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Seventh Inning Stretch
by William Gross of PIMCO,
They say that reality is whatever you wish it to be and I suppose that could be true. Just wish it, as Jiminy Cricket used to say, and it will come true. Realitys relativity came to mind the other day as I was opening a box of Cracker Jacks for an afternoon snack. Thats right I said Cracker Jacks! I cant count the number of people who have told me during the seventh inning stretch at a baseball game to make sure I sing Cracker Jack (without the S) because thats what the song says. I care not. No one ever says buy me some potato chip or some pea
Fixed Income - Where to Now?
by Chris Maxey, Ryan Davis of Fortigent,
Since the end of the Global Financial Crisis (GFC), investors moved aggressively into fixed income asset classes. They were quickly rewarded in the years following the crisis with a combination of falling interest rates and tighter credit spreads, which led to positive absolute returns. The easy money in fixed income is gone, however, and now is the time for careful asset class selection.
ProVise Bullets
For those in college during the 60s the time of sex, drugs, and rock n roll its hard to believe that marijuana has become legal. It is currently legal in some form in about 20 states and more are considering it, at least for medical purposes. Even Florida has strong proponents for the medical use of marijuana. There are always people who are trying to take advantage of the situation and this is no exception.
How to Find Value in Real Estate With Risk On, Risk Off Off Again
by Walter Stabell, III of Invesco Blog,
Recent trends, including falling stock correlations, have been strong indicators that the global economy is normalizing and the practice of risk on, risk off investing, in which investors enter and exit perceived riskier investments based on how they feel about the economy, is now off again after becoming a phenomenon in the post-financial crisis years.
Emerging Markets Feel the Ripples of Fed Tapering
by Sam Wardwell of Pioneer Investments,
Many Emerging Market currencies (notably those of India, Brazil and Indonesia) have been weak since the beginning of May. The declines accelerated sharply in recent weeks, leading to something approaching panic in several markets last week.
Could Clarity Confuse? The Industry Strikes Back
by Jon Vogler of Invesco Blog,
The intention of the Department of Labor (DOL) proposal to illustrate lifetime income streams on 401(k) statements is to clarify retirement income status for participants. But according to industry and trade groups, the requirement may have the opposite effect, creating more confusion than clarity.
Inflation Update
by Team of North Peak Asset Management,
As can be seen in the schematic above, most portfolios are effectively a bet on a low inflation environment due to their heavy reliance on mainstream equities and fixed income securities. In order to protect a portfolio from the damage that inflation can inflict, asset classes that are sensitive to increases in inflation need to be incorporated into the asset mix. These include Inflation Linked Bonds (TIPS), Precious Metals, Global Natural Resource equities and Commodities.
Float Research: Fund Outflows Surge Amid Bond Market Anxieties
by Minyi Chen of AdvisorShares,
Stock and bond funds have given up a net $32.4 billion in August thanks to strong outflows from ETFs and mutual finds alike. Read this investor insight by Minyi Chen, CFA, Chief Operating Officer of TrimTabs Investment Research and Portfolio Manager of AdvisorShares TrimTabs Float Shrink ETF (NYSE Arca: TTFS) to learn about the recent fund flow trends.
Float Research: Is Fed Starting to Lose Control of Bond Market?
by Minyi Chen of AdvisorShares,
Bond yields hit two-year highs as investors pull an additional $19.7 billion from bond funds in August. Read this investor insight by Minyi Chen, CFA, Chief Operating Officer of TrimTabs Investment Research and Portfolio Manager of AdvisorShares TrimTabs Float Shrink ETF (NYSE Arca: TTFS) to learn what concerns may arise in the coming months if this trend continues.
Hot Potato: Momentum As An Investment Strategy
by Ryan Larson of Research Affiliates,
Investors increasingly are attracted to momentum as a key ingredient in their portfolios. But how does momentum fare as a stand-alone strategy? In this issue of Fundamentals, we look at the pros and cons of this important risk factor.
