Since the election of Donald Trump as our next President and the Republicans’ win of both the House and Senate, much has changed in regards to our economic and investment outlooks.
Greetings this New Year from our new office facilities in Westborough, MA. We hope you will find time to stop in if you are in the area!
We have a normal calendar for economic data. There will be important news will come from corporate earnings reports. Since this earnings season is part of an inflection point – the end of the earnings recession– it is special.
Who could argue with an advisor having to act in the best interest of his or her client? Well, I’m indeed going to argue that it’s at least less obvious than it first appears. Even if the rule turns out to be a net positive, I’m going to argue that there are potential large unintended consequences to worry about. This is not a screed against such a rule.
It may not be my money, but it is my job. — Charles Ellis in Investment Policy: How to Win the Loser's Game
Trump’s tax and infrastructure proposals will soon face the reality of US debt and monetary policy. We analyze what to expect next.
The key driver of the stock market, over the long term, is earnings. In the short term as well, earnings can be the primary driver of market performance. So, each quarter, it makes sense to review whether earnings are doing well or poorly, and why.
We would like to take this opportunity to extend our warmest Holiday Wishes to all of our clients and their advisers. 2016 certainly was a year for the history books – from the Brexit surprise to the November surprise; the year certainly was not one that improved the reputation of pollsters!
As a result of some Fed actions taken in 1936 and 1937, the U.S. economy, after experiencing a robust economic recovery starting in early 1934, slipped back into a recession midyear 1937, which lasted through midyear 1938.
Since investors are mostly individuals that have a “day job,” the majority of their “research” comes from a daily dose of media headlines. Therefore, since the media tends to “focus” their attention on “market moving headlines,” either bullish or bearish, investors tend to “react” accordingly.
This article, the first of two parts, is a review of some of the more prominent new tools that advisors can lean on as they prepare for the full DOL rule implementation on April 10. Each of them addresses a different aspect of the rule, and they all approach it from different angles.
ust as I do with the economy, I review the market each month for warning signs of trouble in the near future. Although valuations are now high—a noted risk factor in past bear markets—markets can stay expensive (or get much more expensive) for years and years, which doesn’t give us much to go on timing-wise.
The search for investment portfolio returns is not going to get any easier in 2017 against a backdrop of record U.S. equity prices, narrow credit spreads and low bond yields.
The Year of the Dynamic ETF With the world digesting the surprising results of the 2016 U.S. Presidential Election, the team at IndexIQ has turned their thoughts to next year and their top five ETF-focused trends and insights for 2017.
When the Commerce Department reported on December 22 that 3Q Gross Domestic Product increased at an annual rate of 3.5%, many of us in the forecasting business wondered if that figure might be too optimistic. We also wondered whether the economy could sustain a 3+% growth rate in the 4Q.
It was a big first week of 2017 for the weather and for the U.S. markets. As temps dropped and snow hit nearly every state in the union, stocks only wanted to move into the clouds. The numbers showed that it was a different type of week with growth, biotech and FANG stocks leading the week one charge.
The December Employment Report showed the job market to be in good shape. The pace of job growth slowed in 2016, partly reflecting tighter labor market conditions.
‘Quality’ is one of the those terms in finance that if you ask three different investors to define you get four different answers.
Strong future growth is rooted in some basic dynamics in which Asia Pacific excels.
Factors ranging from China’s evolving economy to the rise of nationalism combined to make 2016 a year that will not be quickly forgotten.
In conjunction with the publishing of a summary of Schwab's 2017 outlook across asset classes; this report is a more detailed summary of my 2017 outlook, with a dash of rear-view mirror analysis of the year just ended. Each of the broad topics discussed below will be further unpacked over the next couple of months in individual reports.
The fourth quarter of 2016 was a profitable period for globally diversified multi asset managers. All major domestic large cap indices were up for both the quarter and the year.
As we always do in January, this month we focus on the investment minefield laid out in front of us and we argue that with upcoming elections in the Netherlands, France and Germany, and economic uncertainties globally, this year could turn into a rather tricky one for investors. There are reasons to be optimistic, however, and we hope that 2017 will be a prosperous year for you all.
We all know that there is a savings crisis in America. According to the National Institute on Retirement Security (NIRS), the median savings balance of near-retirement households is only around $12,000, while the median saving balance for all working-age households is only around $3,000.
Each year I make a practice of reviewing The Ten Surprises of the year that has passed. Last year’s list was on its way to being one of my best and then Donald Trump won the presidential election and everything changed.
