Hypersensitive investors are reacting to every utterance from central banks like the Federal Reserve and the Bank of Japan. Russ shares three investing implications of this fixation.

While economic numbers like GDP or the monthly non-farm payroll report typically garner the headlines, Russ explains why investors should pay more attention to and may want to alter their assumptions based on -- the Chicago Fed National Activity Index (CFNAI).

Theres certainly no shortage of things to worry about right now related to the US economy. But one thing were not too worried about right now: Inflation. Not only is inflation low, but the latest numbers show its actually falling. And as I write in my commentary this week, inflation is unlikely to become a problem in the United States for at least another 12 to 18 months. Why? There are a number of headwinds keeping US prices low in the near term.

The risk of a US slowdown Not discounted in US valuations. While US valuations currently look reasonable, theyre predicated on a US economy growing at around 2% to 2.5%. The risk of slower growth is not priced into the market. If US economic data continues to disappoint, and we get a growth hiccup in the second or third quarter, then were likely to see some US market weakness.

Russ explains why Thursdays market correction in Japan hasnt changed his view that investors should consider a market weight to Japanese stocks.

Slow economic growth and long-term headwinds should keep inflation contained. Low inflation should help support equity markets and high yield bonds, but may be a negative for gold prices. The inflation environment should also help prevent interest rates from rising too fast.

With global equities up more than 25% since their bottom last June, many investors are wondering: Is it too late to move cash from the sidelines to stocks? No, says Russ, and he offers three ideas for where find value today.

With high yield spreads historically tight and prices at all-time highs, some market watchers are wondering whether its time to jump off the high-yield bandwagon. Russ weighs in and explains why this asset class is still worth holding.

The current rally has been fueled by investors looking for relatively "safe" areas of the market. As such, the classic defensive sectors, such as utilities, consumer staples and healthcare, have been outperforming. This trend may be changing, indicating that sectors such as energy and technology are growing more attractive.

The real Great Rotation may just be a shift to cyclical sectors from defensive ones rather than a move to bonds from stocks. Russ explains and offers 3 ways to play this rotation.

Though frontier markets have outperformed developed and emerging markets so far this year, its not too late to explore the frontier. Russ offers three reasons to consider having a small strategic allocation to pre-emerging world equities.

Despite Reinhart and Rogoffs methodology mistakes, their widely cited papers basic conclusion still holds. Russ K warns that both policy makers and investors ignore it at their own peril.

The April employment report confirms that the US is on a slow-but-positive course of economic growth. This environment should be conducive to further gains in equity prices. Europe, in contrast, continues to struggle and investors should approach that region with caution.

The 1Q GDP report was mixed, but the lack of income growth remains troubling. Oil prices are likely to remain range-bound, but that should be good enough to help energy stocks. While yields could decline further in the near-term, Treasuries look quite unappealing.

While the sell-off in gold has dominated headlines lately, another commodity oil has also experienced price declines in recent months. But despite crudes drop, Russ is still a fan of energy stocks for four reasons.

Russ explains why hes no longer advocating the concept of investing in certain smaller developed countries known as the CASSH countries.

The events in Boston were a tragic reminder that markets still face risks from terrorism and geopolitics. In fact, the US market is especially vulnerable to such exogenous shocks right now given that there isnt much bad news discounted into prices.

It might seem like the housing bubble just burst, but as the housing market stages a comeback, investors are asking if were already facing another bubble. Russ explains why home prices arent in a bubble but home builder stock valuations may be.

Russ answers more client and reader questions this time about emerging market equities and debt.

Investors have been expecting interest rates to rise, but with the yield on the 10-year Treasury bond back below 2%, Russ explains two structural factors that are slowing the rate rise.

Investors have enjoyed six months of relative quiet in Europe, but the situation has flared up again over Cyprus. While many investors are wondering why they should care about such a tiny part of Europe, Russ says the answer is because it is indicative of a bigger concern.

Wondering about the outlook going forward for the US economy? Russ shares the economic number that may give you a clue.

While emerging market stocks are underperforming US stocks, Russ explains why longer-term investors may want to give EM markets another look.

After the recent rally in emerging market bonds, is it too late to allocate to this asset class? Not for long-term investors, says Russ and he offers 3 reasons why.

While last week's rally was supported by better-than-expected economic data and improving investor sentiment, the magnitude of US stocks' advance is starting to cause some indicators to flash yellow. Russ explains.

After Tuesday's record setting Dow Industrials close, are US stocks still cheap? Can the market move higher? Russ answers these questions and more.

Now that March 1 has come and gone, what will the sequester mean for the US economy and markets? Maybe not much in the near term, but Russ explains why the second quarter will be a different story.