Active ETF Market Share Update & Weekly Market Review
Last week, total AUM in all active ETFs fell by over $60.5 million. AUM in the Global Bond category fell by nearly $89 million both because of falling values for ETFs in the category and redemptions in certain ETFs. The Foreign Bond category had another bad week, ending almost $36 million below where it began. As in previous weeks, assets in Short Term Bond active ETFs increased, this time by almost $36.5 million.
The Big Secret Mutual Fund Companies Are Hiding
Do you know that most (if not all) mutual fund and ETF sponsors are keeping vital information about their funds secret from you? Well start todays E-Letter with a discussion about what that valuable information is and why fund companies dont want you to know about it.
What Triggers Would Make Japanese Equities Attractive?
by Mark Jason of Invesco Blog,
Through the second quarter of 2013, Japan remained Invesco International Growth Funds largest underweight versus the Custom International Growth Index because our EQV (earnings, quality and valuation) discipline criteria drive us toward high-quality companies at reasonable valuations, and those are scarce in Japan. Why? Because Prime Minister Shinzo Abes success is being priced in, and overcoming two decades lost to stagnation is difficult.
Attention Investors: Don't Fear Rising Rates; Fear Perpetually Low Rates
This months Insight will take a look at the performance of bonds during two previous inflationary periods, the 1940s and the 1970s, and illustrate two very different total return experiences. Through these examples, we will show that bond investors-- and by extension, any investor with a traditional balanced portfolio, should not fear rising rates as much as they should fear perpetually low rates.
What Role for Emerging Markets After the Sell-Off?
by Ramin Toloui of PIMCO,
While history suggests that the sell-off in emerging market bonds could ultimately offer attractive buying opportunities, it is important to anchor investment decisions firmly within a forward-looking economic and market outlook. Continuing vulnerabilities in global growth suggest there is fundamental value in EM bond yields at present valuations, as interest rate hikes priced into EM yield curves are unlikely to materialize in an environment of tentative growth.
Macro View...In Microwave Time (Part 2 of 2)
Todays blog post picks up where last weeks left off by updating the 13 key points for investors I laid out in an article in RIABiz.com on January 14 of this year. These were and are the most significant data and forces for investors to track today, to pursue long-term growth and sidestep major losses. As I did last week, I will also note whether I think each point is a positive or negative (or other) for investors now that we are about 3/5 of the way through 2013. The six areas covered last week were generally positive. Lets see about the final seven on the list
Envisioning the Planning Firm of the Future
by Bob Veres,
Virtually all advisors operate with a value proposition built on bettering their clients financial future through management of their assets. But trends in the workforce and capital markets will force advisors to rethink those assumptions and, if Richie Lee is right, the planning firm of the future will adapt a four-factor service model that places much greater emphasis on helping clients maximize their human capital.
Fight Over the Fed: Why So Ugly?
by Michelle Shwarzman of Invesco Blog,
When President Barack Obama let it slip in a June interview that Federal Reserve (Fed) Chairman Ben Bernanke had already stayed a lot longer than he wanted or he was supposed to, the quest for the next Fed chair was underway. But few anticipated it would devolve into a fairly brutal brawl - by economist standards - between two extremely competent and capable PhD candidates: Fed Vice Chair Janet Yellen and former Treasury Secretary Larry Summers, who also served as Harvards president and chief White House economic advisor.
Lower Your Expectations for Future Return
by Cory Fulton of Mesirow Financial,
While equities are not priced particularly well and the current environment does not bode well for future long-term expected real returns, they are currently a better choice for investors relative to the alternative. Right now, any meaningful shifts in one direction or the other could be setting the investor up for additional disappointment. At this stage in the game, equities look to offer better prospects in the long-term. However, the time is not right to abandon your long-term investment plan in the face of the positive market headlines and lofty predictions emanating from Wall Street.
A Generational Selling Opportunity for the U.S. Long Bond
Because investors tend to extrapolate what their general experience in markets has been recently well into the future, its easy to see why investors are having a long-term love affair with bonds. Yet the data in this paper suggests that a crisis in long bonds is coming and, given this information, individual and institutional investors alike should reconsider the bond portion of their portfolios.
