Are you getting enough diversification from your alternatives allocation?
Our research shows that most portfolios aren’t maximizing the diversification potential of alternatives
The ECB Remains Focused on Its Targets
by Rob Waldner of Invesco Blog, 4/25/16
The European Central Bank (ECB) surprised markets once again on April 21 with the timing of some important announcements and also the scope of its bond purchasing program. While the ECB kept all three of its policy interest rates on hold — as expected — and the size of its asset purchase program unchanged at EUR80 billion a month, ECB President Mario Draghi provided new details in a news conference on the implementation of the bank’s program and on the scope of what assets it can buy. At a high level, Draghi summarized by saying that the ECB’s monetary policies are working, but they need time to be more effective.
A Tale of Two Markets: Dividend, Low Volatility and Quality Factors Earn Top Spots in Q1 2016
by Nick Kalivas of Invesco Blog, 4/18/16
The first quarter of 2016 has come to a close, and what a period it was. The past quarter’s returns were a clear testament to the power of factor investing, and provide further evidence that smart beta strategies can add value to a diversified portfolio.
Energy Bonds: Finding the Silver Lining in Credit Downgrades
by Bixby Stewart of Invesco Blog, 4/11/16
Several highly punitive credit downgrades of higher-quality energy companies surprised the investment grade bond market recently, with some downgrades representing cuts of four to five notches. But Invesco Fixed Income believes there may be a silver lining to these downgrades: Together with low commodity prices, these moves may be driving a positive shift toward more prudent corporate balance sheet management, largely in favor of creditors. While commodity price volatility, an oversupplied oil market and broader macroeconomic uncertainty cause us to be very cautious about investing in energy-related credit, we believe such volatility and change in corporate behavior may create unique opportunities for active investment managers.
Are Valuations Relevant to Low Volatility Investors?
by Nick Kalivas of Invesco Blog, 3/31/16
It’s an age-old adage: buy low and sell high. This mantra is typically seen as a recipe for success in stock market investing, particularly among value investors. In order to determine whether or not a stock is cheap, many value investors use fundamental ratios, such as price-earnings, price-to-book and price-to-sales. Low multiples are taken as an opportunity to buy, while high multiples are seen as an opportunity to sell. Following this line of reasoning, value investors typically shy away from stocks that appear expensive based on valuation ratios, and are drawn to stocks that appear cheap.
Certain European Bank CoCos Still Offer Opportunities
by Ian Centis of Invesco Blog, 3/28/16
European banks’ contingent convertible (CoCo) junior subordinated Additional Tier 1 securities — the junior subordinated subset of the CoCo family — suffered a significant sell-off in January and February from which they have only partly recovered. However, Invesco Fixed Income believes the investment thesis for this asset class remains intact, especially following the European Central Bank’s (ECB) constructive actions announced on March 10.
Think Positive: Three Reasons We’re Unlikely to See Negative Interest Rate Policy in the US
by Laurie Brignac of Invesco Blog, 3/21/16
There has been fresh speculation that the US Federal Reserve (Fed) might implement a negative interest rate policy (NIRP) in its quest to boost the economy. While negative interest rates are not a new phenomenon, we’ll explain three main reasons why Invesco Fixed Income believes this scenario is highly unlikely in the short to medium term.
ECB Makes a Bold Move to Boost Growth
by Rob Waldner, Mark Nash, Nicholas Wall of Invesco Blog, 3/11/16
New monetary stimulus measures announced today by the European Central Bank (ECB) represent a bold move, in our view, and should be positive for riskier European assets, such as credit assets.
Investment Opportunities Are Slowly Emerging in Asia Pacific Markets
by Brent Bates of Invesco Blog, 3/3/16
Virtually all Asia Pacific countries and sectors are experiencing negative earnings revisions, with return on capital falling to decade lows, a weak export environment and lackluster domestic economies. In this environment, investors have sought the highest-growth and highest-quality companies irrespective of valuation. Because the Invesco International and Global Growth team is not willing to buy at any price, we have been priced out of many of businesses we believe are attractive. But we see signs that this is starting to turn in certain areas.
As Equity Markets Normalize, Alternative Strategies May Be Worth Considering
by Walter Davis of Invesco Blog, 2/29/16
As the equity market normalizes, I believe alternative investments can be helpful to investors. That’s because alternatives have a history of outperforming equities during periods of stock market weakness.
Are Markets Returning to 'Normal' Behavior?
by Scott Wolle of Invesco Blog, 2/22/16
The Invesco Global Asset Allocation team doesn’t consider double-digit declines in equity markets to be normal. However, we do see three “typical” characteristics that have returned to the markets over the last few months, characteristics that we believe bode well for a global asset allocation approach.
Skip the Speculation: What Would a Fiduciary Do?
by Tom Rowley of Invesco Blog, 2/16/16
W-2s are out, marking the heart of the IRA season, when more business is traditionally done than at any other time of year. And where does this occasion find many financial advisors (FAs)? They could be speculating endlessly about what the imminent Department of Labor (DOL) fiduciary rule may mean for IRAs. (Please see my earlier blog post, IRA opportunity knocks, despite DOL fiduciary rule). Truth be told, though, nobody knows or will know until the final version of the rule is released, likely in mid-March. In the interim, however, IRA opportunity is knocking loudly.
Volatility in Europe May Reveal New Investment Opportunities in 2016
by Richard Nield of Invesco Blog, 2/8/16
The end of 2015 didn’t bring any dramatic changes to European fundamentals. However, there have been some subtle shifts that the Invesco International and Global Growth team is keeping an eye on in 2016. While our strategy did not initiate any new positions in Europe during the fourth quarter, recent volatility has brought some of our “watch list” names closer to the point where we would add them to the portfolio.
Oil Stocks: Is Bad News Signaling Good Opportunities?
by Kevin Holt of Invesco Blog, 1/28/16
As a deep value manager with a long time horizon, I often see opportunities in the midst of gloomy headlines. While crude oil hit a new 12-year low of around $26 a barrel in January, I view this sector as one of my top long-term opportunities.
Global Currency Watch: The Chinese Renminbi
by Rob Waldner of Invesco Blog, 1/22/16
Volatility in China has been a major driver of global markets, and Chinese foreign exchange policy has been a critical aspect of this volatility. The recent depreciation of China’s currency, the renminbi (RMB), has increased the volatility of currency pairs across Asia and may affect markets across the world.
Four Reasons Why the Bond Market Is Not Headed Toward a Liquidity Crisis
by Tony Wong of Invesco Blog, 1/14/16
Liquidity in fixed income markets has become a major focus of concern inside and outside of the investing community. While the consensus view suggests that US bond markets have become more susceptible to serious shocks, Invesco Fixed Income believes there are four main factors that will help the US avoid a liquidity-induced systemic crisis.
Long-Term Thinking in the Midst of Short-Term Volatility
by Joe Rodriguez of Invesco Blog, 1/11/16
The past year witnessed a significant spike in volatility as the health of the global economy faced uncertainty. Global markets struggled with concerns over growth and stability in China, emerging market weakness and currency devaluation, recession in Japan and the continued need for inflation-targeting policy in Europe. And while the US economy appeared to be the relative picture of health, the equity markets continued to focus on decisions by the Federal Reserve Board (the Fed) and depressed commodity prices.
