The venerable investor Warren Buffett has a real knack of putting complex concepts and ideas into simple and easily understood terms. In my opinion, his quote, “Price is what you pay. Value is what you get” is one of the more profound and important statements he has ever uttered.
What will investors be talking about in 2020? We explain how six key issues could shape the global economy and financial markets next year.
Market valuation is always a factor; but often misunderstood is the vastness of the spectrum of metrics, and the sentiment nature of valuation.
The S&P 500 is up more than 25% year to date and has notched 26 record highs since January.
Yes, there is a downturn in the Global economy, numerous factors are combining together in what seems like a perfect storm of negativity to depress the global economy and quell even the hardiest of investors from any attempts at risk taking. Nothing could, or may I say should, be farther from the truth.
As Thanksgiving comes to an end, and the busy holiday shopping season begins, here are some need-to-know numbers you may have missed from this past week.
The economic calendar is loaded with data and we have a holiday-shortened week. In some circumstances the many economic reports and the Washington stories would dominate. This week the market and economic context suggests a different theme.
Global rates have fallen over the course of 2019. Indeed, trillions of dollars in sovereign debt now carry negative yields. This has forced income-oriented investors to look to non-traditional sources to find sustainable, low-risk yields. Ben Kirby discusses the Thornburg Investment Income Builder fund, which has had an exceptional track record over the last 15 years.
Equity and credit markets have thus far taken lackluster earnings results and lower expectations in stride, but we think this could change if confidence readings drop further.
Flying in the face of negative economic news, U.S. factories picked up steam for the third straight month in November.
Models can help advisors streamline portfolio management while retaining the level of discretion appropriate for their practice.
Although the PMI report is encouraging, there’s still reason to remain somewhat cautious long-term. The latest accounting of global debt levels was just released, and the news might be so bad that it’s good—for gold prices, at least.
In the bond market, staying positive is easier said than done.
Key Takeaways -Plentiful Jobs Harvest Should Help Economy Trot On -Low Turkey Prices Means More to Gobble Up -All S&P 500 Sectors Part of The Positive Parade
Earlier this year, passive management was attacked in two high-profile articles. Those criticisms were proven to be false – and driven by active managers seeking to protect their livelihoods. But that still left the question, which I now examine, of whether flows to passive funds have increased certain risks.
Owing to a recent easing of both Sino-American tensions and monetary policies, many investors seem to be betting on another era of expansion for the global economy. But they would do well to remember that the fundamental risks to growth remain, and are actually getting worse.
Changing dynamics may present a new set of opportunities for investors.
China’s economy is slowing by any measure, while Australia’s central bank takes rates to record lows.
Investors were unfortunately treated to a rather disappointing package of October Chinese economic data. Three of the most important hard data series were reported: fixed asset investment, industrial production and retail sales.
A brief monthly update on what's happening in the municipal bond market.
A review of last month’s market-moving events across countries and asset classes.
A look at what Treasury yields may be telling us about where manufacturing is headed in the months ahead.
During Q3 2019, “haven” assets were strongest among the primary asset classes. This followed a similar pattern from the second quarter.
ESG integration is best used as a tool to improve portfolio returns and/or reduce risk. While usually thought of as a company-level concern, material ESG data can be very useful at the country level as well, especially in emerging markets. ESG signals are only as good as the quality of their inputs.
It’s easy to overlook government bonds today with yields so low. But their interest-rate sensitivity, or duration, can provide vital protection when riskier assets such as stocks and credit struggle.
If you’re an advisor looking to differentiate your practice from others, consider this article to be your first step toward a better understanding of impact investing.
Research Affiliates discusses how its research partnerships with academic thought leaders inform its process and examines the All Asset strategies’ returns per unit of equity beta.
This is an absolute monarchy we’re talking about, after all, and so global investors should not expect to have any shareholder rights. Aramco’s board of directors will have a fiduciary duty to MBS and any future monarch, not to investors. This has some serious implications.
With global growth slowing and significant uncertainty around trade and politics, PIMCO’s Income Fund is taking the long-term view and positioning defensively.
It’s been a largely solid run for U.S. stocks in 2019. With the year now in its final quarter, Tony DeSpirito addresses three questions on investors’ minds.
Nonfarm payrolls rose more than expected last month, despite being held back by the strike at General Motors (which subtracted 42,000) and the exit of 20,000 temporary workers for the 2020 census. There is some uncertainty in these data.
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
Global equity markets continued to face uncertainties during the third quarter of this year, but by and large, they remained resilient.
One of our least favorite things about investing is the remarkable imprecision of language. There are so many terms like “risk,” “momentum,” “smart beta”, and “asset class” (among many others) that have no precise definition– and yet, everyone assumes they know what those terms mean.
In October the International Monetary Fund (IMF) lowered its 2019 GDP forecast to 3.0% from 3.2% in July. This represents a marked slowing from global growth of 3.8% in 2017. The primary driver of the slowdown has been a retrenchment in global trade and business investment in response to the ratcheting up of trade tariffs since early 2018.
The pitfalls and opportunities we see in high yield markets highlight the importance of active portfolio management, rigorous credit analysis, and taking a cautious and selective approach.
For investors, year-to-date gains have been impressive despite the challenging macro backdrop, leaving equity markets near all-time highs and sovereign bond yields at levels that historically would signal recession. However, while we believe recession risk has increased, it is not our base case.
Rising issuance of munis available only to qualified institutional buyers (QIBs) may offer higher yields to investors who can access them.
This week’s Fed meeting started a pause in overnight rate cuts. But what will happen if yields on the long end move up?
Investors may assume they have adequate exposure to gold because they’re invested in a commodities fund. But many of these funds have a relatively small weighting in gold, and so their gold exposure is much smaller than they realized.
ARIS describes key themes in the current global economic and market environment
As expected, the FOMC lowered the fed funds rate (and the IOER) by 25 basis points; with a slightly more hawkish tone in the accompanying statement.
The month ended positively for the S&P 500, Dow Jones Industrial Average, NASDAQ and the Russell 2000 Index.
The U.S. Federal Reserve (the Fed) cut interest rates again—its third such move in as many meetings—lowering its benchmark rate to a target range of 1.50% to 1.75%.
For most of the last 20 years, advisors could safely ignore inflation and the risks it poses to their clients’ fixed-income holdings and earning power. But inflation is too dangerous a risk to disregard. What are the chances of an upward spike in inflation and what would that mean for clients?
In a new GMO Insights piece titled “Emerging Market Stocks: Getting Comfortable with the Uncomfortable,” asset allocation team member Rick Friedman looks at how lackluster emerging market equity returns in recent years have led many investors to write off the asset class, but GMO “humbly suggest(s) investors get more comfortable owning the uncomfortable.”
Preferred securities represent a relatively underappreciated opportunity for income-oriented investors in an overall low yield environment where attractive investments may seem hard to find. In the current market they offer yields and returns comparable to high yield debt, but with quality and trading characteristics more nearly approaching investment grade credits.
At the close of business on Friday, the futures market in federal funds was putting the odds of a 25 basis point rate cut on Wednesday at 90%, which would place the federal funds rate in a range between 1.50 and 1.75%, the lowest it's been since mid-2018.
We focus on fundamentals such as moving averages and standard deviation. We follow leading indicators such as the purchasing manager’s index (PMI) and consumer confidence index. These factors are many times more effective than the headline news at shining a light on the right path.
