market.

2014-05-25 00:00:00 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 00:00:00 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 00:00:00 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 Bloombergs consensus of 48.3.

2014-05-24 00:00:00 “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 00:00:00 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 135.1, down from the previous week's 136.3. The WLI annualized growth indicator (WLIg) rose to 5.0 from 4.9. That's the highest since June of last year.

2014-05-22 00:00:00 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 00:00:00 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 00:00:00 The Percent of Individual Stocks Making New Highs Continues to Contract by Team of GaveKal Capital

It's no secret that we've been concerned about the lack of new highs in individual stocks since at least the beginning of the year. Indeed, we've made note of the divergence between headline stock indices and the number of stocks making new highs here, here, here and here and probably in a few other posts as well.

2014-05-21 00:00:00 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 were told. Yet in the last several months, yields on 10-year Treasury notes and 30-year Treasury bonds have fallen rather significantly. Whats up with that?

2014-05-21 00:00:00 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.

2014-05-20 00:00:00 Gundlach: The Bad News for Housing by Robert Huebscher (Article)

Residential housing is in trouble, according to Jeffrey Gundlach. It's not heading for a repeat of the 2008 collapse, but it's equally unlikely that housing growth will provide the needed push for a strong U.S. economic recovery.

2014-05-20 00:00:00 Emerging Markets Update with Rennie McConnochie by (Article)

Despite recent challenges, the Emerging Markets sector poses a potentially attractive opportunity to long-term CEF investors, says Rennie McConnochie of Aberdeen.

2014-05-20 00:00:00 Irans Iraq by Bill O'Grady of Confluence Investment Management

The last American combat troops left Iraq in December 2011, marking the end of direct U.S. involvement in a nearly eight-year war. In this report, we will discuss recent developments in Iraq, including elections that were held on April 30. We will analyze Irans growing influence in the region and how the Iraq War furthered that influence. As part of this analysis, we will examine how Irans growing power and Americas apparent withdrawal is changing the behavior of other nations in the region. As always, we will conclude with market ramifications.

2014-05-20 00:00:00 Which Resource Areas Show Signs of Strength? by Frank Holmes of U.S. Global Investors

Global synchronized growth, as measured by the Global Purchasing Managers Index (PMI), remained stable or positive for the past 12 months until Japan reversed the momentum in April with a precipitous drop in its PMI. China is contributing modest growth but, fortunately, the U.S. and Europe are rebounding. This lack of consistent global momentum has created a short-term, volatile, hot and cold, stop-and-go sentiment. Global real GDP growth peaked in 2010 at 5.2 percent then slowed for the next three years to 3 percent.

2014-05-20 00:00:00 Computer Tutor?! by Jeffrey Saut of Raymond James

My friend Jerry Goodman died recently. His nom de plume was Adam Smith, obviously taken from the legendary economist Adam Smith (1723 1790). In addition to the book The Money Game, Jerry wrote numerous other books. In his later years, he worked at another friends establishment, that being Craig Drill, eponymous captain of the insightful Drill Capital Management.

2014-05-20 00:00:00 Emerging Markets Masterclass by (Article)

In this two-part video, 45-year industry veteran Tom White offers an in-depth review of emerging markets, including those that are currently facing challenges, but also the developing markets that are now presenting attractive opportunities.

2014-05-19 00:00:00 America The Youthful? Yes, On a Relative Basis by Russ Koesterich of BlackRock

While the United States is aging at a much slower pace than much of the rest of the world, the U.S. population will almost certainly continue to age. As Russ explains, this has three implications for the U.S. economy.

2014-05-19 00:00:00 The Journeys of Sisyphus by John Hussman of Hussman Funds

Investors have again pushed the stone to the top of the mountain.

2014-05-19 00:00:00 Three Questions Investors Need to Ask About Alternatives by Donna Chapman Wilson of Invesco Blog

The world of alternative investments includes a range of hedge fund-like strategies that typically consist of publicly traded equity and fixed income investments, but are unconventionally managed using a variety of exposures (long, short, market neutral) and financial instruments. These strategies have gained acceptance in recent years, and have become more widely available to individual investors through vehicles such as mutual funds. However, questions still remain about the best ways to incorporate them into an asset allocation strategy.

2014-05-17 00:00:00 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

2014-05-16 00:00:00 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 Feds 2% goal), then the Feds 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 00:00:00 Old Turkey by Jeffrey Saut of Raymond James

I revisit the Old Turkey story this morning, which I first read in the classic book Reminiscences of a Stock Operator, about the escapades of Jesse the boy plunger Livermore, because of the reference I made to him last week that drew so many questions. The wisdom of Old Turkey is as good today as it was when first published in 1923. The problem with most investors today is that they have never experienced the 1923 1929, the 1946 1964, or the 1982 2000 secular bull markets.

2014-05-16 00:00:00 Breaking Good by Scott Minerd of Guggenheim Partners

After breaking out of their recent trading range, yields on U.S. Treasuries could now be heading significantly lower and the U.S. economy could enjoy fast economic growth in the coming months.

2014-05-16 00:00:00 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 00:00:00 Can Smart Beta Think? by David Kleinberg of Universal Orbit

The concept of Smart Beta introduced by the principles of Fundamental Indexation (Arnott, Hsu and More 2005) provides for a state of Nirvana, greater performance with less risk. Given the historic price action of equities in the Value and Small Cap asset classes, the extent to which Fundamental indexes are skewed to risk and outperformance relative to its market capitalization weighted CAPM Beta master is mathematical. Similarly, the degree of associated short-term volatility is predictable.