Time to Throw out the Rising-Rate Playbook?
by Clint Harris of Invesco Blog, 1/4/16
We’ve seen daily references to what has worked — or hasn’t worked — when interest rates have risen in the past. Strategists, asset managers and pundits have dusted off numerous “tried-and-true” historical playbooks for investing in a rising-rate environment. But here’s the problem with applying those lessons to today’s markets: We’ve never been in this exact economic environment before, so relying too heavily on what’s worked in the past may not be particularly helpful.
Fed Hikes 25 Basis Points, Signals Gradual Path
by Rob Waldner of Invesco Blog, 12/28/15
On Dec. 16, the Federal Open Market Committee (FOMC) increased the federal funds target rate range from 0-0.25% to 0.25-0.5%, in line with market expectations and Invesco Fixed Income’s baseline scenario. The committee’s “dot projections,” each member’s estimate of the federal funds rate based on personal economic projections, were unchanged for 2016, with a slight shift down thereafter. The median projection is often compared with overall market expectations. The dots signaled a faster pace of interest rate increases than the market had expected before the meeting.
2015's Market Correction Uncovered New Valuation Opportunities
by Kevin Holt of Invesco Blog, 12/11/15
After six years of positive returns and almost four years without a US market correction, August 2015 provided a jolt to investors as the Dow Jones Industrial Average fell 10% from its peak.
Four Key Reasons to Consider Market Neutral Investing
by Kenneth Masse of Invesco Blog, 12/7/15
The market downturn and ensuing volatility in the third quarter of 2015 is a timely reminder about the benefits of diversifying your portfolio with investment strategies that are expected to exhibit little-to-no correlation with the broad equity and bond markets.
What Is the Credit Cycle Telling Us About 2016?
by Tony Wong of Invesco Blog, 11/30/15
As investors anticipate the beginning of a new year, we at Invesco Fixed Income are anticipating a new phase in the credit cycle for several bond asset classes. In this post, I will highlight a few areas where we’re seeing substantial changes in asset classes’ fundamentals or operating environment. We believe these areas could influence the broader market in 2016.
Beyond the Benchmark: Tracking Error Versus Active Share
by Rob Stabler of Invesco Blog, 11/23/15
Active share, a tool for demonstrating how a fund’s portfolio differs from its respective benchmark, has been a common term among active investors over the last few years. Tracking error, which has a much longer history, is often regarded as another tool that does the same job. But the differences between the two measures affect how Invesco’s Global Opportunities investment team views their effectiveness and usefulness for investors.
Volatility Takes Center Stage in 2015
by Clas Olsson of Invesco Blog, 11/16/15
Looking back over the last three to four years, global market performance has been driven mainly by quantitative easing, with little to no profit growth internationally. This, in turn, has led to significant multiple expansion. Market leadership has been driven by defensive stocks, such as consumer staples, as pricing power and emerging market demand for products and services helped them sustain growth.
Social Security Shock: Backroom Budget Deal Bans Two Loopholes
by Tom Rowley of Invesco Blog, 11/9/15
Two weeks ago, “things that go bump in the night” included two Social Security claiming strategies that got bumped from most retirement planning when the Senate passed a last-minute budget deal in the predawn hours of Friday, Oct. 30. There were none of the usual preliminaries: no hearings, no legislation, no grandstanding by proponents and opponents, no discussion in the financial media. It was simply a done deal, sealed and delivered, when President Barack Obama signed the bill into law last Monday to keep the government afloat.
Preparing for Stormy Markets
by Tracy Fielder of Invesco Blog, 10/26/15
It’s the heart of hurricane season, and here on the coast, every tropical weather system brings with it a flood of speculation: Will this turn into a major storm? When will it make landfall? Where will it hit?
New TLAC Guidance Could Have Positive Implications for US Banking Sector
by Jacob Habibi of Invesco Blog, 10/19/15
The Financial Stability Board (FSB), an international body of banking regulators founded to promote global financial stability, on Sept. 25 confirmed that it would release its final proposal for minimum levels of “total loss absorbing capacity” (TLAC) required for globally systemically important financial institutions, or G-SIFIs, by the G20 Summit this November.
Rx for Capex: Hospitals Benefit from Recent Trends
by Juliet Ellis of Invesco Blog, 10/12/15
No matter the industry, the Invesco small-cap team’s stock selection process is bottom-up, but some ideas lead us to others. Experience in health care through more than one cycle is leading Invesco Small Cap Equity Fund into stocks we expect will benefit as this cycle unfolds.
An All-Market Approach to Investing in China
by William Yuen of Invesco Blog, 10/5/15
As China transitions from a manufacturing-driven economy to a consumer-led one, the Chinese investment universe has expanded. Historically, global investors have chosen to invest in Chinese equities via Hong Kong stock exchanges. But with China gradually opening its capital markets to global investors, and more Chinese enterprises successfully listing overseas, the investment options and opportunities have increased significantly. In this changing investment landscape, we are seeing a growing trend toward investors adopting an all-market approach to investing in China.
Fed Bolsters Investment Grade Bond Issuance
by Jacob Habibi, Mike Hyman, Matt Brill of Invesco Blog, 9/28/15
Barring an external shock that sends global risk assets lower, the Federal Reserve’s (Fed) decision to keep interest rates unchanged while lowering its projected pace of future rate hikes is likely to support a continuation of the heavy pace of new corporate bond issuance and merger and acquisition (M&A) activity in the US investment grade (IG) market.
US High Yield: Energy Is Lagging, but Consumers Are Set to Spend
by Scott Roberts and Rahim Shad of Invesco Blog, 9/22/15
Weak commodity prices have made this year’s US high yield story a “tale of two markets.” Year-to-date returns for the overall high yield market were a meager three basis points (0.03%) through Aug. 31. However, if you peel back energy and metals and mining, the rest of the asset class delivered a respectable 2.6% total return over the same period.
Are You Investing in Tomorrow's Dividend Growers?
by Clint Harris of Invesco Blog, 9/14/15
Some 420 companies in the S&P 500 Index pay dividends. If you own a fund that invests in dividend-paying companies, it’s critical for you to understand your fund’s selection criteria. Does it look for increasing dividends? Stable dividends? High dividend yields? These differences can matter greatly to your results.
Investment Grade Bonds Power Explosion in M&A
by Jacob Habibi of Invesco Blog, 9/8/15
New bond issuance in the US investment grade (IG) market has exploded in 2015 as companies look to finance mergers and acquisitions (M&A), and Invesco Fixed Income sees no signs of this trend slowing down through the end of the year.
Making Sense of Market Volatility
by Karen Dunn Kelley of Invesco Blog, 8/31/15
On Aug. 21, the Dow Jones Industrial Average entered a correction, falling 10% from its most recent peak, and reminded investors what volatility looks like after almost four correction-free years. While volatility exposes weaknesses in the market, in my opinion it also reveals the strength of high conviction managers who are skillfully navigating the market. Active management and smart beta strategies seek to surpass the “market averages” offered by traditional benchmarks, providing the potential not only for higher returns, but also for a smoother ride.
