More on Related Themes
2015-11-25 00:00:00 Weighing the Week Ahead: What are the Best Year-End Investments? by Jeff Miller of NewArc Investments, Inc.
There is a lot of data to be reported in only three full trading days, but it does not rate to signal important economic changes. I expect plenty of participants to take the week off and even more will leave after the first hour on Wednesday. The punditry still has pages and air time to fill, despite the lack of fresh news.
2015-11-23 00:00:00 The Three Towers by Christian Thwaites of Brouwer & Janachowski
All three major central banks held policy meetings in October and recently published minutes. Here’s what they said.
2015-11-17 00:00:00 Gundlach – The Psychology of a Rate Hike by Robert Huebscher (Article)
The consensus is building for a Fed rate hike in December. But how the market will react is far less certain. According to Jeffrey Gundlach, that will depend on the context in which the Fed takes action.
2015-11-17 00:00:00 Market Focus: Finding Value in the MLP Misfortune by Investment Strategy Group of Neuberger Berman
The brutal selloff in the energy sector has produced a good deal of collateral damage, even among businesses that seemingly have little to do with the price of crude oil.
2015-11-12 00:00:00 Will Rate Increases Impact Investing in Dividend-Paying Companies? by (Article)
Portfolio Manager Jay Kaplan talks about why he believes a rise in interest rates won't have as high an impact on those strategies that seek long-term total return as opposed to those that mostly focus on high yield.
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?
2015-10-30 00:00:00 Apples and Oranges: A Random Portfolio Case Study by Adam Butler, Michael Philbrick, Rodrigo Gordillo of ReSolve Asset Management
This article was motivated by a provocative discussion with a thoughtful RIA. Let’s call him Harry. Harry expressed some disappointment with the performance of Global Tactical Asset Allocation (GTAA) strategies over the past few years relative to some popular tactical U.S. sector rotation funds.
2015-10-30 00:00:00 REITs and Rates: Dancing to Different Beats by Eric Franco, Ajit Ketkar of AllianceBernstein
Recent volatility in equity markets has added appeal to US REITs, with their generous dividends and cash flows. But could a US rate hike upset the picture? Probably not as much as you think.
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 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 Preparing for Stormy Markets by Tracy Fielder of Invesco Blog
It’s the heart of hurricane season, and here on the coast, every tropical weather system brings with it a flood of speculation: Will this turn into a major storm? When will it make landfall? Where will it hit?
2015-10-21 00:00:00 Yieldcos or Yieldnos? by Roger Nusbaum of AdvisorShares
A little over a year ago we looked at a new income vehicle called a yieldco which was highlighted in Barron’s. Over the weekend Barron’s provided an update on the still small niche and basically they’ve had a rough go in the last three or four months although I should note that for the six months prior they were white hot. Along the way GlobalX listed a fund that tracks the space and although not charted below it has also gone down considerably in the last few months.
2015-10-20 00:00:00 Chart Toppers: Diversification, China and the Fed’s Dual Mandate by Liz Ann Sonders of Charles Schwab
From time to time, instead of diving into a singular topic in these reports, I am going to do a“Chart Toppers” review, where I share some of the more interesting and relevant charts I’ve put together or seen on a variety of topics.
2015-10-16 00:00:00 Retirees: The Risks, Dangers and Advantages of Reaching For Yield: Part 2B by Chuck Carnevale of F.A.S.T. Graphs
There is an undeniable fact that differentiates investing when in retirement versus investing while you are still working. When you are employed, you are working for your money. However, once a person truly enters their retirement years, the situation reverses itself. When in retirement you begin the stage in your life where your money must work for you. In my opinion, this changes the investing dynamic considerably.
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.
2015-10-12 00:00:00 Bob Zenouzi Discusses Delaware’s Dividend Income Fund by Robert Huebscher (Article)
In this interview, Bob Zenouzi, manager of the Delaware Dividend Income Fund (DDIAX), discusses how he strives to provide investors with a yield that is competitive with fixed income, while achieving a premium yield to equities with better downside protection.
2015-10-08 00:00:00 China and the Fed by Dr. Richard Michaud of New Frontier Advisors
The third quarter of 2015 was marked by significant losses in capital values and an increase in volatility. The S&P 500 lost 7.55% in the quarter and 6.71% year-to-date; NASDAQ dropped 7.77% quarterly and 2.26% for the year; Dow Jones Industrial average declined 8.15% in the quarter and 8.68% year-to-date. The VIX fear measure closed the quarter at 24.50, an increase of 42.6% since the beginning of the quarter and 37.7% since the beginning of the year.
2015-10-02 00:00:00 Are Buybacks an Oasis or a Mirage? by Chris Brightman, Vitali Kalesnik, Mark Clements of Research Affiliates
Over the last few years, buybacks have swept through the U.S. equity market like a Saharan sirocco. But have stockholders benefited? A tally of the new issuance during the period answers the question.
2015-10-02 00:00:00 Designing a Dividend Growth Portfolio for a Specific Retirement Yield Objective: Part 1 by Chuck Carnevale of F.A.S.T. Graphs
Managing an investment portfolio is a very personal matter. Consequently, the most important consideration is to design a portfolio that meets your own unique goals, objectives and risk tolerances. Everyone is different, and consequently, every investment portfolio can and should be appropriately different as well. Stated more straightforwardly, I do not believe in cookie-cutter or one-size-fits-all approaches to portfolio design.
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 Designing the Common Stock Portion of Your Retirement Portfolio: Concentrated or Diversified Part 3 by Chuck Carnevale of F.A.S.T. Graphs
Designing the common stock portion of your retirement portfolio is very challenging. For starters, there is no absolutely perfect or even best way to design a stock portfolio. However, there are many effective strategies that have produced successful long-term results. The key to success is to find and implement the strategy that best fits your own unique goals, objectives, needs, and most importantly - risk tolerances.
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.
2015-09-10 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.
2015-09-02 00:00:00 A Case for Active Investing in Low Volatility Equity by David Corris, Jason Hans, Jay Kaufman, Ernesto Ramos of BMO Global Asset Management
Low volatility equity strategies have become an increasingly popular solution in the investor toolbox. This is largely the result of an increasing awareness of the low volatility anomaly, a growing use of lower volatility seeking smart-beta strategies, and a greater appreciation of the damage caused by large portfolio drawdowns.
2015-08-31 00:00:00 Are Investors Overexposed to Non-Guaranteed RMBS? by Keith Jurow (Article)
Let’s look at some recent data that shows the extent of the delinquencies in non-guaranteed mortgages with a focus on the most exposed large metro areas. We’ll then examine the implications for advisors whose clients own funds, ETFs or REITs that own that debt.
2015-08-25 00:00:00 Get Real! Offsetting Inflation Risks in Your Glide Path by Daniel Loewy, Christopher Nikolich of AllianceBernstein
We’ve had a remarkable 30-year run of declining interest rates and modest inflation. As a result, few target-date glide paths were constructed with any inflation protection. We think it’s time to act.
2015-08-24 00:00:00 The Use and Abuse of Dividend Strategies by Robert J. Martorana (Article)
I will look at the underlying justification for a dividend-based strategy and at how the most popular funds have performed recently. I will then discuss the criteria that investors should use to construct the best dividend-oriented portfolio, and which mutual fund best meets those criteria.
2015-08-19 00:00:00 Are MLPs Still a Good Investment? by Alan Cole, Chris Engelman of Cedar Hill Associates
Despite continuing to deliver solid earnings and dividend distribution growth, the prices of many Master Limited Partnerships (MLPs) have declined by about 20% over the past year. Here, President Alan Cole and Managing Director Chris Engelman discuss why MLP prices have been under pressure, as well as the steps Cedar Hill takes when investments like these fall out of favor to determine whether to hold, exit or add to the investment.
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.
2015-08-13 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.
2015-08-12 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.
2015-08-10 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 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?
2015-08-06 00:00:00 Fed’s Higher Rates May Have a Muted Impact on REITs by Boris Pialloux of Master Income ETF
The impact on Real Estate Investment Trusts (REITs) could be muted as strong fundamentals and the use of fixed rate debt may continue to bolster free cash flows and dividends. Additionally, Cap rates (a key denominator to estimate underlying net asset values) may be less sensitive to short-term rate increases than long-term rate trends.
2015-07-30 00:00:00 A Midyear Look at Global Real Estate by Ivy Global Real Estate Team of Ivy Investment Management Company
There are many drivers of recent short-term price changes for publicly traded real estate companies in the current market environment. These include changes in the market’s outlook for economic growth, for interest rate movements, for central bank actions and even the issues surrounding Greece and Ukraine.
2015-07-29 00:00:00 Embrace, Don’t Fear, Illiquid Asset ETFs by Richard Bernstein of Richards Bernstein Advisors
Our research suggests that while many are fearful of the unknown, investors should embrace, not fear, illiquid asset ETFs.
2015-07-28 00:00:00 Weighing the Week Ahead: What is the Message of the Market? by Jeffrey Miller of NewArc Investments, Inc.
As I have noted for the last two weeks, this earnings season carries a special significance. It provides an alternative to the official data on the economy.
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.
2015-07-20 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
2015-07-14 00:00:00 Fees vs. Commissions: Why An Old Debate Is New Again by Bob Veres (Article)
Robo-advisors are forcing us to revisit the ancient fees versus commissions debate. New data and new circumstances have changed the debate in powerful ways.
2015-07-14 00:00:00 Knowing When to Sell Real Estate Investments by Keith Jurow (Article)
For nearly five years, I have offered compelling analysis that the so-called real estate recovery is an illusion. While this evidence has been largely ignored by Wall Street and the pundits, those who heeded my advice in an earlier article to sell certain REITs (VNO, GGP, SPG) and the ETF IYR fared well.
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.
2015-07-07 00:00:00 A Greek Play by Dr. Richard Michaud of New Frontier Advisors
The second quarter of 2015 experienced heightened bond market volatility in anticipation of the Fed’s first rate increase as well as international equity volatility involving Greek debt and Chinese equities. Despite whipsawed volatility, the major domestic and international equity indices ended close to where they started.
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.
2015-06-29 00:00:00 Weighing the Week Ahead: Greek Ripples or Economic Fireworks? by Jeffrey Miller of NewArc Investments, Inc.
The elements are in place for a week of fireworks. Barring some unlikely last-minute news, we are expecting a Greek bank holiday and capital controls on Monday, followed by one of the biggest weeks of the year for economic data, all crammed into a holiday shortened week. Will it be…
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.
2015-06-19 00:00:00 4 Healthcare REITs For A Healthier Retirement Portfolio by Chuck Carnevale of F.A.S.T. Graphs
To be considered prudent investors we must recognize and accept the undeniable reality that all true investing is done in future time. Consequently, the key to long-term investment success is to forecast the future as accurately as we possibly can. Of course, we must simultaneously recognize and accept that forecasting the future can only be accomplished within a reasonable degree of accuracy. Forecasting the future, and investing for that matter, can never be a game of perfect. Nevertheless, our investing success will ultimately be achieved based on how good our forecasts turn out to be.
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.
2015-06-02 00:00:00 Why the Housing Market Collapse is Set to Resume by Keith Jurow (Article)
New home sales are still at one-third the level of the bubble years. Existing home sales have never come close to peak-year levels. Let me explain why the housing collapse is ready to resume in earnest.
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.
2015-05-19 00:00:00 Gundlach - Beware of CNBC Pundits by Robert Huebscher (Article)
On issues as central as the effect of quantitative easing or Fed tightening on interest rates, Jeffrey Gundlach says you shouldn't trust the pundits on CNBC.
2015-05-19 00:00:00 Rates and Returns, 2013 versus 2015 by Heather Rupp of AdvisorShares
Given the recent move in Treasury yields, with the 10-year U.S. Treasury yield up over 30bps in just the last 30 days, the concern about interest rate risk is heating up again.
