Will the plight of consumers drag GDP lower in the second quarter, resulting in a recession?
In January Goldman Sachs projected that the FOMC would increase the federal funds rate at every other meeting (each meeting is 6 weeks apart) starting with the March meeting.
Diverse opportunities in Global Convertibles, as well as structural features, provide tailwinds to counter rising rates and equity volatility. In rising rate environments, convertibles have historically done quite well relative to longer-duration traditional fixed income investments.
Exchange-Traded Funds (ETFs) holding only Russian equities have had creations suspended and trading halted since the war in Ukraine commenced.
This year, the theme for International Women's Day is #BreakTheBias. This theme celebrates the achievements that women have made, takes action for equality, and raises awareness against bias. What better way to honor the holiday than to examine how women are breaking down barriers in the financial services industry?
Markets have already reacted to the threat of a Russian invasion of Ukraine in a textbook manner akin to prior similar events that we have outlined in prior articles on January 31 and February 22.
I propose a strategy that can produce larger price gains or losses than bonds and higher yields than traditional bond funds or ETFs. If yields decline soon, investors can expect double-digit returns in a relatively short period.
Howard Marks’s latest memo considers one of investing’s most fundamental questions: when to sell. Howard explains that it’s foolish to sell because prices are up and because they’re down – and why, most of the time, staying invested is ultimately “the most important thing.”
We hope you enjoy the latest newsletter from Harold Evensky.
The best marketing doesn’t just attract people to your business. It also repels the people you don’t want to work with.
The fund is rated 5 stars in the Small Cap Growth category for the 5-Year, 3-Year, & Overall Periods. As of November 30, 2021, the fund was rated against 507 small cap growth funds in the 5-year category and 574 funds in the 3-year and overall categories, based on total returns.
Historically, fourth quarter tax loss selling of closed-end funds (“CEFs”) has been prevalent in the market. CEFs may be more susceptible to tax loss selling given they trade on a stock exchange and market prices (investor return) can deviate from underlying net asset values (“NAVs”) (fund return).
For life settlements, open-ended funds offer more liquidity than closed-end funds, but they also have lower returns and the management and performance fees are often based on the net asset value of the fund – which can be hard to accurately assess for assets with unlevel cashflows.
The S&P 500 index is up more than 20% so far this year, but more than 90% of its member stocks have had “correction” level drawdowns—more than 10% from a peak—at some point this year. In short, while overall stock market performance has been strong, there has been a lot of churn beneath the surface.
The justification for the 4% rule was based upon historical investment performance from 1925 to 1995. But what is the value of relying on those results when today’s economy is so different?
In case there was any uncertainty about the moral hazard created by the Federal Reserve’s decision to buy junk-bond exchange-traded funds, a group of former senior leaders at BlackRock Inc., JPMorgan Asset Management and HSBC is leaving no room for doubt.
Here are a few ways that advisors can show their clients that they care this holiday season.
The four emotions that I encounter in client interactions are fear, guilt, shame and envy. By anticipating and learning how to address them, we can tailor solutions to each client.
Here are five cost-effective strategies advisors should use to reach Millennials:
There are many potential advantages to investing in tax-exempt municipal bonds, but not all advisors are aware of additional strategies and investment vehicles that can help them meet muni-focused client needs.
Choosing a fund or ETF with a positive ESG profile is fraught with risk. New research shows how carefully investors must weigh considerations such as screening criteria, factor exposures, industry concentration and expenses.
TINA has been applied to investing. You must buy stocks because TINA. You can’t make money any other way. Just close your eyes, buy and hold forever. Or at least through a full market cycle. Frankly, I think that’s stupid.
Growth stocks have lagged cyclicals so far in 2021, but we remain steadfast in our belief that secular growth is the key to generating long-term returns. In this piece, we discuss how we find attractive opportunities in the small cap universe.
Treasury yields fell again in May and credit spreads approached recent tights as the virus continued to recede, allowing the reopening of the economy to progress. Economic data was noisy this month, largely due to base effects, but confirms the ongoing trend of renewed growth and signs of inflation.
Transitory is defined as being of brief duration, tending to pass away and not persistent
Trust is a precious commodity.
In a complete reversal from what was expected roughly a year ago, the outlook for muni issuers is much brighter.
High-profile episodes, such as that involving GameStop, have led some to advocate for banning short selling. But new research confirms that short sellers play a valuable role in keeping markets efficient and preventing prices from overshooting their intrinsic value.
In recent months, two investment themes have been rewarding investors with outperformance: defense sector companies and those participating in share buybacks.
