The Asset Allocation Channel

Getting More From Your Equity Allocation

How can equity investors address the triple threat of a low return environment, scarcity of alpha and the tendency to chase performance?

Jack Bogle on the Limits of the Fiduciary Rule and the Future of the Advisory Industry

Speaking two weeks after his 88th birthday, Jack Bogle called the fiduciary rule “silly” and said that financial advisors’ fees are heading lower. Indeed, he said, advisors are destined to charge hourly or retainer fees, like lawyers and accountants.

Keep Your Eyes on the Credit Markets, Not Washington

With political uncertainty on the rise in D.C., will market volatility spike? Russ discusses why the economy and credit markets matter more.

Keeping Your Balance as Rates Rise

Rising interest rates make bond investors nervous. But purging your portfolio of interest-rate risk can backfire—even in a rising-rate environment. There’s a better way to balance risk and return.

Jeremy Siegel versus Robert Shiller on Equity Valuations

Should you reduce allocations to U.S. equities given the conventional wisdom that prices are “rich” and “due for a correction”? Jeremy Siegel says no; investors should expect 5% real returns from stocks over the long term. But Robert Shiller thinks that number should be much lower.

Our Five Year Forecast for the S&P 500

The vast majority of businesses manage their operations according to a plan. That plan may be as simple as an entrepreneur writing down a few goals on a napkin, or as complex as a massive set of instructions covering the day to day, month to month, year by year, or decade by decade actions required to maximize profits.

Don’t Wait for Rough Markets to Take a Look at Alternatives

Volatility is remarkably low today, but it’s not likely to stay that way. Alternatives have the potential to provide diversification and reduce risk when markets get stormy again. But what’s the best way to design an alternatives allocation?

On My Radar: Near Term Looks Good, Long Term Looks Scary

This is one of the more important pieces I’m sharing with you. It’s a candid look at where we are in the economic cycle and what that likely means for the global markets.

Being Wrong in an Interesting Way

My friend Mark Hulbert once had a philosophy professor at Oxford, who distinguished two ways of being wrong: “You can be just plain wrong, or you can be wrong in an interesting way.” In the latter case, Mark explained, correcting the wrong reveals a lot about the underlying truth.

Comparing Different Strategies for Getting into the Market

Is it better to jump in all at once, to average-in over time or to wait for a market correction?

The Benefits of Active Municipal Bond Management

Robert DiMella is an executive managing director and co-head of MacKay Municipal Managers team, overseeing approximately $20 billion in municipal bond assets. In this interview, he discusses the opportunities for muni bond investors and the outlook for the coming year.

The Great Reset: How Should We Then Invest?

This letter will cover the philosophical underpinnings of my thinking. I’ll also introduce some investment tools (which I will give you access to through a link later on in the letter) that express that philosophy, but you could also design a different answer that fits your own (or your client’s) portfolio construction.

Will the Fed Change Course?

The Fed story may well command attention. I classify it as an important story, but not an urgent one. I have some strongly-held viewpoints:

  1. The exact timing of rate hikes is not important for long-term investors. The Fed has been following a policy of rate increases in line with economic data. While many do not believe this, the data are supportive. Tim Duy on recent strength.
  2. That said, the rate increases have second- and third-order effects. The perception of the pace of hikes impacts exchange rates. The weaker dollar affects major corporate earnings – in both directions. This makes the Fed news worth watching.
  3. Current data are stronger than widely thought, but much depends upon how one views the Q1 softness—meaningful or aberrant. Recent Fed speeches suggest a moderation in the rate-hike path.
  4. Rates will be increased more slowly, but the balance sheet will be reduced.

DOL Throws New Lifeline to Lifetime-Income Solutions

The defined contribution (DC) community has been buzzing about lifetime-income products lately. It’s a topic that’s been dormant for several years, but there are good reasons for renewed interest.

Why Liquid Alternatives Now

K2 Advisors’ Founding Managing Director David Saunders is speaking at the prestigious SALT conference this month in Las Vegas, where he’ll discuss the liquid alternatives landscape and why he thinks now’s the time for investors to consider this asset class.