There has been a lot of discussion about a recent academic paper, "Why Indexing Works," which makes a statistical case for passive investing in equities. The same logic applied to bonds, though, may make the opposite case: Passive fixed income management doesn't work, but active bond management does.
The Fed just gave us its wish list in a best-case scenario. But as the saying goes, if wishes were horses, beggars would ride. In short, Chair Yellen’s remarks, while detailed, are largely theoretical and dependent on many variables that may or may not happen. It would be wrong to assume that a bear market in bonds is a foregone conclusion.
Healthcare continues to generate political controversy. So should investors stay away? Absolutely not. What’s important is to target companies that are positioned to deliver long-term growth no matter what happens to the US healthcare system.
In an interview, AB’s new US Senior Economist, Eric Winograd, explains why he expects the US economy to continue growing and the Fed to raise rates two more times this year. He also highlights two risks: populism and protectionism.
With the S&P 500 Index touching new highs, where’s the US equity market heading? Our US portfolio managers addressed five big questions that are on investors’ minds about valuations, opportunities and risks in the market today.
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.