Last week, we covered Turkey’s geopolitics and history. This week, we complete the series, starting with a discussion on Turkey’s economy with a focus on the changes brought by the Justice and Development Party (AKP), led by President Erdogan. We also examine how foreign debt affects Turkey’s economy and financial system, highlight the impact of the 2016 coup and analyze the causes of the current crisis in Turkey. From there, we discuss the debt problem and Turkey’s options for resolving the crisis. As always, we conclude with market ramifications.
Once again, the economic calendar is fairly light. Vacations continue for many. The upcoming Labor Day weekend will tempt many market participants to end this week early. Financial news seems more like political news these days. Much of the punditry is focused on a death watch for the bull market, with daily discuss of the flattening yield curve and speculation about when it will “invert.” This is not the right question. Pundits should be asking: Should investors be worried about the yield curve?
Gold prices moved up close to 2 percent today, and gold stocks climbed even higher following comments from Federal Reserve Chair Jerome Powell. During his speech at the Jackson Hole Economic Symposium, Powell reiterated the central bank’s commitment to raise interest rates gradually while the U.S. economy continues its strong performance.
In commodity investing, roll yield and carry are not the same thing.
July marked the first month of the calendar year where emerging markets posted positive performance overall, with frontier markets leading the way.
The relative performance of small cap stocks is an important indicator of business fundamentals and market sentiment. We’ve recently noticed that the market has been sending mixed messages about size. Intrigued by these contrary signals, our curiosity prompted a closer look at the all-important size factor.
Over the past decade, U.S. natural gas utility and pipeline companies have significantly increased investment in their infrastructure networks. We believe higher investment is a positive catalyst driving earnings growth for many natural gas distribution companies operating under rate of return (ROR) regulation.
This memo covers three ways in which securities markets seem to be moving toward reducing the role of people: (a) index investing and other forms of passive investing, (b) quantitative and algorithmic investing, and © artificial intelligence and machine learning.
Read Harold Evensky's latest Newsletter.
The CFP Board wants its credentials to be a mandatory requirement for all advisers who hold themselves out as financial planners. If its lobbying efforts to this end are successful, the Board would then become the de facto regulator of the financial planning profession, which is the organization’s goal. But the Board’s disingenuous position on the fiduciary standard and its long history of putting its own interests ahead of those of consumers and its members make the Board decidedly unfit for this role.
The economic calendar is light, and many are already on vacation. Even actual economic news has not competed with the ‘what can we talk about on a slow Friday’ story over the last few weeks. The real news this week begins with the FOMC minutes on Wednesday and ends with Chairman Powell’s speech Friday morning.
The Kansas City Fed’s annual monetary policy symposium begins later this week in Jackson Hole, Wyoming. Around 120 people attend the conference, including central bankers from around the world. In the past, the Fed chair’s speech has often been a big deal for the financial markets.
For microeconomic advances to unleash a productivity rebound economywide, the macroeconomics must cooperate.
For the first time in at least 40 years, there’s a fundamental economic reason that a yield curve near-inversion might notherald a recession.
The Trump administration withdrew from the Iranian nuclear deal and plans to implement sanctions on the country in two phases. In Part I, we introduced this topic and covered the first two potential responses from Iran, which were restarting the nuclear program and projecting power. Last week, we covered the threat to the Strait of Hormuz.
Every summer for the past several decades, I have been organizing lunches for serious investors who spend at least part of their vacation time in eastern Long Island. Those attending include hedge fund wizards, real estate titans, corporate chiefs, thoughtful academics and a few others.
Do Active Managers Provide Higher Factor Exposure than ETFs? Investors can express factor views via smart beta ETFs or mutual funds. Some mutual funds offer higher factor exposure than smart beta ETFs. Given higher fees, strong views on expected factor performance are required.
We’re pleased to share a new white paper on the market anomaly that rose above value, size, quality, low volatility and momentum factors. Written by Bryce Coward, CFA, the study details the results of first market test of the Knowledge Effect, the tendency of highly innovative companies to deliver excess returns.
A look at how low interest rates have led to a surge of money losing companies, and what that may mean as interest rates move higher.
The car you drive isn’t just a status symbol. In the age of digital communication, Bluetooth and wired vehicles, advisors can use their cars to drive leads by converting boring downtime during a commute into active prospecting.
Of all the variables we routinely measure in our behavioral assessments, our research shows that one most accurately predicts risk-taking – overconfidence. It’s time that advisors systematically identify their overconfident clients and develop skills to overcome the bias it breeds.
The belief that detailed quantitative measurement will make performance easier to evaluate, manage efficiently, and improve has survived repeated failures of the doctrine. In fact, the failures serve only to bring forth calls for more of the treatment. Only very rarely is it admitted that quantification doesn’t work and should be scrapped.
In recent years, factor-based investments have become increasingly popular for equity investors. Often missing from the discussion, however, is the concept of fixed income factor strategies. At Invesco Fixed Income, our view is that bond investors can potentially benefit from a factor-based approach. We’ve launched a new suite of exchange-traded funds focused on two factors — quality and value — that we believe may help investors reach their objectives.
The number of publicly listed companies in the U.S. has fallen steadily since 1997. More companies have delisted, in fact, than gone public in every year of the past 20 years except one, 2013. Put another way, the pool is getting smaller even while the population and economy are expanding.
