Last year, I made a number of bold predictions about how the advisory profession is evolving, and what firms are going to have to do to stay ahead of the curve. How have my predictions held up? Here are three transformations that will force every advisory firm to adapt.
GE retaught investors the great lesson that things that cannot go on forever don’t. Hopefully, ExxonMobil investors will heed that lesson.
We view the events of late January and early February as healthy – the final “death spasm” of market reliance on central bank policy, and a return to more normalized market conditions – volatility returns, earnings and fundamentals matter, and a reminder that stocks can go down sometimes as well as always up.
This week, the White House signaled its intention to place punitive tariffs on imports of steel and aluminum. Markets and analysts reacted quickly, and negatively.
Read the latest Evensky & Katz / Foldes Newsletter by Harold Evensky.
Looking long-term, there are mounting risks involving debt that make gold appear very attractive right now as a safe haven and portfolio diversifier.
Forecasting the direction of real estate prices requires the same disciplined approach as for other goods and services. Here are three reasons why commercial real estate supply exceeds market demand, and the implications for your clients and their REIT investments.
Today marks the first day of the Chinese Lunar New Year, also known as the Spring Festival, China’s most important holiday. The fire rooster struts off-stage, clearing the way for the loyal earth dog. According to CLSA’s tongue-in-cheek Feng Shui Index, health care, consumer and paper products are favored to outperform early this year, followed by internet, utilities and tech leading into the summer.
A monthly review of market-moving events across countries and asset classes, and what investors can expect going forward.
Today I’d like to share a few words about the Olympics, but first, two words: Don’t panic.
It has been a long time since we had something that resembles normal interest rates and normal economics. Some even called the financial environment we live in as the “New Normal”. Retirees and savers have suffered the most during this prolonged low rate period.
“Animal spirits” were once again at large in global equity markets during the fourth quarter of 2017 as economic growth perked up in many parts of the globe and equity market returns followed in kind.
GDP growth slowed in the fourth quarter to 1.9% down from 3.5% in the third quarter. Both numbers were skewed by trade data. Third quarter GDP was lifted by .7% from the export of soybeans to South America, while imports shaved -1.7% from fourth quarter GDP.
At the end of the day, equity returns are driven by ROE, and we argue in this month's Absolute Return Letter that ROE is likely to drop as 2018 unfolds, partly due to rising inflationary pressures – particularly wage inflation – and partly due to rising borrowing costs. Perhaps more surprisingly, the new US tax reform could also negatively affect ROE. Continue to read if you want to understand why.
Disruption was definitely top of mind during many of the presentations and interviews at Inside ETFs, including that of producer and composer Quincy Jones, who was at the conference to promote a new stock index that tracks music and entertainment companies
U.S. stocks may have entered a melt-up phase but for now it is relatively well supported by earnings growth; and although sentiment is extended, behavioral measures indicate still some skepticism. However, given elevated valuations, and the aforementioned overly optimistic sentiment, volatility is likely to increase and more frequent pullbacks are possible. The bull should continue to run, but likely with a bit more drama, so it’s important to stay diversified and disciplined around your long-term asset allocation.
We have all been taught to “play by the rules” since the very beginning of our lives. Our parents did the best they could to teach us rules of proper behavior. That list of rules continued to grow longer the older we got, governing our day to day interactions with others.
Since the dawn of time music has played a pivotal role in the defining of the times and the progression made. We would like to utilize the artistic genius of these maestros to bring some context to the current pivotal point in the economy and capital markets.
It is important to separate mini-manias from true bubbles. Unfortunately, the difference is mostly the amount of money chasing the folly. Millions and even billions of dollars lost (and thousands of jobs) equate to fads, while trillions of dollars lost (and rampant unemployment and recessions) are bubbles.
Like much of 2017, politics remained keenly in focus at the end of the year. Tax reform took center stage in the U.S., and President Trump wrapped up this major legislative victory just in time for the holidays. The sweeping tax overhaul moved quickly through both chambers of Congress after the House and Senate drafted amended versions from the separate ones each had previously passed.
My partner and I are at a crossroads in our advisory firm. For years we have been in sync about our values and culture, how we should grow and even the people we have hired to join our team. In the last few months, though, he has become aligned with some radical political philosophies.
Invesco Fixed Income’s macro factor framework provides an understanding of how developments in growth, inflation and financial conditions globally are likely to impact markets.
This week and next we’ll look at forecasts from some of my most trusted friends and colleagues.
I believe these forces behind the fear trade will only intensify in 2018. With inflation finally showing green shoots and President Donald Trump’s $1.5 trillion tax reform law expected to increase deficit spending, this year could provide the right conditions to spur gold prices higher.
The fourth quarter of 2017 closely resembled much of the first three quarters – global markets continued to grow steadily, resulting in positive returns for many strategic domestic and global equity investors.
Beware the consequences of assuming that elevated CAPE ratios are here to stay, but if they are the "new normal," low future returns are likely to be the "new normal" as well.