Grappling with the question of how much is one of the toughest relating to pensions
The nascent recovery in emerging markets has been thrown into question by Trump’s election. While the concerns warrant attention, we still see compelling reasons to invest in developing economies.
What effect will the index fund revolution and the Department of Labor’s (DOL) fiduciary rule have on active managers? The data shows that active management is still a healthy business model. But industry consolidation is coming and advisors will need to change the way they construct portfolios.
Why do so many pundits and politicians, including the future director of the Office of Management and Budget, beat the debt drum so loudly and so often? It’s one of the most effective, and most abused, wedge issues in American politics.
Instead of trying to answer questions about the future, I’ll try to list those we should be asking as 2017 opens. These are the things that I sit and meditate about when I consider the future of economics, markets, and investing. Today’s economy is something like an old-fashioned Swiss watch. It’s a thing of beauty when all those delicate little gears mesh just right. If you ever take the time to actually study the inner workings of the marvelous manifestations of human ingenuity that keep us all alive, it is difficult not to come away awestruck by the ability of the human mind to craft such complexity. But if any of the gears get just a little out of whack, the entire contraption can grind to a halt.
With the US stock market roaring ahead to close 2016 on a high note, the question for many investors is whether the momentum can be sustained.
Included in this week’s On My Radar: -Pension Fund Red Ink – Check Out Your State (Chart) -Foreigners are Dumping Treasury Bonds at Record Rate -The Year in Review -Trade Signals – Strong Dollar, Weak Gold, Equity Trend Up, Bond Trend Down, Sentiment Remains Far Too Optimistic
At a time when the US is poised to turn inward, China’s economic performance is more important globally than ever. Whether China can achieve sustainable growth patterns in the coming years will depend on several key factors, the most important being internal
As the year winds down, our weekly commentaries have reviewed how 2016 forecasts played out, and we do the same this week with a review of fixed income.
Investors have been drawn to real assets in general and to real estate in particular due to the comparative stability and attractiveness of their income returns and the prospects for growth.
An investment landscape of increasingly binary outcomes requires fundamentally different involvement by investors. Importantly, those taking their cues primarily from the US economy are likely to be woefully unprepared.
The evidence is overwhelming that past performance is a poor predictor of active managers’ performance. Studies have found that, beyond a year or two, there is little evidence of performance persistence. A newly published academic study reveals why it’s so hard for active managers to persistently beat a benchmark.
A quarter-century before Brexit came “Black Wednesday.” On Wednesday evening, September 16, 1992, the British government announced its exit from the European Exchange Rate Mechanism, prompting a dramatic devaluation of the British pound. Renowned hedge fund manager George Soros’ legendary bet against the pound in 1992 and his $1 billion profit on Black Wednesday defines for many the swashbuckling style of a global macro trader.
When dealing with markets, one must avoid, as much as possible, emotional responses and simply focus on the facts before us. Last weekend, I presented my “factual” analysis of the market, and explained why I have retained a larger degree bullish perspective.
The Shiller CAPE ratio is typically regarded as a stock market valuation measure. But the CAPE itself is not a good stock market timer. However, it can be indirectly used for market timing by determining a cycle-ID as formulated by Theodore Wong.
Longtime investment professional Maury Fertig of Relative Value Partners shares his perspective on “opportunities and risks” in the municipal bond closed-end fund sector.
We assess three global economic scenarios for 2017.
As is our custom, we close out the current year with our outlook for the next one. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape in the upcoming year.
My colleague Carlos Hardenberg shares his perspective on the opportunities and challenges he sees in emerging markets today and as we head into 2017.
Bond investors are feeling a little shell-shocked after the rise in interest rates in November.
To see how well Janus’ actively managed funds have performed for its investors, I’ll compare the results of its actively managed equity funds to those of index funds from Vanguard and the structured asset class funds of DFA.
The Queens Road Small Value fund has outperformed its benchmark, the Russell 2000 Value Index, over the past 10 years and since inception in 2002, earning an annualized return of 9.59% vs. 8.38% for the Russell 2000 Value Index. I spoke with Steven Scruggs, who has served as portfolio manager for that entire 14-year period.
“If you’re not getting better, you’re getting worse.” – Walter Bahr
Today we’ll look at stock valuation several different ways, see what history tells us about the future, and then think about how to react. There are good reasons to think that the Trump rally could morph into the stereotypical and expected Santa Claus rally. Toward the end of the letter, I will comment on why. It’s actually kind of a rational process. And then what?