2014-05-16 00:00:00 India: Counting Efficiently by Rahul Gupta of Matthews Asia

Indias massive election processinvolving more than 1 million polling stations and 800 million eligible votershas just drawn to a close. Despite being a poor country with annual GDP per capita on the lower end of Asian economies (at US$1,527), it is home to some of the worlds best IT and generic pharmaceutical companies. Electronic voting is one illustration of the dichotomies that are present in the rapidly changing nation. This weeks Asia Weekly explores the hurdles and the technology used to manage the worlds biggest democratic election exercise.

2014-05-15 00:00:00 Five Things Your Credit Manager Shouldnt 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 nave 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 00:00:00 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 todays 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.

2014-05-14 00:00:00 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 00:00:00 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 weeks 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. Whats truly significant when it comes to your investments?

2014-05-13 00:00:00 Thomas White's 2014 Market Outlook by (Article)

Assessing the prospects in 2014, 45-year industry veteran Thomas S. White offers his view of the challenges and opportunities ahead in the global economic markets.

2014-05-13 00:00:00 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 00:00:00 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 00:00:00 El Nio by Kaisa Stucke, Bill OGrady 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 Nio. The soft-commodity markets (grains, sugar, coffee, cocoa and other annual crops) seem to have priced in about a 20% likelihood of an El Nio occurrence this year, while last week the Climate Prediction Center issued a 65% probability for this summer.

2014-05-13 00:00:00 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 00:00:00 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 00:00:00 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 systems 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 00:00:00 Setting the Record Straight by John Hussman of Hussman Funds

If you think the market is not going to lose a large fraction of its value over the next few years, a century of history thinks youre wrong.

2014-05-12 00:00:00 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 were 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 thats been under the radar of many investors.

2014-05-10 00:00:00 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.

2014-05-09 00:00:00 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 todays 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 00:00:00 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 00:00:00 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 00:00:00 Europe, Not Too Hot, Not Too Cold Sweet Spot for Credit Investors by Eve Tournier of PIMCO

European economies are improving, yet the regions 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.

2014-05-07 00:00:00 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 00:00:00 Financial Genius isa 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 00:00:00 First Quarter Letter by Team of Grey Owl Capital Management

The broad equity market displayed a fair amount of volatility during the quarter, but essentially went sideways. This pattern continued through April; 2013s losers became 2014s winners and vice versa. In the broadest sense, bonds narrowly beat stocks on the heels of 2013s thorough drubbing.

2014-05-07 00:00:00 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 00:00:00 Expert Intuition and Investing by John Alberg and Michael Seckler (Article)

There are great investors who are unmoved by unproductive biases and instead exhibit deep expertise, as evidenced by long track records of superior performance. Where does expertise come from? How does an understanding of expertise inform how one should evaluate investment opportunities?

2014-05-06 00:00:00 Weekly Market Update by Team of Castleton Partners

US Treasury yields declined across the entire maturity spectrum last week, as renewed geopolitical risk more than outweighed a strong employment report. With inflation remaining well below the Fed?s target rate of 2%, long dated Treasury yields continued to decline at a faster rate than shorter dated yields, further flattening the yield curve.

2014-05-06 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 Big Pharma's Bitter Pills by Peter Nielsen of Saturna Capital

Price Pressure Becoming Pharmaceutical Industry's Bitter Pill as Breakthrough Drug Therapies Break the Bank

2014-05-05 00:00:00 Cahm Viss Me Eef You Vahn to Live by John Hussman of Hussman Funds

Taking the broad stock market as a whole, and considering all stocks ? not simply the largest of the large caps ? investors are now making the broadest and most leveraged bet on overvalued equities in U.S. history. Conditions somehow do not feel so dangerous because profit margins are cyclically extreme, but I suspect that this only means that investors will be surprised by the depth of the markets losses, as they were in 2000-2002 and 2007-2009. The lessons on this really are freely available all the way back to the South Sea Bubble.

2014-05-04 00:00:00 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 00:00:00 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 00:00:00 Throw Deep?! by Jeffrey Saut of Raymond James

Back in the late 1980s a newspaperman visiting the Raiders football training camp in California had just returned from the Jack London Historic Monument. He read a sample of London?s prose to the Raiders? colorful quarterback, Ken ?The Snake? Stabler:

2014-05-02 00:00:00 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 00:00:00 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.

2014-05-01 00:00:00 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 00:00:00 A Tepid Cyclical Lift by Tom West of Columbia Management

The S&P 500 Index should grow earnings by about 7% this year, while consensus estimates for the U.S. economy are for 2.5% real growth. One reason for the gap between the two numbers is that the constituent companies of the broad market have a more cyclical tilt than the economy itself, and could be expected to expand faster in a recovery. Fair enough. But are the cyclical drivers like investment and discretionary spending on track to deliver that cyclical boost to earnings? The answer is probably yes, but only if expectations are tempered.

2014-05-01 00:00:00 Small-Cap Valuations: Way Too High or Room to Run? by Adam Peck of Heartland Advisors

Small-cap stocks have been on a tear for several quarters. Conventional wisdom in this situation would be to shift assets away from small-caps, and reallocate them to other asset classes. The concept sounds reasonable, but is it well-grounded in fact? What is the state of small-cap valuations today? These questions merit a closer look.

2014-05-01 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 First Quarter Commentary by John Prichard of Knightsbridge Asset Management

In investing, certain things are viewed as worth paying a lot for, if you "know" you're going to get them. Akin to Socrates, we speculate that it may be wiser to admit that you do not know the future and therefore are unwilling to pay for these positive outcomes, than to falsely believe you can know the future with certainty and are justified in paying a high price...

2014-04-29 00:00:00 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?

