The Capital Growth Channel

Craftsmanship in Smart Beta

While somewhat at odds with today’s big-data, warp-speed approach to life and work, thoughtful craftsmanship—the product design and implementation elements that are tangible, measurable, and impactful—can create positive, persistent results in portfolio performance.

Gold and the Global Ticking Debt Bomb

Looking long-term, there are mounting risks involving debt that make gold appear very attractive right now as a safe haven and portfolio diversifier.

Earnings Growth Matched The Rapid Pace of Equity Appreciation in 2017

S&P sales grew 9% over the past year, the best growth in 6 years. Earnings rose 23%, the best growth in 7 years. Profit margins expanded to a new all-time high of 10.8%. Overall, corporate results in the fourth quarter were very good. Earnings during 2017, in fact, rose as much the SPX index itself. The outlook for 2018 appears to also be strong: the consensus expects earnings to grow as much as 18% this year.

S&P 500 Snapshot: Highest Close in Weeks

The S&P 500 spent the day rising, closing at its highest since February 2. The index ended Friday up 0.55% from last Friday and is up 1.91% YTD.

Three Market Concerns Move to the Fore

Last week brought renewed focus to three areas of concern that I’ve been writing about for some time: populism, protectionism and pressure on debtors. It appears that we may be moving closer to certain outcomes that could be of concern to markets.

The Value of Short Volatility Strategies

The authors believe that with today’s heightened valuations across global equity markets, and volatility no longer cheap, now is a fitting time for investors to take a careful look at put writing strategies and consider swapping a portion of their traditional equity exposure for index put-writing. The piece concludes with a “Special Topic” dedicated to examining the recent VIX Blowup.

ECRI Weekly Leading Index Update: WLI Down Slightly from Last Week

Today's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 149.0, down 0.8 from the previous week. Year-over-year the four-week moving average of the indicator is now at 3.98%, down from 4.28% last week. The WLI Growth indicator is now at 7.5, down from the previous week.

RecessionAlert Weekly Leading Index Update

The Weekly Leading Economic Index (WLEI) uses fifty different time series from these categories: Corporate Bond Composite, Treasury Bond Composite, Stock Market Composite, Labor Market Composite, Credit Market Composite.

Defined Contribution: Four Themes for 2018 and Beyond

In our view, the prospective low-return environment calls for a capital-efficient approach that pairs actively managed bonds with passive or enhanced equities in target-date, core and retirement-income allocations.

Counter Cyclical Stocks Are Making New Relative Lows, Right on Cue

Counter cyclical stocks, those in the consumer staples, health care, real estate, telecom and utilities sectors, continue to have a tough go at things. In fact, as of two days ago this group of bond proxies made a new low compared to all developed market stocks, thereby continuing and reinforcing a trend that has been in place since the middle of 2016. Why is that?

Three Warning Signs for Commercial Real Estate and REITs

Forecasting the direction of real estate prices requires the same disciplined approach as for other goods and services. Here are three reasons why commercial real estate supply exceeds market demand, and the implications for your clients and their REIT investments.

The Counterargument: Why We Believe Giving up on Europe in Favor of the U.S. Is Wrong

We respectfully disagree with BlackRock’s stance on U.S. and European equities. Here’s why.

Q&A: Market Volatility Opens Opportunities in Asia

Matthews Asia CIO Robert Horrocks says current stock valuations favor Asia amid an increase in market volatility globally.

The Four Horsemen of the Retirement Apocalypse

In biblical tradition, the four horsemen of the apocalypse are a quartet of immensely powerful entities personifying the four prime concepts – war, famine, pestilence and death – that drive the apocalypse. For today’s investors, the equivalent is historically high equity valuations, historically low bond yields, increasing longevity and, as a result, the increasing need for what can be very expensive long-term care.

Conference Board Leading Economic Index: Another Record High in January

The latest Conference Board Leading Economic Index (LEI) for January increased to 108.1 from 107.0 in December. The Coincident Economic Index (CEI) came in at 103.0, up from the previous month.