The Fama–French value factor, and value investing in general, has suffered an extraordinarily long 13.3 years of underperformance relative to the growth investing style. The current drawdown has been by far the longest as well as the largest since July 1963. Arnott, Harvey, Kalesnik, and Linnainmaa examine the potential causes of value’s underperformance and provide estimates of value’s performance relative to growth’s performance under different revaluation scenarios over the next decade.
It is becoming increasingly clear that the massive global stimulus is being financed by a rise in money, not debt.
In investing, uncertainty is a given – how we deal with it will be critical. Read Howard Marks’s latest memo, in which he discusses the value of understanding the limitations of our foresight and “investing scared.”
The economic calendar is a normal one and is beginning to include data from after the start of the crisis. This week includes small business and consumer sentiment surveys, as well as April data for retail sales and industrial production. I will also be watching jobless claims, both new and continuing.
Negative corporate news and economic data buffeted stocks, after markets racked up wins in April.
We rely upon the ‘history’ of the market and the ‘science’ of evaluating economic indicators, but this period of uncertainty has pushed us to ‘think outside the box,’ and add an element of creativity to our investment views.
Many investors are looking for emerging signs of a return to normalcy from the coronavirus crisis. While there are many indicators to choose from, we’ve assembled a group of signals, with the help of big data, that may point the way.
It is a light economic calendar if measured by the number of reports but an important one given the focus on employment. We will get reports from ADP, the “official” BLS employment situation numbers, and the weekly early indicator from jobless claims. Whatever else happens in the economy, jobs take center stage.
Both the bear market and subsequent rally have occurred at warp speed; yet the economic recovery may be disappointing to what the market’s now “priced in.”
In response to the COVID-19 pandemic governments imposed shelter in place rules for their citizens and issued orders to close all but essential business in their country. The collective impact resulted in an unprecedented global plunge in economic activity that threatens the existence of many small and medium size businesses...
Low Price to Something investing, or “value” investing as it has come to be known since Fama/French introduced the “value” factor has been a disaster for investors over the past 10 plus years.
I don’t know if you’ve noticed, but the market’s been a bit bumpy lately, so I decided to send out my NewsLetter early to give you something to read other than financial pornography designed to scare the begeebies out of you.
COVID-19 has affected the data collection process for the major economic reports, including employment, consumer prices, retail sales, and industrial production. However, the incoming economic figures imply a stunningly swift, sharp decline in economic activity.
As headlines revolve around the impact of the coronavirus and the costs of government spending packages to keep the economy afloat, the state of Social Security is one thing we can find at least some assurance in, says Gail Buckner, our personal retirement and financial planning strategist.
Small-business advocates from California to Massachusetts say the planned increases will reduce the number of people hired.
The broad range of economic data signal that a recession began in March. Real Gross Domestic Product (GDP, the total of final goods and services produced in our economy) is expected to have fallen in the advance estimate for 1Q20. The 2Q20 figures will show an unprecedented decline in activity.
Bear markets beget portfolio losses, unhappy clients and, sadly, lawsuits against advisors. If you relied on any of the popular risk tolerance products to construct that portfolio, here’s how you are likely to fare under the careful scrutiny of an arbitrator.
Physical gold continued to catch a bid this week, trading above $1,760 an ounce, on a host of head-spinning economic news, from millions more Americans filing jobless claims to record money-printing to negative oil prices.
A growing body of research suggests segregating people by age isn’t healthy for anyone, young or old.
Two exchange-traded funds contributed to the carnage in the oil market in April.
How does caring for a 70-, 80-, or 90-year old parent affect the retirement plans of a 40-, 50-, or 60-something woman (especially a woman navigating a major transition)?
Stocks and earnings don’t always move in tandem; with stocks typically leading earnings … but is the market’s rally too much, too soon?
The economic calendar is light and provides little post-COVID19 data. Continuing jobless claims takes on a new importance, and we may get some useful information from the components of the University of Michigan sentiment survey.
Adoptees of bucket strategies were rewarded over the past two months, as their cash reserves buffered them psychologically from the market decline. Such strategies avoid taking withdrawals from stocks when the market is down, as it is now. But do bucket strategies provide a financial benefit – as some claim – or are any benefits purely behavioral?
What is the value of a financial advisor in 2020? We believe financial advisors have never been more valuable than they are right now. This annual Value of an Advisor study quantifies that dedication and the resulting benefit.