This is the fourth part in a series about my late partner, Emery Kertesz. I’ve summarized his management principles. They have broad applicability
A flexible bond strategy can deliver strong performance with low volatility by diversifying across global markets.
Covered call strategies can help investors manage short-term volatility and may provide better long-term outcomes while seeking to provide attractive monthly income to investors.
Treasury yields rocketed higher in February, with the move again concentrated in longer maturities. Volatility spiked as liquidity dried up in the Treasury market, especially after a very weak 7-year auction that briefly pushed 10-year Treasury yields to 1.60%. The news flow was largely the same direction: an improving economy, increased vaccine rollout with deaths and hospitalizations turning sharply lower, and a continued march toward a substantial fiscal stimulus plan.
The main fund from Cathie Wood’s Ark Investment Management slipped in pre-market trading on Thursday, as it struggles to stabilize following a 20% drop from its February peak.
Those of us in the coaching business may be doing some harm, notwithstanding our good intentions.
Rob Arnott: “There hasn’t been a better time to be a value investor at any other time in my career. I look back at the tech bubble and I never thought I would see valuations stretched the way they were then. We're back to that, and then some." We invite you to revisit “Reports of Value’s Death Have Been Greatly Exaggerated” now published in the Financial Analysts Journal.
Hope is high that economic growth will accelerate as more people are vaccinated against COVID-19, but so far economic data has been lackluster. Meanwhile, bond investors are expecting inflation despite signs that the economic recovery’s momentum may be stalling. Why does everything seem so disconnected?
Treasury yields continued to march higher in January, with the move again concentrated in longer maturities. Mortgage spreads tightened slightly, while corporate bond spreads were mostly mixed. The market remains stuck between the push/pull of the prospect for greater fiscal stimulus and ongoing vaccine rollout versus continued lockdowns and the greatest one-month mortality rate since the pandemic began nearly a year ago.
Internet message boards are lighting up and certain stocks have seen some unusually dramatic price moves. David Mann, our Head of Global Exchange Traded Funds (ETFs) Capital Markets, ponders whether ETFs could be subject to similar volatility.
Inflation will likely heat up in the coming months, but not to worrying levels.
In my third and last article in this series, I identify the two most powerful steps I’d like to see advisors take to get more clients.
If global growth resumes in 2021, aided by the rollout of vaccines and the Fed’s continued commitment to ultra-low interest rates, some developing countries may be able to avoid default, because yield-hungry investors will continue to buy their bonds. But other countries will not be so lucky.
Despite the overwhelming challenges Las Vegas and Southern Nevada have faced in 2020, the help, assistance, and contributions from a variety of local charities have not only positively impacted the lives of many grateful beneficiaries, but also fulfilled the lives of those in a position to give.
There are many major policy decisions that will influence the outlook—trade, energy, taxes and budget deficits, and pandemic relief. However, it’s difficult to assess how these issues will be addressed post-election, and even more unpredictable how the market will react.
Jeffrey Gundlach, who famously predicted Trump’s victory in 2016, says the president will secure another term. David Rosenberg acknowledged that possibility, but is not so sure of the outcome. Both offered their predictions for the post-election economy and markets.
Enjoy Harold Evensky's latest Newsletter.
The Investment Company Act of 1940 contains a loophole providing institutional investors an advantage over individual investors that some are using to the detriment of closed-end funds and their retail investors.
Resiliency and diversification potential remain critical in a world with meaningful uncertainty ahead.
The snarky comments about financial engineering practically write themselves: An exchange-traded fund investing in collateralized loan obligations? What could go wrong?
There are many clients who might resist the fee increase but most of the ones I believe will do so would be fine if they left the firm.
The investment grade fixed income market has been unusually active in 2020. Initial concerns about Covid-19 triggered a sharp selloff, but sentiment abruptly reversed when the Fed announced plans to purchase corporate bonds. Spreads have nearly returned to their pre-pandemic levels, but not all sectors have recovered equally, creating interesting opportunities for savvy investors.
How do I keep my team working together effectively in this remote environment?
Jeffrey Gundlach, who famously predicted Donald Trump’s victory in 2016, said that the president will defeat the presumptive Democratic nominee, Joe Biden, in November. He also dimmed the expectations of fixed-income investors when he said to avoid short- and long-term bonds.