2015-05-13 00:00:00 When is “in” not the opposite of “out”? by Jerry Wagner of Flexible Plan Investments
When you ask someone what is the opposite of “in,” they automatically say “out.” But when you ask them “What’s the opposite of income?”, some might immediately start to say “outcome”, but that’s never their final guess.
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.
2015-05-08 00:00:00 MLPs: Providing Growth and Income Potential Despite Low Oil Prices by Joe Rodriguez, Darin Turner, Walt Stabell III of Invesco Blog
With oil prices down around approximately 50% since June 2014, investors are increasingly wary of the entire energy sector. Even given this environment, master limited partnerships (MLPs) represent an energy investment that we believe may weather short-term volatility in energy prices, benefit from the US’s long-term infrastructure needs, and provide attractive income potential for investors.
2015-05-08 00:00:00 Where Dividend Investors are Seeking Income by Russ Koesterich of BlackRock
Guest contributor Tony DeSpirito explains how investing in dividend-paying stocks isn’t what it used to be – and how to make dividend investing work in your portfolio.
2015-05-05 00:00:00 Should Investors Unload Their Mortgage REITs? by Keith Jurow (Article)
Lured by irresistible double-digit yields in 2012 and early 2013, investors dived into mortgage REITs with abandon. Having discussed the serious risks of equity REITs in my previous article, now is a good time to examine whether mortgage REITs pose similar risks for the unwary.
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.
2015-04-29 00:00:00 MLPs Waxing not Waning by David Chiaro of Eagle Global Advisors
We view the recent sell off of MLPs/midstream energy infrastructure companies as a buying opportunity. Our long-term evaluation of the total return prospects of these companies is very good, especially on a risk adjusted basis.
2015-04-16 00:00:00 REIT CEFs by (Article)
Closed-end funds focusing on Real Estate Investment Trusts (REITS) offer potentially attractive exposure to a huge asset class, says Mark McAllister of ClearBridge Investments.
2015-04-16 00:00:00 Implications of a Fed Funds Rate Hike on Asian Securities by Gerald Hwang of Matthews Asia
The prospect of a higher U.S. federal funds rate can make U.S. cash and short duration Treasurys look more attractive vs. risky assets. The effect of higher U.S. short rates is felt across all asset classes, regardless of the pattern of cash flows or currency of denomination. We can expect some market reallocation out of risky assets and into risk-free assets. But why does the market seem to fear a wholesale shift out of risky assets and why might that view be unjustified? In the second installment of a two-part series, Matthews Asia Portfolio Manager Gerald Hwang, CFA, examines the ways in wh
2015-04-14 00:00:00 The Case for Not Currency Hedging Foreign Equity Investments: A U.S. Investor’s Perspective by Catherine LeGraw of GMO
In a new white paper, Catherine LeGraw of GMO's asset allocation team explains GMO's approach to currency hedging, a topic which has gained relevance as the U.S. dollar has strengthened.
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.
2015-04-07 00:00:00 Behind Arnott's Strategy for PIMCO's All Asset Funds by John Coumarianos (Article)
If you thought a stretch of subpar performance would shake a fund manager's confidence, you'd be wrong in the case of Rob Arnott. Through Research Affiliates, his Newport Beach firm most famous for its fundamental indexing strategies, Arnott manages PIMCO's All Asset funds. These include PIMCO All Asset (PAAIX) and PIMCO All Asset All Authority (PAUIX).
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 How should we think about risk today in an investment world that has largely rewarded it? by Francis Gannon of The Royce Funds
The removal of "patience" from the Federal Reserve's vernacular might be as close as investors get to a more concrete timeframe for an increase in interest rates, at least for now.
2015-03-31 00:00:00 The Not-So-Hidden Risks in REITs by Keith Jurow (Article)
With most investors confident that equity REITs are a sure bet to continue their upward momentum, now is an excellent time to carefully examine whether this ebullience is justified. Let's see what the conditions in the real-estate market mean for valuations in several of the largest REITs, as well as two of the ETFs that hold them - IYR and VNQ.
2015-03-30 00:00:00 EM Sector Featuring Ryan Paylor by (Article)
Ryan Paylor of Thomas J. Herzfeld Advisors shares a CEF market view, commenting on discounts, interest rates and sectors.
2015-03-27 00:00:00 REITs in a Rising Interest-Rate Environment by Wilson Magee of Franklin Templeton Investments
Wilson Magee, director of global real estate and infrastructure securities, Franklin Real Asset Advisors®, believes this environment is causing many investors to search for alternative investments that can add an income-oriented asset to their portfolio as well as gain exposure to global economic growth potential. He outlines why he thinks it’s an opportune time for many investors to consider diversifying into global real estate through an actively managed investment vehicle.
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.
2015-03-17 00:00:00 Gundlach - Don't Bet on Higher Rates by Robert Huebscher (Article)
Even if the Fed raises short-term interest rates as many expect it to, longer-term bond investors won't face a decline in prices, according to Jeffrey Gundlach. Indeed, the market may have already priced in the effect of rate hikes, he said.
2015-03-16 00:00:00 An Overview of Nontraditional Assets by Michael Winchell of Larkin Point Investment Advisors LLC
We review a collection of nontraditional assets and acknowledge the growing attempts to offer more liquid instruments with market exposure to these assets. However, it is our opinion that these assets will ultimately represent a small portion of the overall allocation to alternative investments.
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.
2015-03-09 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.
2015-03-07 00:00:00 After a Dismal 2014 Business Development Companies Poised to Outperform in the New Year by Grier Eliasek of Prospect Capital Corp.
After a dismal performance in 2014 business development companies are enjoying a reversal of fortune, floating to the top of the leaderboard in the New Year. They’re outpacing their interest-rate sensitive brethren, utilities and REITs, bonds and the S&P 500 alike amid widespread anticipation that the Federal Reserve will lift interest rates mid year. As the stock market grows ever more expensive and profit margins are reaching record highs, the catalysts that should drive outperformance in BDCs grow stronger and stronger considering that most BDCs are trading at single-digit multiples.
2015-03-06 00:00:00 Taking a Multi-Asset Approach to Inflation by Duy Nguyen of Invesco Blog
With more than two decades of stable inflation in the US and forecasts calling for moderate inflation in the short term, many investors have become complacent about the risk of inflation to the real value of their portfolios. But inflation can change unexpectedly, and although we don’t believe that change is necessarily imminent, investors should remain vigilant about addressing this risk.
2015-03-02 00:00:00 Royce Premier Fund: Reviewing 2014 and Positioning for 2015 by (Article)
Portfolio Manager Lauren Romeo talks about the relative performance challenges for Royce Premier Fund and the types of businesses we are emphasizing and avoiding.
2015-02-27 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
The U.S. Housing Industry Continues to Struggle; The "Millennials" Hold the Key to Housing; Is Another Bubble Forming in U.S. Commercial Real Estate?
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.
2015-02-17 00:00:00 What Does the Current Low Interest Rate Environment Mean for Agency MBS? by Mike Cudzil, Daniel Hyman of PIMCO
After the agency MBS market in 2014 was dominated by low volatility, limited prepayment risk and strong performance, the strong rally in U.S. Treasuries in January resulted in just the opposite. With the Fed ending net purchases of MBS in October 2014, it seems unlikely for the private investment community to take the Fed’s place in the MBS market at this level of interest rates and spreads. PIMCO expects the environment for MBS in 2015 to be quite the opposite of 2014, resulting in higher volatility, cheaper valuations and more attractive excess return opportunities for the active manager.
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.
2015-02-13 00:00:00 DC Managed Accounts: Shining a Spotlight on Investment Advice by Steve Ferber, Michael Esselman of PIMCO
?Nearly one in three defined contribution (DC) plans offers managed account and automated advice services that attempt to enhance investment outcomes with personalized advice. As the Government Accountability Office has reported, however, plan sponsors often have had limited or insufficient information to evaluate and monitor automated advice engines, despite having fiduciary responsibility over advice provided to participants.
2015-02-12 00:00:00 On My Radar: Go Ahead Angela, Make My Day by Steve Blumenthal of CMG Capital Management Group
I spend a great deal of time writing about valuations, probable future returns (near record lows today), portfolio construction and risk management. Reflecting on four days of non-stop sessions, media interviews and meetings at the Inside ETFs Annual Conference this past week, I thought I’d share several key takeaways with you.
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 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.
2015-02-06 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.
2015-01-23 00:00:00 Despite Hitting an Oil Slick, Evidence Underpins a Positive Outlook on MLPs by David Chiaro of Eagle Global Advisors
The fall in energy prices has raised concerns that the dramatic hydrocarbon volume growth we have seen from the new shale plays in the U.S. in the past few years is over or might even reverse. We believe these concerns are overblown. We think the current dislocation in the commodity markets is a case of supply temporarily getting ahead of demand.
2015-01-23 00:00:00 U.S. Lodging: The Recovery Checks In for an Extended Stay by Ray Huang, Amit Arora of PIMCO
Relatively high occupancy levels should drive room rate growth in the hotel sector over the next several years, despite some supply entering the market. We see opportunities in certain segments, such as premium hotels and C-corporations, due to high barriers to entry and pricing power.
2015-01-20 00:00:00 Gundlach's Forecast for 2015 by Robert Huebscher (Article)
Despite a fragile economic recovery - now threatened by falling oil prices - and the likelihood that the Fed will raise short-term rates, the prospects for the U.S. bond market in 2015 are good, according to Jeffrey Gundlach.
2015-01-13 00:00:00 Is the Commercial Office Market Recovery a Mirage? by Keith Jurow (Article)
I will focus on an important question few analysts are raising: Is the so-called recovery in commercial office markets real or a mirage?
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.
2014-12-30 00:00:00 MLPs Werent Supposed To Decline by Roger Nusbaum of AdvisorShares
Most income investors will know at least a little about Master Limited Partnerships more commonly referred to as MLPs. Most MLPs are tied to the transportation of energy products. They collect royalties as the energy product moves through their pipeline (this is a very common structure). Fundamentally, the movement of MLPs should not be vulnerable to price movements of the underlying energy product. The royalty collected is what it is.
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.
2014-12-15 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.
2014-12-11 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!
2014-12-10 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.
2014-12-05 00:00:00 Liquidity Factor Featuring Mariana Bush 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.
2014-12-03 00:00:00 Digging Deeper for Market Valuations by Robert McConnaughey of Columbia Management
Nobody buys a house without looking inside. And nobody should make investment decisions without doing their due diligence on the underlying fundamentals. But that is exactly what happens in an investment world increasingly driven by high-level asset allocation and utilization of passive, index-based products or strategies. Pundits look at aggregate index data and declare one country cheap (or some other action-inducing characteristic) vs. another. Maybe they are right, but maybe they are missing something too.
2014-11-26 00:00:00 Global Economic Perspective: November by Christopher Molumphy, Michael Materasso, Roger Bayston, Michael Hasenstab & John Beck of Franklin Templeton Investments
Steady improvements in US employment and relatively good economic growth figures mean that debate over when the US Federal Reserve (Fed) will begin to tighten policy continues to be the order of the day. US job growth increased at a fairly brisk pace in October, and numbers for the previous two months (already good) were revised higher. Since the start of 2014, US employers have added more than 220,000 workers on average each month, which should be sufficient to sustain economic momentum after an initial reading showed annualized gross domestic product (GDP) growth of 3.5% in the third quarter
2014-11-25 00:00:00 The Dangers of Euphoria in Real Estate Investments by Keith Jurow (Article)
There is widespread consensus that the real estate crisis is over. Because of this complacency, wealth management firms and RIAs widely believe that you do not need to talk about risks at all.
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.
2014-11-21 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.
2014-11-18 00:00:00 How AQR's New Fund Adds Value - An Alternative Approach to Alternatives: Investing with Style by Larry Swedroe (Article)
The conventional justification for alternative investments has been their ability to effectively diversify against core equity and fixed-income allocations. But, in many cases, the empirical data doesn't support that view. A new fund provides a different way to obtain returns from sources that have low to negative correlation to stocks and bonds, as well as each other - an alternative to alternative investment vehicles.