President Donald Trump unveiled guidelines for “Opening Up America Again,” a three-phase approach to be executed by state and local officials. Some governors have already expressed interest in easing restrictions sooner rather than later.
We don’t know how this will develop, or how quickly, but I think it is far more likely to bring asset price deflation than inflation. We are going to reprice the world. Probably including your part of it.
China's economy was the first to suffer the consequences of fighting the novel coronavirus and is the first on the road to recovery. After an initial cover-up and more than 3,000 deaths, China appears to have brought COVID-19 under control and laid the foundation for a gradual economic recovery, although normal activity levels may not be reached until 2021.
This letter is one of the more difficult ones to write because things are changing so rapidly. We caution readers that we are not epidemiologists, but it is our job to try, to the best of our ability, to figure out what is going on, and that’s what we attempt to do with this letter.
Read Howard Marks's latest memo, in which he discusses the notion of making informed guesses regarding the future and shares his questions about re-opening the U.S. economy and the latest Federal Reserve moves to help the economy combat the coronavirus.
While the COVID-19 crisis is far from over, we expect central bank and government policies to be key to performance in the second quarter.
This is the best time for you to double down on your marketing efforts and fully embrace a digital communications process.
Some 6.6 million additional workers filed for jobless claims this week, but it’s always darkest before the dawn. There’s ample reason to keep hope alive that conditions will be improving sooner than expected.
The most important thing for an investor is to set the right balance between offense and defense. Today Howard Marks no longer feels defense should be favored. Find out why in his latest memo, Calibrating, in which he describes the importance of positioning portfolios in response to the environment.
Labor market data has never looked as ugly, with more hits to come; but many are looking ahead at what an eventual recovery will look like.
While the US economy continues to suffer the wrath of the coronavirus, a recovery will eventually come. Franklin Equity Group's Grant Bowers provides his latest update on the US equity market, and what he and his team have an eye on with a long-term investment view.
The majority of the time, when you hear someone say “I bought it for the dividend,” they are trying to rationalize an investment mistake. However, it is in the rationalization that the “mistake” is compounded over time. One of the most important rules of successful investors is to “cut losers short and let winners run.”
Relief efforts measured in trillions of dollars are bound to have some positive effect.
After giving our clients a few days to digest it, we’d like to share this memo from Thursday with all of our readers. We hope you’ll find it helpful.
We know a lot more about COVID-19 than we did a few weeks ago; but there remain questions that are unanswerable at this stage. We don’t know how much worse this gets before it starts to get better...
Hopes for a pact between Texas oil and OPEC have begun to unravel.
These extreme measures appear to be having great success, particularly in Asian countries. Whereas the number of cases continues to rise in Italy, Spain, Iran and elsewhere, the number has begun to stabilize, if not plateau, in Asian countries.
After an initial cover-up and more than 3,000 deaths, China appears to have brought COVID-19 under control, just as the spread of the coronavirus is accelerating across the U.S. and Europe. With China's domestic-demand driven economy set to rebound and mainland investors avoiding the panic that has smacked western markets, its economy could put a floor under global growth and offer a safe haven to investors.
Are municipal bond issuers vulnerable to the COVID-19 pandemic? We assess key sectors, from states to hospitals to airports.
This is a short midweek note, something I haven’t done for years. But as we all know, these are very special and difficult times. I’ll give you two links. They describe the nature of the new coronavirus pandemic and its potential consequences. I have run this past the best medical professionals I know, and they agree.
As COVID-19 spread around the world in the early months of 2020, governments enacted quarantines, travel bans, school closings and other measures. Global supply chains were disrupted. Reduced demand is weighing on many industries, starting with travel, hospitality and leisure. Oil prices dropped after Saudi Arabia boosted production, in effect launching a price war with Russia. U.S. Treasury yields fell to record lows.
In recent weeks, COVID-19 has led to escalating economic concerns. What started as a seemingly sharp, but likely temporary, reduction in Chinese activity, including disruptions to global supply chains, became more worrisome as the coronavirus moved to the rest of the world.
The Trump administration is discussing a plan that could amount to as much as $1.2 trillion in spending -- including direct payments of $1,000 or more to Americans within two weeks -- to blunt some of the economic impact of the widening coronavirus outbreak.
We have a full economic calendar. Only the FOMC decision will get major market attention. Initial jobless claims provide a post-virus look at the job market. Housing data remains interesting. Despite this, the media focus will remain on the coronavirus crisis.
