The conventional thinking about what it takes to create a winning culture is unhelpful – either it is too vague or flat-out wrong. Instead, there are three traits shared by organizations with winning cultures.
After being mostly absent in 2017, volatility has made a comeback. The S&P 500 Index closed down for the first three months of 2018—the first time it’s done so in 10 quarters. It also had its worst start to April since 1929. Gold performed as expected during the quarter, serving as a safe haven and delivering positive returns, while the price of oil surged more than 5 percent on U.S. dollar weakness and news that OPEC and Russia could be cooperating to limit output for a long period.
The Great Recession of 2008 – which ended in the spring of 2009 – brought on one of the greatest and longest bull markets in modern history. For true value-oriented dividend growth investors, the recession created a virtual cornucopia of excellent dividend growth stock investment opportunities that existed until the end of August 2013.
The underperformance of Buffett’s Berkshire stock (BRK.A) relative to the S&P 500 over the last 10 years is virtually fully explained by the negative performance of the value factor over that period.
Quarterly commentary giving an overview of the markets and the importance of having and implementing a strategy when investing in the markets.
Now that the first quarter of 2018 has just ended, what could be more fitting than to look back at the relative valuation of the S&P 500 stock index as of last year’s fourth quarter? After all, isn’t that what we economists do best, look back?
The economic calendar has several of the most important reports. The managerial rosters will be back at full strength, perhaps after an extra day or two off. Investment committees will consider implications from Q1 results. Pundits will try to explain what it all means.
By combining a tilt toward companies that display financial discipline and that embrace corporate diversity with the return engine of a fundamentally weighted portfolio, we believe investors in environmental, social, and governance (ESG)–related strategies have the opportunity to earn superior long-term risk-adjusted returns.
Having our global headquarters in the midst of California’s Silicon Valley gives Franklin Templeton a particular insight into the development of the technology sector. And often, new technologies can influence more than just a single industry or sector. We believe investors should consider potential market impacts although how these technologies will play out remains to be seen.
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 global expansion is either nearing its demand-driven peak or in the early stages of a supply-driven renaissance. We share our assessment and portfolio positioning.
A number of our clients are watching the markets and becoming increasingly uncomfortable with the ups and downs. We have many retirees and soon-to-retire clients and 2008 is still fresh in their minds. They fear another disastrous downswing in their portfolios.
Emerging market economies are more vulnerable to the ill effects of ESG issues, but because transparency into such issues in these regions has been lacking, and because investors may have different understanding of risks and opportunities than ESG ratings agencies, integration has been difficult," the white paper says.
On March 8, officials from South Korea briefed U.S. officials on a recent dinner with Kim Jong-un, which marked the first time South Korean officials had been inside North Korea’s Communist Party headquarters since the Korean War. The South Koreans informed Trump of Kim Jong-un’s desire to have a meeting and Trump agreed.
What should bond investors do when rates are rising and the credit cycle is ending? Perhaps not what you would expect. But getting this right can be critical for the health of your fixed-income allocation.
It’s been a week and I’m starting to recover from my post-SIC high. It’s a weird feeling. I love SIC, yet processing it all takes time. Imagine one of those brain maps that shows the neurons opening new pathways. That’s what SIC does. It opens connections that I didn’t previously have.
Several weeks ago three professors from the Columbia and Dartmouth business schools recapped some of their work on accounting for intangible investment in a Harvard Business Review article. Their key finding, which builds on Professor Baruch Lev’s analysis in The End of Accounting, is that, “accounting earnings are practically irrelevant for digital companies”.
Assessing our portfolios’ performance is a necessary activity, but by being aware that measurement over shorter time horizons is dominated by noise, we can better resist the natural human instinct to “do something”—typically selling the underperforming investment at exactly the wrong time—if near-term performance falls below expectations.
Last week, we discussed China’s power structure and how the suspension of term limits changes recent precedents. This week, we continue this topic by analyzing China’s challenges while shifting from the world’s high growth/low cost producer to a slower growth, “normal” economy.
Economic theory posits that investors require high expected returns when cyclical consumption is low in economic contractions and low expected returns when cyclical consumption is high in economic expansions. New research is consistent with that theory.
Goldilocks reappeared last week with an extremely strong jobs report that gave stocks another reason to cheer the ninth birthday of the bull market.
Nonfarm payrolls rose by 313,000 in the initial estimate for February, with a net revision of +54,000 to December and January. The unemployment rate held steady at 4.1%, despite a rise in labor force participation.