Unattractive ‘Glamour Stocks’ Lead the Way in Asia Pacific
by Brent Bates of Invesco Blog, 8/20/15
Economic growth continues to decelerate across the Asia Pacific region. Domestic economies have not been robust enough to offset weakness in commodities and exports, and both revenue and earnings expectations were adjusted downward by 1% during the second quarter. Because growth is scarce, investors have been crowding into the highest-growth and highest-quality stocks; within Asia and Japan, this group of stocks is now trading at the highest premium to the rest of the market that we’ve seen in the past 20 years.
Chinese Yuan Depreciates Further: What is the Endgame?
by Rob Waldner of Invesco Blog, 8/17/15
After China’s surprise devaluation of the yuan by 1.9% last Tuesday, the Chinese currency was devalued by another 1.6% on Wednesday. Policymakers appear to be following a pattern of setting the daily fix, which sets the center point for trading during that day, with reference to the market price at the close of the previous day. Invesco Fixed Income believes that further devaluations are likely as the People’s Bank of China (PBoC), the country’s central bank, acquiesces to market pressure and price movements over time.
An Alternative Asset Class You May Take for Granted, Part 2
by Darin Turner of Invesco Blog, 8/10/15
Infrastructure is an integral part of your daily life. You drive on it, depend on it for electricity and water, and use it to communicate on your cell phone. But have you considered investing in it? Infrastructure investment can offer several potential benefits to an overall portfolio.
Bridging the Gap in Global Infrastructure Funding, Part 1
by Darin Turner of Invesco Blog, 8/3/15
Infrastructure is the backbone of every economy, providing essential public services such as water supply, energy and mobility. And for investors, infrastructure also has the potential to provide unique benefits.
Screens vs. Windows: Why Choosing a Fund Manager Requires Both
by Tracy Fielder of Invesco Blog, 7/27/15
Choosing the right fund manager is an important decision for investors, and many rely on data screens to help them sift through mountains of performance numbers. But screens alone don’t tell you the whole story. To get a clear view of how a fund might fit into your portfolio, you also need a window into the mind of the manager.
Iranian Oil to Fuel Further Price Drop?
by Norman MacDonald of Invesco Blog, 7/20/15
As part of the intensely negotiated nuclear agreement with Iran announced on July 14, Western financial and economic sanctions in place since 2011, including an oil embargo imposed on Iran by the US and the European Union, will be lifted. With a deal, known as the Joint Comprehensive Plan of Action (JCPOA), in the rearview mirror, observers are questioning the return of Iranian oil to the world market: When will it happen, and how much will it be?
Greek Referendum: Definitive Vote Ushers in Further Uncertainty
by Rob Waldner, Mark Nash of Invesco Blog, 7/10/15
Greek voters sent a definitive message Sunday, July 5. They said “no” to further austerity measures required for additional bailout aid from the European Union (EU). In a 60/40 vote, Greek voters rejected EU reforms and entitlement cuts required for a new EU funding program. But according to exit polls, the referendum did not appear to be a vote to leave the euro.
What does the Outcome of the Greek Referendum Mean?
by John Greenwood of Invesco Blog, 7/6/15
On Sunday, July 5, the Greek people had to choose in a referendum between Scylla and Charybdis: voting “Yes” if they were willing to accept the demands of their creditors and “No” if they rejected those proposals. The outcome was that approximately 61% voted “No” and 39% voted “Yes” in a turnout of 62% (6.16 million people out of 9.86 million registered voters).
Diversification: A Better Way to Avoid Portfolio Gridlock
by Tracy Fielder of Invesco Blog, 6/25/15
Every morning as I drive into the office, I see my fellow commuters darting from lane to lane, trying to choose the fastest one. The problem is, traffic in the “fast” lane inevitably slows down as cars crowd into it, and the slower lanes suddenly become the place to be. So in the long run, despite their risky maneuvers, these drivers don’t usually get much farther ahead than anybody else.
Concerned About Rising Interest Rates? Consider These Four Alternative Investments
by Walter Davis of Invesco Blog, 6/18/15
As I travel across the country meeting with financial advisors and their clients, a common concern I hear voiced is “how can I position my portfolio for when the inevitable happens and interest rates start to rise?” In response, I state that certain types of alternative investments are well suited to help prepare portfolios for rising interest rates in the future, while also potentially adding value in the present.
Alternative Investing: Two Ways to Mitigate Manager Risk
by Walter Davis of Invesco Blog, 6/12/15
Mitigating manager risk involves two things: 1. Conducting due diligence on the manager before investing. This helps increase an investor’s chances of selecting a successful manager. 2. Diversifying across multiple managers. This step helps reduce manager risk by diversifying across multiple managers.
Strong Demand for Chicago Bonds Shows It’s No Detroit
by Stephanie Larosiliere, John Loch of Invesco Blog, 6/4/15
Moody’s Investors Service recently downgraded Chicago’s $8.1 billion of outstanding general obligation (GO) debt two notches to Ba1, officially putting the bonds in the “junk” rating category, after a May 8 ruling by the Illinois Supreme Court struck down a law overhauling state employee and teacher pensions, narrowing the city’s options for curbing growth in its unfunded pension liabilities.
Three Reasons Why We Like Brazil’s Prospects
by Mark Jason of Invesco Blog, 6/1/15
Strong headwinds in Brazil have recently blown its stock market off course. In the first quarter of 2015, Brazilian equities fell more than 15% in US dollar terms, as measured by the Bovespa Index. While current forecasts do not see these storms abating any time soon, our team finds reasons for optimism over the long term.
Don’t Fear Rising Rates — Embrace Them
by Scott Eldridge of Invesco Blog, 5/27/15
Interest rates have been on the march since late January, thanks largely to global rate markets and a looming US Federal Reserve. In general, bonds are vulnerable to falling market prices as a result of higher rates, but there are income investments that can be used to take advantage of, rather than fall victim to, rising rates. They’re known as floating rate instruments.
Risk Parity: Reducing Our Bond Exposure
by Scott Wolle of Invesco Blog, 5/14/15
Every month, the portfolio management team for the Invesco Balanced-Risk Allocation strategy examines the market’s signals for stocks, bonds and commodities, and makes tactical adjustments in an effort to enhance returns. In recent weeks, our tactical signals for government bonds have led us to substantially reduce our exposure and adopt an underweight position.
MLPs: Providing Growth and Income Potential Despite Low Oil Prices
by Joe Rodriguez, Darin Turner, Walt Stabell III of Invesco Blog, 5/8/15
With oil prices down around approximately 50% since June 2014, investors are increasingly wary of the entire energy sector. Even given this environment, master limited partnerships (MLPs) represent an energy investment that we believe may weather short-term volatility in energy prices, benefit from the US’s long-term infrastructure needs, and provide attractive income potential for investors.
Finding Large Opportunities in Small-Cap Stocks
by Jason Holzer of Invesco Blog, 4/30/15
While the world’s expectations for US earnings growth have weakened into nearly single digits, Europe is finally seeing some positive developments after years of headwinds. At the same time, European valuations are about 40% cheaper than those in the US on the basis of the Schiller price-to-earnings ratio.1 As we survey the brightening landscape in Europe, looking for companies that meet our criteria for earnings, quality and valuations (EQV), an especially interesting area for us is in the small-cap market.