Market risks come in three flavors: recession risk, economic shock risk, and risks within the market itself. So, what do these risks look like for August? Let’s take a closer look at the numbers.
In a new white paper on GMO’s website, Jeremy Grantham updates his discussion of the threats posed by climate change, population growth and increasing environmental toxicity, and his perspective on the role investors can play in combating these threats. In “The Race of Our Lives Revisited” Grantham summarizes the current state of affairs and the likely impact on the future ability to feed the 11 billion people projected to live on Earth by 2100.
Most investors believe that all passively managed funds in the same asset class are virtual substitutes for one another. The result is that, when choosing a specific fund, their sole focus is on its expense ratio. That is a mistake for a wide variety of reasons. The first is that expense ratios are not a mutual fund’s only expense.
Synchronized global growth was one of the main themes coming into 2018. In the second quarter GDP in the U.S. was the strongest since 2014, even as growth around the world downshifted. While global growth will be decent in the second half of this year, growth has already slowed in the U.K, Europe, China, and Japan.
This has been an unusually fruitful season for books for and about financial planners. Four absolute masters of the financial planning universe have published books that add to your chances of success as you grow your business and career.
The Northern Trust economics team explores India, recaps revisions to U.S. economic measurements, and gauges potential future economic growth.
A landmark study looked back at more than 100 years of data and 23 countries to determine if there are reasons to believe the cross-sectional patterns in factor returns will persist, or whether they were just anomalies that tended to disappear after publication.
In 2018, rising inflation, higher US interest rates and escalating trade tensions have led to concerns about global economic growth and bouts of equity-market volatility.
Most investors are not aware of this but the number of publicly-traded companies listed on US stock exchanges has plunged almost 50% since the peak in 1996. This phenomenon is not limited to the United States.
How are today’s fixed income managers integrating ESG factors into their investment practices? Learn what our latest ESG survey reveals.
It is frustrating to have great relationships with clients and centers-of-influence (COIs) but virtually no one refers, especially considering how many people we know. Too few of our happy clients refer to us. Is this normal?
Many (if not most) people think about retirement in terms of saving for the day they leave the workforce and won’t be collecting a paycheck any longer. The prospect of outliving one’s savings is therefore a top source of stress, along with being able to pay escalating health care costs.
Women face at least 12 unique financial and life challenges related to long-term retirement planning. Addressing them can be overwhelming and uncomfortable. Only by understanding the issues can you develop strategies that will provide the greatest chance of achieving your clients’ goals.
Since we are necessarily in the predictions business, this letter offers our expectations for equity market returns. We admit our crystal ball is typically cloudy when it comes to what markets will do in the near term. While nothing is ever for certain, we can better view the potential for longer-term stock market returns from a couple of perspectives.
Meet Juan León – a key member of the U.S. Global Investors’ investment team. Juan is responsible for researching companies, sectors and industries, in addition to constructing new investment strategies for several of the firm’s mutual funds and ETFs.
Geopolitics dominates the news these days, over-shadowing what remains a fundamentally solid global economy. As always, Donald Trump is at the center of most of the “noise”...
We think the US economy remains in good shape, with the rate of growth potentially picking up, a labor market that is tight but attracting new workers, and inflation that still seems relatively subdued. Boosted by tax cuts and spending increases, these favorable conditions could continue for some time.
With fears of a trade war looming over global large-cap stocks, the small-cap factor emerged as the clear winner of the second quarter. Specifically, small-cap low volatility/high dividend was the best-performing factor, followed by the small-cap versions of value, growth, equal weight and momentum.
The popular view is that we face a retirement crisis. But receiving far less publicity are a few experienced researchers pointing to evidence that retirees are actually doing okay. I’ll sort out these differing views.
The Northern Trust Economics team shares its outlook on the Fed’s balance sheet, the world's persistent preference for cash, and the challenge of measuring the gig economy.
Modern finance has discovered that stocks that share certain fundamental characteristics called “factors” exhibit different return and risk characteristics than the overall market. These factors or “dimensions of the market” can be classified as: dividend yield, volatility, momentum, quality, size and value.
There are a number of changes taking place in the investment environment and they are likely to have an influence on the returns on financial assets for some time to come. When the world’s leading economy, with more than a fifth of global GDP, does not participate in major alliances dealing with matters of security and the environment, this has longer-term investment implications.
There’s a tug of war brewing between housing costs and consumer budgets in the US. Single-family home prices have risen 6% a year or more since 2011, and supply/demand forces point to further increases. But consumer budgets have limits. Some buyers are now spending around half of their income on housing.
Topics of discussion are Economic Outlook – “It’s a Mad Mad Mad Mad World”, Market Outlook – “Volatility is the New Black”, Building “All Weather” Portfolios.
Aluminum. Cars. Solar panels. It’s hard to track the tariffs without a scorecard. As headlines continue to swirl, many investors worry about the impact on the US economy. Clearly, tariffs and trade wars hurt growth, but we don’t think the impact will be big enough to derail the economy just yet.
In a narrow market, pruning a growth-oriented portfolio can be challenging given market leaders’ prominence in benchmark indexes. I believe that’s why we’re seeing unusual responses to earnings announcements in 2018.
