The 10 Most Important Things I Tell Clients
Over the past couple of decades, I’ve told clients many very important things. Most of them are timeless, which is why I find myself saying the same things repeatedly. Here are the top 10, and I’ve saved my most important for last.
Pending Home Sales Increased 2.5% in December, Ending Six-Month Slide
The National Association of Realtors released the December data for its pending home sales index. According to the National Association of Realtors®, "Pending home sales increased in December for the first time since May 2022 — following six consecutive months of declines."
Municipal Bonds: Is it Safe to Get Back in the Water?
Investors are still recovering from the municipal market beatdown of 2022, but the current higher absolute yield levels provide an attractive “re-entry” point for municipal market investors.
Jeremy Grantham Warns of a 17% Plunge in the S&P 500 This Year
The popping of the bubble in US stocks is far from over and investors shouldn’t get too excited about a strong start to the year for the market, warns Jeremy Grantham, the co-founder and long-term investment strategist of GMO.
World Markets Update: January 20, 2023
Seven of eight indexes on our world watch list posted gains through January 20, 2023. The top performer is Hong Kong's Hang Sent with a YTD gain of 11.44%. France's CAC 40 is in second with a YTD gain of 8.07%, and Germany's DAXK remains in third with a YTD gain of 7.97%. Coming in last for the third straight week is India's BSE SENEX with a loss of 0.36% YTD.
Episode 34: Revenge of the Old Economy
Low interest rates and a focus on being green led to significant underinvestment in the old economy. Netflix rose and Exxon fell. But we’re now beginning a rotation away from the new economy back to the old, says Jeff Currie, global head of commodities research at Goldman Sachs. In this episode of The Active Share, Jeff tells Hugo how he sees the future of energy, from green tech to oil, from the east to the west—who will win, who will lose, and how investors can prepare.
How Custodial Competition Will Transform the Advisor Space
It’s big news that Envestnet is moving into the RIA custodial space and will soon be competing head-to-head with its biggest integration partners: an expanded Schwab platform, Fidelity and Pershing. I suspect that this is just the first of many so-called software “platforms” that will jump into the custody competition.
Fund Managers Are Betting On China Stocks And Commodities As The Country Reopens
A January survey conducted by Bank of America shows that 91% of money managers believe China will “fully reopen” in 2023. That’s a significant increase from December 2022. Growth expectations for the country are also at a 17-year high.
Investors Start to Unwind the $540 Billion America First Trade
The America First trade that sent money gushing to the US over the past three years is finally starting to lose its shine as market optimism gravitates back to unloved markets outside of the world’s biggest economy.
From All-Weather to All-Terrain Investing for the Stormy Decade Ahead
This article explores how the addition of specific liquid alternative strategies produces an “All-Terrain” portfolio with the potential for improved long-term performance across a wider range of market environments.
Calpers Makes $1 Billion Bet on Small Funds as New CIO Reshapes Pension
The California Public Employees’ Retirement System is making a $1 billion wager that small private equity firms without the heft of the biggest buyout institutions can boost the pension giant’s returns and clout.
Quantamental Investing: A Brief Primer on KCR’s Toolkits
At KCR, we believe in the Quantamental Investment approach–a strategy that leverages the most useful aspects of both quantitative investing and fundamental investing.
Meta Named Favorite Internet Stock for 2023 in JPMorgan Survey
Meta Platforms Inc. is expected to be the top-performing megacap internet stock this year, according to a JPMorgan survey of investors, suggesting a rebound for the Facebook parent after its worst year on record.
Amazon, Salesforce Job Cuts Are Warning Signs for Stock Prices
Tens of thousands of tech sector job cuts may not be enough to reverse the collapse in share prices, given the looming economic downturn could slash companies’ revenues far more than the cost savings they make via layoffs.
Value Stocks to Lure Investors During Grim Earnings Season
Investors are bracing for a miserable stretch of earnings reports that will likely extend the dominance of value shares as Corporate America grapples with high inflation and rising borrowing costs, the latest MLIV Pulse survey shows.