John Hathaway, manager of the Tocqueville Gold Fund (TGLDX) writes in his Q4 investor letter that “cryptocurrencies attempt to mimic one of the key attributes of gold: a liquid real asset with no counterparty risk. We view cryptocurrencies as contributors, and possibly as accelerants, to the long-term undermining of all paper currencies. We see them as allies of gold and threats to fiat currency, not as an existential threat to the metal, as they have been so frequently portrayed.”
Today’s fixed income investment environment can be especially negative for bond portfolios heavily weighted with core holdings such as Treasuries, agencies, MBS, and investment-grade corporate bonds—all of which are highly sensitive to rising interest rates and changing fiscal and monetary policy.
The economic calendar is loaded, especially with reports on housing. Despite this, the calendar and recent events will stimulate pundits to get out their crystal balls. I expect many to be asking: Can the rally in stocks find fresh legs in 2018?
Times have changed, in more ways than one. This December has been especially hectic, with the transition in Brexit negotiations, U.S. tax reform debate and Bitcoin setting new highs every few minutes.
In a new quarterly letter to GMO's institutional clients, head of asset allocation Ben Inker discusses why investors should be thinking about the risks of surging inflation, even if such a surge may not be inevitable or even probable. Chief investment strategist Jeremy Grantham considers the current market environment and how to most rationally take risk with the ultimate stakes on the line.
A review of last month’s market-moving events across countries and asset classes.
The economic calendar is normal, but there are plenty of cross-currents from other major events. Bitcoin futures, the FOMC meeting, more debate on the tax legislation, the Alabama special Senate election, and an avalanche of 2018 forecasts.
Writing about blockchain and bitcoin right now is a little like buying a new computer in the 1990s. The tech was advancing so fast in those days that as soon as you brought the thing home, it was sorely outdated. Similarly, the cryptocurrency world is changing so rapidly at the moment that even before “the ink dries” on one of my posts, some important new development has already surfaced.
In most parts of Canada we have very distinct seasons. Some months of the year are temperate and relatively dry, while other months are cold and snowy. As a result, most Canadian towns of any size have stores that sell skis and bikes.
Ben Bernanke and our panel of world-renowned advisors examine the outlook for global economic growth amid geopolitical shifts.
Neil Hennessy is a portfolio manager and chief investment officer at Hennessy Funds. In this interview, he discusses the compelling opportunities in mid-cap and Japanese stocks, and what RIAs should be doing in advance of the next market correction.
This week’s letter will take a look at the growing number of ridiculous, inane, and otherwise nonsensical absurdities that fill the daily economic headlines. I have gone from the occasional smile to scratching my head now and then to “WTF” moments several times a week.
The U.S. is no longer fit to lead in global governance and that is driving a change in the world order. As a result, the coming decade will be vastly more unstable, according to Ian Bremmer.
Mohamed El-Erian says that investors have been “enticed to become increasingly exposed to historically illiquid asset class segments.” Here are the asset classes and ETFs that are most at risk.
A review of last month’s market-moving events across countries and asset classes
This week’s On My Radar is an investment outlook piece. While current trend evidence remains bullish, you’ll see valuation data below that tells us the coming 7-, 10- and 12-year equity market returns are not so good. Your and my clients are expecting 10% forward returns; however, due to extremely high valuations they are likely get 0% to 2%. Trouble spots? There are many.
Today, central banks are under attack for missing their inflation targets, failing to maintain financial stability or restore it in transparent ways, and ignoring the global repercussions of their policies. But compromising central bank independence in order to enhance political accountability would be to throw the baby out with the bathwater.
When you write about economics, you learn very quickly that the economy doesn’t care what you say about it. The forces that drive it are beyond any one person’s comprehension, much less control. But at the same time, the economy doesn’t work like a law of nature. Unlike gravity, for instance, the economy responds to human choices and preferences. We influence it, even if we don’t understand exactly how.
Recently I identified five agents of change that I believe investors should know about right now. I’d like to add one more to the list: Mohammad bin Salman. The crown prince of Saudi Arabia, 32, was little known outside the region before this past weekend when he jailed members of the royal family, presumably in an attempt to consolidate power ahead of taking the throne.
Global CIO Jeff Hussey discusses why we believe having a clear view of your portfolio—with detailed, real-time knowledge down to the street level—is essential in today's market environment.
Value investing is under attack. The US equity market is at its most expensive level in history and has spent most of the past six years in the top quintile of expensive. In addition, value equities have underperformed the broad market and more widely growth equities for over ten years.
All major financial euphoria episodes hold aspects in common. Among our favorite books on investing is John Kenneth Galbraith’s A Short History of Financial Euphoria. More than any other economist, we admire his understanding of the connection between the securities markets and the economy.
The world is changing fast right now in ways that many investors might not easily recognize or want to admit. This could end up being a costly mistake. If you’re not paying attention, you could be letting opportunities pass you by without even realizing it. With that in mind, I’ve put together a list of five agents of change that I think investors need to be aware of and possibly factor into their decision-making process.
Our central expectation for the European Central Bank (ECB) meeting on 26 October is for the Governing Council to extend asset purchases by nine months at €30 billion per month to September 2018, without yet committing to a specific end date, while strengthening its commitment to keep policy rates and the balance sheet unchanged when asset purchases end next year.
