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.
The Fed’s $5 trillion bazooka, helicopter drops of cash, and a tripling of deficits over the next two years imply a future bout of high and volatile inflation unless fiscal policy nimbly pivots to help prevent the toxic side effect of a spike in inflation. Is that expectation realistic?
The COVID-19 pandemic could devastate parts of the developing world. But with a concerted, cooperative, and holistic approach, the international community can avoid a large-scale humanitarian tragedy in vulnerable regions – and protect the rest of the world from destabilizing blowback.
The coronavirus pandemic has created a number of pricing dislocations within markets across the globe. In its second-quarter outlook, the K2 Advisors team takes a look at how hedge fund managers are navigating the current market environment and which strategies are finding opportunities from these dislocations.
While ESG was initially a hot topic for equity investors, fixed income market investors are quickly catching up. In this blog, we aim to share some key ESG integration trends we see among the fixed income market participants.
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.
In the first quarter of 2020, stock markets across the globe experienced one of the worst quarters in the history of global financial markets. But maybe it’s time for investors to take a pause and do some strategic thinking...
In late February, our Bond Asset Allocation/Tactical Fixed Income model prompted us to sell out of high yield bonds and instead take up a defensive position. It isn’t enough to simply analyze creditworthiness of issuers or movements in credit spreads. Anyone who thought they were taking a “tactical” approach without a broader analysis was likely sorely disappointed as the latter half of the quarter unfolded.
Evidence from decades and even centuries ago, plus the unique circumstances of the current global health crisis and its economic impact, suggests we can expect a “New Neutral 2.0” of lower interest rates for longer.
I am going to tell you how to win over female clients by not losing them at the onset.
With a very healthy dose of humility, let’s take a look at what a reopening of the global economy may look like.
If you are hoping the “bear market” is over, and have jumped “back in” with all your capital, you are in “good company,” as many others, judging by my twitter feed, have done the same. Just be prepared to be disappointed in the months ahead.
Remaining on hold and waiting to see where life takes us over the next two to three months (or perhaps longer) is prudent. Patience will prove to be a virtue in these highly uncertain times.
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.
These are unusual times, to say the least. Few in the financial industry have seen a global pandemic and widespread economic shutdown, and we must approach our outlooks with a dose of humility.
The last decade has been a painful one for investors who believe in a factor-based approach to investing and have stuck with those factors that have historically performed well, namely the value factor. But a breed of products have avoided the plight. ETFs that were designed to be nimble and allocate across a range of factors have not suffered the same performance deficit.
Nikko Asset Management’s Global Investment Committee examines how the coronavirus pandemic has impacted global economies and where they’re finding overlooked and undervalued investment opportunities amid the volatility.
Up until almost every government announced “Big Bazooka” strategies to address the abrupt slowdown a quality-oriented portfolio outperformed. The stock market regime is likely to shift in the near term as massive government stimulus designed to prevent bankruptcy will do exactly that. Therefore, small businesses and poor-quality companies with dangerously high levels of debt will be bailed out.
He contends the lockdowns intended to contain the coronavirus pandemic are worse than the disease itself.
There is a general perception that expensive equipment and expertise are required to create successful video content, but that is simply not true. Here are three simple steps to create professional-looking videos.
Minimum volatility strategies are one way to seek more equity stability, which may help investors stay in the markets over the long run.
Below is a letter we recently sent to clients about how we are responding to the recent market selloff.
Major adjustments in capital markets around the globe have changed our long-term expected return forecasts for the 100+ assets we model. Before the corona crash we forecast long-term real returns for US equities to be only 1% a year. Now new, lower valuations suggest higher returns.
A head-spinning 6.6 million Americans filed new claims for unemployment benefits this week bringing the two-week total to 10 million. That’s more than the combined populations of Los Angeles and Chicago.
The coronavirus has forced a number of behavior changes throughout societies across the globe, including how we work, shop and interact with others. Our Head of Equities Stephen Dover discusses how COVID-19 has impacted investor decisions, too.
Even though economic activity in many countries has dramatically slowed or stopped due to the coronavirus outbreak, Franklin Templeton Emerging Markets Equity’s Andrew Ness still thinks there’s underlying long-term potential in emerging markets. He shares the specifics of what he’s on the lookout for as an investor in this highly uncertain period, which eventually will pass.
Our baseline economic forecast is a U-shaped global recovery, but substantial unknowns remain.
Vanguard Group and Ant Financial’s joint venture is rolling out a new robo advisor to target the Chinese fintech giant’s 900 million users.
Matt provides a framework that he and his team use to make sense of the headlines and the price bids flashing on their monitors. His realistic, yet hopeful outlook provides a roadmap for successfully navigating this universal crisis together.
I am not usually an indecisive person, but everything about this current environment puts me on edge and I don’t trust my own judgments.
The more I review the research, the more convinced I am that giving advice in almost every context is ill-advised. But I’m receiving a lot of advice these days.
Quarterly commentary giving an overview of the markets and the importance of having and implementing a strategy when investing in the markets.
With the economic and market situation changing by the day, I decided to approach this letter a little differently. Rather than go deep on one topic, I’ll share brief bullets on the many points swirling in my mind. Think of it as Postcards from the Frontline. These will be in no particular order and may generate even more questions.
As both traditional and alternative asset markets descend into turmoil this month, it’s important to remember the inherent strengths of a diversified portfolio. A market rout always causes correlation to go to 1 across virtually all assets as investors flee to the perceived safety of cash.
There are three key areas where the allocation requirements of passive fixed-income vehicles have an impact on the market.
With the coronavirus creating havoc across the globe, researchers are rushing to find better treatment options and a cure. Our Head of Equities, Stephen Dover, and Portfolio Manager Evan McCulloch outline a few of the efforts the medical and scientific communities are taking to combat the virus.
A global recession is likely through the first half of the year, with a rebound possible during the second half of 2020, provided the virus threat subsides.
More than 350,000 fitness instructors and trainers in the US have turned to streaming to keep their businesses afloat. Here are nine of the best online workouts.
The U.S. Federal Reserve unveiled a series of significant policy measures to help sustain the economy.
Much-criticized modern monetary theory (MMT) and its next-of-kin, “helicopter money,” are the inevitable measures to resuscitate the economy in the crisis it faces.
Given the magnitude, and multiple confirmations, of these signals, it is far too soon to assume the “bear market” is over. This is particularly the case, given the selloff is less than one-month old.
The municipal fixed income market, like most other asset classes, is experiencing unprecedented volatility. Large mutual fund outflows are adding to the volatility as investors seek to add to cash reserves by selling what may be deemed easiest to sell.
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.
Growing policy responses reflect greater estimates of the costs of COVID-19.
Without the right programs, this shortfall in credit availability will increase and it will further deepen the crisis.
A burgeoning Wall Street strategy that’s been pitched as a shelter from storms is proving anything but in this once-in-a-century market turmoil.
Some clients want to free up cash for investment opportunities, others to offset the cost of margin calls after borrowing against stock holdings.