Combining Active and Passive: Three Issues to Consider for Risk-Averse Investors
by Clint Harris of Invesco Blog, 4/10/15
I was having a lively due diligence meeting with a retirement consultant the other day, discussing how our team manages Invesco Diversified Dividend Fund, and where we, as a conservative strategy, see opportunities and risks in the market today. Then came a moment of truth. The consultant sat back and said, “I really believe in what you all are doing, but many of my retirement plan committees just want passive index funds to bring down expenses.”
Dividend Value Investing: No Time for Suspension of Disbelief, Part 3
by Meggan Walsh of Invesco Blog, 4/6/15
As previously explained in this series, investors who follow Hollywood’s lead and suspend disbelief may very well overlook the potential downside risk of a profit cycle in its later stages. But to avoid misunderstanding the market, it’s important to balance the concerns I’ve previously addressed in the first two parts of this series with supporting factors for the market.
Dividend Value Investing: No Time for Suspension of Disbelief, Part 2
by Meggan Walsh of Invesco Blog, 3/30/15
While investors may be riveted by Hollywood’s surprise endings and cliffhangers, they generally aren’t fond of unexpected plot twists in the market. So here’s a spoiler alert. The operating results of companies in the current cycle have been quite strong, and many investors expect this to continue. But we’ve seen enough plot twists over time to know this can be a risky assumption.
Dividend Value Investing: No Time for Suspension of Disbelief
by Meggan Walsh of Invesco Blog, 3/23/15
When Hollywood tells a story, the expectation is that viewers are willing to suspend disbelief to fully immerse themselves in the plot. But when the market tells a story, suspending disbelief may result in overly complacent investors who blithely ignore the potential downside risk of a profit cycle in its later stages, which we see today through the lens of our full-cycle perspective.
Brazil: Macro Headwinds Are Strengthening
by Sean Newman of Invesco Blog, 3/16/15
Invesco Fixed Income’s outlook on Brazil as a sovereign credit is deteriorating. Downside risks to growth have increased given the country’s deteriorating fiscal position, rising interest rates, lower commodity prices, global growth headwinds, water and electricity shortages, among other challenges. The key for markets, in our view, will be the administration’s ability to deliver on promised fiscal adjustments.
Taking a Multi-Asset Approach to Inflation
by Duy Nguyen of Invesco Blog, 3/6/15
With more than two decades of stable inflation in the US and forecasts calling for moderate inflation in the short term, many investors have become complacent about the risk of inflation to the real value of their portfolios. But inflation can change unexpectedly, and although we don’t believe that change is necessarily imminent, investors should remain vigilant about addressing this risk.
Investing in Volatility: Is Asian Volatility Poised to Rise?
by David Jubb of Invesco Blog, 2/26/15
Volatility is cheap these days. That may sound strange at first. But, the Invesco Multi Asset team views volatility as an investable asset type that can be included in our investment strategy. Why might this make sense? We believe volatility can provide additional diversification and return benefits when combined with our portfolio’s other asset exposures. For example, when volatility is low, markets may benefit. But when it rises, markets can come under pressure.
Exploring for High Yield Energy Opportunities Amid Ailing Oil Prices
by Scott Roberts of Invesco Blog, 2/23/15
Energy is a popular topic of conversation in the high yield bond space, with many observers warning of a wave of defaults to come due to the plunge in oil prices. While there will likely be some defaults in the sector, we believe that the market’s pessimism has been overly broad, and we view energy as a potential source of opportunity in 2015. Having a clear understanding of macro drivers in energy, paired with careful security selection, will be key to successfully navigating this volatile space, in our view.
Why We’re Cautious on Credit
by Rob Waldner of Invesco Blog, 2/17/15
In the current environment of rising global volatility and potentially weak US corporate earnings growth, Invesco Fixed Income is cautious on US and European credit. While European investment grade credit may be supported by the European Central Bank’s (ECB) program of quantitative easing (QE), we believe US investment grade would likely underperform US Treasuries in the current environment, although we would expect it to perform better than riskier assets.
Leaning in to Headwinds and Headlines
by Matt Dennis of Invesco Blog, 2/9/15
There’s been no shortage of headlines focused on European volatility lately, and the current consensus is that Europe is the last place investors want to put money. The risk for investors in my mind, however, is that they follow the headlines and exit Europe now instead of leaning into the headwinds of consensus and building positions.
Contrarian View: A More Balanced Approach to Rate Risk in 2015
by Scott Eldridge of Invesco Blog, 1/29/15
The threat of higher interest rates is dominating many 2015 outlooks for investors and professional forecasters alike. Consensus expectations call for the Federal Reserve (Fed) to begin tightening in the second half of the year, with market rates to rise in concert and bond prices to fall. But the changing composition of voting members on the Federal Open Market Committee (FOMC) is a looming variable that I believe will likely impact the pace and severity of Fed action.
Rate Cut a Positive Jolt for India?s Growth Dynamics
by Jack Deino of Invesco Blog, 1/26/15
In a surprise move, the Reserve Bank of India (RBI) cut its policy rate for the first time in two years on Jan. 15 by 25 basis points (bps) to 7.75%. Encouraged by multiple anti-inflationary catalysts building up over the past few months - including lower commodity prices, a stable rupee, a favorable winter wheat crop and the government?s commitment to fiscal consolidation - the RBI instituted a rare inter-meeting rate cut.
Swiss Surprise: National Bank Ends Currency Cap
by Rob Waldner, Nicholas Wall, Ray Uy of Invesco Blog, 1/20/15
On Jan. 15, the Swiss National Bank (SNB) unexpectedly abandoned its policy to cap the value of the franc at 1.2 euros.1 Over the past few years, the SNB has had to sell billions of francs to buy euros to prevent an excessive appreciation of the domestic currency - a too-strong currency could dent the country?s export business.
Averages Won't Keep You Warm...or Wisely Invested
by Jack Tierney of Invesco Blog, 1/8/15
When investors build their portfolio allocations, they correctly look at long-term average returns for the asset classes they?re considering, such as stocks, bonds, real estate, cash and alternatives. After looking at the returns for asset classes below, though, an investor may be tempted to invest everything in emerging market securities and real estate investment trusts (REITs), as they have the highest average annual returns over the last 10 years.
Global Economic Outlook: US Sets the Pace for Growth in 2015
by John Greenwood of Invesco Blog, 1/2/15
As we begin the new year, there are certain key issues that I expect to dominate the macroeconomic conversation and to impact markets around the world. Here, I highlight a few of those issues.
Completing the Alternative Investments Puzzle: Putting the Pieces Together
by Walter Davis of Invesco Blog, 12/22/14
In my previous blog, I discussed why I believe advisors and investors should approach alternative investments much like a jigsaw puzzle and offered an organizing framework that can help. When putting together a puzzle, the first step is to sort and organize all the pieces. For alternatives, the first step is to organize and align the various alternative strategies with specific investment objectives. This step is critical because it helps investors decide whether alternatives can help them meet their needs, and, therefore, whether they should invest in them.
How to Approach the Alternative Investments Puzzle: Putting the Pieces Together
by Walter Davis of Invesco Blog, 12/15/14
Every summer my family and I go on a vacation to the beach. While there, my wife buys a big jigsaw puzzle for us to work on. Every year, we feel overwhelmed immediately after she dumps out all 1,000 pieces.
