When the Stimulus Stops, Cash Flow Matters
Several rounds of massive stimulus by the Federal Reserve has kept interest rates well below where they would otherwise be, buoying both stock and bond markets. As stock prices have reached new peaks, many professional investors consider current valuations to be stretched. When the stimulus finally stops, a new era of rising interest rates will likely take hold. And experienced investors know that rising interest rates and high valuations and can be a dangerous combination. Read more.
Flying Blind: Forecasting with No Data or Endgame
Everything from the government shutdown to posturing regarding the lifting of the debt ceiling has heightened uncertainty about the economic outlook. Consumer and business confidence have fallen since the threat of a shutdown emerged, while the reality has taken a toll on communities where a large number of federal workers have been furloughed. Everyone, from cab drivers to restaurant owners, small retailers and (largely) defense manufacturers, were affected in the early days of the partial shutdown of government agencies.
Lower Your Expectations for Future Return
While equities are not priced particularly well and the current environment does not bode well for future long-term expected real returns, they are currently a better choice for investors relative to the alternative. Right now, any meaningful shifts in one direction or the other could be setting the investor up for additional disappointment. At this stage in the game, equities look to offer better prospects in the long-term. However, the time is not right to abandon your long-term investment plan in the face of the positive market headlines and lofty predictions emanating from Wall Street.
How Low Can They Go?
Mesirow Financial's Fixed Income team provides insight that can help bond investors put in perspective the current low interest rate environment.
A Growing Water Crisis Creates Investment Opportunities in Agriculture
Water is ubiquitous, the ultimate source for life and the most important commodity for human existence. No less importantly, water is a critical input for food. Yet only a small fraction of total global water less than 1% is usable for food production, due to salinity and glaciers. As a result, water represents one of the single most important determinants of the value of today's investment opportunities in food production and farmland.