When Old Rules Break Down, Consider a New Investing Approach
One of the biggest breakdowns has been in the relationship between stocks and bonds. Stock prices and bond prices are usually not correlated, meaning bonds can serve as the cornerstone of a hedge when stock prices waver and drop.
The Never-Ending Failure to Identify Future Mutual Fund Outperformers
Countless investment practitioners and academics have unsuccessfully searched for the metric that can successfully identify future mutual fund outperformers. What follows is the saga of the latest failed attempt.
Women Rarely Manage ETFs. Meet the Team Looking to Change That
The $6.5 trillion US ETF industry boomed in 2022 as innovative product debuts and market volatility fueled a near-record number of launches. But the fanfare revealed a major flaw in the space: the lack of women helming the funds.
Is It Time To Rethink The 60/40 Portfolio?
Investors who use a 60/40 portfolio had a rough year. In the past, putting 60% in stocks and 40% in bonds has often helped investors hedge against losses in either asset class. But 2022 had other ideas.
Here Are the Top ETFs for Retail Investors in 2023
In the rough year ahead, bonds might be one of the only bright spots. It would mark a dramatic turnaround from 2022, when bonds fell alongside almost every other asset class, posting their worst year in a generation.
Alternative Investments: The Case for Real Estate
Public and private real estate investments present a compelling opportunity in the current environment of high inflation and rising interest rates, according to Daniel Scher and Blair Schmicker from Franklin Equity Group.
Byron Wien Sees Market Bottom by Mid-Year, Positive Real Rates
The US stock market will bottom by the middle of 2023 as the Federal Reserve tamps down inflation without causing anything worse than a “mild” economic recession, according to Byron Wien’s annual list of surprises.
Tesla Poised for Delivery Record Despite Demand Concerns
Tesla Inc. is expected to announce record quarterly deliveries in early January but that may not be enough to satisfy investors as the electric-vehicle leader grapples with inflation, rising interest rates, crimped production in China and concerns about softening demand.
Moving Averages: S&P Down 5.9% in December, Down 19.4% in 2022
Valid until the market close on January 31, 2023.
The S&P 500 closed December with a monthly loss of 5.9% after a gain of 5.4% in November. At this point, after close on the last day of the month, four of five S&P 500 strategies are signaling "cash" — iShares Barclays 7-10 Year Treasury (IEF), Vanguard REIT Index ETF (VNQ), Vanguard Total Stock Market ETF (VTI), and Invesco DB Commodity Index Tracking (DBC) — down from from last month's quintuple "cash" signal.
US Treasury Signals Opening for Foreign Carmakers on EV Subsidy
The US Treasury Department signaled some imported cars will qualify for electric-vehicle tax credits in the Inflation Reduction Act, a move that could assuage Asian and European allies’ concerns about the sweeping climate legislation.
BNP Defends $20 Billion ESG Call as Downgrades Feed Controversy
The asset management arm of BNP Paribas SA said using a different interpretation of “sustainable investment” than some of its peers has allowed it to keep the European Union’s top ESG tag attached to about $20 billion worth of funds.
From Crypto to ESG, These Are US Regulators' Top Priorities in 2023
Crypto is squarely in the cross hairs of Washington regulators, with fresh calls for stricter controls before the industry can get big enough to affect the broader financial system.
Diverse Thought, Endless Possibilities
When a society embraces cognitive diversity, powerful outcomes can result. In this episode of The Active Share, Hugo sits down with Matthew Syed, a best-selling author, highly acclaimed speaker, and award-winning journalist, to discuss what it means to think in complex ways; the implications of moving away from group think; and how investors can benefit from diverse cultures and voices.
Higher for Longer
This will be my last letter of 2022. I want to use this letter as a set-up for my annual forecast issue the first week of January. That means we will touch on a variety of topics, kind of a snapshot into where my mind is today. Get ready to travel the world but let’s start at home with the Federal Reserve meeting this week.