Bond Wars
by William Gross of PIMCO,
Adaptation is tantamount to survival in the physical world. So argued Darwin, at least, and I am not one to argue with most science and its interpretation of natural laws. Adaptation has been critical as well for the survival of countries during wartime, incidents of which I am drawn to like a bear to honey, especially when they concern WWI. Stick with me for a few paragraphs on this the following is not likely to be boring and almost certainly should be instructive.
Investment Advice Technology and How to Lose Money in the Coming Years
by Kendall Anderson of Anderson Griggs,
Adventures are good for my soul. They create wonderful memories, both of where I have been and all the effort it took to get there. All of us have memories, both good and not so good. I am a bit worried about the near term future.
Three Reasons Why Money Market Yields Are So Low
by Craig Bloodworth of Invesco Blog,
Im often asked why money market yields are so low today - even lower than they were a few months ago. My response generally begins with overnight repurchase agreements, or repo, which impact the price of term securities in the money market space.
Alternatives for Today's and Tomorrow's Market Challenges
Investors should consider alternative investment strategies, which could enhance diversification and the potential for alpha, or risk-adjusted returns, because returns from traditional asset classes in coming years may be lower and more volatile than those realized historically.
Why Tinkering Too Much with Your Portfolio Won't Pay Off
by Team of Knowledge @ Wharton,
When it comes to your investment portfolio, how much attention is too much -- and what constitutes too little? In a recent paper, Wharton finance professor Andrew B. Abel and two colleagues found that even when transaction costs are small, it makes more sense to act according to a schedule with surprisingly long intervals. Too much fussing, in other words, is counterproductive -- even if its cheap.
Weekly Commentary & Outlook
Throughout the 1980s, we heard talk from the investment community to go global, invest worldwide, perhaps driven by true globalization of corporate exchange and balance sheets, and perhaps also by the need by firms to create new products for their consumers to devour. Mutual funds, brokerages, and private equity companies alike saturated the media with product offerings from every corner of the globe and every possible market sector, including telecom, basic materials, energy and industrial development.
Investors Pull $17.5 Billion from Bond Mutual Funds in July
Investors keeping socking money into U.S. Equities while outflows from bond mutual funds continue. Read this investor insight by TrimTabs Asset Management to learn more about the recent fund flows and what other activity may be foretelling.
Who Let the Ferrari Out of the Garage?
by Blaine Rollins of 361 Capital,
With just three trading days left in the month, July is in the running for the title of least volatile month of the year, with the Standard & Poors 500-stock index averaging moves of just 0.39% this month through Thursdays close. That is lower than the 0.41% and 0.42% averages of January and March, respectively, when stocks were grinding slowly, but steadily higher.
Detroit Bankruptcy Not Indicative of Credit Trends
Detroit filed for bankruptcy on July 18, making it the largest municipality to file for bankruptcy, as well as the first time a states largest city has filed. While this is a historic event, its definitely not unexpected - Detroits declining finances date back to the 1960s. A 50-year trend is a pretty telling metric.
What's Wrong With Indexes?
It has been more than 35 years since the first broad market index funds debuted. At the time, they were a cutting edge strategy for core equity allocation. Today, index funds are a major part of 401(k) and other retirement plans, particularly ones tracking the Standard & Poors 500. But they have deep flaws.
Economic Value Approach to ROIC May Unearth Hidden Value
by Team of Jacob Asset Management,
Equity mutual fund managers employ a wide variety of investing approaches in an attempt to outperform the market, but very few stand out from the crowd. The approaches that do work over the long term tend to be very distinctive, focusing consistently on a specific methodology that is executed regardless of the market environment.
Average Gas Price Could Hit $4 by Labor Day... Or Not
With the recent jump in gasoline prices, several energy analysts are forecasting that prices at the pump will top $4 a gallon (national average) later this summer. On the other hand, some analysts feel that gas prices will only go up another 5-10 cents a gallon just ahead, and then move lower in the fall. Of course, no one knows for sure. Today, well take a look at whats driving gas prices higher.
