After little more than two weeks, President Donald Trump’s honeymoon with Wall Street appears to have been put on hold—for the moment, at least—with major indices making only tepid moves since his January 20 inauguration. That includes the small-cap Russell 2000 Index, which surged in the days following Election Day on hopes that Trump’s pledge to roll back regulations and lower corporate taxes would benefit domestic small businesses the most.
Investing always involves some risk. Right now, US macro is not one of them.
This month's Absolute Return Letter is a follow-up to last month's letter. In January I argued why investors could be facing a much more hostile Fed this year than generally perceived, and this month we look at the implications of that; why beta risk should be de-emphasized in 2017, and where we spot better opportunities.
Earlier this month, David Zahn, head of European Fixed Income, Franklin Templeton Fixed Income Group, set out some thoughts on the political and economic landscape for Europe in 2017.
To pursue Absolute Engagement is to be intentional about structuring your business in a way that supports meaningful growth. At the same time, it’s about ensuring that you have the capacity, energy and passion to stay focused on your goals for the long haul. So Absolute Engagement is about your business, your life and the connection between the two.
At the Washington joint press conference with Prime Minister May held on January 27th, President Trump told the watching world, "Brexit is going to be a wonderful thing." The meeting did much to clear the way for Britain to stand alone and enter trade with the United States without the European Union (EU).
Impact investing continues to grow in popularity. Donor-advised funds are a useful tool for impact investing, provided that donors and their advisors are aware of certain points before making these investments.
The past several years have made many investors complacent about inflation. That complacency served bond bulls well.
Tomorrow marks the Lunar New Year, the most important date in the Chinese calendar. It’s also the start of the longest holiday at two weeks, during which the largest mass migration of humans occurs every year as families reunite and go on vacations, both domestic and overseas.
GMO Quarterly Letter by Ben Inker and Jeremy Grantham
Capitalism and democracy work together to power economic growth and sustain our standard of living; capitalism, with all of its faults, is still the best generator of investment and human capital in the world.
On December 7, 2016, Italy's Prime Minister Matteo Renzi resigned following defeat in a national referendum, that he had supported, that would have changed the country's parliamentary system.
Faced with a Tweeter-in-chief, how are investors to navigate what’s ahead? Is there a strategy behind President Trump’s outbursts; and if so, how shall investors position themselves to protect their portfolios or profit from it?
One of the greatest strengths of American capitalism is how it addresses the problems faced by its citizens. The greater the problem, and the more lives impacted by the problem, the more entrepreneurs, academics and government officials there are seeking solutions.
China is selling US Treasuries at a record pace to support its currency, the Chinese yuan (also known as the renminbi), and to stem the flow of money leaving the country.
If you are like many busy working people with many responsibilities and stresses, you probably have little time to think about retirement. But as the wise Ben Franklin once said, “If you fail to plan, you are planning to fail.”
Greetings this New Year from our new office facilities in Westborough, MA. We hope you will find time to stop in if you are in the area!
The Ten Surprises of 2017 have a generally constructive tone. President Trump campaigned promising significant change to the American people. He raised expectations, and that’s why he won.
Investors would have done well in 2016 to heed the words of Heraclitus, paraphrased: “Expect the unexpected.” Brexit and the U.S. election results were two glaring examples of the unexpected becoming reality.
My article last month on developments that imperil the AUM-fee model generated a spirited response on APViewpoint. A recent report from Accenture Consulting and an interview I did with a compliance professional illustrate why this subject is more controversial than I originally thought.
2016 began with a thud and ended with a bang. After one of the worst-ever starts to a year, U.S. stocks managed to rebound and ultimately finish the year with solid gains.
Donald J. Trump was sworn in as the 45th President of the United States. President Trump steps to center stage. Bring us jobs, bring us tax reform and bring us a grand fiscal infrastructure spend. That would be positive.
Take Warren Buffett. He backed Hillary Clinton throughout the primaries and general election. And yet just yesterday, on the eve of Trump’s inauguration, he said he supported the new president and his cabinet “overwhelmingly,” adding that he’s confident America “will work fine under Donald Trump.”
Although continued political uncertainty looks set to dominate the investment agenda for 2017, much as it did in 2016, David Zahn, head of European Fixed Income, Franklin Templeton Fixed Income Group, feels investors need to take heed of other themes that may be bubbling under the surface in the year ahead.
There is much we don't know about how the Trump presidency will play out. Will the Wall get built? Who will pay for it? Will it have at least some fencing? Will repeal and replace happen at exactly the same time? Will Trump throw a ceremonial switch? Will there be a Trump National Golf Course in Sochi? It's anyone's guess.
Small businesses and entrepreneurs have had a rough time of it for these past eight years. New startups and entrepreneurial activity have pretty much been stagnant, weighed down by heavy regulation, high taxes and an economy that’s just been stumbling along.