Three Reasons Why Municipal Bonds May Offer More Than Just Tax-Exempt Income
by Stephanie Larosiliere of Invesco Blog, 12/5/14
Tax-exempt income historically has been the main reason why investors buy municipal bonds. As a result of newer tax laws, including several provisions that expired at the end of 2013, tax bills for high-income earners have increased in recent years.
Worried About Year-End Capital Gains Taxes? ETFs May Help
by John Feyerer of Invesco Blog, 12/1/14
This is the time of year when asset managers announce year-end capital gains distribution estimates for their funds. Capital gains are generated when funds sell their holdings at a profit. Due to the solid performance of the markets this year, some investors may find their tax liabilities have grown along with their portfolio balance even if they havent sold their investments.
Risk Parity: Comparing the Objections With Reality - Part 2
by Scott Wolle, Michael McHugh, David Gluch of Invesco Blog, 11/24/14
As the use of risk parity has grown, so have criticisms against the approach. In this blog series, I look at objections Ive heard about risk parity, and explain why we believe they do not apply to our risk-parity approach - the Invesco Balanced-Risk Allocation strategy.
Risk Parity: Comparing the Objections With Reality Part 1
by Scott Wolle, Michael McHugh, David Gluch of Invesco Blog, 11/17/14
Over the last several years, risk parity has gained prominence as a general asset allocation approach as well as a specific strategy. Rising adoption rates of the approach have invited scrutiny from both practitioners and academics. We agree with some of the challenges identified by critics and have addressed them over time through our research agenda. Others, however, either do not apply to our version of risk parity or, at least to our knowledge, the approach in general.
Emerging Markets Trends: Whats Negative for One Market May Boost Another
by Steve Cao of Invesco Blog, 11/10/14
Economic conditions have continued to deteriorate in emerging markets, and corporate earnings forecasts have fallen. Overall, emerging markets were down 4.3% in the third quarter, underperforming the developed world. In the midst of this negative news, however, were seeing a few bright spots start to emerge, and weve been able to add holdings that, in our view, became mispriced during market volatility.
Worried About the Unknown? Focus on the Business Cycle Instead
by John Greenwood of Invesco Blog, 11/3/14
Lately, Ive been fielding questions about the possible unknowns that could bring about the end of the current economic expansion. While I understand investors trepidation about the unknown, I believe this concern is misplaced. Business cycles do not generally end because of unforeseen accidents. They normally end because central banks, in an effort to bring down inflation, raise interest rates, which creates an inverted yield curve and slows money and credit growth. We are clearly a long way from this scenario at present.
The Positive Impact of Falling Oil Prices
by Nick Kalivas of Invesco Blog, 10/24/14
Crude oil prices have dropped sharply over the last few months thanks to abundant global production and signs of slowing global economic growth. Lower oil prices could inject spending power into the economy as consumers eventually pay less for gasoline and open their wallets in other areas. This would provide a positive shock and potentially bolster the performance of consumer discretionary shares.
Japan: Small Change Clouds Big Picture
by Mark Jason of Invesco Blog, 10/20/14
We continue to believe that achieving real economic growth in Japan requires changes that are hard to come by. On a recent trip to Japan, it became clear to me that this next stage of Abenomics shorthand for Prime Minister Shinzo Abes three-arrow economic revitalization program of monetary easing, targeted financial support and structural reforms calls for corporate governance reform to take the spotlight as a core part of the important third arrow, particularly as regulatory reforms have made slow progress thus far.
Assessing the Economic Impact of Hong Kongs Occupy Central Movement
by Paul Chan of Invesco Blog, 10/14/14
The Occupy Central (OC) movement was officially launched on Sept. 28, starting with members from the Occupy Central with Love and Peace (OCLP), the HK Federation of Students and Scholarism groups staging a sit-in in Central and Admiralty that blocked traffic in key commercial and business districts in Hong Kong.
Nontraded REITs’ Dividends Come With Confusion, Controversy
by Walter Stabell III of Invesco Blog, 10/6/14
Interest rates have been low for quite some time, and investors are searching for ways to generate higher yields. An increasing number of them have turned to non-exchange-traded real estate investment trusts (nontraded REITs). However, nontraded REITs offer high levels of confusion and controversy along with their high yields, and regulators are concerned that these products may not be appropriate for many of the people who invest in them.
Global Equities Stay Thirsty for Liquidity
by Rick Golod of Invesco Blog, 9/25/14
Taking a step back from the usual economic and market insights, my September commentary is devoted to a topic that Ive been long overdue in addressing. Financial advisors have frequently asked about my approach to asset allocation, and Ive outlined my strategy for diversifying within the US equity space in my commentary, Harnessing the Markets Natural Rotation: An Asset Allocation Strategy. Here, Id like to provide a summary of my outlook, which remains unchanged from the previous month.
It Will Take More Than ECB Rate Cuts for the Eurozone to Fully Recover
by John Greenwood of Invesco Blog, 9/22/14
The European Central Banks (ECB) surprise rate cuts on Sept. 4 reducing its main lending and deposit rates by 10 basis points show that its policies so far have been inadequate to solve the euro-areas economic malaise. Economic growth has stalled, and deflation remains a threat in the eurozone. The rate cuts may help to weaken the euro further in the currency markets, but nobody should be under any illusion that banks will start lending or expanding their deposits as a result of the rate cuts alone, or that these cuts will trigger a wider economic recovery.
Why Development Trumps Acquisitions in Our Real Estate Portfolios
by Paul Curbo of Invesco Blog, 9/15/14
One of the trends affecting real estate markets this year is the increasing difficulty commercial real estate companies are facing as they seek to complete potential acquisitions. Strengthening commercial real estate fundamentals, coupled with the low cost of financing, have resulted in a large increase in the number of bidders for assets in the past several quarters.
Searching for Value in Global Small-Cap Stocks
by Virginia Au of Invesco Blog, 9/8/14
While many global small-cap companies have gotten their balance sheets in good shape over the last few years, valuations are currently a concern. The MSCI World Index is up 184% since the market low on March 9, 2009, and we believe most equities are at or near full value. This makes it much harder to find high-quality companies at cheap prices. Against this backdrop, the challenge is to find the hidden gems within the vast universe of global small-cap companies.
All Eyes on the ECB as Europes Recovery Remains Fragile
by Matthew Dennis of Invesco Blog, 9/3/14
While the European Central Bank (ECB) has successfully eased financial market stress over the past two-plus years, Europes long-awaited recovery still remains fragile and imbalanced.
Correcting a Common Misconception about Alternative Investments
by Walter Davis of Invesco Blog, 8/25/14
A common misconception about alternative investments is that these investments have failed anytime they underperform the stock market. Investors need to know that alternative investments are designed to achieve returns that are more consistent and less volatile than those of the stock market on a long-term basis across multiple market cycles.
Dynamic and Durable Growth Part 4: The Coming Mobile Advertising Boom
by Ido Cohen of Invesco Blog, 8/18/14
This is the fourth in a four-part series examining dynamic and durable growth themes that affect the US economy and present opportunities for investors. The first post examined the biotech revolution, the second explored the enormous implications of shale energy, and the third looked at the impending mobile data tsunami.