2014-04-28 00:00:00 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 00:00:00 IMF Meetings: China and Ukraine Concern Emerging Market Investors by Banu Asik Elizondo of Invesco Blog

Three recurring themes pertaining to emerging markets became apparent during the recent spring International Monetary Fund (IMF) meetings in Washington, D.C.

2014-04-28 00:00:00 Resisting the Sirens by Mark Oelschlager of Oak Associates

There has been an interesting shift in the market over the past several weeks, as high-growth stocks (an area to which we have limited exposure, given our preference for more fairly-valued growth opportunities) have suffered a significant correction after being the darlings of the market since June of last year.

2014-04-28 00:00:00 Equities Awaiting Stronger Growth Before Next Move by Robert Doll of Nuveen Asset Management

U.S. equities finished modestly lower last week with the S&P 500 nearly unchanged. Most of the damage occurred on Friday when escalating tensions surrounding Ukraine weighed on sentiment. Positive dynamics included an improvement in first quarter earnings metrics, a notable pickup in M&A activity and deal speculation. A broader macro narrative reflects better traction for the recovery and gradual policy normalization. With momentum plays under renewed scrutiny, several internet, software and biotech companies sold off despite an expected cushion from solid first quarter results.

2014-04-28 00:00:00 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.

2014-04-26 00:00:00 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 00:00:00 ?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 00:00:00 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 00:00:00 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 134.9, up from last week?s 133.6 (revised from 133.5). The WLI annualized growth indicator (WLIg) rose to 3.3 from last week?s 3.0. Here are some notable developments since ECRI?s public recession call on September 30, 2011: 1) The S&P 500 is up 61.0% at yesterday?s close, although off its record close on April 2nd. 2) the unemployment rate has dropped to 6.7%, and 3) Q4 GDP was revised upward to 2.6%.

2014-04-23 00:00:00 The Real Obamacare Nightmare is Just Beginning by Gary Halbert of Halbert Wealth Management

Last Thursday, the Obama administration said that a total of eight million Americans had signed up for Obamacare. In a hastily called press event, President Obama spiked the football, took a victory lap around the White House and declared the healthcare law a smashing success ? although they still haven?t told us how many enrollees have actually paid a premium, or how many were simply replacing their policies that were canceled due to Obamacare.

2014-04-23 00:00:00 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 00:00:00 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.

2014-04-22 00:00:00 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.

2014-04-21 00:00:00 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 00:00:00 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 00:00:00 The Federal Reserve's Two-Legged Stool by John Hussman of Hussman Funds

In viewing the Fed?s mandate as a tradeoff only between inflation and unemployment, Chair Yellen seems to overlook the feature of economic dynamics that has been most punishing for the U.S. economy over the past decade. That feature is repeated malinvestment, yield-seeking speculation, and ultimately financial instability, largely enabled by the Federal Reserve?s own actions.

2014-04-21 00:00:00 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 00:00:00 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

After examining much of the latest scholarly research, and conducting in house research on the link between household wealth and spending, we found the wealth effect to be much weaker than the FOMC presumes. In fact, it is difficult to document any consistent impact with most of the research pointing to a spending increase of only one cent per one dollar rise in wealth at best. Some studies even indicate that the wealth effect is only an interesting theory and cannot be observed in practice.

2014-04-17 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 Reserves "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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 Every Portfolio Has Faith by William Smead of Smead Capital Management

At Smead Capital Management, we believe that everyone who invests has faith in someone or something. We also believe that who and what you put your faith into is greatly influenced by the time period involved. As we look out into the rest of 2014 and beyond, we would like to consider the kind of faith required by the largest pools of investment dollars in the US. This includes looking at who they are trusting, what they are trusting in, and what time frames they are operating under.

2014-04-15 00:00:00 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 countrys 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 US Stock Markets Surprisingly Steady - First Quarter Review by David Edwards of Heron Financial

Surprisingly steady! How can we say that? Because compared to the price swings of the last six years, the recent 3.9% decline in US Stocks (from a record set April 2) barely registers relative to the powerful uptrend since mid 2011.

2014-04-14 00:00:00 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 00:00:00 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 00:00:00 Margins, Multiples, and the Iron Law of Valuation by John Hussman of Hussman Funds

The Iron Law of Valuation is that every security is a claim on an expected stream of future cash flows, and given that expected stream of future cash flows, the current price of the security moves opposite to the expected future return on that security. A corollary to the Iron Law of Valuation is that one can only reliably use a ?price/X? multiple to value stocks if ?X? is a sufficient statistic for the very long-term stream of cash flows that stocks are likely to deliver into the hands of investors for decades to come.

2014-04-12 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The Federal Reserves 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 00:00:00 Proper Perspective by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

Getting caught up in the weeds is easy in this 24-hour news cycle where everyone is looking to make a splash, but successful investing requires staying above the fray. The U.S. economy is growing and equities appear fairly valued, Europe has issues to deal with but has come a long way from the depths, Japan may be working against itself but improvement has been seen, and the threat of a Chinese debacle at this point seems minimal.

2014-04-12 00:00:00 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 00:00:00 Equities Appear Attractive in Years Leading Up to Fed Tightening by Kevin Mahn of Hennion & Walsh

Fed Chair Janet Yellen said her expectation for the first increase in the Federal Funds Rate would come approximately six months following the end of the asset purchase program.

2014-04-11 00:00:00 Bubble Bursting? Only for Biotech & Internet Stocks by Russ Koesterich of iShares Blog

The recent sluggish performance of U.S. stocks is leading some market watchers to question whether we?re witnessing the bursting of an equity bubble. Russ explains that while U.S. equities overall are not in a bubble, valuations have started to become an issue, particularly for certain segments of the market.

