In this article we put our optimization machine framework to the test. Specifically, we make predictions about which portfolio methods are theoretically optimal based on what we’ve learned about observed historical relationships between risk and return. Then we test these predictions by running simulations on several datasets.

When should you run from a bear, and when should you stand your ground? Not large mammals, but the dreaded bear markets. While an actual bear can kill you, a bear market can ruin your finances with one terrible swipe! Here’s how to protect yourself from these terrible financial creatures.

There has been a lot of angst lately over the rise in interest rates and the question of whether the government will be able to continue to fund itself given the massive surge in the fiscal deficit since the beginning of the year.

It was the best of times, it was the worst of times. Why did the stock market fall? No reason, and every reason. There doesn’t need to be a catalyst. Sometimes the market is simply going to do whatever the market is going to do, but the list of worries was already there.

Worries about rising U.S. interest rates have gripped global financial markets in recent weeks, with investors questioning whether the era of historically low global interest rates will persist.

Asset price inflation (check). Financed by debt growth (check). We’ve spent the last three weeks reviewing Ray Dalio’s A Template for Understanding Big Debt Crises. I hope you found the insights as helpful as I did.

Stock market action recently illustrates again why it’s important for investors to remain disciplined and diversified in a way consistent with their risk tolerances and investment goals. The bull market may have more legs, and upside surprises are possible, but risks have been rising over the past year or so, leading us to be more cautious and recommend that investors limit the risk in their portfolios.

Templeton Global Macro CIO Michael Hasenstab shares his thoughts on why he thinks US Treasury yields have moved higher. He also gives his take on recent weakness in emerging markets.

According to the 2018 edition of the Stock Trader’s Almanac, October has been a “great” time to buy. Once ranked last in terms of stock performance, the 10th month has delivered relatively average returns since 1950. What makes it so attractive is that it’s followed by November and December, historically among the very best months for stocks. We’re also entering the three most bullish quarters of the four-year presidential cycle, based on 120 years of stock market data.

Read the September 2018 Market Commentary from Milliman FRM

India's growth rate accelerated to 8.2% in the second quarter of 2018 as the shocks from demonetization and the imposition of the Goods and Services Tax (GST) wore off, supported by inventory restocking and a low base of comparison. The principal drivers of growth were government and private spending.

This yield metric has risen to its highest level in nearly 30 years

US Treasury yields have risen in response to strong economic growth. In the first week of October, the yield on the 10-year bond surged to its highest level in more than seven years. The question is: Do yields have more room to run?

As we enter another period of accelerated Brexit negotiations, how can investors best navigate the next few weeks and months? Our assessment is that a number of U.K. assets have already priced in a significant chance of a disruptive Brexit, but there is scope for further moves in either direction, depending on the path the negotiations take.

Is last week’s 18 basis point selloff in 10 year government bonds the start of a bond bear market or a market adjusting to the realities of the time, albeit in a somewhat disorderly way? The answer to this question has obvious implications for not just bonds, but all asset classes from equities to commodities to real estate.

This year we have favored financial stocks on the basis of earnings momentum, deregulation, a steepening yield curve and the value factor.

Growth and value stocks are often seen as opposing one another—but we believe they can be complementary within an equity portfolio.

Long-term bond yields are rising amid positive economic data and rising inflation.

There is a light economic calendar with a focus on inflation data. This is timely given the growing fear about rising interest rates. While these reports have been benign in recent years, even a modest uptick could fuel concerns.

The United Stated Mexico Canada Agreement (USMCA), which must still be approved by Congress, is mostly the same as the old agreement, but don’t call it NAFTA 2.0. The agreement should not have much of an impact on overall economic growth or inflation, but it is a hurdle cleared.

Although the runway between now and the next recession remains fairly long, there are some factors signaling that we may need to start the countdown clock fairly soon.

John Maynard Keynes, the British economist whose ideas fundamentally changed the theory and practice of economics, once said, “When the facts change, I change my mind - what do you do, sir?” So on a short-term trading basis, we came into last week believing the S&P 500 (SPX/2885.57) was going to grind higher into our envisioned mid-November’s “energy peak.”

With the economic expansion nine months from being the longest in U.S. history, the yield curve nearly flat and housing market indicators peaking earlier this year, it doesn’t take much imagination to see what’s next: a recession and falling interest rate cycle – i.e., a U.S. Treasury bull market. This article studies the history of these cycles and offers a roadmap for the upcoming one.

According to a recent Cornerstone Macro report, the three most influential macro trends this year have been 1) the strengthening U.S. dollar, 2) the flattening yield curve and 3) slowing global manufacturing expansion.

