Blackstone is pleased to offer the following Market Commentary by Byron Wien which shares his thinking on global economic developments, market insights and other factors that may influence investment opportunities and strategies.
The House Financial Services Committee has shifted Fed Chair Powell’s monetary policy testimony to Tuesday, February 27.
At the request of The Wall Street Journal, over the last month we conducted a series of polls asking our readers to forecast the returns for the next 10 years for a series of asset classes. The results are below.
What a great question! I recently reread the above quote from Bob Prechter. It’s an excellent quip and virtually everybody can identify with it. On the surface the question seems laughable; who can’t accept huge gains? But in order to set yourself up for such gains you have to possess the courage to take an oversize position and maybe even leverage it.
Many investors are now willing to sacrifice liquidity in the search for higher yields, more attractive risk-adjusted returns and the flexibility to hedge against downside risk.
Looking long-term, there are mounting risks involving debt that make gold appear very attractive right now as a safe haven and portfolio diversifier.
In our view, the prospective low-return environment calls for a capital-efficient approach that pairs actively managed bonds with passive or enhanced equities in target-date, core and retirement-income allocations.
Do you have any tips on the best way to coach and mentor someone who is the heir apparent in my firm? I have a young man who is sharp, highly credentialed and very good with clients. The problem is he rubs people in the firm the wrong way.
As readers of the missives know, the three sectors we have really liked are Financials, Technology, and Industrials. Therefore, we were excited to arrive in Boston last week to see portfolio manager (PMs) and renew friendships.
With Congress’ passage of an additional $368 billion in federal spending over the next two years on February 9, our government budget deficits could approach, and perhaps exceed, $1 trillion annually for the next several years. That’s very scary!
After falling into their first correction in two years, US equities regained half of their loses in just 6 days. The rebound has been strong enough and persistent enough to suggest that it has further to run. Sentiment and volatility backwardation support that view. However, a low retest over the coming weeks is still a viable risk.
In a new quarterly letter to GMO's institutional clients, head of asset allocation Ben Inker considers the hypothetical question posed by chief investment strategist Jeremy Grantham in his third-quarter 2017 letter, "What should you do if you are tasked with managing Stalin's pension portfolio?" ("Don't Act Like Stalin! But maybe hire portfolio managers that do?").
The 2018 Software Survey, conducted by Advisor Perspectives, Joel Bruckenstein at T3, and my firm, Inside Information, offered by far the most comprehensive data on the advisor tech landscape ever collected. In all, we received 1,554 useable responses, representing firms very small to very large, across a broad spectrum of experience in the business.
We believe it’s time to take a good hard look at the municipal bond market, because what was true 10 years ago, very well may not be true today.
In a record-breaking sprint from all-time highs to an “official” correction, the “short vol” trade unwinding exacerbates an initially fundamentals-driven decline.
So most know we took one of our South Florida speaking tours last week. Such tours consist of meeting with portfolio managers, presentations to clients of Raymond James, branch visits with our financial advisors, doing the media thing, well you get the idea.
Investors worried about wage and inflation data should appreciate the underlying strength of the economy, not to mention strong corporate earnings. The market volatility is creating better entry points for longer-term investors.
Active equity performance depends on the stock-picking skill and market conditions. Recent academic research confirms that returns to stock picking rises in tandem with increased stock return cross-sectional dispersion and skewness, along with greater market volatility.
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.
Monday’s monster stock selloff is exhibit A for why I frequently recommend a 10 percent weighting in gold, with 5 percent in bullion and jewelry, the other 5 percent in high-quality gold stocks, mutual funds and ETFs.
The financial advisory industry is full of handy insights when it comes to web design. The slightest difference, even if it’s not clearly visible, can be a game changer in such a competitive industry.
Hearing the latest reports on growing number of breakaways and the rise of the advisory business model would make you think that there is a sudden revolution in the industry. This couldn’t be further from reality.
Valentine’s Day is a huge commercial holiday for diamond companies and florists. It is great for financial advisors, too. Here are some ideas to get the love connection going with some new prospects this February 14.
Advisors should focus on establishing trust with potential clients, but what happens when all that person wants to do is talk about risk?
Value in Short-Term Bonds: The sharp rise in short-term rates in 2017 has created attractive valuations on the front end of the investment-grade curve. If the curve could speak, almost certainly the shorter maturities would now be shouting, Look at me---look at me! Not since fall 2008 have investors been able to earn 2.0% or more on high-quality, short-term bonds such as 2-year Treasury notes.