2014-04-11 00:00:00 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 134.9, up from last week's 133.6 (revised from 133.5). The WLI annualized growth indicator (WLIg) rose to 3.3 from last week's 3.0.

2014-04-10 00:00:00 The Russians Are Coming by Jeffrey Saut of Raymond James

The Russians Are Coming, The Russians Are Coming is a 1966 American comedy film directed by Norman Jewison and based on Nathaniel Benchley?s book The Off-Islanders. The movie tells the Cold War story of the comedic chaos that happens when a Soviet submarine runs aground closely offshore a small island town near New England and the crew is forced to come ashore. Last Friday, however, rumors that the ?Russians are coming? swirled down the canyons of Wall Street, causing a late Friday Fade that left the S&P 500 (SPX/1865.09) down an eye-popping 24 points.

2014-04-10 00:00:00 Wanting Work Makes a Difference by Scott Minerd of Guggenheim Partners

As the Fed considers the precise timing of tightening monetary policy, a key consideration will be how many Americans want to get back to work. Monetary doves found an olive twig amid the floodwaters last week when the labor force participation rate increased slightly.

2014-04-10 00:00:00 "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 00:00:00 Investment Success Often Depends On Choosing the Right Investment Horizon by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, reminds investors of the dangers of extrapolation, terming it "one of the worst biases of investing." Complicating matters is Sicart's contention that "possibly the second worst investment bias is our need to believe a good story."

2014-04-09 00:00:00 Whatever It Takes 2.0? by Axel Merk of Merk Investments

If you are convincingly irrational the market may expect extreme measures and front run your bluff. It?s in this spirit that ECB President Draghi is threatening the market with another bazooka. We discuss implications for investors.

2014-04-09 00:00:00 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 00:00:00 Reasons To Remain Optimistic In 2014 by Sandra Martin of Martin Investment Management

The equity markets have taken a respite in 2014 after returning more than 32% in 2013. Margin expansion has been the largest influence on profit growth and should continue with present low inflation expectations. We believe that mergers and share buybacks may continue to increase shareholder value for large capitalization stocks.

2014-04-09 00:00:00 Master Limited Partnerships by Greg Reid and the Salient MLP Team of Salient Partners

Master Limited Partnerships (?MLPs?) are a unique asset class in the investment landscape. Historically, MLPs have been primarily owned by high net worth and retail investors due in part to the tax complexities. However, MLPs have started gaining traction over the past few years among institutional investors as they seek alternative sources of yield in our present low-yield world.

2014-04-09 00:00:00 Dare to be Great II by Howard Marks of Oaktree Capital

In September 2006, I wrote a memo entitled Dare to Be Great, with suggestions on how institutional investors might approach the goal of achieving superior investment results. Ive had some additional thoughts on the matter since then, meaning its time to return to it. Since fewer people were reading my memos in those days, Im going to start off repeating a bit of its content and go on from there.

2014-04-08 00:00:00 How to Avoid the Coming Crunch on Advisor Compensation by Dan Richards (Article)

Here are the two key ways that life will look very different for financial advisors in 10 years: a change in the structure of advisor practices and downward pressure on compensation.

2014-04-08 00:00:00 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 00:00:00 Our Five Year Forecast Beginning February 20, 2014 by Kendall Anderson of Anderson Griggs

Late last month I took on the role of judge, not in a court of law, but in a university competition, the CFA Institute Research Challenge Southern Classic. My task was to choose one of fourteen teams from South Carolina, Georgia and Alabama universities to go on to represent their region in the Americas Regional bracket of the CFA Institute Research Challenge. The challenge gives university students from around the globe an opportunity to gain real-world experience as they assume the role of a research analyst

2014-04-07 00:00:00 The Other Side of the Mountain by John Hussman of Hussman Funds

Having witnessed the glorious advancing portion of the uncompleted market cycle since 2009, investors might, perhaps, want to consider how this cycle might end. After long diagonal advances to overvalued speculative peaks, the other side of the mountain is typically not a permanently high plateau.

2014-04-07 00:00:00 The Doubt of Appearances by Dimitri Balatsos of Tesseract Partners

Households have made significant progress mending their balance sheet in the post-crisis period. Assets have been boosted on the back of higher home values and stock prices, while liabilities have been trimmed, mostly mortgages, thanks in large part to widespread home foreclosures.

2014-04-04 00:00:00 Putin and the Naughty Chair by Robert Stimpson of Oak Associates

On the surface, the first quarter of 2014 appears to be decent. The S&P 500 eked out a gain of 1.8% in the first three months of the year, despite heightened geopolitical tensions, a changing of the guard at the Federal Reserve, and frigid weather hampering economic growth. Accounts managed by Oak Associates have topped the S&P 500 year-to-date. That being said, signs of internal weakness are present in US equities.

2014-04-04 00:00:00 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 00:00:00 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.6, unchanged last week (which was revised from 133.5). The WLI annualized growth indicator (WLIg) rose to 3.0 from last week?s 2.9. Here are some notable developments since ECRI?s public recession call on September 30, 2011: 1) The S&P 500 is up 61.9% at yesterday?s close, fractionally off its record close on April 2nd. 2) the unemployment rate has dropped to 6.7%, and 3) Q4 GDP was revised upward to 2.6%.

2014-04-04 00:00:00 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 00:00:00 Avoiding Complacency by Heather Rupp of AdvisorShares

Active managers dont have a mandate to hold any certain securities, thus they can pick and choose as to what they feel offers the best return level for a given risk profile. The high yield bond market still offers plenty of what we view as very attractive opportunities in credits that we see as solid companies at yields about 300 basis points or more above the yield level on this bond.