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.
2014-11-11 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.
2014-11-04 00:00:00 Rhyme and Reason by John Mauldin of Mauldin Economics
We?ll revisit the phenomenon of October as a month of negative market surprises. It actually has its roots in the interplay between farming and banking.
2014-10-29 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.
2014-10-16 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 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.
2014-10-06 00:00:00 What’s Next from the Bank of Japan by Jeremy Schwartz of WisdomTree
I had the opportunity to meet with Takeshi Yamada of the Market Intelligence Group at the Bank of Japan (BOJ), and I attended a presentation at the Mizuho conference by Eiji Maeda, the director-general of the Research and Statistics Department.
2014-10-06 00:00:00 Nontraded REITs’ Dividends Come With Confusion, Controversy by Walter Stabell III of Invesco Blog
Interest rates have been low for quite some time, and investors are searching for ways to generate higher yields. An increasing number of them have turned to non-exchange-traded real estate investment trusts (nontraded REITs). However, nontraded REITs offer high levels of confusion and controversy along with their high yields, and regulators are concerned that these products may not be appropriate for many of the people who invest in them.
2014-09-25 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.
2014-09-17 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.
2014-09-15 00:00:00 Understanding the Potential Risks and Rewards of Alternative Investments by Bob Andres of Andres Capital Management
Today, Investors are confronted with constructing or restructuring an asset allocation model in an environment where traditional equity and fixed income securities are fully valued. As a result, investors may be facing a period of nominal or negative returns from both of these traditional asset classes. In this environment, alternative investments may play a pivotal role in providing investors with broad diversification, lower correlations, and as a result, enhanced downside protection.
2014-09-15 00:00:00 Why Development Trumps Acquisitions in Our Real Estate Portfolios by Paul Curbo of Invesco Blog
One of the trends affecting real estate markets this year is the increasing difficulty commercial real estate companies are facing as they seek to complete potential acquisitions. Strengthening commercial real estate fundamentals, coupled with the low cost of financing, have resulted in a large increase in the number of bidders for assets in the past several quarters.
2014-09-09 00:00:00 What is "Fee-Only?" Is the CFP Board Taking the Right Approach to Defining it? by Bob Veres (Article)
Which is more important to your advisory practice - your CFP designation or your fee-only status? Before you answer, consider this: Your CFP mark says very little about whether you adhere to a fiduciary standard, and less about your mode of compensation. Those issues are at the forefront of an ongoing controversy pitting the CFP Board against a prominent advisor, and there is little sign that its outcome will resolve the ongoing debate about how to define a fee-only professional engagement. If anything, it raises more questions than answers.
2014-09-09 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.
2014-09-02 00:00:00 Ranking the Top 10 "Differentiators" for Advisory Firms by Bob Veres (Article)
If we have a clear idea of what foregrounds one advisory firm ahead of others, then we can deliberately cultivate those characteristics. The problem is, nobody has ever compiled a comprehensive list of differentiators, much less ranked them according to importance. So, to fill that obvious void, I've ranked the top 10 differentiators that I've personally seen advisors use in their positioning and marketing.
2014-08-13 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.
2014-08-06 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.
2014-07-30 00:00:00 The Outlook for MLPs and Midstream Energy Infrastructure Continues to Look Bright by David Chiaro of Eagle Global Advisors
The quarter saw a number of positive developments that underpin our long term positive outlook on MLPs. Firstly, the need for new midstream infrastructure remains significant, and a number of announcements of large new projects highlighted that this need is not abating. Also, a significant new development in the quarter was the emergence of new export markets for ethane and condensate which will entail associated infrastructure development and other possible profit opportunities for MLPs.
2014-07-18 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.
2014-07-10 00:00:00 Are Prices Too High in U.S. Commercial Real Estate?? by John Murray of PIMCO
The recovery in commercial real estate (CRE) has been driven more by low rates than improvements in fundamentals. However, fundamentals are improving and capitalization rates should remain low amid low New Neutral policy rates. We expect capital flows in both debt and equity to CRE to continue to increase, and we see opportunities for investors resulting from capital flows, demographics, loan maturities and regulatory reforms. ?
2014-07-07 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."
2014-07-02 00:00:00 On Top of the Market Chart Book - "Global Equities Inch Forward in the First Quater" by Team of AMG Funds
Now updated through 1Q. This compendium provides an historical perspective of economic data compared to today's results, and provides comments on any developing trends. We also include a synopsis of financial markets results. The OTOTM Chart Book is designed with easy-to-read graphics to tell a story and help you visualize the changes taking place in today's economy.
2014-06-30 00:00:00 Revisiting Valuation Extremes - 2008 to Now by Team of GaveKal Capital
Last week we took a look at how much price to book multiples have expanded since 2008. Today, we are undergoing the same exercise but this time we are looking at price to cash flow multiples.
2014-06-27 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.
2014-06-25 00:00:00 Self Sufficiency and Resourcefulness Over Complaining by Roger Nusbaum of AdvisorShares
There were several interesting and related articles from the last few days that could make for an interesting discussion.
2014-06-20 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.
2014-06-19 00:00:00 Designing Balanced DC Menus: Considering Inflation-Hedging Strategies???? by Stacy Schaus, Ying Gao of PIMCO
Inflation-hedging strategies are fundamental to DC investment lineups and participants? need to build and preserve purchasing power in retirement. Plan sponsors should evaluate these assets separately and in combination before adding them to core lineups and target-date strategies. Selected assets or blends should be designed to deliver the primary benefits of inflation responsiveness, diversification relative to stocks, volatility reduction and downside risk mitigation.
2014-06-13 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.
2014-06-10 00:00:00 Six Questions for the Future of the Planning Profession by Bob Veres (Article)
A few weeks ago, I asked for your help as we created the scenario learning session for the Insider's Forum conference in September. We're going to map out some possible futures that you can prepare for, using as raw material the crowdsourced thoughts and ideas that you provide to us. Here are six questions that have been raised and addressed about the future in the first round of our exercise.
2014-06-06 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.
2014-05-27 00:00:00 Structured Portfolios: Solving the Problems with Indexing by Larry Swedroe (Article)
An overwhelming body of evidence demonstrates that the majority of investors would be better off by adopting indexed investment strategies. A total-stock-market index is fine for many investors. But indexed investors who desire certain types of exposure face a number of problems - which are solved with what I call "structured portfolios."
2014-05-22 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.
2014-05-07 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.
2014-05-05 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.
2014-05-02 00:00:00 Need for New Midstream Energy Infrastructure Remains Strong by David Chiaro of Eagle Global Advisors
Capital expenditures expected to surpass $640 billion by 2035, says David Chiaro, co-portfolio manager of the Eagle MLP Strategy Fund.
2014-04-29 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.
2014-04-23 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.
2014-04-17 00:00:00 Fixed Income Outlook by Team of Osterweis Capital Management
Given that the Fed is likely to complete its asset purchases this year and may raise rates in early 2015, we still feel that Treasuries and investment grade bonds are unattractive. Although yields in the high yield universe are low by historical standards, they still give us a decent cushion against rising rates, especially at the shorter end of the maturity spectrum. Maintaining a shorter duration exposure in high yield and some convertible bonds, as well as a cash reserve, continues to make sense.
2014-04-15 00:00:00 Does Rebalancing Really Pay Off?? by Michael Edesess (Article)
No investment advice is more universally offered than the advice - originally posited by William Bernstein - to rebalance your portfolio. Yet, the evidence that this practice is beneficial is shockingly meager.
2014-04-15 00:00:00 Credit Availability Underpins Recovery in Commercial Real Estate Prices, But Also Poses Risks to CMB by Bryan Tsu of PIMCO
Credit availability, low interest rates, limited new construction and improving economic conditions have contributed to the recovery in commercial real estate (CRE) prices. We expect a strong 2014 in the commercial mortgage-backed securities (CMBS) market, which has been a primary source of CRE credit expansion. Increasingly aggressive loan underwriting is a concern. CMBS investors need to speak with their wallets and push back on either valuations or underwriting standards if recent trends continue.
2014-04-10 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.
2014-03-18 00:00:00 Japan?s Rising Opportunity by Neil Hennessy, Masakazu Takeda of Hennessy Funds
After WWII, the Japanese economy began what is sometimes referred to as the ?Economic Miracle?, a three-decade long period of growth and prosperity. Japanese firms and their management teams were studied around the world as the model of efficiency and an example for all companies and leaders to strive for. In 1989, a bubble in real estate fueled by speculators burst, and the Japanese markets crashed. Since then, the Japanese economy has been in a virtual standstill with more than two decades of stagnant growth and a deflationary environment.
2014-03-06 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.
2014-02-26 00:00:00 Market Perspective by CCR Wealth Management Investment Committee of CCR Wealth Management
It cost $0.32 to mail a letter, unemployment was 4.9%, O.J. Simpson was found liable in a civil suit, Hong Kong was returned to Chinese rule, Timothy McVeigh was sentenced to Death, Green Bay defeated the Patriots in the Super Bowl, Titanic came crashing into movie theatres, and Dolly, the first genetically engineered lamb was unveiled to the public; the year was 1997.
2014-02-26 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.
2014-02-20 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 Stocks for 2014: High Yield and Fairly Valued Dividend Stocks for High Current Income ? Part 5 by Chuck Carnevale of F.A.S.T. Graphs
Retired investors seeking high income to live off of during retirement, face greater challenges today than almost ever before. The days of high yields available from bonds and other fixed income vehicles are long gone. Consequently, generating an adequate level of current income on retirement portfolios is difficult to say the least. This is especially tricky for those investors with a low tolerance for risk.
2014-02-03 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.
2014-01-29 00:00:00 How the Pioneer of Hydraulic Fracturing changed the MLP Landscape by David Chiaro of Eagle Global Advisors
A banner year for MLPs and the future looks bright.
2014-01-22 00:00:00 Commodities Remain a Source of Frustration by Chris Maxey, Ryan Davis of Fortigent
The environment following the global financial crisis has been a challenging one for asset allocators, as long held relationships shifted and traditional idioms were turned on their head. As we detailed last week in "The Diversification Obituary," investors have seen little work in their portfolios other than US stocks, while supposed diversifiers have offered little more than muted beta and unusually high correlations.
2014-01-16 00:00:00 Stocks for 2014: Something for Everyone: Part 1 by Chuck Carnevale of F.A.S.T. Graphs
My biggest pet peeve regarding common stock investing is how so many people have a tendency to over-generalize this asset class. Commonly held beliefs such as investing in stocks is risky, or that the stock market is overvalued, or that the fed is driving stock prices, etc., are just a few examples illustrating my point. In truth, common stocks are as individually different as people are individually different. When dealing with human beings, most reasonable thinking people would reject prejudicial statements. Personally, I believe we should have the same attitude about common stocks.
2014-01-15 00:00:00 The January Barometer by Jeffrey Saut of Raymond James
Its that time of year again when the media is abuzz with that old stock market saying, "so goes the first week of the new year, so goes the month and so goes the year." Admittedly the January Barometer has a pretty good track record.
2014-01-14 00:00:00 The Diversification Obituary by Chris Maxey, Ryan Davis of Fortigent
According to some major media outlets, 2013 was the year diversification died. With the S&P 500 racing to a more than 30% gain (the largest since the late 90s), it seemed as though no other asset class truly mattered last year. While it is true domestic equities had a banner year, one-asset class portfolios will never be robust, and there is reason to believe 2013 is a prime example of why diversification is incredibly important.
2014-01-09 00:00:00 The Price Action of Stocks Trumps Fundamentals by Robert Mark of Castle Investment Management
Perhaps the best argument that one can make for stocks is that many hold doubts about the continuing bull market. The reasons for these doubts are understandable, as the economic recovery has been anemic and growth has slowed significantly - likely leading to lower profits in the future. As a result, corporations have aggressively cut costs, increased productivity and preserved cash - pushing profit margins to historically high levels.
