Several months into the Covid-19 era, Howard Marks takes a step back to consider the global health crisis, the economic fallout and the U.S.’s response to date. He also shines light on how one might – or might not – view the current circumstances in the framework of a market cycle.

These days, pretty much everything is hyper-political, including death rates from disease, wearing masks, opening schools, whether some demonstrations are "mostly peaceful" or "violent," and now GDP.

As an advisor, effectively communicating with your clients is an integral part of maintaining and growing your business. In the current era of working from home and social distancing this task has been even more difficult as many face-to-face interactions have been replaced by phone calls and Zoom meetings.

About two-thirds of this month’s comment is about COVID-19 and the risk of a second wave. This is not only for the sake of public health, which would be enough, and not only to contribute to a better understanding of the epidemic.

Thus far the market has shrugged off the recent rise in Covid cases, but the situation remains fluid. In our view, the best strategy is to invest in companies that are able to grow during this time of stress, either organically or by increasing market share as weaker competitors fall by the wayside.

Does 9 times higher yield in EM than in US bonds make for an attractive investment proposition? We lay out the arguments. 

Tesla’s market capitalization just crossed $300 billion. It’s the largest car maker in the world. Tesla’s market cap implies that its production will go up from the 400,000 cars a year it produces today...

We all know that past performance is no guarantee of future results, but you can see in the chart below that the white metal could possibly be setting up for another epic run-up. At this stage of the bull market, silver’s current price appreciation is ahead of any previous rally.

With the US dollar index recently having completed a so called “death cross”, we thought it would be a good opportunity to review the investment implications of a potential trend change in the USD.

Automatic stabilizers prevented an economic breakdown, while trains are running empty and money stays parked.

Weeks before the S&P 500 bottomed, many millennial Robinhood investors began picking up coronavirus-impacted airline stocks. The buying spree continued even after Warren Buffett announced that he’d dumped his holdings.

Politicians love saying small businesses are important to the economy. In this case, it isn’t just rhetoric. The millions of little companies with a handful of workers are, collectively, more important than the few hundred large enterprises we see in the news.

U.S. stocks have been fairly resilient lately, even as coronavirus hotspots flare up around the country. Although consumers and businesses are increasingly worried about rolling shutdowns, major stock indexes generally have moved sideways. How long can this continue? Much depends on the shape of the economic recovery.

At LPL Research, we know the stock market is forward-looking: It focuses on what’s happening today and what it sees on the path ahead. Much of the real-time economic data we follow—such as transportation activity, home sales, and jobless claims—is showing tangible evidence that economic activity—while still depressed—has begun to make a comeback.

The value of this year’s annual hedge fund performance survey was turned on its head when a pandemic shut down the global economy and sent securities plummeting. But a deeper look at consistently performing funds revealed managers that as a group have largely been able to weather the storm better than the market and their peers.

Saying that extreme stock market valuations are “justified” by low interest rates is like saying that poking yourself in the eye is “justified” by smashing your thumb with a hammer.

Precious metals were the big winners for the first six months of 2020. Spot gold took the first place position, rising over 17 percent, followed in second place by silver, up nearly 2 percent. Palladium rounded out the top three, essentially flat at negative 10 basis points.

Software and hardware companies are supporting new forms of consumption in Asia, such as the growing popularity of online games. Portfolio managers Sharat Shroff and Inbok Song discuss the opportunity set for long-term investors.

American ingenuity is something to take pride in this weekend as we (safely) celebrate the Fourth of July.

The case for considering tactical and long-term allocations to small cap stocks.

A “perfect storm” of surging government debt levels, plunging real bond yields, rising coronavirus cases and deteriorating economic forecasts pushed the price of gold to an eight-year high this week, and some analysts now project the metal to top its all-time high within the next 12 months.

Pundits, prognosticators, and even investment boards often make misleading declarations that an asset class is broken, that its prospects for earning investors a reasonable future return are very dim. These proclamations can lead to investors’ abandoning these assets to chase recent winners.

We like to go a bit further with our definition and add that luxury goods are those for which demand has tended to grow faster than potential buyers’ disposable incomes. This contrasts with “necessities,” for which demand growth has been more in line with income growth over time.

Can you reignite the growth of your business in the the second half of 2020? We think so. Here’s why we believe the next six months may hold a once-in-a-lifetime opportunity.

Fed Funds futures are predicting that the Federal Reserve will lower their benchmark Fed Funds rate below zero by mid-2021. Will this really happen?

In this latest survey, 68 leading bond and currency managers considered valuations, expectations and outlooks for the coming months.

Coronavirus cases and hospitalizations are spiking again in several countries, including the U.S. California had its biggest one-day jump in infections. Arizona, Florida and Texas are also turning into new hotspots.