2014-04-04 00:00:00 A New Machine: Is a Capital Spending Cycle Imminent? by Liz Ann Sonders of Charles Schwab

Activist investors have helped highlight companies bias toward stock buybacks/dividends vs. longer-term capital investments. Preconditions for a pickup in capital spending appear to be lining up. The technology and industrial sectors are likely the biggest beneficiaries.

2014-04-03 00:00:00 Chuck Royce on 1Q14: Despite Minor Pullback, Market Still Shows Strength by Chuck Royce of The Royce Funds

Despite the market's subdued first-quarter performance, annualized total returns for the major indexes remained in double-digit territory for the one-, three-, and five-year periods ended March 31, 2014. President, Director of Investments, and Portfolio Manager Chuck Royce offers his thoughts on the market's behavior during the first quarter and why he thinks investors can expect a major correction within the next twelve months.

2014-04-03 00:00:00 Q2 fixed income outlook ? Hitting for the cycle by Gene Tannuzzo of Columbia Management

By the middle of this year, the economic expansion in the U.S. will officially turn five years old. By comparison, the average of all business cycle expansions tracked by the National Bureau of Economic Research dating back to the mid-1800s is about three and half years. But like many five year olds, this cycle hardly seems mature. In particular, we have taken notice of three key elements of the business cycle that have distinct implications for bond investing today.

2014-04-03 00:00:00 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 00:00:00 Yellen?s Labor Market Dashboard by Scott Brown of Raymond James

In her years as a Federal Reserve official (governor, district bank president, and vice chair), Janet Yellen expressed a greater concern about job conditions than her peers. As expected, that emphasis has continued into her tenure as Fed chair.

2014-04-03 00:00:00 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.

2014-04-02 00:00:00 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 00:00:00 A Year of Reversals Amid a Search for Value by Russ Koesterich of iShares Blog

Stocks have traded in a relatively narrow range for the past two weeks, but beneath the surface, some of last year?s winners are shaping up to be this year?s losers. Russ explains the shifts he?s seeing and what they mean for investors.

2014-04-01 00:00:00 Evolving Infrastructure Investing - Broader, Deeper, Global by (Article)

Infrastructure offers an attractive combination of potential inflation hedging, income generation and long-term capital growth. In this video, Northern Trust's Shundrawn Thomas, Global Head of ETFs, outlines the distinctive approach that FlexShares' NFRA ETF takes by starting from the bottom up in identifying companies with infrastructure ownership across traditional and new infrastructure sectors.

2014-04-01 00:00:00 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 00:00:00 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 00:00:00 Equities Sag as Macro Backdrop Quiets Down by Robert Doll of Nuveen Asset Management

Last week U.S. equities struggled for direction as the S&P 500 declined 0.4%. Small cap stocks were hit harder, and macro and geopolitical issues seemed to be on the back burner. Overall, emerging markets rallied, value and contrarian plays outperformed and Japanese stocks bounced.

2014-04-01 00:00:00 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 00:00:00 Why Key Long-Term Trends Matter to Stock Pickers by Virginie Maisonneuve of PIMCO

The combination of demographic changes, climate change and the ongoing shift in emerging markets over the next 30 years will have long-term consequences for supply and demand factors and business sustainability for many companies. The impact of these long-term trends must not be underestimated. It is crucial for equity investors to not only be attuned to them, but also to understand how companies are adapting to the shifts in the global corporate operating environment. ?

2014-04-01 00:00:00 Fundamental Tango by Scotty George of Alexander Capital

The economy and financial markets are forever sending out mixed, parallel, or confusing messages. Inflation or stagflation? Buy now, or take your profits? Proceed slowly, or go home? At this moment, the signals are hardly synchronized.

2014-03-31 00:00:00 European Rally Has Legs by Nick Kalivas of Invesco Blog

Since hitting a low on June 1, 2012, the MSCI Europe Index has rallied 64.73%. In our view, there?s room for European equity markets to advance further, supported by strong fundamentals, positive flows and a steady uptrend from the June 2012 low.

2014-03-31 00:00:00 Shifting Policy at the Fed: Good for Long-Term Growth, Bad for Cyclical Bubbles by John Hussman of Hussman Funds

The Fed is wisely and palpably moving away from the idea that more QE is automatically better for the economy, and has started to correctly question the effectiveness of QE, as well as its potential to worsen economic risks rather than remove them.

2014-03-28 00:00:00 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 00:00:00 ?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 00:00:00 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.5, up from 133.0 last week (a revision from 132.9). The WLI annualized growth indicator (WLIg) at one decimal place rose to 2.9 from last week's 2.3.

2014-03-28 00:00:00 Lacking Conviction by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Investors seem to lack conviction, what will potentially push them to one side or the other.

2014-03-28 00:00:00 Hotchkis & Wiley: Frequently Asked Questions by Team of Hotchkis & Wiley

In Hotchkis & Wiley's 2014 1Q Newsletter, Ray Kennedy, Mark Hudoff, and the rest of Hotchkis & Wiley's high yield team examines the high yield market and attempt to answer the questions it they get asked most frequently, or ones they believe to be particularly relevant in the current market environment.

2014-03-28 00:00:00 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 00:00:00 What Has Been Fueling the Rise of Gold in 2014? by Kevin Mahn of Hennion & Walsh

Gold declined approximately 28% for the year of 2013, its worst annual performance since 1981 according toUSA Today. At that time, the downturn ended Golds own bull market run of 12 consecutive years as investors jumped on the back of this current bull market by piling into stock funds in 2013 and largely exiting bond funds.