With the U.S. economy humming and corporate fundamentals on solid footing, it's perhaps little surprise that markets have been cooperative this year. Investor sentiment remains strong and this has fueled higher-still stock prices, which of course is further supporting positive sentiment. It's a bull market.

The Chinese stock market is closed this week for the Golden Week holiday. On this side of the Pacific the markets have been busy this week with US Treasury bond yields breaking out and stocks selling off—especially technology—based on the revelation that China implanted devices in technology products shipped to the US.

Now in its 10th year, the U.S. economic expansion could become the longest on record: Our forecast calls for the current “late-cycle” phase of the expansion to last at least another year, barring any policy mistakes.

TIPS underperformed Treasurys by 40 bp, falling 1.1% due to moderating inflation. The average TIPS yield rose 33 bp to 0.92%, while the breakeven spread fell 10 bp to 205 bp. Recent oil & gas price increases should wake inflation, giving TIPS an edge. Longer-term, the interplay between the FOMC and Treasury yields looms large.

We believe there are three positives, three negatives and three wildcards for stock market performance in the fourth quarter. We expect the balance of these factors to result in further gains for global stocks.

We have heard the statement, “Nobody can consistently time the stock market’s ups and downs;” and, for the most part we agree with that. However, if one listens to the message of the market, one can certainly decide if one should be “playing hard,” or not playing so hard.

Will Democrats retake the House of Representatives in the US midterm elections this fall? Will it matter for your investment portfolio if they do? Probably not so much, although a Democratic sweep of both houses could be more disruptive.

In the 16 years since the Principles for Responsible Investment (PRI) were first unveiled there’s been a sea change in awareness and concern for the environment among the general public. But that hasn’t necessarily been reflected in the asset management world.

With the clock ticking on LIBOR, the market begins the adjustment to SOFR

One of the biggest threats clients face in retirement is chasing higher investment income. I’ve seen people go back to work because they concentrated on income and lost their principal. Income is the wrong goal, particularly since much of so-called income is just a ruse allowed by regulators.

I’ve been getting lots of questions lately about the merits of owning TIPS versus nominal bonds. With that in mind, today I’ll discuss how to determine the more appropriate strategy.

The price of gold fell back below $1,200 an ounce again this week as the U.S. dollar advanced following another federal funds rate hike. It’s now set to log its sixth straight month of declines, its longest losing streak since 1989.

The Fed raised rates for the third time this year, and expects another three hikes next year; while also upping its near-term economic projections.

The US Federal Reserve (Fed) raised its benchmark short-term interest rate for the third time this year, which was no surprise to most market participants. Chris Molumphy, chief investment officer, Franklin Templeton Fixed Income Group, offers his take on the Fed’s “normalization” path in light of what he sees as an overall positive US economic backdrop.

As expected, the Fed raised interest rates today following its September policy meeting. Could the escalating trade war between the U.S. and China impact plans for future increases?

The idea for this memo came from the seven worst words in the investment world: “too much money chasing too few deals.”

We see growth slowing, but not an imminent recession. We invest accordingly.

I don’t trust the fundamentals of the global economy. The system is built on quicksand.

After being out of favor for 17 months, fund managers are now overweight US equities by the most since January 2015. It's at an extreme, and the US should underperform.

What impacts could escalating trade tensions and rising U.S. interest rates have on global markets and economies in the months ahead? See what our strategists’ views are for the fourth quarter of 2018 and beyond.

Well, “you did it,” as the senior index followed most of the other indices to new all-time highs. We have repeatedly written that this was going to happen given the Advance-Decline Line’s continuing new highs, as well as the stock market’s strong breadth.

I believe that two of the most important investing principles that prudent investors should embrace are valuation and time in the market. Consequently, the title of this article is mildly misleading, because both concepts are extremely important towards achieving long-term investing success. In other words, I believe attempting to argue the importance of one over the other is a waste of time and energy.

The Federal Reserve meets on Wednesday and there's one thing we know for sure: it's going to raise rates by another 25 basis points, lifting the federal funds rate to a range from 2.00 to 2.25%.

To develop retirement strategies, advisors need to consider worst-case outcomes due to poor investment performance. One way uses historical returns and focuses on the particular periods that produced the worst outcomes. Another way uses forward-looking estimates of future returns and Monte Carlo simulations to generate a range of potential outcomes. I’ll develop new measures to compare those two approaches and demonstrate why I strongly favor the forward-looking approach.

High-yield returns have been great lately, as technical flows, fundamental factors and good economic growth align. But tight spreads, lofty net leverage and event risk don’t make for smooth sailing ahead.

In case you couldn’t tell from the ubiquitous political ads and yard signs, midterm elections are right around the corner—46 days from now, to be exact. Historically, volatility has increased and markets have dipped leading up to midterms on uncertainty, but afterward they’ve outperformed.