The Factor-Based Investing Channel

How to Dodge the Debt Train

An active manager worth his or her salt will manage risk as part of the deal, and risk management is exactly what you need when you live on a railroad track. It doesn’t have to be perfect, just good enough to mitigate the major drawdowns. If everybody else loses 40% and you only lose 25%, you’ll be way ahead of the crowd. And the right manager should avoid even that scenario and keep you near break-even.

Overbought or Oversold? Let These Mathematical Signals Be Your Guide

Anticipate before you participate in the market. This is a classic piece of advice I like to give investors and have written about extensively in my CEO blog, Frank Talk. Financial markets are influenced by relatively predictable cycles and trading patterns, and by better understanding these we are able to react thoughtfully to headline noise or unexpected market developments.

The Fed's Balance Sheet May Remain Larger for Longer

The Northern Trust Economics team shares its outlook on the Fed’s balance sheet, the world's persistent preference for cash, and the challenge of measuring the gig economy.

Loan Growth Has Slowed as IOER Has Risen

Is this the anti-inflationary mechanism the Fed is counting on?

Under Pressure

In the second quarter volatility waned and performance decoupled as divergent backdrops created variances in returns for assets classes and markets across the globe. The winning trades for the second quarter were in the U.S. energy sector, U.S. small companies, and a select group of technology and consumer discretionary stocks.

Has the Storm Passed in the Emerging Markets?

Stock and currency markets often take their cues from the credit markets, so we find it instructive to keep a close eye on credit spreads and credit default swaps (CDS). Looking at the credit markets in the emerging markets, we think there may be initial signs that the storm that has engulfed emerging market assets may be over.

Regional Factor Face-Off

Modern finance has discovered that stocks that share certain fundamental characteristics called “factors” exhibit different return and risk characteristics than the overall market. These factors or “dimensions of the market” can be classified as: dividend yield, volatility, momentum, quality, size and value.

The Dangers of Inward Thinking

There are a number of changes taking place in the investment environment and they are likely to have an influence on the returns on financial assets for some time to come. When the world’s leading economy, with more than a fifth of global GDP, does not participate in major alliances dealing with matters of security and the environment, this has longer-term investment implications.

Emerging Markets Might Be Ready To Outperform

Emerging markets equities have lagged in 2018 and throughout most of the last decade. Recent fund outflows have been extreme. Fund managers are underweight the region. Their currencies and commodities are not liked. The region is now "cheap" and it might be ready to outperform.

Can't Build Them? Join them: Rising Home Prices & Lack of Construction

There’s a tug of war brewing between housing costs and consumer budgets in the US. Single-family home prices have risen 6% a year or more since 2011, and supply/demand forces point to further increases. But consumer budgets have limits. Some buyers are now spending around half of their income on housing.

Think Small in a Trade War? Yes, but Think Carefully, Too

As trade tensions escalate, investors are flocking to stocks of smaller US companies, which rely less on foreign sales than their large-cap peers. But in some industries, tariffs could affect smaller companies in unexpected ways.

Minute with the Manager: Meet Ralph Aldis

Meet Ralph Aldis – one of the longest standing members of the investment team at U.S. Global Investors. Ralph is responsible for analyzing gold and precious metals stocks in his role as co-portfolio manager for the World Precious Minerals Fund (UNWPX) and the Gold and Precious Metals Fund (USERX).

Yield Curve Inversion: Not What it Appears

There has been considerable discussion lately about the slowly inverting yield curve and what it may signal for growth prospects going forward. Commonly used as a proxy for the yield curve is the spread between 10-Year US Treasury yields and 2-Year US Treasury yields.

Second Quarter 2018: Unique But Not Different

For much of this recovery and expansion, many have opined that this economic cycle would ultimately end very differently than those of the past. We have resisted this narrative and instead explained our belief that this cycle will indeed follow the same path and end like all others.

The Dynasty Economic & Market Outlook: Volatility is the New Black

Topics of discussion are Economic Outlook – “It’s a Mad Mad Mad Mad World”, Market Outlook – “Volatility is the New Black”, Building “All Weather” Portfolios.