The common characterization of US-China relations as a new Cold War is wrong. Instead, the most recent spike in tensions between the two countries – the second time this has happened since US President Donald Trump took office in 2016 – is primarily motivated by political considerations ahead of the November US presidential election.

A brief monthly update on what's happening in the municipal bond market.

Over the course of history, during world wars, pandemics, financial crises, and deep recessions, municipal bond defaults have been an extremely rare occurrence. There have been less than 700 rated municipal bond defaults in the over 100 years of public finance existence. As a point of comparison, we saw over 117 corporate defaults in 2019 alone.

Read Harold Evensky's latest NewsLetter.

Having trouble helping your clients appreciate a balanced portfolio? These charts may help.

The way to get people to think about death is to imagine that by doing so they will never die. Recognizing this universal character trait will lead to more productive planning outcomes.

The selloff this week was “perfectly normal,” according to the math. Find out why it makes sense to have a long-term investment horizon.

Puerto Rico’s debt attracted investors throughout the U.S. for its higher yields and because the securities are tax exempt in all 50 states. Bondholders now wonder if they will ever get repaid.

It will go down as the wildest of the shale wildcatters, the overreaching pioneer of fracking techniques that minted vast fortunes and, now, have left behind ruin.

It is imperative that all Americans see recent events around racial inequality as a call for action and work to ensure equality for people of color. In his latest memo, Howard Marks shares his thoughts and pledges to heed this call.

Between mid-February and late March 2020, we saw a “take no prisoners” market crash. Anything with a whiff of perceived risk crashed, in direct proportion to its perceived risk. The only assets that soared—because of tumbling interest rates—were long Treasury bonds, and with them, the net present value of pension obligations.

Warren Buffett “should have kept airline stocks because the airline stocks went through the roof today,” President Trump said this week. It’s a good thing that investors chose not to follow Buffett’s lead, as airline stocks are up 50% since his exit.

In a new quarterly letter to GMO clients, Ben Inker, head of asset allocation discusses the current uncertainty over the market and economic outlook and the decision to significantly reduce net equity exposure in the GMO Benchmark-Free Asset Allocation Strategy. Alongside Inker’s letter, Jeremy Grantham writes in “The Virus, The Economy and The Market” ...

Every day, ETFs are expanding in number, assets, and complexity. Now, more than ever, it is important to keep your clients’ best interests in mind as you navigate this evolving landscape. To be successful, advisors must do this without sacrificing client experience, financial outcomes, and overall communication.

Join Carlton Neel, CEO of Chaikin Analytics, and Pete Carmasino, Director of Advisor Strategies at Chaikin Analytics, as they explore the overall ETF landscape and debut a cutting edge platform that improves client communications, offers compliant-friendly reporting, and keeps your clients’ best interest at heart.

Advisors will learn how to:

• Utilize best in breed platforms to communicate with clients

• Perform a model checkup—diagnose your ETF models to ensure that they have the best of the best in each category of asset style and class

• Use techniques to engage with clients and demonstrate best interest practices

• Understand how a forward-looking quantitative rating and customizable reports can help grow your practice and facilitate compliance

After the presentation, the presenters Carlton Neel, Sash Hayman, and Pete Carmasino will be available to answer live questions.

Three factors that may explain today’s disconnect between Wall Street and Main Street.

The dominant question we’ve been getting from investors is about the perceived disconnect between what’s happening on Main Street and what’s happening on Wall Street.

The advisory industry is unaware that the traditional asset-location rules (i.e, put bonds in tax-deferred accounts and stocks in taxable accounts) don’t work in our low interest rate environment. The exact opposite is appropriate for most retirees.

In order to sustain this population and our growing demand for resource-intensive animal-based foods, the World Resources Institute estimates that crop production will need to increase by 56% from a 2010 baseline.

The coronavirus kills, everyone knows it. But this isn't the first deadly virus the world has seen, so what happened? Why did we react the way we did? One answer is that this is the first social media pandemic. News and narratives travel in real-time right into our hands.

Are you willing to handle what I call "the boredom of success" – doing mundane things over and over again until you realize your goals?

Email marketing is one of the best ways to connect with clients and prospects. But to get results from your efforts, you need to make email list building a priority.

Against this backdrop of anything-goes spending, the idea of having a national currency backed by a real asset like gold seems less and less crazy to some. Doing so, it’s believed, would force lawmakers to practice fiscal discipline, reign in inflation and normalize international trade.

Is it possible the Fed over-reacted to a natural disaster? There are two different types of “recessionary” events that occur throughout history. The first is a “business cycle” recession, which happens with some regularity as excesses build up in the economy. These cycles generally take 12-18 months to complete as those excesses are reversed.