With over 30,000 individual issuers and one million distinct securities, the supply of municipal bonds is highly fragmented.
Though the “Trump bump” helped, the year-old winning streak in smaller stocks owes far more to the spirited US economy. This rally has firepower, but we’d be choosy in riding the next leg higher.
In a companion paper, “Six Impossible Things Before Breakfast,” we present evidence that asset markets are generally priced for “secular stagnation,” and argue that this requires a number of extreme assumptions on the part of investors.
One of the great joys of working at GMO is the freedom to disagree. Indeed, many moons ago when Ben Inker first approached me about joining GMO, he told me that, having read my work, he believed we were very much philosophically aligned.
The markets have enjoyed a tremendous ride since the election. The Dow Jones Industrial Average has advanced over 2,500 points (a 15.1% total return) since then. Most of this “hope” rally has occurred on enthusiasm for anticipated pro-business policies, such as lower taxes and fewer regulations.
Details of Donald Trump’s economic agenda remain an enigma. Yet there are already enough clues to help investors target companies that should do well in an era of unpredictable policies from the incoming president.
Trump’s tax and infrastructure proposals will soon face the reality of US debt and monetary policy. We analyze what to expect next.
Has the 70-80% replacement rate for retirement income met its use-by date?
Some of Donald Trump’s plans for the US economy may provide a big boost for small stocks. We think there are five compelling reasons for investors to take a closer look at this segment of the market.
Every quarter, we update our global forecast map. Explore our key themes by region in our latest infographic.