Weekly Market Commentary
by Team of Tuttle Tactical Management,
Stocks continued to move up this week as money still has no other place to go. However, the rate of incline has slowed quite a bit causing the rally to look a little bit tired leaving the market vulnerable to a correction. That applies to a "normal" market, with "normal" asset classes, and places for traders to put money if they pull it out of stocks. One of the consequences of QE is we no longer have a "normal" market and there is nowhere else to go.
D-Day +1
by Jeffrey Saut of Raymond James,
I have termed last Friday (7/19/13) as D-Day because for the past few months my work has targeted that date as a potential turning point for the equity markets. Given the upside stampede, my sense was/is that turn would be to the downside for the first meaningful pullback of the year. In past missives I have elaborated on the reasons and clearly the media has listened.
Taper Protection: Where to Go when Rates Rise
I have fielded a number of questions from advisors about the effects of rising interest rates on real estate values. The negative effect of rising rates is predictable for fixed incomes, but real estate returns vary and are dependent on a number of factors. I will start with a historical analysis that demonstrates the strength of real estate returns during periods of rising rates. Then Ill outline the factors that drive changes in real estate values in a rising-interest-rate environment.
U.S. Equity Fund Inflow in July Seventh-Highest Monthly Inflow
Investors are piling into U.S. Stocks with July only a little half over. Read this investor insight by TrimTabs Asset Management to learn more about the recent uptick in U.S. Equities and other detailed supply and demand activity with the stock market at the start of Q3.
Closed-end Fund Review
Following a quarter in which the average closed-end fund was up 4.31%, the universe of 595 funds was lower by 5.60% on a share price total return basis during the second quarter (both figures from Morningstar). For many funds, most of the weakness occurred during the month of June (when the average fund was lower by 6.09% on a share price total return basis, according to Morningstar).
The Great Rotation Continues Forward...
by Blaine Rollins of 361 Capital,
Fed Chairman Ben Bernanke grabbed the mic on Wednesday and gave a performance that garnered a standing ovation from Stock, Bond, and Commodity investors. Only U.S. Dollar longs went home dragging their programs and spilling their popcorn. As a result, U.S. equity markets ended the week at all-time highs as stocks remained the darlings of the asset classes.
A Pivotal Point in the Markets
by Meggan Walsh of Invesco Blog,
Because the market is a forward-discounting mechanism, its not unusual for it to have led the economic recovery over the last four years. Today, I believe the market has already discounted a decent economy over the intermediate term and is approximately fairly valued. But thats not the whole story.
Commodities 2013 Halftime Report: A Time to Mine for Opportunity?
It was a challenging first half of the year for most commodities, with only two resources we track on our Periodic Table of Commodities Returns rising in value. Natural gas and oil rose 6.5 percent and 5 percent, respectively, while silver lost a third of its value and gold lost a quarter of its price from the beginning of the year.
Bond Yields Gone Wild?
With the Federal Reserves intention to taper its easing, yields have risen quickly, causing municipal bonds to experience their worst decline since September 2008. In the second quarter, the Barclays Capital Municipal Bond Index lost nearly 3 percent, with the long end of the yield curve receiving the biggest blow, as bonds maturing in 20 years fell more than 4 percent.
TIPS Get Hammered in the 2013 Second Quarter
by Stephen Percoco of Lark Research,
The beginning of the return to normalized interest rates took a big toll on straight Treasury securities in the 2013 second quarter, but TIPS got hit even harder. For the quarter, the average TIPS security lost 6.6%, worse than the average loss of 3.0% on comparable maturity Treasurys and by far the worst losses seen in the TIPS market since the 2008 financial crisis.
Retirement Portfolios: Fears over Rising Rates are Overblown
by Joe Tomlinson,
The second quarter saw increases in interest rates, losses in every category of bonds and investors abandoning fixed-income markets. The distress has been particularly acute among retirement investors who considered bond funds to be safe. But are fears of bond losses overblown? I will make the case that the rise in interest rates is actually good for retirement portfolios. To see this, one has to look beyond the quarterly statement losses and focus on overall retirement outcomes.
Results 2,951–3,000
of 3,303 found.