2014-03-27 00:00:00 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 00:00:00 The Media?s Incomplete Coverage of the Active/Passive Debate by Roger Nusbaum of AdvisorShares

Barron?s revisited the debate between active and passive portfolio management with it?s conclusion revealed in the article?s title; Go Active for Bonds, but Index Your Stocks. This is an important issue for market participants to explore and the revisit every so often.

2014-03-26 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 Our Most Read Article from Last Week: Gundlach - Rates Will Remain Low in 2014 by Robert Huebscher (Article)

Slowing economic growth, low inflation and a lack of motivated sellers will keep interest rates depressed, at least for the rest of this year, according to Jeffrey Gundlach. But investors should prepare for an eventual rise in rates, he said, because he is skeptical of the Federal Reserve’s ability to successfully exit from QE.

2014-03-25 00:00:00 Low Rates for a Long Time & Preparing for the Eventual Rise by Sponsored Content from OppenheimerFunds (Article)

Interest rates, in a slow growth and only modest inflation world, are likely to remain low for the foreseeable future. Still, the fears of rising rates persist. We believe these fears may be overstated, and this Q&A covers our views on generating income in a low rate world and protecting portfolios in the event of an unexpected rise in rates.

2014-03-25 00:00:00 Stocks: "Aging Bull" Could Still Pack a Punch by Milton Ezrati of Lord Abbett

Bearish market observers fret that earnings growth will falter and that current equity valuations are unsustainable. Their worries are misplaced.

2014-03-24 00:00:00 Market Outlook by Scotty George of Alexander Capital

For those of us that have been around for awhile, we have come to recognize that each Federal Reserve Board Chairman has had a unique way of speaking and a unique personality. Remember the "Volcker Rules"? How about "Greenspan-speak"? Well, last week we had a chance to take a measure of the person, and her language, who currently presides over monetary policy, Fed Chair Janet Yellen. And while a snapshot is not necessarily a truism of the embodiment of the whole, there were a few takeaways, not the least of which was the market's (once again) overreaction to what was being said.

2014-03-24 00:00:00 Four Reasons Businesses Could Begin Spending Again Soon by Russ Koesterich of iShares Blog

Despite record profits and exceptionally high corporate cash levels, capital spending by U.S. businesses remains subdued. Russ explains why this could change this year as well as what a pickup in capital spending would mean for investors.

2014-03-24 00:00:00 Fed-Induced Speculation Does Not Create Wealth by John Hussman of Hussman Funds

Fed-induced speculation does not create wealth. It only changes the profile of returns over time. It redistributes wealth away from investors who are enticed to buy at rich valuations and hold the bag, and redistributes wealth toward the handful of investors both fortunate and wise enough to sell at rich valuations and wait for better opportunities.

2014-03-24 00:00:00 Is the Fed Supporting the Equity Markets? by Tom Riegert of Hatteras Funds

The Federal Reserve?s unprecedented increase in reserves purchased through its quantitative easing programs has paralleled the performance of the equity markets to a startling degree. Has the Fed?s program been supporting the equity markets? We examine the strong correlation between the Fed?s balance sheet and the performance of the S&P 500 since end-2008, and ponder the effects the Fed?s long-awaited tapering will have on market volatility. Investors facing the uncertainty ahead could well find alternative investments a welcome addition to their portfolio.

2014-03-22 00:00:00 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 00:00:00 We See Opportunities in Commodities by Bob Greer, Ronit M. Walny, Klaus Thuerbach of PIMCO

Fundamentals and some recent data suggest that challenging trends for commodity investing may be coming to an end. Commodities may increase their role as an important and unique source of returns, diversification and protection from unanticipated inflation. As commodity sectors are each dominated by unique factors, we see even more opportunities to add value through active management.

2014-03-22 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 Emerging Markets: Four Reasons for Caution, Not Abstinence by Russ Koesterich of iShares Blog

In the space of three years, emerging markets have gone from a key strategic asset class to persona non grata. But while Russ shares investors? concerns on the near-term outlook for EM assets, he doesn?t agree that EM stocks should be completely shunned.

2014-03-21 00:00:00 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 00:00:00 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.9, down from 133.6 last week (a revision from 133.8). The WLI annualized growth indicator (WLIg) at one decimal place rose to 2.3 from last week's 2.1 (a revision from 2.3).

2014-03-19 00:00:00 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.

2014-03-18 00:00:00 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 Reserves ability to successfully exit from QE.

2014-03-18 00:00:00 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 00:00:00 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 00:00:00 Restoring the "Virtuous Cycle" of Economic Growth by John Hussman of Hussman Funds

The so-called ?dual mandate? of the Federal Reserve does not ask the Fed to manage short-run or even cyclical fluctuations in the economy. Instead ? whether one believes that the goals of that mandate are achievable or not ? it asks the Fed to ?maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.?

2014-03-17 00:00:00 Market Outlook by Scotty George of Alexander Capital

What's another 200 point down day (Dow) when you're having fun? The violent and excessive overreactions of the week prior were added to by Asia and Europe on Thursday/Friday past, just for good measure.

2014-03-17 00:00:00 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 00:00:00 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 00:00:00 Recalibrating the Retirement Clock: Should 75 Be the New 65? by Nick Kaiser of Saturna Capital

Retirement sounds pretty sweet, doesn't it? Exotic holidays. Finally writing that novel. Never having to rely on an alarm clock to wake up early. Being your own boss. Retirement goals are as varied as people themselves.

2014-03-17 00:00:00 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 00:00:00 Newsletter by Harold Evensky of Evensky & Katz

Harold Evensky's quarterly letter to his readers.

2014-03-15 00:00:00 Follow the Money to Asia's Tech Hub by Frank Holmes of U.S. Global Investors

Chinas 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, its 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 00:00:00 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.