2014-01-07 00:00:00 The Risk Forecast for 2014 by Geoff Considine, Ph.D. (Article)
It’s the time of year when market pundits take to the notoriously difficult task of forecasting returns. Volatility is equally important, however, and it can be predicted much more reliably than asset-class performance. My forecast shows that the options market is underestimating risk in 2014, giving investors an opportunity to purchase portfolio protection at attractive prices.
2013-12-17 00:00:00 Five Strategies for a Rising-Rate Environment Revisited by Kane Cotton, CFA and Jonathan Scheid, CFA (Article)
In June 2010, we recommended five strategies for a rising-rate environment, acknowledging that we had no idea when or how abruptly rates would rise. Indeed, rates fell since we wrote that article. But they are on the rise again. After reviewing how our original five strategies performed, we’ll now present our revised recommendations for investing as rates increase.
2013-11-26 00:00:00 While You Were Sleeping: Asian Developments Loom for Financial Markets by Chris Maxey, Ryan Davis of Fortigent
Amid all the Fed talk dominating airwaves and headlines, a few key developments occurred overseas last week that could shape financial markets significantly in the quarters ahead.
2013-11-22 00:00:00 Understanding the Rise of China by Frank Holmes of U.S. Global Investors
If the sweeping economic reforms planned by Chinese leaders during the Third Plenum can be our guide, it looks to be a promising decade for global investors. Details released this week confirmed President Xi Jinpings concerted efforts to move China toward a market-based economy that mirrors the West.
2013-11-21 00:00:00 When the Stimulus Stops, Cash Flow Matters by U.S. Equity Management team of Mesirow Financial
Several rounds of massive stimulus by the Federal Reserve has kept interest rates well below where they would otherwise be, buoying both stock and bond markets. As stock prices have reached new peaks, many professional investors consider current valuations to be stretched. When the stimulus finally stops, a new era of rising interest rates will likely take hold. And experienced investors know that rising interest rates and high valuations and can be a dangerous combination. Read more.
2013-11-15 00:00:00 Has Washington Drama Taken Its Toll On MLPs? by David Chiaro of Eagle Global Advisors
They did it! They blew it up! shouts Charlton Heston in the iconic ending scene of the film Planet of the Apes when he finds out he has been living on a post-nuclear war planet Earth. Americans are probably having some of the same feelings about our current world resulting from the ongoing political nuclear war raging in our nations capital.
2013-11-06 00:00:00 Permabull? by Jeffrey Saut of Raymond James
A permabull is defined as somebody who is always upbeat about the future direction of the stock market and the economy. Recently I have been called a permabull by certain members of the media, which may be true since March of 2009, but certainly not true over the past 14 years.
2013-11-04 00:00:00 Steve Jobs Didn't Give a *!@% About the Debt Ceiling by Jeffrey Bronchick of Cove Street Capital
A quick nod to Bloomberg columnist Caroline Baum from whom we lifted our title. Anything else you might have been (or will be) subjected to on the subject of how the government operates pales in materiality to the headline. And as miserable as our predicament seems to anyone over the age of 13, it really and truly is old and increasingly dull news. To wit, I present the following, highly curated list of quotes-please note the timeline.
2013-11-04 00:00:00 Mortgage REITs: Last Chance to Exit? by Keith Jurow of Advisor Perspectives (dshort.com)
An online advertisement raises the following question often asked by your clients: Can you find me more income? In a nutshell, that is the dilemma facing high net worth investors.
2013-10-29 00:00:00 Only RED That You Have Seen in October... by Blaine Rollins of 361 Capital
The markets felt a bit different this week. While equities finished with another weekly gain, it was lead to new highs by a new and interesting cast of characters: the Dow Industrials, Dividend Stocks (like Utilities & Industrials), Germany, the United Kingdom, Gold & Silver, and Long Maturity Treasuries. While everyone under invested in risk is hoping for a pullback, the rest who are equal or overweight seem to be looking to buy on any pullback.
2013-10-26 00:00:00 Inflation Update by Team of North Peak Asset Management
Historically the larger the increase in monthly inflation, the worse mainstream stocks and nominal bonds perform.
2013-10-24 00:00:00 Putting Tax-Deferred Accounts to Best Use by Kathleen Fisher, Tara Thompson Popernik of AllianceBernstein
The common wisdom about retirement planning is to fund tax-deferred vehicles such as 401(k) plans and IRAs to the maxand we agree. But how to put these accounts to best use is more complicated.
2013-10-18 00:00:00 Despite Uncertainty, the Market Still Looks Strong by Charlie Dreifus of The Royce Funds
Although it was an ugly battle, on Thursday morning October 17 President Obama signed a bill that reopened the government into January 2014 and raised the debt ceiling until early February of next year.
2013-10-07 00:00:00 Ted Williams, Ford F-150's, and Market Valuations by Robert Mark of Castle Investment Management
In late 2008 Lehman Brothers had just collapsed, AIG needed help from the US government and markets around the world were in a tailspin. Today, five short years later, we find it strange how the strength of the stock market defies a climate of declining earnings. With another quarter of corporate results behind us, equities continue to rally despite corporate earnings offering no material support, with many companies actually talking down their future growth prospects.
2013-10-02 00:00:00 Chuck Royce on 3Q13: Quality Small-Caps Can Continue to Bear Fruit by Chuck Royce of The Royce Funds
Co-CIO, President, and Portfolio Manager Chuck Royce discusses his outlook on the current state of the small-cap market, his continued confidence in quality despite the Feds announcement in September to prolong its ongoing stimulus efforts, and the current case for active small-cap management.
2013-10-01 00:00:00 The Ultimate Income Portfolio Revisited by Geoff Considine (Article)
Rising interest rates will be unkind to income-generating assets and the investors who depend on them in retirement. My ultimate-income portfolio (UIP) provides a solution to this problem. It has reliably produced high income and low volatility with respect to the stock market, and its performance is likely to continue, even if rates rise further.
2013-09-30 00:00:00 The Global Sea Change Continues by Richard Bernstein of Richard Bernstein Advisors
Most investors will readily admit the global credit bubble is deflating, yet continue to favor credit-based asset classes within their portfolios. Whereas many investors still believe that the emerging markets are a growth story, the data tell us that U.S. investors can find growth in their own backyard.
2013-09-24 00:00:00 Is The Dividend Mania Ending? by Doug Ramsey of Leuthold Weeden Capital Management
In the last couple of months, theres been an unusually high number of stocks making new 52-week lows even though the S&P 500 remains 24% above its own 52-week low set last November. This disjointed type of internal market action is usually not healthy, but it can persist for awhile before the warning flag turns from yellow to red.
2013-09-21 00:00:00 This Will Not End Well by Robert Mark of Castle Investment Management
How do you justify higher equity valuations if profit margins are more likely to contract than expand and revenue growth is stalling? Why naturally you discount those future cash flows by a lower cost of capital! But to my eye, the Federal Reserve appears to be slowly losing control of the bond market interest rates are separating from the raw pressure of central bank interventions. We know why this will end badly, we just dont know when.
2013-09-21 00:00:00 Fifty Shades of Gold by Frank Holmes of U.S. Global Investors
Unlike many commodities, there are many shades to gold, such as the Love Trades buying gold for loved ones and the Fear Trades purchasing gold as a store of value. An additional shade investors need to be aware of is how the Fed interprets the recovery of the U.S. economy.
2013-09-20 00:00:00 U.S. Commercial Real Estate: Will the Good Times Last? by Devin Chen of PIMCO
The CRE market has experienced a gradual recovery in asset pricing since the 2008 financial crisis. Despite the duration of the recovery, there continues to be dislocation in the CRE market that astute investors can capitalize on. We believe certain properties in non-major markets look attractive for acquisition, and have been acquiring residential land on an opportunistic basis.
2013-09-17 00:00:00 Gundlach ? Where to Expect the Next Crisis by Robert Huebscher (Article)
Unless there is a crisis, dont expect a major decline in interest rates, according to Jeffrey Gundlach. And if such a crisis occurs, Gundlach warned, it will most likely take place in this emerging market.
2013-09-03 00:00:00 How to Find Value in Real Estate With Risk On, Risk Off Off Again by Walter Stabell, III of Invesco Blog
Recent trends, including falling stock correlations, have been strong indicators that the global economy is normalizing and the practice of risk on, risk off investing, in which investors enter and exit perceived riskier investments based on how they feel about the economy, is now off again after becoming a phenomenon in the post-financial crisis years.
2013-08-27 00:00:00 How Real is the Recovery in Commercial Real Estate? by Joel Beam, Ian Goltra of Forward Management
How Real Is the Recovery in Commercial Real Estate? A conversation with Joel Beam and Ian Goltra of Forwards Real Estate Portfolio Management Team.
2013-08-20 00:00:00 Epic Climb Up and to the Right... by Blaine Rollins of 361 Capital
Interest rates continue to make an epic climb up and to the right...
2013-08-08 00:00:00 Absolute Strategies Fund Portfolio Commentary by Jay Compson of Absolute Investment Advisers
In our last quarter commentary we posed a simple question: "Why does the economy need so much stimulus and quantitative easing for so little growth?" Over the last two years or so, we feel that we have identified and explained the structural issues and risks very clearly. But in the second quarter, the equity and credit markets may have done a better job offering investors a true glimpse of the realities facing global markets.
2013-08-08 00:00:00 Quarterly Letter by Team of Grey Owl Capital Management
To begin, let us state that we are tired of writing about macroeconomic issues. We suspect you are tired of reading about them. We would like nothing more than to send out a quarterly letter full of updates on the companies we own and the rationale for individual buy and sell decisions. Nevertheless, we must address the market action following Federal Reserve Chairman Ben Bernankes May 22nd testimony before Congress, where he merely floated the idea of tapering the Feds quantitative easing efforts.
2013-08-08 00:00:00 Is The Financial Crisis Over For Financial Stocks? by Chuck Carnevale of F.A.S.T. Graphs
The cause of the financial crisis of 2007 -2008, also known as the Great Recession of 2008, is attributed to many different theories. However, one of the most common theories is an easy money regulatory environment that led to an abundance of subprime loans, which in turn inflated real estate prices to bubble levels. Additionally, many blame the Financial sector, predominantly the money center banks, for exploiting the lax lending requirements with reckless and greedy behavior.
2013-08-07 00:00:00 Japan The Land of the Rising Stock Market by Richard Bernstein of Richard Bernstein Advisors
We have been ardent bulls on the Japanese stock market since last Fall. Our thesis has been a simple one: For the first time in the history of our data, Japan began running consecutive monthly current account deficits.
2013-07-30 00:00:00 The Power of Diversification and Safe Withdrawal Rates by Geoff Considine (Article)
When Bill Bengen published his seminal research in 1994, a 4% safe withdrawal rate (SWR) was clearly attainable with a variety of asset allocations. But bond yields are lower now than they were then, and equity returns for the next 20 years are unlikely to exceed those of the prior two decades. Indeed, a new paper by three highly respected researchers showed that SWRs for stock-bond portfolios are well below 4%. But as I will demonstrate, a 4% SWR is still possible with a more diversified portfolio ? and without subjecting clients to additional risk.
2013-07-30 00:00:00 FPA Crescent: Steve Romick's Quarterly Commentary by Steven Romick of FPA Funds
FPA Crescent Fund has released its quarterly commentary examining the state of the fund and its investments as well as an outlook on the greater economy. Portfolio manager Steve Romick feels that the economic recovery has been disappointing and largely engineered by central bank policy and worries that low interest rates and novel and theoretical Fed policy could lead to unintended consequences.
2013-07-18 00:00:00 Second Quarter 2013 Financial Market Commentary by Andrew Zimmerman of DT Investment Partners
To taper, or not to taper, that is the question that investors are currently grappling with.
