As Thanksgiving approaches, we are reminded of our history. Financial planners are the voice of the financial industry for many of our clients. Here’s a bit about the history of interest rates in this wonderful country of ours as well as globally.
Notwithstanding all the self-congratulatory flourishes in Chinese President Xi Jinping’s political report to the 19th National Congress, there is good reason to believe that the Chinese economy is only in the early stages of its long-heralded structural transformation. To reach its goal, China will have to resolve three contradictions.
In baseball terms, we believe the upward cycle of emerging markets (EM) is in roughly the third inning of a nine-inning game. In other words, we still see plenty of upside ahead and think it remains a good time to buy.
In what was a surprisingly quiet quarter for the Treasury market, TIPS outperformed straight Treasurys. According to my calculations, TIPS on average earned 0.9 percent in the 2017 third quarter compared to 0.6 percent for straight Treasurys.
A decade after the onset of the global financial crisis, it seems more than appropriate for central bankers to move the levers of policy off their emergency settings. A world in recovery – no matter how anemic it may be – does not require a crisis-like approach to monetary policy.
Frothy stocks and well bid bonds can undercut portfolio performance if rates move higher, though long/short equity strategies can support long-run returns.
On August 14, President Donald Trump instructed the US Trade Representative to commence investigating Chinese infringement of intellectual property rights. Whatever the merit of such allegations, Chinese retaliation against US trade sanctions would almost certainly cause far more economic damage.
Since the infamous “dot com” meltdown nearly two decades ago, people have tended to question any sort of extended run-up in technology-sector stocks.
Overall, we believe small-cap stocks in emerging markets offer attractive prospects for active managers. A multitude of mispriced securities, market inefficiencies and a paucity of research provide considerable investment opportunities, in our view.