Larry Swedroe and Kevin Grogan have created a near-perfect guide for practitioners and investors who are concerned about prospective returns from stocks and bonds in the current environment. The book explains how to think about the value of diversification and presents at least five novel strategies with exhaustive attention to detail.
PIMCO’s new partnership with the organization Girls Who Invest is one more step toward a more inclusive financial services industry. It is also an act of conviction.
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.
We generally don’t get our investment philosophy from beer commercials, but the takeaway from this one bears reflection: Deviate from what is working at your own peril.
There isn’t convincing evidence that a style-timing strategy, based on business cycles, can be expected to be profitable going forward.
When the value trade goes global, investors are poised to benefit. Evidence from the international equity, bond, currency, and commodity markets indicates that the value premium is a global phenomenon that can offer important portfolio diversification. However, the devil is in the details: we argue that the successful implementation of global value strategies critically depends on an economically motivated design.
Buying high yielding and selling low yielding stocks is not an attractive strategy. Combining Dividend Yield with Quality & Growth factors improves the performance. Interestingly Dividend Growth adds relatively little value.
Gregg S. Fisher founded Gerstein Fisher in 1993 based on a vision of offering a quantitative investment management approach grounded in sound economic theory and more efficiently implemented through technology. In this interview, he discusses the virtues of multi-factor investing and which factors are attractive in today’s market.
Italian general elections were held on March 4, 2018. The election results point to a hung parliament, with no party or coalition winning enough votes to form a government.
There are logical explanations for why the size premium may have shrunk. But there also remain simple, intuitive, risk-based explanations for why the premium should persist.
I’m going to wrap up our series on the problems of collecting and analyzing data in the first half of this letter, and then I’ll quickly comment on the Trump tariffs.
We are amused when commentators cite just one factor for a market movement because there's almost always a confluence of factors influencing the markets at any one time.
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.
President Donald Trump’s proposed tariff on imported steel and aluminum, at 25 percent and 10 percent, is much more than a shot across the bow. Indeed, this could be the official kickoff of the trade war we all anticipated. The protectionist trade policy, announced this week as the president met with metals executives, raised fresh inflation worries and had an immediate impact on capital markets.
Stock market volatility appears to be largely a consequence of the economic environment returning to a more “normal” status.
Last March, we wrote a piece entitled “Equity Repricing Under a New Administration: A Tail Risk Scenario.” We posited that the proposed pro-growth tax and spending policies of the Trump administration, thrust onto an economy nearing full capacity, could lead to a general rise in the inflation rate and ultimately the real rate of interest.
Target-date funds played a big part in helping defined contribution (DC) plan participants stay invested through February’s market turmoil. And history does repeat: in the severe 2008–09 financial crisis, these funds kept many participants positioned to take part in a lengthy bull market.
The opening months of 2018 have seen volatility return to global financial markets, but we think it is important to stress US economic fundamentals have remained broadly the same. After an unusually long period of calm in many markets, the reappearance of volatility at some point seemed likely, even if the speed of market gyrations has been unsettling for investors.
We look at options “insurance” the same way we look at any asset: It can make sense at one price but make no sense at another. As you will see, at today’s price they make a lot of sense.
While somewhat at odds with today’s big-data, warp-speed approach to life and work, thoughtful craftsmanship—the product design and implementation elements that are tangible, measurable, and impactful—can create positive, persistent results in portfolio performance.
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.
Recent market volatility suggests that investors are questioning whether the post-crisis subpar pace of economic growth, which we dubbed The New Normal, is subsiding, to be replaced by more traditional late-cycle outcomes – in particular faster inflation and tighter monetary policy.
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!
In the movie, Minority Report, Tom Cruise plays a policeman in a world where crimes are predicted ahead of time. Cruise’s character gets accused of a future murder and he is forced to work incredibly hard to acquit himself of the anticipated crime.
Stocks globally have experienced more than a week of tumultuous trading, with the US stock market officially in correction territory. And after being relatively sedate for years, the VIX Index has risen dramatically in recent days, indicating rising volatility.
I am a traditionalist when it comes to outdoor cooking: wood and charcoal are the only suitable fuels.
Hasenstab shares his thoughts on navigating today’s market challenges. He covers recent market volatility, inflationary threats in the United States, upcoming elections in Latin America, potential “fault lines” in Europe and credit risk in China.