2013-07-18 00:00:00 Closed-end Fund Review by Jeff Margolin of First Trust Advisors
Following a quarter in which the average closed-end fund was up 4.31%, the universe of 595 funds was lower by 5.60% on a share price total return basis during the second quarter (both figures from Morningstar). For many funds, most of the weakness occurred during the month of June (when the average fund was lower by 6.09% on a share price total return basis, according to Morningstar).
2013-07-16 00:00:00 The Great Rotation Continues Forward... by Blaine Rollins of 361 Capital
Fed Chairman Ben Bernanke grabbed the mic on Wednesday and gave a performance that garnered a standing ovation from Stock, Bond, and Commodity investors. Only U.S. Dollar longs went home dragging their programs and spilling their popcorn. As a result, U.S. equity markets ended the week at all-time highs as stocks remained the darlings of the asset classes.
2013-07-09 00:00:00 The Fed's Bind: Tapering, Timetables and Turmoil by Scott Minerd of Guggenheim Partners
There are striking parallels between the dramatic recent sell-off in U.S. Treasuries and the Great Bond Crash of 1994. But the summer of volatility now facing financial markets is no doomsday scenario. Instead, it puts the U.S. Federal Reserve in a bind. Higher interest rates will reduce housing affordability, which is especially troublesome since housing is the primary locomotive of U.S. economic growth.
2013-07-03 00:00:00 For Abenomics, the Hard Part Is Still to Come by Guy Bruten of AllianceBernstein
Prime Minister Shinzo Abes Abenomics program, designed to revive Japans economy, was a big success in its first five months, easily surpassing low expectations. But its drifted off course since it began, and the going is sure to get tougher from here. Still, its too early to write off this policy experiment.
2013-07-02 00:00:00 Second Quarter Market Commentary by Mark Oelschlager of Oak Associates
The market posted another positive quarter, with the S&P 500 returning almost 3%. In recent years, Q2 has witnessed a growth problem, in which softening economic data prompted investors to sell stocks. But this year that did not happen, as the data actually improved. While new job creation is less than some would like to see, there has been a clear acceleration over the past six months.
2013-06-28 00:00:00 Reviewing the Dividend Sell-Off by Jeff Middleswart of Ranger International
Higher yielding stocks outperformed for much of this year, but fell sharply with the pop in interest rates.
2013-06-27 00:00:00 Welcome Back, Mr. Bond by Jeffrey Saut of Raymond James
Weve been expecting you Mr. Bond. The phrase is itself a variant and joins the phrase Play it again Sam as a phrase attributed to a film or TV series. I have used said quip over the past few years, having been wrong-footedly expecting a backup in interest rates. While I did finally target the yield low of last July, the ensuing rate rise has been far slower than I would have thought, that is until the past few weeks.
2013-06-26 00:00:00 Weekly Market Review Notes by Team of Tuttle Tactical Management
This has been a rough week for the markets. It started when Bernanke spoke (if this keeps up we will have to buy protection before he speaks the next time) and continued with bad economic news out of China. The selloff after Bernankes speech looked like a buy on the rumor, sell on the fact event. The selloff after weak China data came out was a good, old fashioned sell off.
2013-06-25 00:00:00 How Not to Invest in Dividend Stocks: Seven Mistakes Investors Commonly Make by David Ruff of Forward Management
While investors may assume that dividend investing is relatively straightforward, they commonly make mistakes that may undercut the potential income and total return of their investments.
2013-06-25 00:00:00 Despite More Downside Risk, Stick with Stocks by Russ Koesterich of iShares Blog
Despite stocks recent declines and the rocky road ahead, Russ explains why he still prefers equities over bonds.
2013-06-21 00:00:00 Are Actively Managed Funds About to Gain an Edge by Francis Gannon of The Royce Funds
Although 10-year Treasury rates rose last month, the strong performance of certain cyclical sectors within small-cap looks to us like investors may be showing a bit more confidence in areas favored by many active investment approaches.
2013-06-18 00:00:00 Help Clients Fill the Income Void by Sponsored Content from Legg Mason Global Income Survey (Article)
Affluent investors all over the world just arent getting what they want from their income investments, according to Legg Masons recently released Global Income Survey. Yet there is good news: most say they want to become more knowledgeable about income investing, and theyre eager for financial professionals to point out fresh opportunities.
2013-06-14 00:00:00 A Taste of Rising Rates by Team of Neuberger Berman
The mantra "sell in May and go away" has taken on a new twist this year. Equity markets saw mixed returns last month but bonds took a beating, with losses materializing in nearly every fixed income segment. The reason? Interest rates rose significantlyand rather unexpectedlyover the course of the month. What implications would rising rates have for the market? We consider whats ahead.
2013-06-14 00:00:00 Changing Picture by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab
We could be in the beginning stages of an adjustment toward a more "normal" monetary policy environment, with attendant volatility. This once again illustrates the importance of diversification and focusing on long-term goals when investing. We continue to believe the US equity markets are an attractive place for assets and recommend buying on pullbacks to the extent that you need to add to equity exposure. Additionally, continue to exercise caution around fixed income allocations and focus more on the developed markets vs. EM.
2013-06-11 00:00:00 Gundlach ? Dont Sell Your Bonds by Robert Huebscher (Article)
Dont sell your bonds just yet, according to Jeffrey Gundlach. Global economic growth is slowing, he said, and the U.S. will be competing for a larger slice of a shrinking worldwide pie. A weaker economy dims the prospects for higher interest rates. The benchmark 10-year Treasury yield ? currently 2.08% ? will be 1.70% by the end of the year, according to Gundlach, providing profits for holders of long-term bonds.
2013-06-11 00:00:00 May Flowers Bring Best Equity Market Since 1997 as Bonds Wilt by Douglas Cote of ING Investment Management
The S&P 500 has opened 2013 with its best year-through-May return since 1997. U.S. Treasury prices, in contrast, plunged last month on talks of Fed tapering. Dont expect the reflation in bond yields to continue in the near term, as the Fed continues to struggle in its current war against deflation. Fundamental business activity not quantitative easing is the wellspring of sustained economic growth, creating lasting sales and profits. For investors, the two biggest self-defeating fears continue to be 1) the fear of buying equities and 2) the fear of buying bonds.
2013-06-11 00:00:00 And Like Clockwork... by Blaine Rollins of 361 Capital
And like clockwork, stocks bounced both from their very short term oversold point and off the 50 day moving average on Wednesday...
2013-06-11 00:00:00 6 Investing Implications of Friday's Jobs Report by Russ Koesterich of iShares Blog
While the jobs report on Friday merely confirmed that the recovery continues to chug along slowly, it does have six implications for investors.
2013-06-07 00:00:00 As Economy Heats Up, Will Commodities? by Frank Holmes of U.S. Global Investors
Dont wait for the Fed to officially raise rates, as research shows that investors get the most benefit from materials and energy stocks by getting in now
2013-06-06 00:00:00 But We Want Goldilocks-Like Growth by Blaine Rollins of 361 Capital
While the equity markets would enjoy a bit of the great rotation out of the 20+ year outperformance in bonds and into equities, the move in May has been too much, too quick for even equity investors to stomach. So while the Long Treasury ETF (TLT) fell -6.8% in May, the size of the move even scared investors in REITs (IYR), Junk Bonds (JNK/HYG), and Utilities (XLU).
2013-06-05 00:00:00 Weekly Market Commentary by Team of Tuttle Tactical Management
Yesterday ended the streak of up Tuesdays in the market while last week saw an acceleration in the the "crush anything that pays any sort of yield" theme. Treasuries, high yield bonds, preferred shares, Utilities, REITs, etc. all got killed. At this point this just seems like the weird type of dislocation that happens sometimes in markets where money just doesnt want to go anywhere except under a mattress.
2013-06-04 00:00:00 The Role of Cash in Multi-Asset Portfolios by Ashish Tiwari, Andrew Spottiswoode of PIMCO
Determining the optimal allocation to cash is as challenging as ever in todays unusually uncertain markets. When allocating to cash, investors should consider a multi-dimensional framework to assess the liquidity of the underlying cash instruments. In our view, the most attractive risk-adjusted opportunities for cash investors lie just outside the traditional money market space.
2013-06-03 00:00:00 Defense and Selective Offense by Mark Kiesel of PIMCO
Given the markets newfound risk appetite for credit and less attractive valuations, we are taking advantage of global credit market liquidity in an effort to reduce our overall risk posture. In our selective offense approach, we continue to favor U.S. housing and housing-related areas, in addition to select investments in the energy, pipeline, specialty finance, gaming, hospitals, and airline and auto industries, given the more positive fundamental outlook for these sectors.
2013-05-31 00:00:00 Into the Woods by Tony Crescenzi, Tadashi Kakuchi, Ben Emons of PIMCO
Excess liquidity, falling net issuance and higher correlations among assets complicate the eventual exit that the Federal Reserve and other central banks must make from their extraordinary policies. The Bank of Japans ideology has completely changed to tackling deflation from tolerating deflation. The key focus in the coming months will be how private sectors react. Investors who depend chiefly upon central bank activism may put themselves at risk. They may need to hedge volatility by ensuring their investments are built more on solid fundamentals and reasona
2013-05-30 00:00:00 Global DC Plans: Similar Destinations, Distinctly Different Paths by Stacy Schaus, William G. S. Allport, Justin Blesy of PIMCO
DC plans in in the U.S., Australia and the U.K. may benefit from better aligning asset allocation defaults to workers needed outcome: purchasing power in retirement. Focusing on needed outcomes would suggest a higher allocation to real assets, earlier de-risking and consideration of tail risk hedging.
2013-05-24 00:00:00 Bifurcation Blues by Herbert and Randall Abramson of Trapeze Asset Management
Bifurcation. A very technical sounding word. It merely means ?a division into two parts?, which is what we are witnessing in many areas related to investment, both macro and micro. And it is exhibiting to value investors those areas to avoid and the most attractive to embrace. And giving rise to a wide range of disparate opinions among economic and investment professionals as to what outcomes are likely. Needless to say, we have our own strong views.
2013-05-23 00:00:00 Investing in Gold: Does It Stack Up? by Team of Knowledge@Wharton
Gold has a timeless allure -- especially if you worry about stock market volatility, inflation, a decay of ordinary currency or the collapse of civilization. Yet not everyone agrees that gold offers the safe haven its promoters describe. How reliable can demand be for a commodity that very few people actually need? What is the proper role for gold in an investment portfolio? Why has its price been falling?
2013-05-21 00:00:00 A Cry for Help from Income Investors by Sponsored Content from Legg Mason Global Income Survey (Article)
Confronted with the stark realities of income investing now, affluent investors all over the world are rethinking their approach, notes Legg Mason’s just-released Global Income Survey. Yet the Survey also found income investors hungry for more knowledge and ideas -- creating opportunities for savvy financial advisors.
2013-05-20 00:00:00 Global Real Estate Is Hot Again, but Where Are the Best Opportunities? by Joe Rodriguez of Invesco
In this low interest rate environment, yield-hungry investors have been moving out of bonds, and many are opting for real estate investment opportunities. Combine that with a structural undersupply of institutional quality real estate in many key cities across the globe, and an attractive case for investment starts to emerge. Heres where we see the most attractive and promising opportunities by region this year.
2013-05-20 00:00:00 Equity Income Offers Good Yield Hunting by Peter Vanderlee and Mark McAllister (Article)
With a combination of income growth and capital appreciation potential, equity income securities deliver a potent mix that's attracting increased investor interest. ClearBridge Investments' Portfolio Managers, Peter Vanderlee and Mark McAllister, share their thoughts on ClearBridge's innovative, high-quality offering in this space?a best of breed, tax-simplified approach that includes specialized equity income securities like REITs and MLPs.