2014-03-14 00:00:00 Deflationary Pressure and Tight Credit Facilities Weigh on Eurozone Recovery? by Andrew Balls of PIMCO

The eurozone is enjoying a broadly balanced resurgence in economic output and domestic demand. Deflation risk is real, and the European Central Bank?s asymmetric attitude toward its inflation target could contribute to a decline in inflation expectations. In the current climate, we continue to favour select regional credit exposure and look to generate attractive returns across European credit and asset-backed securities.

2014-03-14 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Global trade negotiations have stalled; This is a delicate time for Chinese finance; Where will Europes growth come from?

2014-03-13 00:00:00 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 00:00:00 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%.

2014-03-12 00:00:00 The Bull Market Turns Five by Doug Ramsey of Leuthold Weeden Capital Management

The post-2009 stock market upswing now qualifies as only the sixth cyclical bull market since 1900 to last five years or more. Life expectancies at such an advanced age are limited; only three of the previous five-year-old bulls lived to see a sixth birthday. Many media and market pundits seem to believe a rising age somehow leads to rising life expectancy. The consensus opinion that a new secular bull market has begun is much more confident today than at the bull?s first, second, third or fourth birthdays.

2014-03-12 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 U.S. Economy: The Mild Kingdom by Milton Ezrati of Lord Abbett

"Animal spirits" remain caged as business spending lags. What will it take to unleash them?

2014-03-11 00:00:00 Thirsty for Income? Try Dividend Growth by Frank Caruso of AllianceBernstein

Chasing yield has become a challenging mission for investors in recent years. As yields collapsed in fixed income, investors flocked to bond-like substitutes such as high dividend-yielding stocks. Now that these stocks have become a bit pricey, we think companies with strong dividend-growth potential offer a better way to source equity income.

2014-03-10 00:00:00 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 00:00:00 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 00:00:00 Happy Birthday, Bull Market by Russ Koesterich of BlackRock

March 10, 2014, could be considered the fifth birthday of the current equity bull market. Investors looked beyond mixed economic data and turmoil in the Ukraine to push stocks to further gains last week. Stocks still remain a more attractive option relative to traditional bonds and cash.

2014-03-10 00:00:00 It Is Informed Optimism To Wait For The Rain by John Hussman of Hussman Funds

Regardless of very short-term market direction, it is urgent for investors to understand where the equity markets are positioned in the context of the full market cycle.

2014-03-10 00:00:00 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 00:00:00 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 00:00:00 Do Spring Showers Bring Stock Gains? Don?t Count on it by Russ Koesterich of iShares Blog

Some investors looking for a catalyst to move stocks higher in coming months have pointed to the calendar, expecting that markets tend to do better in the spring. Russ gives three reasons why he cautions investors against putting too much faith in the influence of the seasons.

2014-03-07 00:00:00 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 00:00:00 Volatility Returns as Crisis in Ukraine Creates Uncertainty by Kevin Mahn of Hennion & Walsh

Most investors have most likely never even heard of Ukraine prior to the last two weeks. Now the future of Ukraine and potential repercussions on other countries in the region appear to be at the forefront of investor minds across the globe. Overall, Ukraine is a relatively small country in Eastern Europe with a population of about 46 million people that borders the likes of Russia, Belarus, Poland, Slovakia, Hungary, Romania and Moldova.

2014-03-06 00:00:00 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 00:00:00 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 00:00:00 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.

2014-03-05 00:00:00 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 00:00:00 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.

2014-03-04 00:00:00 Our Thoughts on Warren Buffett's Thoughts by William Smead of Smead Capital Management

The Berkshire Hathaway 2013 Annual Shareholder Letter came out on Saturday the 1st of March, 2014. Mr. Buffett was in rare form and we'd like to share some of his key thoughts which speak directly to what we do at Smead Capital Management.

2014-03-03 00:00:00 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 00:00:00 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 00:00:00 The Long Road Back by Scott Brown of Raymond James

Five years ago, the economy appeared to be in freefall. Monetary policy and fiscal stimulus helped to halt the downslide, but a full economic recovery was still expected to take years. This wasn?t your father?s recession that we went through; it was your grandfather?s depression. We have made progress, but we still has very long way to go.

2014-03-03 00:00:00 I?m Confused by Jeffrey Saut of Raymond James

In one of last week?s Morning Tacks I used this email from one of our financial advisors: ?Hey Jeff, about a month ago I emailed you asking if the ~1750 low on the S&P 500 was a good buying opportunity. You emailed back saying ? ?No, not yet? ? and ever since in your remarks you claim not yet. So now that we are well above that level, clients are asking why didn?t we get in ... what?s your recommendation??

2014-03-03 00:00:00 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 00:00:00 Equities Rise Despite Mixed Fundamental News by Bob Doll of Nuveen Asset Management

U.S. equities increased 1.3% last week as the S&P surpassed the key 1850 level and pushed to new record highs. One favorable dynamic of the rally was the upside leadership from retail stocks, as earnings were largely ahead of expectations. Fed Chair Janet Yellen suggested concern about softerthan-expected spending in a number of recent data releases, but the bar for adjusting the tapering process has not been lowered.

2014-03-03 00:00:00 Bond Aid: Positive Outlook for High Yield in 2014 by Darren Hughes, Scott Roberts of Invesco Blog

While most fixed income asset classes tied to interest rates saw negative returns during 2013, high yield bonds returned more than 8%, according to the JP Morgan Domestic High Yield Index. While we anticipate slightly lower returns in 2014, it looks to be a positive year for high yield markets.

