The Income Channel

Five Decades of Middle-Class Wages: August 2017 Update

We've updated this series to include Thursday's release of the Consumer Price Index as the deflator and the August monthly update. The latest hypothetical real (inflation-adjusted) annual earnings are at $37,272, down 12.6% from 44 years ago.

Large-Cap Value Farming

Value investing is very similar to farming. A farmer needs fertile ground, well-planted seeds, unshakable patience, loads of sunshine, watering and weeding, as well as a great deal of courage and faith to succeed in the long run. Today, we believe that investors need to reexamine the benefits of a value investing approach toward the end of an era which has rewarded growth stock investing.

How to Trade in Today’s Placid Bond Markets

Today’s low bond market volatility won’t last forever. But knowing whether a correction will come next week or next year isn’t so important. Having an efficient trading strategy that can execute in both tranquil and turbulent markets is.

How the German Election Could Dictate Europe’s Future Direction

As Germany prepares to go to the polls in its general election, David Zahn, Franklin Templeton Fixed Income Group’s head of European fixed income, considers what the result could mean for Europe, the European Union and the eurozone.

The Risk of a New Economic Non-Order

The upcoming IMF and World Bank annual meetings offer a critical opportunity to start a serious discussion on how to arrest the lose-lose dynamics that have been gaining traction in the global economy. The longer it takes for the seeds of reform to be sown, the less likely they will be to take root.

The German Election and Markets

What might the German election mean for markets?

U.S. Debt Tops $20 Trillion - Stocks Soar To Record Highs

We touch on several bases in today’s letter that are not entirely related. We begin with the 800-pound gorilla in the room – the fact that the US national debt topped $20 trillion last week.

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.

Five Surefire Ways to Lose a Prospect

It’s been challenging to limit this list to five surefire ways to fail to convert a prospect, but these will be a good start.

U.S. Household Incomes: A 50-Year Perspective

The Census Bureau has released its annual report on household income data for 2016. Last year the median (middle) household income rose to $59,149, a 4.1% increase over 2015 and a record high. The median income adjusted for inflation is also at a record high, above the peak of $58,882 set in 2000. The mean (average) household income set a new high of $83,143. More about that in another commentary. Meanwhile, let's take a closer look at the quintile averages, which dates from 1967, along with the statistics for the top 5%.

North Korea: An Update

North Korea has become increasingly belligerent, launching ballistic missiles, testing a hydrogen device and claiming to have miniaturized a warhead; if true, this means it is a nuclear power. Although Trump says “all options are on the table,” a full-scale war would be catastrophic and may be impossible to contain.

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.

Retirement & CEFs

Adding closed-end funds to your investment portfolio may be a way to help boost your retirement income, industry pros say.

Random Gleanings at 38,000 Feet

Reflecting on the months of travel as we wing our way back to Tampa at 38,000 feet, one of the more interesting encounters in those travels was spending time with Steve Forbes (Forbes Magazine). Although Steve is a staunch Republican, he suggested that Republicans worship at the altar of the CBO (Congressional Budget Office). 

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.