I hate making predictions. I got the tech wreak and sub-prime right, but was far too early on those predictions.
Don’t get too far ahead of yourself and drink the cool aid that bonds will underperform. Investor fears of higher interest rates have caused volatility, which we believe presents opportunities in the fixed income markets. Global central banks continue to intervene in the markets in such a way that natural market mechanisms cannot function properly.
You’re in denial if you believe that U.S. stocks are fairly valued, the Eurozone does not face a crisis or a strong dollar will support stability in the global economy. Those themes were presented by Albert Edwards and his fellow speakers at the annual investment conference sponsored by Societe Generale.
I gave you my own thoughts last week (see “Skeptically Optimistic”). Today we’ll review several other forecasts from people who deserve your attention. Of necessity, I must leave out some good ones, but I think the ones I cover will give you plenty of useful information.
One of the attempted barbs tossed my way at various points in the past 20 years is “Cassandra.” Frankly, I kind of like it.
U.S. stocks have been consolidating gains seen in the aftermath of the November presidential election, a healthy process following such strong gains. Further appreciation should be supported by improving U.S. and global economic and earnings growth. Disappointments are likely on the U.S. policy front but we would view those as buying opportunities for now.
Look at what President-elect Donald Trump’s pledge to lower taxes and slash regulations is doing to business optimism here in the U.S. Last month, the Index of Small Business Optimism soared a phenomenal 7.4 points to 105.8, its highest reading since 2004. The National Federation of Independent Business (NFIB), which conducts the survey, reported that attitudes toward capital spending and job creation in particular surprised to the upside. Research firm Evercore ISI called it a “blowout report,” and I have to agree.
The search for investment portfolio returns is not going to get any easier in 2017 against a backdrop of record U.S. equity prices, narrow credit spreads and low bond yields.
Paul O’Connor, Head of Multi-Asset, reviews 2016’s lessons, and details the key themes that investors should prepare for in 2017. He explains which areas of the market look most and least appealing from a cross-asset perspective.
I traveled once to Africa, as you might have guessed by now, and it's been a part of me ever since. Being perhaps the cradle of civilization, if not life itself, Africa casts an eerie glow over the entire history and, indeed, meaning of existence.
There are several irrefutable facts that should be informing the strategies for leaders in financial services.
Today, let’s take a look at the most current equity market valuations for they can tell us a great deal about future 7-year and 10-year annualized returns. We’ll also look at the bond market. Total U.S. credit market debt-to-GDP is nearly 355%. Global debt-to-GDP is 325%.
Instead of sitting on the sidelines in 2017, take a look at Europe’s corporate bond markets. They could prove a beacon of stability in an uncertain world.
Three recent events had a meaningful impact on me. They illustrated the devastating consequences of inadequate life insurance. I want to share them with you.
The upcoming press conference with president-elect Trump could offer insights into policy changes and the domestic and global effects. Looking back at historical data and market cycles can help investors make sense of what might be changing in the new year. With positive returns last year, having strategies for a diversified global portfolio could help continue growth, even in unknown conditions.
As we’ll see, a great deal will happen in the first third of the year that could (and likely will) radically change the course of events in the last two-thirds. Furthermore, the possible outcomes are in the hands of inherently unpredictable individual humans otherwise known as politicians (and not just in the US, thank you very much!) instead of dispassionate market forces. Fancy quantitative models will be of little help.
Strong future growth is rooted in some basic dynamics in which Asia Pacific excels.
US equities are starting the year at new all-time highs. The rally is supported by healthy breadth and a relatively solid economic foundation. The biggest watchout is volatility, which has fallen to an extreme. A mean reversion in volatility is odds-on and that is normally unfavorable, short term, for equities.
I find it curious that many in the financial media continue to have a bias against gold, even though it generated better returns in 2016 than 10-year Treasuries and the U.S. dollar, which performed half as well. And when it was up as much as 28 percent in the summer, they still didn’t have anything positive to say, arguing it had gone up too much.
Factors ranging from China’s evolving economy to the rise of nationalism combined to make 2016 a year that will not be quickly forgotten.
3 rules that may help your clients navigate the low-return environment.
The fourth quarter of 2016 was a profitable period for globally diversified multi asset managers. All major domestic large cap indices were up for both the quarter and the year.
As we always do in January, this month we focus on the investment minefield laid out in front of us and we argue that with upcoming elections in the Netherlands, France and Germany, and economic uncertainties globally, this year could turn into a rather tricky one for investors. There are reasons to be optimistic, however, and we hope that 2017 will be a prosperous year for you all.
We all know that there is a savings crisis in America. According to the National Institute on Retirement Security (NIRS), the median savings balance of near-retirement households is only around $12,000, while the median saving balance for all working-age households is only around $3,000.