2013-05-15 00:00:00 Pacific Basin Market Overview by Team of Nomura Asset Management
Pacific Basin equity markets continued to rally in April, led by Japan where the central bank announced that it intends to double the monetary base and inject liquidity into the markets. The MSCI AC Asia Pacific Free Index including Japan gained 4.9% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.6% higher in April. (All performance figures are based on MSCI indices in U.S. dollar terms with dividends included unless otherwise stated.)
2013-05-10 00:00:00 A Tale of Two Markets: Equity Bulls and Bond Bears by Douglas Cote of ING Investment Management
Surging equity markets absent an accompanying rate rally is a red flag, as Treasury yields remain well below normal. While investors renewed enthusiasm for equities is warranted, they must be careful to avoid the folly of gaming diversification. Corporate earnings have impressed, though revenue has struggled due in part to a moribund Europe. Divergent markets mean investors should stay broadly diversified in equities and real bonds not near-cash and ever alert to the fundamentals.
2013-05-07 00:00:00 Investing for Income and Capital Appreciation by Giorgio Caputo, Rob Hordon, Ed Meigs, Sean Slein of First Eagle Investment Management
A Q&A with First Eagle Investment Managements senior members and their market views and strategic insights.
2013-05-07 00:00:00 Bail-Ins, Bernanke, and Buyouts: Assessing Key Event Risks for Fixed-Income Investors by Team of Hartford Funds
While the eventual shift to less accommodative central-bank policy and a rise in global interest rates are perhaps the greatest focuses of concern today for bond investors, other risks also merit scrutiny. European sovereign debt worries have resurfaced as the tiny nation of Cyprus, representing just 0.3% of euro-area gross domestic product (GDP), joined the list of bailout recipients. Recent rhetoric from the Fed has prompted investors to consider the impact of an eventual winding down of its asset purchases.
2013-04-29 00:00:00 New Highs Bring New Worries by Richard Golod of Invesco
The sustainability of the rallies in US and Japanese equities this year so far is looking uncertain amid slowing year-over-year earnings growth and mixed global economic signals. European and emerging market shares have traded lower year to date and seem likely to continue lagging in the near term. However, on balance, I remain optimistic about global equities, seeking yield opportunities and investments with an actively managed, more selective approach.
2013-04-26 00:00:00 A Funny Thing Happened on the Way to Equilibrium by Ben Inker of GMO
The bedrock of GMOs investment philosophy is reversion to the mean. We believe that capitalism should cause the return on capital to be in line with the cost of capital, and that assets that embody similar risks should offer similar long-term returns. These beliefs, in turn, guide our assumptions that equities should trade at replacement cost, that the long-term return to equities should be approximately the same as their normalized earnings yield, and that assets without long return histories should have similar valuations and equilibrium returns as related assets with longer histories
2013-04-26 00:00:00 Many Of My Dividend Growth Stocks Have Become Overvalued, What Do I Do Now? by Chuck Carnevale of F.A.S.T. Graphs
To me, theres almost nothing better than finding a great company that I truly want to own at a fair valuation, or better yet, undervalued. In the long run, it has been my experience that this usually leads to outsized future returns, especially if you buy stocks when they are undervalued at the time. But there is quite often a side effect that can prove very disconcerting. Once an undervalued stock starts moving to the upside, momentum will often carry it above what prudent fair valuation would dictate.
2013-04-24 00:00:00 The 5% Problem: Double Jeopardy for Traditional Bond Investors by Nathan Rowader of Forward Management
Investors have suffered with low yields, but profited from rising bond values during the 30-year bull market for bonds. We believe the bond market is moving into a bearish phase, putting the value of existing bond holdings at risk. A variety of income-producing options are available for those who want to diversify bond portfolios and seek better yields. Historical analysis shows that a diversified portfolio would have outperformed traditional bonds during the last bear bond market and in periods of rising interest rates.
2013-04-10 00:00:00 The Clock is Ticking for Passive Management by Team of The Royce Funds
It may feel like only yesterday, but it has been four years since the equity market bottomed in March 2009. Much has changed since that timegovernment debt and the Feds balance sheet have exploded, bond yields have declined, and quantitative easing has become the norm.
2013-04-10 00:00:00 Investing for Income? Safe Bets Can be Surprisingly Risky. by Joe Kringdon of Pioneer Investments
The recent, seemingly terminal decline in interest rates has been difficult on many investors who have been planning their income needs for the future. Interestingly enough, a wise presenter at a meeting I attended in January* addressed this very point with a wow factor of quite a different nature.
2013-04-02 00:00:00 Chuck Royce on 1Q 2013: Conditions Remain Favorable for Equities by Team of The Royce Funds
In stark contrast to what we saw in 2010, 2011, and most of the first half of 2012, the market tuned out a lot of seemingly ominous political news and enjoyed a strong first quarter.
2013-03-28 00:00:00 Whatever It Takes in Japan? It Takes an 'Audacious' Monetary Policy! by Richard Clarida and Tomoya Masanao of PIMCO
The BOJ will have to make some key monetary policy decisions soon, given Kurodas sincere but ambitious desire to achieve 2% inflation within two years. The BOJ has lagged far behind other major central banks in the deployment of its balance sheet since the onset of the financial crisis. Expect Japans monetary policy to be more aggressive and experimental as it shifts toward reflating the economy. For global investors, this may mean a modest economic growth contribution from Japan, at least over a cyclical horizon, as well as additional central bank liquidity pouring into global m
2013-03-26 00:00:00 A Cry for Help from Income Investors by Legg Mason Global Income Survey (Article)
Confronted with the stark realities of income investing now, affluent investors all over the world are rethinking their approach, notes Legg Masons just-released Global Income Survey. Yet the Survey also found income investors hungry for more knowledge and ideas -- creating opportunities for savvy financial advisors.
2013-03-20 00:00:00 Global Real Estate StocksTime to Get Out? by Eric Franco of AllianceBernstein
Real estate stocks have now rebounded from the crash during the global financial crisis. But we think valuations are still reasonable, especially as property fundamentals continue to improve in key markets.
2013-03-07 00:00:00 Capex Revival by Francis Gannon of The Royce Funds
For some time now, we have been noting the defensive nature of the investment environment, one in which fear and uncertainty continue to be the major forces driving markets. Interestingly, this trend has held true for both investors and corporations alike of late. Even after a powerful move from the low of last November, for example, investors remain fearful about cyclical or economically sensitive sectors while at the same time embracing those very sectors that benefit from easy money, are defensive by nature, and are supposedly riskless.
2013-03-01 00:00:00 Wait for Your Pitch in Today's Market by John West of Research Affiliates
Great hitting in baseball depends in part on waiting for the right pitch. In today's market, most asset classescoming off their impressive 2012 recordare "high and outside" the valuations necessary for future big league returns. Patience is the name of the game today.
2013-02-28 00:00:00 Jeremy Siegel on Why Stocks Are -- and Will Remain -- the Best Bet by Team of Knowledge @ Wharton
Though stock market volatility continues to rattle investors' nerves, the future looks bright for equities in the U.S. and many emerging markets, according to Wharton finance professor Jeremy Siegel. That's not so for bonds, which could become money-losing investments as rising interest rates drive bond prices down. In an interview with Knowledge@Wharton, Siegel says that investors should think about reducing their bond holdings, buying more stocks and keeping just enough cash for a rainy day and other liquidity needs, since interest rates on cash are near zero.
2013-02-22 00:00:00 Finding What's Real in Real Estate by Team of Franklin Templeton Investments
The U.S. financial crisis in 2008-2009 left many investors with a reluctance to take investment risks, particularly those related to any of the world's wilted housing markets. However, as your local real estate agent would likely tell you, the market in one location can be vastly different than it is in another. Wilson Magee, co-manager of Franklin Global Real Estate Fund would agree that the adage "location, location, location" applies not only to individual home buyers and sellers, but to investors seeking opportunities in the commercial real estate sector, too.
2013-02-19 00:00:00 Kyle Bass on Inflation and How to Protect Against It by Mark Quam (Article)
Kyle Bass, the founder of Hayman Capital, foresaw the collapse of the sub-prime mortgage bond market in 2008 and the foreign sovereign debt crisis in Greece. Bass' latest warning is about looming Inflation ? and he advises how to protect against it.
2013-02-14 00:00:00 Is Inflation Around the Next Corner? Then What? by Pete Sorrentino of Huntington Funds
As the Federal Reserve Board reiterates its intention to keep interest rates near zero into 2015, it appears that the markets and many investors are growing complacent about inflation. Ever since the Financial Crisis of 2007-08, "headline inflation," as measured by the Consumer Price Index (CPI), has stayed low so far. Although it has threatened to break out at times, economic weakness has restrained the price growth that underlies inflation.
2013-02-08 00:00:00 The Year in Review: 2012 by Richard Bernstein of Richard Bernstein Advisors
Politicians crave the spotlight, but it is unfortunate that investors watch the show. 2012, like 2011, was another year in which Washington theatrics scared investors. As a result, investors largely missed out on above average equity returns. Corporate profits and valuations, and not Washington, continue to be the primary drivers of equity returns. We think there are several important points to consider when reviewing 2012 performance, and when structuring portfolios for 2013.
2013-01-30 00:00:00 Expanding Horizons: The Most Difficult Environment for Generating Income in 140 Years by Ehren Stanhope, Travis Fairchild of O'Shaughnessy Asset Management
In the most difficult environment for generating income in 140 years, we survey the landscape of income-generating options, review lessons from the previous bond Bear Market, and demonstrate why we believe global, dividend-paying equities deserve a prominent role in investor portfolios.
2013-01-16 00:00:00 The Rise of Asia's REITs by Sherwood Zhang of Matthews Asia
Real estate investment trusts (REITs) in Asia are following in the footsteps of their U.S. counterparts as they become an increasingly important asset class attracting investors looking to gain exposure to a diversified pool of real assets and relatively high yields. In the past decade, REITs have become a growing force in the regions investment universe. This month Sherwood Zhang, CFA, takes a look at just how far Asia's REIT markets have come, and what new opportunities as well as risks may still exist.
2013-01-15 00:00:00 Template for a Year-End Client Letter 2012 in Review: Learning from the Past, Looking to the Future by Dan Richards (Article)
Client concerns about whether you're on top of things can be reduced by sending regular overviews of what's happened in the immediate past and the outlook for the period ahead. That's why each year since 2008, I have posted templates to serve as a starting point for advisors looking to send clients an overview of the year that just ended and the outlook for the period ahead.
2013-01-15 00:00:00 The Markets and the Cult of Now by Joseph Paul of AllianceBernstein
Crisis-battered investors continue to favor the relative certainty of current income over the "maybe" of future capital appreciation. If you ask me, however, this hyperfixation on Now is creating some provocative opportunities in Later.
2013-01-08 00:00:00 The Forecast for Risk in 2013 by Geoff Considine (Article)
With the new year upon us, pundits are issuing their forecasts of market returns for 2013 and beyond. But returns don't occur in a vacuum ? meeting clients' goals requires an asset allocation that appropriately balances return and risk. So what follows are my predictions for risk across major asset classes, based on a theoretically sound approach that has proven to be reliable in the past.
2013-01-07 00:00:00 White Noise? by Jeffrey Saut of Raymond James
"Investing in the financial markets necessarily involves one's ability to change perspectives over time... And there's more of the white noise than ever before."... The Contrary Investor.com. So said the Contrary Investor; and I could not agree more given my sense that the media remains "long" volatility. Indeed, every time volatility increases, so do my phone calls from the financial media as they feel "compelled to come up with rationales for daily movements in asset prices;" last week was no exception.
2013-01-02 00:00:00 Brian McMahon on Thornburg?s Investment Income Builder Fund by Robert Huebscher (Article)
Brian McMahon is the chief executive officer and chief investment officer for Thornburg Investment Management, where he the co-portfolio manager for the $11.4 billion Thornburg Investment Income Builder Fund (TIBAX). The fund's goal is income production, and it has outperformed its benchmark, the Morningstar Moderate Target Risk, over the last ten years (10.87% versus 2.88%). In this interview, he offers his views on the economy and the markets, and how he has positioned his fund.
