Investing based on short term-market gyrations and noise from the 24/7 business news cycle rarely drives alpha. At RBA, we’d rather invest dispassionately based on market fundamentals and focus on longer time horizons. Remember to ignore the Tweet and invest for the meat.
When the Fed instituted ZIRP, investors were overenthusiastic to invest in the next great Unicorn. Now that rates are rising and money is no longer free, investors are beginning to realize that rational investing and positive cash flows trump hype and speculation.
If the only difference between playing for digital coins in mobile games and mining for cryptocurrencies is the ability to openly trade the coins for goods and services, one should wonder if the crypto frenzy is worth the hype and speculation. We think not.
Many income-oriented investors may not be appropriately positioned for the current market environment, with increasing inflation and looming tariffs poised to lead to significant underperformance.
Successful investing in this cycle has depended largely on following the business cycle and ignoring the myriad of fears. As the economy enters a late-cycle phase, investors need to recognize the characteristics of a late-cycle environment and how to accordingly position portfolios.
In the 9th year of this bull market, investors remain overweight bonds in an environment poised to drastically limit fixed income returns. It’s time to avoid bonds’ day of reckoning.
While Tech remains one of RBA’s largest overweight sectors in our portfolios, one thing to consider is the sector’s dirty little secret: it’s really a deep cyclical.
2008 may have generationally scarred investor psychology. As a result, many continue to disavow the current bull market and instead heed warnings of an impending bear market. We argue that fundamentals remain strong and the global equity markets are rife with opportunity.
Many investors no longer view the US as the global safe haven to turn to during bouts of volatility. We argue that US and global fundamentals remain strong, however, many global investors seem to be losing religion.
It’s time again for RBA’s annual ‘Charts for the beach,’ where we highlight what consensus is currently missing.