Dynamic and Durable Growth Part 3: The Mobile Data Tsunami
by Ido Cohen of Invesco Blog, 8/11/14
This is the third in a four-part series examining dynamic and durable growth themes that affect the US economy and present opportunities for investors. The first post explored the biotech revolution, and the second looked at the enormous implications of shale energy. The final post will examine the coming mobile advertising boom.
Dynamic and Durable Growth Part 2: The Enormous Implications of Shale Energy
by Erik Voss of Invesco Blog, 8/4/14
This is the second in a four-part series examining dynamic and durable growth themes that affect the US economy and may present opportunities for investors. The first post explored the biotech revolution, and the third and fourth posts will discuss the massive changes in mobility.
Dynamic and Durable Growth - Part 1: A Biotech/Pharma Revolution
by Janet Luby of Invesco Blog, 7/28/14
This is the first in a four-part series examining dynamic and durable growth themes that affect the US economy and may present opportunities for investors. The remaining three blog posts will examine the enormous implications of shale energy and the massive changes in mobility.
Mid-Year Review: Interest-Rate Sensitive Stocks May Correct With First Fed Rate Hike
by Rick Golod of Invesco Blog, 7/21/14
With the recent strength in the economy and decline in the unemployment rate, the probability that the Federal Reserve (Fed) increases rates in the first half of 2015 is rising, in my opinion. Given the volume of media noise about this, its understandable that many investors are still worried about the stock markets potential for correction.
Energy: Shale Generates Tectonic Changes
by Stephen Toy of Invesco Blog, 7/14/14
The shale revolution, only seven or eight years old, has been the catalyst for a tectonic change in US energy production and policy. It has also created a new paradigm in US manufacturing, launched a renaissance in the chemical industry, and is driving infrastructure spending. So how do we think about the shale revolution in terms of investing? Its twofold.
India and Indonesia: Change, Challenge and Opportunity
by Jack Deino of Invesco Blog, 7/7/14
In both India and Indonesia, leaders are facing intense pressure from markets and investors to initiate reforms that are real rather than merely cosmetic. Our outlook is somewhat more bullish for India, but we believe change can lead to opportunity in both countries.
How Road Construction Can Help With Portfolio Construction
by R. Scott Dennis of Invesco Blog, 6/27/14
Investors have long looked to real estate to provide income potential, hedge against future inflation and provide diversification to traditional stock and bond portfolios. More recently, an increasing number of investors have been expanding their horizons and including real assets in their portfolio construction as well such as infrastructure and master limited partnerships (MLPs). At Invesco Real Estate, we believe the US and the world is heading for a building boom that would bode well for real assets.
A Contrarians View of Value: Pharmaceuticals
by Kevin Holt of Invesco Blog, 6/20/14
The pharmaceuticals industry is in the midst of a renaissance. Patent expiration concerns, pipeline disappointments and setbacks, and a highly uncertain regulatory backdrop have forced managements to rethink the way they have historically conducted business. In this environment, certain companies stand out to us as deep value opportunities businesses whose stock prices dont reflect our view of their long-term potential.
A Contrarians View of Value: Energy
by Kevin Holt of Invesco Blog, 6/13/14
This is the second in a three-part series on sector opportunities as seen by a contrarian value investor Senior Portfolio Manager Kevin Holt. The previous post discussed financials.
A Contrarians View of Value: Financials
by Kevin Holt of Invesco Blog, 6/6/14
In the wake of the Great Recession, and significant regulatory changes, investors are concerned that large banks may not be able to generate the type of profits that they have in the past. We dont disagree with that assessment. However, we do disagree with the current equity valuations of the large banks we believe the market has priced in a too-pessimistic view of profitability.
Thai Coup: Business as Usual
by Paul Chan, Jalil Rasheed of Invesco Blog, 6/2/14
On May 22, Thailands military launched its 12th coup after a failed attempt to get the caretaker government and the opposition to resolve a seven-month political stalemate. While the military has seized temporary control, we believe the coup will have limited economic and investment impact.
After Indias Election, Execution takes Center Stage for Debt Markets
by Jack Deino of Invesco Blog, 5/27/14
Financial markets in India have already rallied strongly in anticipation of the overwhelming majority win by incoming Prime Minister Narendra Modi and the Bharatiya Janata Party (BJP). The countrys currency (the Indian rupee) rose 15% from its August peak, while five-year credit default swaps on the State Bank of India (SBI) tightened from a spread of 371 to 207 in the same period.
Three Questions Investors Need to Ask About Alternatives
by Donna Chapman Wilson of Invesco Blog, 5/19/14
The world of alternative investments includes a range of hedge fund-like strategies that typically consist of publicly traded equity and fixed income investments, but are unconventionally managed using a variety of exposures (long, short, market neutral) and financial instruments. These strategies have gained acceptance in recent years, and have become more widely available to individual investors through vehicles such as mutual funds. However, questions still remain about the best ways to incorporate them into an asset allocation strategy.
Energy: An Overlooked Bull Market
by Ron Sloan of Invesco Blog, 5/12/14
Defensive stocks, such as health care and utilities, have led the market for most of 2014. But were starting to see a shift toward cyclical sectors that offer greater exposure to a strengthening economy. In my view, the most overlooked cyclical sector is energy, which has experienced a very strong start this year thats been under the radar of many investors.
Retail, Infrastructure Are Issues to Watch in Colombia and Peru
by Jason Trujillo of Invesco Blog, 5/5/14
The Invesco Emerging Markets team spent a week traveling through Colombia and Peru, meeting with company management teams, consultants and government officials. During our trip, two themes were prevalent that could have broad implications for local companies and global investors: the relative under-penetration of modern-format retailing throughout Colombia and Peru, and the severe need for infrastructure improvement.
IMF Meetings: China and Ukraine Concern Emerging Market Investors
by Banu Asik Elizondo of Invesco Blog, 4/28/14
Three recurring themes pertaining to emerging markets became apparent during the recent spring International Monetary Fund (IMF) meetings in Washington, D.C.
Rising Food Prices May Whet Investors' Appetite for Agriculture
by Nick Kalivas of Invesco Blog, 4/21/14
Food prices are affected by a wide range of factors - from weather to geopolitics. Today, these factors seem to be pointing toward rising food inflation, and investors want to know where potential opportunities may lie.
Why Today?s Environment Favors Active High Yield Strategies
by Darren Hughes, Scott Roberts of Invesco Blog, 4/14/14
Fixed income investors are looking for ways to prepare their portfolios for rising interest rates. While bond prices generally fall when rates rise, history shows that high yield bonds have typically held up well in rising rate environments.
Income Is Always a Good Idea
by Jack Tierney of Invesco Blog, 4/4/14
Most of the 2014 forecasts were positive on stocks, albeit at a lower return after such a strong year in 2013, and negative on bonds. However, January was a down month for stocks and a very strong month for bonds, February saw stocks rebound and bonds range-bound, and March thus far has stocks down more than up and bonds still range-bound. With apologies for altering the famous quote attributed to Audrey Hepburn in Sabrina, "Paris is always a good idea," I would say that "income is always a good idea."
European Rally Has Legs
by Nick Kalivas of Invesco Blog, 3/31/14
Since hitting a low on June 1, 2012, the MSCI Europe Index has rallied 64.73%. In our view, there?s room for European equity markets to advance further, supported by strong fundamentals, positive flows and a steady uptrend from the June 2012 low.