2012-12-26 00:00:00 Gundlach's High-Conviction Investment Idea by Robert Huebscher (Article)
Count Jeffrey Gundlach among those who expect Japan's currency to collapse because it can't service its debt. Japan's challenges may parallel those that the US faces, and Gundlach feels strongly that they have created a compelling investment opportunity.
2012-12-04 00:00:00 Surprising Choices in the Search for Safety Near-Certain Loss of Purchasing Power versus Short-Term by Jason Petitte, CFA (Article)
Risk, in its many guises, is unavoidable, and investors today are taking on significant amounts of credit risk, duration, and leverage to obtain high yields from many presumably safe bonds. But certain types of risk are often mispriced. By overweighting one's portfolio to those sectors that currently offer attractive risk-adjusted returns, investors will be better positioned to meet their long-term goals.
2012-11-16 00:00:00 The REIT Stuff: How REIT Investors Have Benefited from the Real Estate Recovery by Steve Benyik of Lord Abbett
In an otherwise slow-growth economy, real estate investment trusts' (REITs) strong returns and yields have attracted considerable investment in recent years. Steve Benyik, Lord Abbett REIT analyst, provides perspective on the sector's key trends.
2012-11-06 00:00:00 Letters to the Editor by Various (Article)
A reader responds to Gary Halbert's commentary, What Really Happened in Benghazi on Sept. 11, which appeared on October 31, and a reader responds to David Schawel's article, Will Bonds Be 'Burnt to a Crisp?', which appeared on October 16.
2012-10-30 00:00:00 The Dangers of Mortgage REITs: Does Doubling the Leverage Make Them a Good Investment? by David Schawel, CFA (Article)
Levered mortgage-backed REITs are dangerous. Many of those who invest in the underlying REITs have little idea what is generating 10%+ yields, nor do they understand what scenarios could lead share prices to drop precipitously. These investors need to recall the lesson we all learned so vividly in 2008 - leverage may increase returns, but it does so by significantly magnifying risk.
2012-10-09 00:00:00 A Q3 Letter to Clients - Insights from a Wall Street Legend by Dan Richards (Article)
Here is a template for a letter to serve as a starting point for advisors looking to send clients an overview of the past 90 days and the outlook for the period ahead. In it, I draw upon investing principles articulated by the legendary Barton Biggs, who passed away earlier this year.
2012-09-06 00:00:00 Outlook and opportunities in global markets by Market experts (Article)
Natixis Global Asset Management, At the half: 2012 Find out what's driving equity, fixed-income, and REITs markets from the experts
2012-08-29 00:00:00 International Real Estate Securities: Review and Outlook by Jon Cheigh, Rogier Quirijns, Gerios Rovers, Luke Sullivan of Cohen & Steers
We would like to share with you our review and outlook for the international real estate securities market as of July 31, 2012. The FTSE EPRA/NAREIT Developed ex-U.S. Real Estate Index had a total return of 5.2% for the month (net of dividend withholding taxes) in U.S. dollars. By comparison, U.S. REITs returned 2.0% for the month, as measured by the FTSE NAREIT Equity REIT Index. Year to date, the indexes returned 21.3% and 17.2%, respectively.
2012-08-27 00:00:00 European Real Estate Securities: Review and Outlook by Rogier Quirijns, Gerios Rovers of Cohen & Steers
We would like to share with you our review and outlook for the European real estate securities market as of July 31, 2012. For the month, the FTSE EPRA/NAREIT Developed Europe Real Estate Index had a total return of 3.9% (in U.S. dollars, net of dividend withholding taxes). By comparison, U.S. REITs had a total return of 2.0%, as measured by the FTSE NAREIT Equity REIT Index. Year to date, the indexes had total returns of 14.0% and 17.2%, respectively.
2012-07-24 00:00:00 High Yield and Low Risk: Finding the Best Closed-End Funds by Geoff Considine (Article)
Yield-starved investors have ventured into exotic - and often risky - assets, including hedge funds, non-traded REITs and private placements. But an asset class that has been around since 1893 offers a compelling combination of low risk and high income. A carefully selected portfolio of closed-end funds (CEFs) will yield 8% with less volatility than the S&P 500.
2012-07-10 00:00:00 A Mid-Year Client Letter: Wisdom from Three Wall Street Veterans by Dan Richards (Article)
Here is a template for a letter to serve as a starting point for advisors looking to send clients an overview of the past 90 days and the outlook for the period ahead.
2012-06-19 00:00:00 Cohen & Steers European Real Estate Securities Strategy by Team of Cohen & Steers
We would like to share with you our review and outlook for the European real estate securities market as of May 31, 2012. For the month, the FTSE EPRA/NAREIT Developed Europe Real Estate Index had a total return of 7.5% (in U.S. dollars, net of dividend withholding taxes). By comparison, U.S. REITs had a total return of 4.5%, as measured by the FTSE NAREIT Equity REIT Index. Year to date, the indexes had total returns of +3.0% and +8.8%, respectively.
2012-06-15 00:00:00 Cohen & Steers International Real Estate Securities Strategy by Team of Cohen & Steers
We would like to share with you our review and outlook for theinternational real estate securities market as of May 31, 2012. The FTSE EPRA/NAREIT Developed ex-U.S. Real Estate Index had a total return of 8.0% for the month (net of dividendwithholding taxes) in U.S. dollars. By comparison, U.S. REITs returned 4.5% for the month, as measured by the FTSE NAREIT Equity REIT Index. Year to date, the indexes returned +7.3% and +8.8%, respectively.
2012-06-12 00:00:00 The Problems with Trying to Benchmark Unconstrained Portfolios by Ken Solow (Article)
Benchmarking unconstrained, 'go-anywhere' managers is difficult. Common methods to determine an appropriate benchmark - such as an ex-post regression of how the fund was invested - can obscure the actions of the manager. Is the only solution to simply select an arbitrary benchmark and proceed accordingly?
2012-06-05 00:00:00 Finding the Best Dividend Fund by Geoff Considine (Article)
Assets are flowing into dividend-stock funds. But many experts are warning that those investors are setting themselves up for significant losses. Using an objective methodology that assesses tradeoff between yield and risk, we can determine those funds that investors should prefer - and a few they should avoid.
2012-05-29 00:00:00 What Does a Dividend Tax Hike Mean for Dividend-paying Stocks? by Steve Chun (Article)
The Bush tax cuts are due to expire at the end of this year, but owners of dividend-paying stocks need not be afraid. Historically, changes in tax regimes have had little effect on the value of the aggregate stock market. Historical data show that even vulnerable asset sub-classes - high-yield stocks, for example - have not lost value long-term as a result of similar tax increases.
2012-05-14 00:00:00 Dont Paint Yourself into a Corner with Overly Defensive Strategies by Vadim Zlotnikov of AllianceBernstein
Popular strategies for hedging against deflation and hyperinflation are likely to be disastrous if the economic outlook grows more benign as we expect. With the economic and policy outlook still uncertain, investors fear two contradictory but equally negative possible outcomes: deflation/deleveraging on the one hand and hyperinflation/currency devaluations on the other. As a result, instruments that can deliver protection in one or the other of these scenarios have enjoyed substantial inflows. Many investors have snapped up Treasuries, REITs and high-dividend-yielding stocks for insulation.
2012-05-08 00:00:00 Richard Bernstein: US Assets will Outperform over the Next Decade by Robert Huebscher (Article)
Prior to founding the firm that now bears his name, Richard Bernstein was the chief investment strategist at Merrill Lynch & Co. In this interview, he discusses why he expects US assets - both equities and fixed income - to be the outperformers among global markets over the next decade.
2012-05-01 00:00:00 Why MLPs Belong in Your Portfolio by Geoff Considine (Article)
One would think that an asset class yielding 7% and carrying less volatility than do equities would be popular with investors. Yet, despite those attributes, master limited partnerships (MLPs) remain unknown or ignored by large numbers of investors. The case for MLPs is compelling, so it's time for a deep examination of the special properties of this asset class.
2012-04-20 00:00:00 U.S. Real Estate Securities Review and Outlook, First Quarter 2012 by Team of Cohen & Steers
We have a very favorable view of specific office markets, including life sciences, technology and media, as well as New York offices broadly. We also continue to like prime retail and self storage owners, which are seeing very strong fundamentals. In contrast, we remain cautious toward health care properties and secondary retail. We have also reduced our allocation to apartment REITs on the margin following their strong run in 2011.
2012-04-10 00:00:00 Allocating to Real Assets: Why Diversification Matters by Cohen & Steers (Article)
One way to extend the long-term purchasing power of a traditional stock and bond portfolio is through an allocation to real assets. But individually, categories like commodities, natural resource equities and REITs can be volatile. Cohen & Steers meets the challenge with a focus on broad asset-class diversification.
2012-04-03 00:00:00 A Q1 Letter to Clients: Bernanke, Buffett and Siegel on the Prospects Ahead by Dan Richards (Article)
Here is a template for a letter to serve as a starting point for advisors looking to send clients a summary of what's happened in the past 90 days and the outlook for the period ahead.
2012-03-23 00:00:00 Global Real Estate Securities Investment Review and Outlook February 2012 by Team of Cohen & Steers
Global real estate securities added to their year-to-date gains in February, although the pace of the rally moderated. Most markets in Europe and Asia Pacific continued to benefit from the retreat of macro risk concerns. U.S. REITs, which advanced in 2011 while other regions struggled, had a modest decline.
2012-03-05 00:00:00 Choosing the Right REIT Can Benefit Diversification by Team of American Century Investments
The quest for consistently high risk-adjusted return is an arduous, never-ending journey. This outline introduces the basics of Real Estate Investment Trusts (REITs). That REITs can serve as a useful portfolio diversifier can easily be made apparent. The next issue becomes which type of REIT? The emphasis of this write-up is on identifying the different types of REITs. Outfitted with this information, investors can make better REIT choices, aiding portfolio diversification now and into the future.
2012-02-14 00:00:00 ?The Greatest Anomaly in Finance' by Geoff Considine (Article)
If I told you that there is an easy-to-exploit market anomaly that has enabled investors to consistently and substantially outperform the market with less risk for more than four decades, your first instinct might be to roll your eyes. After all, the unending quest to improve returns while lowering risk has yielded countless methods with initial promise that subsequently collapse under further scrutiny.
2012-01-10 00:00:00 Gundlach on the Key Risk for Bond Investors by Robert Huebscher (Article)
Watch out if you own a bond fund that underperformed its benchmark by 2% or more last year, as most did. Rather than put their careers at risk by suffering a second year of poor performance, those fund managers will turn to indexation, according to DoubleLine?s Jeffrey Gundlach. And since the Barclay?s Aggregate Index holds nearly 35% of its assets in Treasury bonds with near-zero yields, its investors will endure poor returns.
2011-12-23 00:00:00 U.S. Real Estate Securities - November 2011 by Team of Cohen & Steers
Europe appears headed for recession, which would have at least some negative effect on the U.S. economy. However, that is a scenario we have incorporated into our models, and we continue to expect slow but steady domestic growth with gradually improving fundamentals for U.S. commercial real estate. Our estimates of net asset value are largely conservative. While transactional information has been relatively light, it has provided confirmation to our numbers. We believe acquisition activity could pick up as 2012 progresses, especially as REITs ability to raise capital remains in force.
2011-12-06 00:00:00 Why Shiller and Soros May Be Wrong about Farmland Investing by Robert Huebscher (Article)
Earlier this year, Yale's Robert Shiller identified farmland as an asset class in the early stage of bubble formation. George Soros, Jim Grant and Jim Rogers have espoused similarly bullish views. But advisors - even those managing the assets of very wealthy clients - shouldn't bet the farm on these expert forecasts just yet.
