Of all the variables we routinely measure in our behavioral assessments, our research shows that one most accurately predicts risk-taking – overconfidence. It’s time that advisors systematically identify their overconfident clients and develop skills to overcome the bias it breeds.

The market remains in a narrow trading range, near the record highs. There have been some relatively minor leadership changes. This reflects not investor complacency, but intense disagreement about how to interpret data and events. Each viewpoint has a history, a philosophy, and problem something to sell!

The belief that detailed quantitative measurement will make performance easier to evaluate, manage efficiently, and improve has survived repeated failures of the doctrine. In fact, the failures serve only to bring forth calls for more of the treatment. Only very rarely is it admitted that quantification doesn’t work and should be scrapped.

In recent years, factor-based investments have become increasingly popular for equity investors. Often missing from the discussion, however, is the concept of fixed income factor strategies. At Invesco Fixed Income, our view is that bond investors can potentially benefit from a factor-based approach. We’ve launched a new suite of exchange-traded funds focused on two factors — quality and value — that we believe may help investors reach their objectives.

This report may end up being the first in an ongoing series. I think of it as a “look inside my notebook,” as it literally represents a synopsis of the recent notes I put together for our latest Asset Allocation Working Group meeting. These represent a number of budding risks for the economy with which the markets are grappling. There are offsetting positives of course, but let’s leave this report to a look at some of the possible negatives.

So, as most of you know we were on a road trip last week. We flew into Albany, New York on Sunday only to be greeted with hotter temperatures than what we left in Florida. The mountain drive to Manchester, Vermont was spectacular, but hereto the temperatures were hotter than Florida.

U.S. stock dividends have grown much faster than inflation.

We've updated this series to include Friday morning's release of the Consumer Price Index as the deflator and the July monthly update. The latest hypothetical real (inflation-adjusted) annual earnings are at $38,279, down 12.5% from 45-plus years ago.

The number of publicly listed companies in the U.S. has fallen steadily since 1997. More companies have delisted, in fact, than gone public in every year of the past 20 years except one, 2013. Put another way, the pool is getting smaller even while the population and economy are expanding.

This year at "Camp Kotok," I quickly sensed a more upbeat mood. Not that many that were wildly bullish, but most were positive or at least neutral. There weren’t nearly as many bears as I expected. “Cautious optimism” seemed to be the theme. That led me to refine my own views with a wide variety of participants. Today, I’ll do the same for you.

The S&P 500 started Monday climbing, only to stay in a narrow range through the rest of the week, closing Friday down 0.71% from Thursday and below its Monday open. The index closed with a weekly loss of 0.25% and is up 5.10% YTD (as of Jan. 1).

Let's take a closer look at recent activity in US Treasuries. The yield on the 10-year note ended Friday at 2.87% and the 30-year bond closed at 3.03%. The 2-10 yield spread is now at 0.26%.

Value investing is a proven long-term investing strategy that produces above-average results at below-average risk – if engaged in properly. However, there are four primary advantages to investing in undervalued dividend growth stocks that facilitate strong long-term performance while simultaneously lowering risk.

Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.

Environmental, social and governance (ESG) indicators are integral to PIMCO’s sovereign credit assessments, which inform our investment decisions. But how exactly do we incorporate ESG considerations into our decisions?

This morning's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 147.8, up fractionally from the previous week. Year-over-year the four-week moving average of the indicator is now at 2.50%, down from 2.64% last week. The WLI Growth indicator is now at 0.6, also down from the previous week.

Market risks come in three flavors: recession risk, economic shock risk, and risks within the market itself. So, what do these risks look like for August? Let’s take a closer look at the numbers.

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.

In a new white paper on GMO’s website, Jeremy Grantham updates his discussion of the threats posed by climate change, population growth and increasing environmental toxicity, and his perspective on the role investors can play in combating these threats. In “The Race of Our Lives Revisited” Grantham summarizes the current state of affairs and the likely impact on the future ability to feed the 11 billion people projected to live on Earth by 2100.

Owens & Minor Inc. reported earnings yesterday and simultaneously revised their 2018 earnings outlook lower. As fate would have it, I produced an article and a video where I highlighted 12 undervalued dividend growth research candidates which included Owens & Minor.

Portfolio managers Dan Ivascyn and Alfred Murata discuss the impact of higher market volatility and how they are positioning the Income Strategy for change ahead.

The Brexit clock is ticking as the United Kingdom’s departure from the European Union (EU) is set to take place in March 2019. But is the UK ready to leave? And is there still a chance it won’t?

In this issue, Research Affiliates discusses positioning in emerging markets and why investors should care about the distinction between real and nominal returns.

The U.S. economy is going through a hot summer, but will cool off later this year.

Synchronized global growth was one of the main themes coming into 2018. In the second quarter GDP in the U.S. was the strongest since 2014, even as growth around the world downshifted. While global growth will be decent in the second half of this year, growth has already slowed in the U.K, Europe, China, and Japan.

Emerging equities are more volatile than developed market equities. This owes little to the volatility of emerging stock markets in local terms and much more to the strong positive correlation between their local stock markets and movements in their currencies. The spring of 2018 was a classic example of this, with US dollar strength driving significant emerging weakness.

We've updated our monthly workforce analysis to include last week's Employment Report for July. The unemployment rate dropped to 3.9%, and the number of new nonfarm jobs (a relatively volatile number subject to extensive revisions) came in at 157K.

We don’t know how long ago we met Frederick “Shad” Rowe, but we are glad we did, because our conversations with him have been net worth changing.

The Labor Force Participation Rate (LFPR) is a simple computation: You take the Civilian Labor Force (people age 16 and over employed or seeking employment) and divide it by the Civilian Noninstitutional Population (those 16 and over not in the military and or committed to an institution). The result is the participation rate expressed as a percent.

Here are some small changes you can make to your office and the way you present yourself that will quickly inspire trust.