In the last week, stocks have pulled back and volatility has once again spiked. Russ outlines the 3 factors that hindered the rally and explains the implications for investors.

Markets saw a return to more volatile conditions last weeka trend that is likely to continue. The sequester is likely to contribute to an increased fiscal drag in the first half of the year. Nevertheless, stocks have the potential for increased gains, although the road ahead will be bumpier.

Waiting for a market correction? Wondering how to potentially protect your gains? Forget merely opting for traditional defensive sectors. Instead, consider Russ' four suggestions.

The global economy is stuck in a two-speed regime: Developed markets like Europe, Japan and the United States are stalling, while China is re-accelerating. Russ explains what this divergent growth landscape means for his country outlooks.

Though Russ continues to like Australian equities for the longer term, he explains why he may downgrade his near-term view of the Australian market soon.

Though Russ continues to like Australian equities for the longer term, he explains why he may downgrade his near-term view of the Australian market soon.

When the Commerce Department releases the headline January retail sales number on Wednesday, economists expect to see a big drop from December. Russ explains why the number could come in even lower and the implications for investors.

Though the Fed continues to flood the US economy with money, Russ explains why inflation isn't likely to be a problem until 2014 and what investors can do in the meantime to prepare.

Do you avoid the stock market? Shun diversification? Trade inefficiently? Russ and guest blogger Nelli Oster an investment strategist on Russ' team examine three common bad behaviors among investors and provide tips for potentially mitigating their impact.

While markets cheered the House of Representatives' recent vote to temporarily suspend the debt ceiling, the US economy isn't out of the woods yet. Russ highlights the two major risks it still faces.

It's time again for Russ K's annual look back at the investment calls he made in 2012. Find out what he got right and the couple of things he got wrong.

While Im optimistic that Japanese stocks can move higher in coming months, Id advocate investing in them only if dollar-based investors have the flexibility to hedge the currency effect of a weaker yen (more on that below). So with that caveat out of the way, here are four reasons why I think Japanese stocks can move higher in the near term.

Thanks to solid earnings, some decent (if mixed) economic news and indications that the debt ceiling debate may be delayed slightly, stocks posted additional gains last week, continuing their strong start to 2013. For the week, the Dow Jones industrial average climbed 1.2% to 13,649, the S&P 500 index advanced 1.0% to 1,485 and the NASDAQ composite rose 0.3% to 3,134. Bonds have remained relatively steady, with the 10-year Us treasury closing the week at a yield of 1.84%, two one-hundredths lower than the previous Friday close.

Many investors have flocked to the perceived safety of defensive sectors over the past few years, including consumer staples. But Russ gives three reasons they might want to think twice about the sector now.

Some market watchers are interpreting Tuesday's better-than-expected US retail sales report as a sign that the US consumer is coming back. But as Russ explains, a closer look at the numbers shows this much heralded return is likely to be delayed a bit longer.

Enjoy the US stock market rally while it lasts. Russ Koesterich has three reasons why investors should remain cautious in the near term.

Think emerging markets equities have run their course? Not so fast despite recent strong performance, Russ explains why there's room for further EM gains in 2013.

After last week's partial deal, Russ explains when investors should expect more market volatility and another round of late-night drama from Washington.

Stock markets started 2013 off with a bang, as investors expressed relief over the down-to-the-wire agreement on the fiscal cliff that came on January 1. For the week, the Dow Jones industrial average jumped 3.8% to 13,435, the S&P 500 index rose 4.6% to 1,466 and the Nasdaq composite advanced 4.8% to 3,101. Although the deal reached last week was good news for the markets, Washington's fiscal soap opera is far from over. Although the deal reached last week was good news for the markets, Washingtons fiscal soap opera is far from over.

As we look ahead to 2013, it is impossible to make any sort of forecast without first turning our attention to the still-unresolved fiscal cliff debate. We have long said that unless we were to see significant movement on the issues of tax rates and entitlement spending, the most likely outcome would be some sort of bare-bones deal. At the time of this writing, congress and the President were still negotiating, but our analysis suggests that such a bare-bones resolution remains the most probable result, even if it does not come before the January 1 deadline.

As discussed in previous posts, Congress kicked off the New Year with a bare bones deal to avert (or at least delay) the fiscal cliff. Though markets responded positively to the news Wednesday morning, the euphoria isn't likely to last.

A grand bargain in fiscal cliff negotiations remains elusive, but a bare bones deal seems likely. Russ K explains what that means for the economy and investors.

Overweighting Germany has made a great deal of sense this year, but now Russ gives 3 reasons why it may be time to take some profit and revert to a neutral position.