We have long been big fans of the books about Sherlock Holmes ever since our misbegotten youth. Strangely enough, being a strategist/analyst is much like being a detective. One has to gather the evidence, pour through it, decipher it, eliminate the “noise,” and come to a conclusion that tips the odds of making money in our favor.
After a fantastic year, concerns are growing about a potential downturn in the stock markets. At times like these, it’s especially important to focus on investing strategies that can deliver a smoother pattern of long-term returns.
The macro data from the past month continues to mostly point to positive growth. On balance, the evidence suggests the imminent onset of a recession is unlikely.
After helping more than 150 financial advisors write their marketing materials, I keep seeing a common mistake. They write in “financialese.”
Our sales manager is starting to implement more stringent requirements around how many calls we have to make each day and how many meetings we have to have in order to plan a trip. He wants to weave results into our bonus program.
Stocks have ripped higher to start the year and “melt-up” has become a popular descriptor; but it’s time to judge whether the flame’s too hot.
“You’ve Got Mail” is a 1998 romantic comedy-drama starring Meg Ryan and Tom Hanks. The film is about two people involved in an online romance who are unaware that they are also business rivals. In this morning missive, however, we are not referring to the movie, but rather some recent emails we have received.
Whether you’re investing in cannabis directly on a company-by-company basis or using some of the many commingled investment vehicles available, advisors need to know the right questions to ask in their due-diligence process.
Owners of privately held businesses face unique challenges – most importantly, weighing how the sale of their company will affect their financial future and life style. Advisors are eminently qualified to help evaluate those decisions.
New York City will be the first city to divest from fossil fuels for its pension plans. The question is what does divestment mean? And what does divestment look like at the portfolio level?
David Enrich’s The Spider Network is an engaging chronicle of how employees of financial companies conspire to move LIBOR and its offshoots by small amounts for the sole purpose of benefiting derivatives traders who profited from the moves. The book implicitly raises a key question for the financial industry, indeed for the entirety of capitalism: Is there an ethical code that must be followed, apart from and beyond the requirements of the law; or is all that is necessary to be ethical merely to adhere to the law?
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.
The year was 1963, the singer was Lesley Gore, and the song was “It’s My Party.” Clearly, that song seems appropriate given the government shutdown over the weekend. Indeed, “It’s My Party” and the blame rests with both parties in the political equation.
In a year when the S&P 500 hit all-time highs, gold also held strong, finishing 2017 up 13.5 percent, according to the World Gold Council. Gold’s annual gain was the largest since 2010, outperforming all major asset classes other than stocks.
The “big three” discount brokers use sales incentives to get their advisors to gather assets and push certain products.
If you lapse into a lecture about the overwhelming evidence supporting passive investments, remember you might as well be showing the prospect an article about bird feeding.
In their first-quarter (Q1) 2018 outlook, K2 Advisors’ Research and Portfolio Construction teams believe favorable dispersion has created reasons for optimism in three main hedge-fund strategies: Long/Short Equity – Europe, Relative Value and Discretionary Macro. We believe offering these insights will help investors better understand the rationale for owning retail mutual funds that invest in hedge strategies.
At the beginning of every year, a number of investment professionals at Thornburg voluntarily place their informal, internal-only bets on which three securities—from stocks to currencies or other financial assets—might together produce the best beta-adjusted returns in the year ahead.
In this far-reaching interview, Jack Bogle comments on the future of index funds, argues that the value premium has been arbitraged away and attacks publicly-held mutual fund companies.
I introduce an investment benchmark that simplifies the tracking process toward goals, which if achieved, provide certitude that one’s long-term objectives will be met.
At the beginning of every year, we update what’s typically one of our most popular pages, the Periodic Table of Commodity Returns. I encourage you to explore 10 years’ worth of data on basic materials such as aluminum, zinc and everything in between. A word of warning, though—the interactive feature makes the table highly addictive.
Emerging markets and commodities present the best investment opportunities for this year, according to Jeffrey Gundlach. Those to avoid include the S&P 500, which he claims will show a loss for 2018. His larger warning was that most of the good news on the economic front is already priced into the capital markets.
Much has been written recently about the yield curve. It is espoused that the flattening yield curve is telegraphing the potential of a recession in the not too distant future.
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.