Retirement Savings: How Much Is Enough? Part 2: Good News Not Good Enough
by Jon Vogler of Invesco Blog, 3/21/14
This second blog in a two-part series about retirement readiness discusses whether 401(k)s and Social Security can adequately meet retirement income needs. Part 1 looked at the rule-of-thumb numbers cited as guidelines for income replacement in retirement.
Retirement Savings: How Much Is Enough? Part 1: 70%, More or Less?
by Jon Vogler of Invesco Blog, 3/17/14
This first blog of a two-part series about retirement readiness looks at the rule-of-thumb numbers cited as guidelines for income replacement in retirement. Part 2 will discuss how adequately 401(k)s and Social Security will meet those target numbers.
Four Reasons to Consider Emerging Markets for the Long Term
by Borge Endresen of Invesco Blog, 3/10/14
Emerging markets are at that peculiar place where everyone likes them over the long term, but very few like them in the short term. Many well-publicized headwinds from 2013 remain going into 2014, accompanied by election uncertainty in Brazil, India, Indonesia, South Africa and Turkey. And political uncertainty keeps surfacing in such places as Thailand, Turkey and the Ukraine.
Bond Aid: Positive Outlook for High Yield in 2014
by Darren Hughes, Scott Roberts of Invesco Blog, 3/3/14
While most fixed income asset classes tied to interest rates saw negative returns during 2013, high yield bonds returned more than 8%, according to the JP Morgan Domestic High Yield Index. While we anticipate slightly lower returns in 2014, it looks to be a positive year for high yield markets.
Leading Indicators Offer a Window into Europe?s Recovery
by Matthew Dennis of Invesco Blog, 2/24/14
We?re seeing signs that the recovery in Europe is progressing. I wanted to take a moment to highlight some of the positives, uncertainties and opportunities that we believe investors should consider about the region.
After a Rocky 2013, What's in Store for Asia This Year?
by Brent Bates of Invesco Blog, 2/18/14
Overall, 2013 wasnt the best year for Asian markets, however there are several trends emerging that we believe will be good for the region this year.
A Secular Bull Market?
by Juliet Ellis of Invesco Blog, 2/3/14
Five years from now, I believe we will look back and see that 2014 was part of the early stages of a multi-year secular bull market for US equities, characterized by rising stock prices with only short, intervening market corrections.
Commodities: Is the Bear Market Near Its End?
by Scott Wolle of Invesco Blog, 1/27/14
On the surface, 2014 looks to be a tough year for commodities, as multi-year projects increase the flow of supplies to market even as demand has turned tepid, especially in emerging markets. However, a deeper look at the history of this asset class suggests that the outlook for commodities might turn around sooner than many expect.
Upstream Companies Set to Benefit if US Allows Oil Exports
by Juan Hartsfield of Invesco Blog, 1/21/14
US crude oil production is booming, and controversy over possibly exporting some of this abundance has quickly heated up in early 2014. Most recently, Alaskas Lisa Murkowski, the top-ranking Republican on the Senate Energy Committee, spoke out on Jan. 7 in favor of easing US restrictions on oil exports, which were largely enacted in the 1970s when domestic energy was scarce and lines at the gasoline pump were long. The topic of crude exports is polarizing politically and, given the recent lack of collaboration in Washington, its poised to be a recurring headline for some time.
Money Matters Part 2: China's Bitcoin Ban
by John Greenwood of Invesco Blog, 1/13/14
This second of a two-part series about bitcoin looks at the impact of Chinas recent ban on the virtual currency. Part 1 examined the viability of bitcoins as a potential global currency.
Money Matters Part 1: Bitcoin as Global Currency?
by John Greenwood of Invesco Blog, 1/6/14
In 2009, bitcoin became the first cryptocurrency, or digital medium of exchange, to begin trading. Is it currency or a commodity? Is it a potential peer or a threat to existing currencies? Lets take a closer look.
What Does US Tapering Mean for Asia?
by Paul Chan of Invesco Blog, 12/30/13
The US Federal Reserve (Fed) took its first step toward unwinding its unprecedented monetary stimulus. Beginning in January 2014, the Fed will reduce monthly asset purchases by $10 billion to $75 billion. The scale of the tapering was very much in line with market expectation. While timing may have surprised some investors, the market had already priced in the Feds imminent move.
401(k) Makeover: Future Trends
by Jon Vogler of Invesco Blog, 12/23/13
Retirement experts believe your 401(k) plan will take on a new look and focus over the next few years as the industry introduces changes aimed at getting participants to save more money and do more planning for retirement.
Debt Crisis Recovery: Bell Curves and Balance Sheets
by John Greenwood of Invesco Blog, 12/16/13
This three-part series examines the life cycle of a debt crisis and looks at where the US, UK and eurozone are in the recovery process. This second post looks at where the US stands in the deleveraging process. Part 1 explained the phases of a debt crisis, while Part 3 will focus on why the UK and eurozone lag the US in balance-sheet repair.
Debt Crisis Recovery: Bell Curves and Balance Sheets
by John Greenwood of Invesco Blog, 12/9/13
This three-part series examines the life cycle of a debt crisis and looks at where the US, UK and eurozone are in the recovery process. This first post explains the phases of a debt crisis. Part 2 will look at where the US stands in the deleveraging process, while Part 3 will focus on why the UK and eurozone lag the US in balance-sheet repair.
Investing in China? What You Should Know About Gaining Access to the Markets
by Ted Samulowitz, Graham Day of Invesco Blog, 12/2/13
Investors with exposure to China and those interested in gaining a foot into the country received some good news last month when it was announced that Chinas GDP grew by 7.8% in the third quarter. The news was a sigh of relief for investors as Chinas economy appears to have avoided the hard landing economists and investors had feared.
Recent Economic Trends Help Make Korea a Hidden Gem in Asia
by Paul Chan and Simon Jeong of Invesco Blog, 11/25/13
After more than two decades of financial setbacks, recent macroeconomic data is helping Korea overcome the negative economic stigma associated with its economy and equity markets.
The ECB Rate Cut - Too Little and Too Late
by John Greenwood of Invesco Blog, 11/18/13
The decision of the European Central Bank (ECB) last week to cut its main refinancing rate from 0.5% to 0.25% and the marginal lending facility from 1.00% to 0.75% is too little and too late -- and virtually irrelevant to financial markets. The decision came after published data showed the eurozone headline consumer price index slowing to 0.7% year-on-year in October. Of course the equity markets rallied temporarily in a knee-jerk reaction to the ECBs move, but by the end of the day most of the gains were lost.
Health Care: Rx for Growth and Defense
by Ted Samulowitz of Invesco Blog, 11/11/13
The Capital Asset Pricing Model, used to price risky securities, suggests growth and defensive investments are mutually exclusive because the more an asset can return, the higher its risk must be. But growth itself can provide defensive benefits when a secular growth story occurs regardless of the business cycle.
The Great Stall of China
by Steve Cao, Mark Jason of Invesco Blog, 11/4/13
While China is without question the growth driver and the outperformer among Asian emerging markets, its clear the country is transitioning toward slower growth because of demographic factors and domestic rebalancing. In our view, China is entering a multiyear period of slower growth, but we consider its future growth robust and sustainable when compared with overall global gross domestic product (GDP) growth -- albeit below the annualized pace of more than 10% China experienced from 2001 to 2010.
