The Asset Allocation Channel

Are Diversifying Assets Up Next in the Return-Seeking Cycle?

After a sustained period of return leadership by U.S. stocks, a number of diversifying assets now appear poised for outperformance.

Time to Take a (Measured) Risk?

Astute investors know that buying when others are fearful can be a good strategy. Despite remarkably low market volatility, investors continue to avoid risk. This month, we examine previous periods of risk and investor behavior, when investors discarded normal valuation measures, threw caution to the wind, and suffered the consequences.

Worried About Rising Rates? Here’s Why You Shouldn’t Be

Should tighter monetary policy on both sides of the Atlantic worry bond investors? We don’t think so. Bonds have historically delivered positive returns when interest rates rise—particularly when they rise gradually.

Generation Dove: The Fed's Norm for Nearly 20 Years

With the top two positions at the Federal Reserve soon to be open, Russ discusses how the easy money era goes back a long way.

On My Radar – Forward We Go

Last week, investors were lamenting the lack of inflation. This week, they’re fixated on its rise. On Thursday, data showed consumer prices climbed 0.4% in August from a month earlier and 1.9% from a year earlier, a sign that inflation is once again on the upswing after months of soft readings.

Weekly Market Summary

The major US indices all recorded new all-time highs (ATH) this week. The very broad NYSE, covering 2800 stocks, also made a new ATH, suggesting the rally is supported by adequate breadth. Longer-term studies and the fundamental macro data continue to indicate that further upside into year-end is odds-on. On a short-term basis, there are several reasons to be on alert for weakness over the next week or two. An important FOMC meeting is on deck for Wednesday.

Robo Advice Data Now Available for Advisors

Robo advice is the newest disruptor in the financial industry and many advisors are not sure how to interpret this new investment advice solution. Some are writing it off as a solution for lower asset customers, some are concerned about the competitive threat, while others are embracing the technology for use in their own business.

2017 Winners Make Peculiar Bedfellows

Russ explores why both risky assets and traditional safe havens have performed well this year, and whether that can continue.

Fund Managers Drop US Exposure to 10 Year Low

Global equities have risen 12% in the past 6 months and 17% in the past year, yet fund managers continue to hold significant amounts of cash, suggesting lingering risk aversion. Allocations to US equities dropped to their lowest level in 10 years (since November 2007) in September: this is when US equities usually outperform.

Active Fixed-Income Fund Management: There’s Nothing Passive About It

Should investors prefer an active investment fixed income investment management strategy over a passive fixed income investment strategy? LM Capital Group believes that actively managed fixed income investment management strategies may meaningfully impact investors’ portfolios in five ways.

NFIB Small Business Survey: Index Maintains Momentum in August

The latest issue of the NFIB Small Business Economic Trends came out this morning. The headline number for August came in at 105.3, up 0.1 from the previous month. The index is at the 97th percentile in this series. Today's number came in above the forecast of 105.0.

Vanguard’s Chief Economist – Automation is Not Killing Jobs

Rapid technological advances are transforming the global workplace. But fears that automation will permanently destroy American jobs are misplaced, according to Joe Davis. Instead, the jobs that require “uniquely human” skills will proliferate, Davis said.

Energy: The Perils of 'Volume over Value'

There’s an ongoing narrative about the energy industry that says exploration and production (E&P) companies are making money in unconventional shale plays, even with oil selling for only $50 a barrel. This is touted as a positive trend. But a deeper dive into energy company fundamentals suggests a vastly different story — one that prioritizes production volume over economic value.

On My Radar: Breathtaking Risks Yet Bullish Trend Persists

I’m writing to you from Chicago where I am attending the Morningstar ETF Conference. Vanguard’s global chief economist, Joe Davis, kicked off the event Wednesday evening advising investors to expect lower returns and rocky markets for the next two to three years.

Managed Futures Strategies: Inside the “Black Box”

Momentum, trend-following, managed futures - are terms that can seem intimidating and opaque for many investors. But, while these types of investment strategies may be less familiar than traditional strategies, they can be quite intuitive and offer attractive diversification and return potential that is worth getting to know.