2014-02-28 00:00:00 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 00:00:00 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 00:00:00 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 00:00:00 Bounce Back by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

US stocks have bounced and the markets 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 00:00:00 Gut Check: The Outlook on Fixed Income by Colin Lundgren of Columbia Management

With nearly two months of the year behind us, we thought now would be a good time to see how the fixed-income market is faring in 2014 and assess our outlook. We asked our investment team five questions to help capture our view on the market today.

2014-02-27 00:00:00 Corporate Credit Charting its Own Course by Eric Takaha of Franklin Templeton

At the start of the year, equity investors were fretting about possible emerging-market contagion, while bond investors were fretting about fallout from US Federal Reserve tapering. Meanwhile, the corporate credit market seemed to be charting its own course. Eric Takaha, director of the Corporate & High Yield Group and senior vice president, Franklin Templeton Fixed Income Group, takes a look at the corporate credit/high-yield market and explains why he currently sees supportive fundamentals.

2014-02-26 00:00:00 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 00:00:00 Gaps, Not Growth by Zach Pandl of Columbia Management

Monetary policy is primarily about "gaps" not growth: the Fed is trying to reduce spare capacity in the economy, not bring about a rapid expansion per se.

2014-02-26 00:00:00 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.

2014-02-25 00:00:00 Why I Sold by Jim Whiddon (Article)

In 2012 at age 52, after almost three decades in financial services, I decided to sell my Dallas -based independent registered investment advisor (RIA), JWA Financial. Why would I trade in the peak earning years of my career after I successfully positioned my firm to take it to the next level? In a series of articles, I’ll explore a multi-faceted topic weighing on the minds of many advisors - succession planning.

2014-02-25 00:00:00 Understanding the CAPE Debate: The History of 24 or More by Keith C. Goddard, CFA, Channing S. Smith, CFA, and Monty L. Butts (Article)

At its recent level near 25, the cyclically adjusted price-to-earnings ratio (CAPE) of the U.S. stock market suggests that stocks are very richly priced or that there is something wrong with the CAPE. Debate about these two explanations intensifies each time the ratio ticks higher. This article offers objective data to help readers decide for themselves.

2014-02-25 00:00:00 Time to Worry About Europe Again? by Chris Maxey, Ryan Davis of Fortigent

The European sovereign debt crisis has all but faded from investors? minds since ECB President Mario Draghi?s famous pronouncement on July 26, 2012 that he would do ?whatever it takes? to save the monetary union. Since that time, equity markets in Europe rallied sharply as accumulated risk aversion fell away.

2014-02-25 00:00:00 U.S. Economy: Curb Your Enthusiasm by Milton Ezrati of Lord Abbett

Amid optimistic projections of an acceleration in growth, the factors that have restrained GDP remain firmly in place.

2014-02-25 00:00:00 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 00:00:00 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%.

2014-02-24 00:00:00 Market Outlook by Scotty George of Alexander Capital

In the four and one-half year market recovery since the "Great Recession" there has been a remarkable transformation in the construction and analysis of corporate earnings. This is something that gives me pause for concern.

2014-02-24 00:00:00 Corporate Credit Charting its Own Course by Eric Takaha of Franklin Templeton

At the start of the year, equity investors were fretting about possible emerging-market contagion, while bond investors were fretting about fallout from US Federal Reserve tapering. Meanwhile, the corporate credit market seemed to be charting its own course. Eric Takaha, director of the Corporate & High Yield Group and senior vice president, Franklin Templeton Fixed Income Group, takes a look at the corporate credit/high-yield market and explains why he currently sees supportive fundamentals.

2014-02-24 00:00:00 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 00:00:00 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 00:00:00 Secular Bull Or Bear? by Doug Ramsey of Leuthold Weeden Capital Management

At the January highs, the S&P 500 had gained almost 175% in just 58 months, while secondary stocks and equal-weighted market measures have gained considerably more. If it?s already over (and we don?t think it is), this cyclical bull will go down as a memorable one. But is this move the first leg of a new secular bull market? ? We think the next cyclical bear market will drive the market to levels low enough that debate will rage over the true date of the secular bear market low: was it 2009, or 201X?

2014-02-24 00:00:00 Leading Indicators Offer a Window into Europe?s Recovery by Matthew Dennis of Invesco Blog

We?re seeing signs that the recovery in Europe is progressing. I wanted to take a moment to highlight some of the positives, uncertainties and opportunities that we believe investors should consider about the region.

2014-02-23 00:00:00 The Worst Ten-Letter Word by John Mauldin of Mauldin Economics

A new word is achieving ubiquity. The word has always been with us and at times has been a beacon to attract the friends of liberty and opportunity. But now I?m afraid it is beginning to be used as a justification for social and economic policies that will limit the expansion of both liberty and opportunity. The word? Inequality.

2014-02-22 00:00:00 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 00:00:00 This Common Misconception about China May Be Hurting Your Portfolio by Frank Holmes of U.S. Global Investors

China is making headlines again, only this time the news attempts to dispel a common myth about the Asian giant.

2014-02-21 00:00:00 Is the U.S. Economy Under the Weather? by Carl Tannenbaum of Northern Trust

Is the U.S. economy under the weather?; Japan is faltering a bit as year two of Abenomics begins; Bitcoin has generated a lot of attention, some of it unwanted

2014-02-20 00:00:00 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 00:00:00 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 individuals goals, objectives and risk tolerances. With that said, I believe it logically follows that in order to create a successful portfolio, the individual investor must first conduct some serious introspection to be sure that they truly "know thyself." Therefore, I believe the first, and perhaps most critical step, towards designing a successful equity portfolio is to ask your-self, and honestly answer several important questions.

2014-02-20 00:00:00 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 th