Low-Volatility Strategies Challenge Conventional Ideas of Risk and Return
by Joseph Becker of Invesco Blog, 10/28/13
If asked to sum up in a single word their investing experience over the last 15 years, many investors would likely say, volatile.
Looking Past the Politics: What Does the Market Need to Grow?
by Ron Sloan of Invesco Blog, 10/21/13
As the tone of the debt ceiling negotiations in Washington wavered over the past several days, equity markets rose and fell in kind. While lawmakers were able to come to a last-minute agreement to raise the debt ceiling and end the 16-day federal government shutdown, the key to putting the markets on a solid foundation for the longer term is for corporations to generate earnings growth through increased revenues.
Move Along, Market: It's Only a Gaper's Delay
by Rick Golod of Invesco Blog, 10/14/13
After several days of stalemate between the White House and Congress, House Republicans have offered a six-week debt ceiling extension conditional on negotiating a package of fiscal concessions. The debt ceiling offer is straightforward, but the shutdown would continue until the fiscal concessions are agreed on. While this may dampen the economy and equity market, at least in the short run, I believe long-term investors should stay put and be patient.
The House at Main and Wall
by Justin Speer of Invesco Blog, 9/30/13
This four-part series tracks the recent US housing recovery and explains why investors should be both encouraged and cautious. Part 4 looks at pockets of investment opportunity on Main Street. Part 1 traced the recoverys trajectory against the backdrop of the overall US economy. Part 2 examined affordability and interest rates, while Part 3 discussed why homebuilders stocks may potentially be overvalued.
Credit Rating Agencies: Can They Get It Right? Part 3: Five Years After the Fall
by Michelle Shwarzman of Invesco Blog, 9/23/13
This three-part series takes a critical look at the growing role of credit rating agencies (CRAs) in the global financial system. This post reports on the United Nations General Assembly (UNGA) debate about the role of CRAs in the international financial system. Part 1 focused on the involvement of CRAs in recent financial and economic crises in the US and Europe, while Part 2 described post-crises attempts to reform CRAs.
Investing in Puerto Rico: What Investors Should Know
by Stephanie Larosiliere of Invesco Blog, 9/16/13
In recent quarters, investors have been on high alert about Puerto Ricos ailing financial situation. The concern was sparked by the US territorys ongoing recession, which has been characterized by high unemployment, $70 billion of total debt and a consecutive streak of annual budget deficits. Compounding investors fears were Detroits recent bankruptcy filing and Junes massive sell-off in the municipal bond market, which may have caused some weakness in Puerto Ricos debt.
Reasons for Optimism in a Sloppy Third Quarter
by Ron Sloan of Invesco Blog, 9/9/13
Investors are anticipating the day that we transition from a market dominated by monetary stimulus to an earnings-driven market. The problem is that earnings arent cooperating yet. In my view, weve still got a sloppy third and maybe fourth quarter to get through, but I think 2014 will likely be a much better earnings market.
How to Find Value in Real Estate With Risk On, Risk Off Off Again
by Walter Stabell, III of Invesco Blog, 9/3/13
Recent trends, including falling stock correlations, have been strong indicators that the global economy is normalizing and the practice of risk on, risk off investing, in which investors enter and exit perceived riskier investments based on how they feel about the economy, is now off again after becoming a phenomenon in the post-financial crisis years.
Could Clarity Confuse? The Industry Strikes Back
by Jon Vogler of Invesco Blog, 8/26/13
The intention of the Department of Labor (DOL) proposal to illustrate lifetime income streams on 401(k) statements is to clarify retirement income status for participants. But according to industry and trade groups, the requirement may have the opposite effect, creating more confusion than clarity.
What Triggers Would Make Japanese Equities Attractive?
by Mark Jason of Invesco Blog, 8/19/13
Through the second quarter of 2013, Japan remained Invesco International Growth Funds largest underweight versus the Custom International Growth Index because our EQV (earnings, quality and valuation) discipline criteria drive us toward high-quality companies at reasonable valuations, and those are scarce in Japan. Why? Because Prime Minister Shinzo Abes success is being priced in, and overcoming two decades lost to stagnation is difficult.
Fight Over the Fed: Why So Ugly?
by Michelle Shwarzman of Invesco Blog, 8/12/13
When President Barack Obama let it slip in a June interview that Federal Reserve (Fed) Chairman Ben Bernanke had already stayed a lot longer than he wanted or he was supposed to, the quest for the next Fed chair was underway. But few anticipated it would devolve into a fairly brutal brawl - by economist standards - between two extremely competent and capable PhD candidates: Fed Vice Chair Janet Yellen and former Treasury Secretary Larry Summers, who also served as Harvards president and chief White House economic advisor.
Three Reasons Why Money Market Yields Are So Low
by Craig Bloodworth of Invesco Blog, 8/2/13
Im often asked why money market yields are so low today - even lower than they were a few months ago. My response generally begins with overnight repurchase agreements, or repo, which impact the price of term securities in the money market space.
Detroit Bankruptcy Not Indicative of Credit Trends
by Mary Jane Minier and Matt Nichols of Invesco Blog, 7/29/13
Detroit filed for bankruptcy on July 18, making it the largest municipality to file for bankruptcy, as well as the first time a states largest city has filed. While this is a historic event, its definitely not unexpected - Detroits declining finances date back to the 1960s. A 50-year trend is a pretty telling metric.
Egypt: Stating the Obvious
by Michelle Shwarzman of Invesco Blog, 7/19/13
Although the outcome may have been viewed as a surprise by many, the ongoing economic malaise that partially fueled the revolt against and eventual ouster of Egyptian President Muhammad Morsi, was not.
A Pivotal Point in the Markets
by Meggan Walsh of Invesco Blog, 7/15/13
Because the market is a forward-discounting mechanism, its not unusual for it to have led the economic recovery over the last four years. Today, I believe the market has already discounted a decent economy over the intermediate term and is approximately fairly valued. But thats not the whole story.
Emerging Markets Debt Remains Fundamentally Strong
by Claudia Calich, Jack Deino of Invesco Blog, 7/8/13
Junes massive bond sell-off, prompted by fears that the Federal Reserve would wind down its bond-buying program, has had a negative trickle-down effect on emerging market debt-dedicated assets, which were hit hard as part of the record $14.45 billion in outflows seen in the overall bond market for the week ending June 12.
Consider Convertibles in a Rising Rate Environment
by Walter Stabell III of Invesco Blog, 7/1/13
The recent mass exodus out of bonds in which investors pulled more than $18 billion from funds that invest in bonds over a two-week period ending June 12 may have left you searching for the best opportunities in the bond market.
Despite Interest Rate Concerns, Muni Volatility May Offer an Entry Point
by Jack Tierney of Invesco Blog, 6/24/13
As we approach the midway point of 2013, the capital markets have many concerns: the potential end of quantitative easing (QE3), the slow rate of economic growth, the stubbornly high unemployment rate and the sorry state of affairs in both federal and state government finances. I wont speculate on the eventual outcome of these issues, especially where politics is concerned. But I do think its valuable to look past the markets fear and search for areas where smart investors can take clear-eyed action and benefit in uncertain conditions.