For some time now I have been concerned about the state of American competitiveness looking out a decade ahead. Innovation has been the lifeblood of our economic success, and nowhere has this been more apparent than in information technology since the advent of the Internet and the Smartphone. China has risen from being a largely agricultural economy when Mao died in 1976 to become the second most important economy in the world today. Still, many thought leaders believe its growth, even at modest rates, is unsustainable and that the country is good at copying the technology of others, but not as strong as an innovator of fundamental technologies on its own.

Dan Fuss has established himself as one of the most respected bond investors in the industry over his 60-year tenure. In a talk last week, Fuss warned investors of geopolitical uncertainty and higher rates in credit markets.

Recent data have supported our view that the drivers of the US economy’s solid expansion remain in place, and should allow the US Federal Reserve (Fed) to move further toward its goal of normalizing interest rates. Some data releases have clearly been skewed by the recent major hurricanes, but we feel any negative impact on the economy is likely to be transient and outweighed by demand arising from reconstruction.

The modest growth rate is contributing to the length of the current economic expansion, and American households are in the best financial shape in years. Our 3Q17 Quarterly Update report discusses the economic expansion and its impact on equities, fixed income, and more.

Currency Strategist Van Luu shows how thoughtful management of currency risks and opportunities may help reach investing objectives, despite the low return environment.

Beyond all the twists, turns, and quirks in the economic data reports, the overall picture appears largely the same. Growth remains on a moderate track, somewhat beyond a long-term sustainable rate (as the job market continues to tighten).

When world leaders talk, markets react. And with social media becoming mainstream, politicians have a new way of getting their message to the masses.

Low market correlations make it easier for active portfolio managers to stand out—positively or negatively. But what matters most is how a portfolio of select stocks performs through market cycles, regardless of correlations.

Momentum is one of the most compelling factors in theoretical long–short paper portfolios, but live results of momentum strategies fall short of theoretical returns. Thoughtful implementation, a careful sell discipline, and an avoidance of stocks with stale momentum can narrow the gap between paper and live results.

What should fixed income investors expect in 2018? In this white paper, Mary Ellen Stanek, CFA, shares Baird Advisors’ annual investment outlook, makes a case for “lower and longer” economic growth, and identifies headwinds that could present challenges for market participants in the new year.

None of the factors consistently generated positive performance during recent market crashes. However, almost any factor exposure would have increased the risk-return ratio of an equity-centric portfolio. Low Volatility and Mean-Reversion would have been most beneficial. Momentum least.

Morningstar’s Fund Manager of the Year is one of the most coveted awards in the mutual fund industry. Indeed, fund companies devote enormous resources to promoting award recipients. But should advisors invest their clients’ funds with those winners?

Current market valuations are consistent with negative expected returns for the S&P 500 over the coming 10-12 years, with a likely market loss of more than -60% in the interim.

Are high-quality businesses as overvalued as the broader markets and will that bode ill for our future investment returns?

Last Month in Perspective: The convoy of developed world central banks reducing policy accommodation appeared to gather steam. Global political developments continued to capture headlines. Interest rates moved higher on the hawkish tilt in central bank rhetoric, and equities gained on generally positive economic data.

Generating consistent returns under uncertain conditions is a challenge. Can multi-asset strategies make the job a little easier? We think so. But a lot depends on how they’re designed.

The worst economic recovery of the post-war period will continue to be restrained by a consumer sector burdened by paltry income growth, a low and falling saving rate, and an increasingly restrictive Federal Reserve policy. Additionally, with the extremely high level of U.S. government debt and deteriorating fiscal situation, the economy is unlikely to benefit from any debt-financed tax changes. Finally, from a longer-term perspective, the recent natural disasters are an additional constraint on economic growth.

If the current economic expansion lasts another year and a half, it'll be the longest on record, even surpassing the expansion of the 1990s that ended in early 2001.

A downturn for stocks may not be top of mind these days, but one will happen eventually. To prepare for that, Russ discusses why the source of the selloff matters as much as the magnitude.

As expected, hurricanes Harvey and Irma had a significant impact on the nonfarm payroll data. However, it’s impossible to say exactly how much. The distorted September payroll figures were never going to be a factor in the Fed policy outlook. There will be two more employment reports before the mid-December policy meeting and we can expect a recovery from hurricane effects.

Current market valuations are consistent with negative expected returns for the S&P 500 over the coming 10-12 years, with a likely market loss of more than -60% in the interim. The proposition that “lower interest rates justify higher valuations” has become a rather dangerous slogan, and is a distressingly incomplete statement that ignores the other half of the sentence: “provided that the stream of expected cash flows is held constant.”

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.

The third quarter of 2017 closely resembled the first half of the year – global markets continued to grow steadily, resulting in positive returns for many strategic domestic and global equity investors.

Here are the key takeaways from events and interviews for capital-growth investors during the past month. Focusing on strong companies with a competitive advantage offer opportunities, but it comes at a price.

In today’s expensive U.S. equity market, valuation may be more paramount than ever—and not necessarily just in the long term.