2011-11-28 00:00:00 REITs: A Market Update by Arthur Hurley of Columbia Management
The Real Estate Investment Trust market experienced significant volatility during the third quarter with three different +/-15% moves. Global macro events continue to impact the REIT market, and the issues during the summer within the credit markets reminded investors that 2008 was not that long ago. With that said, earnings reported during the third quarter were generally in line or better than expected and most management teams had positive commentary with cautiously optimistic outlooks.
2011-11-08 00:00:00 Bill Gross' Revised Paradigm: The New Normal Minus by Robert Huebscher (Article)
Following the financial crisis of 2008, PIMCO articulated its 'new normal' forecast of slow growth and mediocre capital market returns. Appending the even drearier modifier 'minus' to that outlook, Bill Gross said that expectations now appear worse than even he previously feared. Gross was pessimistic in both the near and long terms, and he startled the audience with his premonition that 'capitalism is at risk.'
2011-11-01 00:00:00 The Questions to Ask about Non-Traded REITs by Robert P. Seawright (Article)
The attraction of high yields comes at the expense of higher risk, a time-worn lesson that should be an ongoing focus for investors in non-traded REITs.
2011-10-20 00:00:00 U.S. Real Estate Securities by Global Real Estate Team of Cohen & Steers
We would like to share with you our review and outlook for the U.S. real estate securities market as of September 30, 2011. The FTSE NAREIT Equity REIT Index had a total return of 14.7% for the quarter, compared with a 13.9% return for the S&P 500 Index. Year to date, the indexes had total returns of 6.0% and 8.7%, respectively. From a sector perspective, we believe apartment REITs will continue to benefit from positive market fundamentals despite a weak job market. We remain underweight in office REITs, but continue to see attractive opportunities in urban markets.
2011-10-11 00:00:00 Managed Futures are not a New Asset Class by Michael Kitces (Article)
The focus on finding investments that have a low correlation to equities has grown to such an obsession that we're willing to name anything that has a low correlation as 'a new asset class.' While some alternatives truly have their own investment characteristics unique from stocks and bonds, other alternatives - like managed futures - simply represent an active manager buying and selling existing asset classes.
2011-09-06 00:00:00 Byron Wien Reflects on His List of Surprises by Laurence B. Siegel (Article)
Byron Wien is a senior managing director and vice chairman of Blackstone Advisory Partners, the largest alternative investment firm in the world with $140 billion under management. Each year, for the last 26 years, he has published a list of 10 'surprises' investors should expect in the capital markets and the economy. In this interview, he reflects on his list for 2011 and what see sees ahead.
2011-09-06 00:00:00 Five Strategies for a Sideways Market by Kane Cotton, CFA and Jonathan Scheid, CFA (Article)
If this slow growth environment coupled with asset price volatility continues for (to steal a quote from Fed Chairman Bernanke) 'an extended period,' what additional portfolio strategies might aid the overall risk/return profile of investor portfolios? More specifically, how do you manage investments in a sideways market?
2011-08-02 00:00:00 Improving on the Ultimate Income Portfolio by Geoff Considine (Article)
The Ultimate Income Portfolio, which was published in this newsletter July 6 of last year, has delivered the risk-adjusted returns that I projected. Here's a detailed look at how last year's portfolio performed and several ways it can be improved in today's environment.
2011-05-24 00:00:00 How to Build a Low-Risk High-Income Portfolio by Geoff Considine (Article)
Prominent investors, including Bill Gross and Warren Buffett, now say that the yields on long-term government debt do not justify the risks. But is this perception correct? I offer a way to answer that question - and to construct a low-risk high-income portfolio - using the prices of put options to derive the true risk levels of various asset classes.
2011-04-12 00:00:00 Been Down So Long It Looks Like Up To Me by Michael Lewitt (Article)
"The budget crisis is a crisis of leadership," writes Michael Lewitt in the latest issue of the HCM Market letter. "There is no intellectual mystery involved in cutting the budget - entitlement spending must be reduced through the adoption of tighter eligibility standards... The markets will also have to evaluate whether Congress and the Obama administration can make any meaningful progress on budget reform, which will mean tackling the entitlement issue. The failure to rein in federal deficits remains a profound threat to the dollar and interest rates."
2011-01-18 00:00:00 Letters to the Editor by Various (Article)
A number of readers respond to Nancy Opiela's article, Tactical Asset Allocation and Market Timing: What's the Difference?, and one reader responds to Michael Lewitt's article, The Wages of Growth. Both articles appeared last week.
2010-12-31 00:00:00 Pessimism was not the Winning Bet in 2010 by David Edwards of Heron Financial Group
The easy money has been made, particularly in certain economically sensitive sectors. Returns in bonds could be flat or even negative over the next several years. We?ve substantially increased our exposure to boring old consumer staples, utilities, REITs and telecomm stocks, which offer dividend yields starting at 4% and ranging up to 12%. We expect US GDP growth to range between 2-3% over the next 4 quarters. In that environment, we would forecast gains in the S&P 500 of 8-10%, but now we wonder whether December?s 6.9% gain has already accounted for most of 2011?s stock market returns.
2010-11-30 00:00:00 QE2: Beware the Perils of its Success by Vitaliy Katsenelson (Article)
QE2 is like a drug prescription that comes with a list of side effects that are often worse than the disease it was supposed to cure. It is difficult to know the unintended consequences of QE2, but it may result in a substantial decline in the dollar, stagflation, lower economic growth and much higher interest rates.
2010-10-12 00:00:00 How Not To Get Screwed by the Bond Bubble by Isbitts of Emerald Asset Advisors
Bond funds, particularly those that invest in U.S. Treasury securities and other types of bonds at the low end of the risk spectrum, have seen piles of new cash in 2010. Whether it is through long-short funds, arbitrage, multi-strategy or 'equity surrogates' like convertibles and REITs, however, it is possible to create a portfolio with a low standard deviation without having to be trapped by a low fixed rate and the threat of rising bond prices.
2010-07-20 00:00:00 Martin Leibowitz? Failed Defense of the Endowment Model by Michael Edesess (Article)
The latest book from Martin Leibowitz, one of the most respected thinkers in the investment industry, attempts to justify the endowment model of investing. As Michael Edesess writes in this review, Leibowitz's defense is highly problematic, and that should concern any advisor utilizing a Yale-like strategy.
2010-07-06 00:00:00 The Ultimate Income Portfolio by Geoff Considine, Ph.D. (Article)
Conventional approaches to constructing income-oriented portfolios use either bonds or high-yield stocks. In this article, Geoff Considine explores a compelling alternative to that approach: a carefully selected model high-yield portfolio consisting primarily of low-beta, high-dividend stocks, against which the investor sells call options.
2010-06-29 00:00:00 Timber as an Asset Class: If a Tree Falls in the Forest, Should you Buy It? by Charlie Curnow (Article)
"If the sun shines and it rains, the trees grow about on schedule," wrote Jeremy Grantham, chairman of Boston-based investment firm GMO, in his quarterly newsletter in April 2007. Grantham's enthusiasm for timber, which remains true to this day, may be excessive, despite the fact that, on the surface, historical data seems to support his optimism. If a tree falls in the forest, should you buy it?
2010-06-29 00:00:00 Inflation Protection Investment Strategies by Vern Sumnicht (Article)
The value of the dollar is sure to erode, and investors will be left to grapple with the inflationary consequences. As Vern Sumnicht shows in this guest contribution, recent policies suggest steep inflation may be just around the corner. Fortunately, investors have some options to bolster their portfolios against the threat of inflation.
2010-05-18 00:00:00 Jeremy Grantham Guarantees Gold will Crash by Robert Huebscher (Article)
Jeremy Grantham, the investor celebrated for his ability to spot and exploit bubbles in asset classes, guaranteed yesterday that the current bull market in gold will end. His proof? He bought some - for his own account - at the end of last week. That comment was tongue-in-cheek, but he went on to identify two asset classes likely to go into bubble territory.
2010-03-30 00:00:00 Not a Lost Decade for Diversified, Balanced Portfolios by Joni L. Clark, CFA, CFP (Article)
Did the last ten years really demolish the foundations of Modern Portfolio Theory and classic investing principles? How did portfolios that stuck to the principles of effective diversification and buy-and-hold investing actually perform during the so-called "Lost Decade?" The answers to both questions is an unqualified "no," writes Joni Clark of Loring Ward in this guest contribution, based on her analysis of a DFA-based strategy.
2010-03-23 00:00:00 Game On! by Lance Paddock (Article)
Advisor Lance Paddock comments on the exchange between Wealthcare's Dave Loeper and SCM's Roger Schreiner. Paddock lauds Loeper's focus on managing assets based on client goals, but says Schreiner's challenge is nonetheless fair, and urges Loeper to accept Schreiner's terms.
2010-03-02 00:00:00 Asset Allocation for Grantham?s Seven Lean Years by Geoff Considine, Ph.D. (Article)
Followers of Jeremy Grantham know his consistently accurate long-term forecasts well, as well as his ability to identify and avoid asset bubbles and steer clients into high-performing asset classes. Grantham's prescience is remarkable but not irreplicable. Geoff Considine shows that his Monte Carlo simulations nearly match Grantham's forecasts, and he reviews the implications for asset allocations.
2010-03-02 00:00:00 Asset Allocation Perspective by Scott Wittman, CFA (Article)
Scott Wittman, Chief Investment Officer for American Century Investments, provides his quarterly review of macro-economic factors and trends which influence the tactical weighting decisions for American Century's asset allocation funds. In the article, Wittman reviews and comments on recent events, trends and expected short-term future changes in monetary, fiscal, industrial, trade, regulatory, political and financial macro economic factors. We thank them for their sponsorship. This is sponsored content.
2010-01-26 00:00:00 Diversification Really Does Pay Off by Geoff Considine, Ph.D. (Article)
The last decade severely tested investors' belief in the value of diversification and strategic asset allocation, leading some in the financial media to assert that diversification and asset allocation failed and were worthless during the crash of 2007-2008. Now is an ideal moment to look back and assess the carnage.
2010-01-26 00:00:00 The Potemkin Market by Michael Lewitt (Article)
We are again privileged to publish the current issue of Michael Lewitt's newsletter, titled The Potemkin Market. Lewitt updates his forecast for the S&P 500, criticizes the current financial reform efforts and the ongoing GSE bailout and Fed Chairman Bernanke. Lewitt argues that risk is overpriced in many segments of the market.
2010-01-19 00:00:00 A Market for Contrarians by Robert Huebscher (Article)
Along with Steve Leuthold, Rob Arnott, Doug Kass and DoubleLine co-founder Joe Galligan were among the speakers at Fortigent's conference. These three speakers' bearish sentiment extended across a wide range of asset classes, opening lots of possibilities for those who prefer contrarian bets.
2010-01-14 00:00:00 Domestic REITs by Team of Litman Gregory
At current valuations, we believe REITs are overvalued. We think REIT investors are anticipating a quick and meaningful rebound in cash flows/dividends. Our dividend growth assumption over the next ye
2009-11-24 00:00:00 Interview: Brian McMahon of Thornburg Investments by Robert Huebscher (Article)
We speak with Brian McMahon, CEO and CIO of Thornburg Investment Management about the Thornburg Income Builder Fund (TIBAX) and the challenges of finding income-producing securities in today's markets.
2009-09-08 00:00:00 Are REITs Now Undervalued? by Geoff Considine, Ph.D. (Article)
The last couple of years have been rough for real estate, but there was a time not too long ago when it seemed that this was a 'special' asset class, with REITs providing valuable diversification benefits and consistently high returns. Do today's low valuations represent an opportunity to buy? Can investors expect a return to low correlations for REITs with the major equity market indexes?
2009-08-25 00:00:00 The New Normal and Asset Allocation Merriman?s Response by Larry Katz, CFA (Article)
Larry Katz, Director of Research at Merriman, Inc., responds to Geoff Considine's article two weeks ago, What the New Normal Means for Asset Allocation. He has multiple objections concerning much of Considine's logic, and would not recommend his alternative portfolio to their clients.