With limited evidence of excess in the global financial system and mostly low interest rates around the world, we remain optimistic about global economic prospects. The expansion is poised to continue, led by growth in emerging economies.

Last week, I got several calls asking me how U.S. tax reform will impact the price of gold. If you can answer this question, you might be able to answer how tax reform will impact other assets. Let me explain.

The world is running out of freshwater, and much needs to be done unless we want a crisis to turn into a catastrophe. Desalination will fix the problem, they say, but desalination is not an option open to all countries. A dramatic change in consumer habits and attitudes must also take place, and that takes time.

This article will tackle the “p-hacking” issue and propose a framework to help those who embrace evidence-based investing to make judicious decisions based on a more thoughtful interpretation of finance research.

Tail-risk hedging strategies profit from significant market corrections. They may be used alongside or to replace traditional risk management strategies (e.g., diversification via asset allocation) where the core portfolios have a significant allocation to equities or other volatile assets. This type of insurance is now priced very attractively relative to historical levels and is a cost-effective way to insure against equity drawdowns.

On Sept. 20, the Federal Reserve (Fed) officially announced the start of its balance sheet unwinding process, embarking on a slow journey of reversing the quantitative easing (QE) policy that it launched in the wake of the global financial crisis.

We see three risks to the outlook for steady economic growth. Yet we also see opportunities for investors to target above-benchmark returns while emphasizing defense at a time of low volatility and full valuations.

In my conversations with institutional investors I find a surprising lack of optimism about the outlook for equities. The capitalization-weighted Standard & Poor’s 500 was up over 11% year-to-date, excluding dividends, on September 18. Some would argue that only a few stocks are accounting for the rise, but the equal-weighted S&P 500 was up over 8% year-to-date as well.

Geopolitical analysis is a multi-disciplined examination that starts with geography and includes economics, sociology and history. The successful use of a historical analog requires selecting one that has the best fit to the current situation. Selecting an inappropriate historical parallel can be seriously misleading.

The final installment of our 2017 global market outlook is here. See our strategists’ views on global investment markets and economies.

In Passive Carnage Is Illogical, we discuss what is driving the passive rotation, as well as how strategies and products have evolved to suit investors’ changing needs.. We also consider the importance of three disruptors in asset management that are having a remarkable influence, including: Separately Managed Accounts (SMAs), Robo-advisors (Robos), and Exchange Traded Funds (ETFs).

Tail risk hedging seeks to protect gains without loss of upside equity potential.

Michael Edesess’ article, The Trend that is Ruining Finance Research, makes the case that financial research is flawed. In this two-part series, I will examine the points that Edesess raised in some detail.

Atlantic-hugging policymakers and pundits, buffered by a continent and a large ocean, may not fully appreciate the significant effect on global financial markets that the threat posed by North Korea has had in recent months. But competition for safe assets has clearly heated up.

So the mindset, I think, goes something like this. Yes, market valuations are elevated, but, you know, low interest rates justify higher valuations. Besides, there’s really no alternative to stocks because you’ll get what, 1% annually in cash? Look at how the market has done in recent years. There’s no comparison.

Today I want to continue with the hard-hitting analysis of our public pension problems and say more about personal storm preparation. We all have some very important choices to make.

Three new health care reform initiatives - from the political right, left, and center - are developing in the Senate. Earlier this week I joined CNBC's Nightly Business Report to discuss the proposal up first for consideration: the Graham-Cassidy bill, which would turn the ACA into a system of state grants.

Today’s low bond market volatility won’t last forever. But knowing whether a correction will come next week or next year isn’t so important. Having an efficient trading strategy that can execute in both tranquil and turbulent markets is.

The investing industry is constantly devising new acronyms and buzzwords. Sometimes these can be dangerous. The rise of the FANG stocks highlights how clusters of stocks may create investing hazards that standard risk models struggle to detect.

Countless articles have been written in the past 10 years predicting (or warning) of China’s imminent financial demise, with the number of articles accelerating in recent years amid China’s debt build-up in the post Global Financial Crisis period. Investing on the basis of a “China collapse” view of the world would likely have resulted in more risk-averse portfolios in the emerging debt space and, hence, lower returns in recent years.

In a troubling sign for global economic growth, productivity has been in decline for decades. In the first of a special series on productivity, Neil Dwane, Global Strategist at Allianz Global Investors, explores why businesses, governments and investors need to find ways to solve the productivity puzzle.

Analysis of environmental, social and governance factors (ESG) is particularly important for bank investments because the confidence of their depositors and borrowers largely drives banks’ valuations.

Never before in the US have we experienced a natural disaster of the magnitude of Harvey. The damage is of such a degree that we find it nearly impossible to comprehend. Yet Harvey does not stand alone. Climate events that preceded it give us much-needed insight into how municipalities recover, and whether disasters precipitate credit defaults.

Speculation had been rife that the European Central Bank might have used its September Governing Council meeting to signal the start of tapering for its quantitative easing program. That confirmation didn’t come, switching attention to the October 26 meeting.

Current extremes present what I view as one of the three most important opportunities in history to defend capital. My sense is that many investors will squander this opportunity until yet another bubble implodes.