Closed-end funds are known for leveraged income generation, but yields can come from a range of sources, strategies and products. John Cole Scott, founder of the Active Investment Company Alliance and chief investment officer of CEF Advisors, offers his perspective on the current CEF landscape and challenges presented by the coronavirus, not to mention the presidential election and recession recovery. Scott also shares his excitement about the AICA online CEF conference on Aug. 13, featuring the “best and brightest” minds in the CEF industry.
Municipal Bond Closed-end Funds, like most investments, have felt the impact of the coronavirus-stricken economy. But Dave Lamb of Nuveen says Muni CEFs have rebounded well, especially those with higher quality credits. Despite potential concern of a recession-driven shortfall of taxes supporting munis, Lamb is optimistic about the future. He says it’s an “opportune time to invest in closed-end funds.” He expects discounts to continue to narrow and notes the low cost of leverage has helped lead many funds to increase distributions.
It is safe to say that expectations are low as the bottom up consensus for the S&P 500 calls for a year over year earnings decline of about 45% in the 2Q. This would be the largest year over year decline since 2008. But that is well understood at this point.
Be wary of these five common copywriting mistakes I see advisors make on their websites.
Having trouble helping your clients appreciate a balanced portfolio? These charts may help.
The economic calendar is a normal one and is beginning to include data from after the start of the crisis. This week includes small business and consumer sentiment surveys, as well as April data for retail sales and industrial production. I will also be watching jobless claims, both new and continuing.
While predicting that “economic activity in March and April will be the worst of our professional careers,” Grant nonetheless says markets see light at the end of the tunnel that includes economic recovery by July.
The economic calendar is light and provides little post-COVID19 data. Continuing jobless claims takes on a new importance, and we may get some useful information from the components of the University of Michigan sentiment survey.
Closed-end funds are currently trading at a discount as equity markets have dropped. Here’s where to spot opportunities.
Matt provides a framework that he and his team use to make sense of the headlines and the price bids flashing on their monitors. His realistic, yet hopeful outlook provides a roadmap for successfully navigating this universal crisis together.
Even with all the benefits attributable to closed-end funds—intraday trading, low financing costs of leverage, ability to be fully invested, and consistent source of income—they have some idiosyncrasies that present challenges, especially during extreme volatility
Michael Grant is preparing for rebound in equities and has positioned the long/short portfolio accordingly. To use a Wayne Gretzky analogy, he is skating to where the puck will be, not where it is.
During these turbulent times, how does one track and value the performance of an exchange-traded fund? David Mann, Head of Capital Markets, Global Exchange-Traded Funds, opines on ways to “keep score.”
Municipal closed-end funds (“CEFs”) currently offer high levels of tax advantaged income and can often be purchased at a discount to their current net asset value.
Gundlach’s survey of the economic and financial destruction wrought by the coronavirus shows problems abound.
When markets turn volatile, some question the role of exchange-traded funds (ETFs) in exacerbating market moves. David Mann, our Head of Capital Markets, Global ETFs, offers some perspective.
The Fed could give the economy a powerful boost by maintaining the mix of assets on its balance sheet.
Legendary investor and mentor to many investing greats Benjamin Graham once aptly stated that: “investing is most intelligent when it is most businesslike.” Personally, I agree which is why I refer to what I personally adhere to and practice with my own investing as “business perspective investing.”
We have a big economic calendar including important data on consumer confidence, personal income and spending, and inflation. There will also be another round of housing news – two measures of prices, new home sales, and pending home sales. While it is not expected to change, the second estimate of Q4 GDP will be reported.
Let's talk about visualization: The ability to mentally rehearse successful outcomes in a relaxed state before they actually happen.
The economic calendar is normal in another week split by a holiday. Many market participants will not show up until Thursday – and perhaps not even then. The ISM reports, manufacturing and non-manufacturing, are both post-holiday. My guess is that the financial media will continue the attention to 2020 outlook ideas. Some reporters will take a look instead at events from the past decade.
A brief monthly update on what's happening in the municipal bond market.
Research Affiliates discusses why they believe value investing is still alive and well and explains how changes to the display of expense ratios seek to enhance clarity for investors.
Positive returns across asset classes in 2019 may limit tax loss selling in closed-end funds, but we see potential long term value in select sectors where investors can still buy assets at a discount.
We aim to support wealth management firms, advisors, and investors as they assess portfolio strategy and navigate the shifting trends we face in the new year.
The economic calendar is loaded with data and we have a holiday-shortened week. In some circumstances the many economic reports and the Washington stories would dominate. This week the market and economic context suggests a different theme.
In October the International Monetary Fund (IMF) lowered its 2019 GDP forecast to 3.0% from 3.2% in July. This represents a marked slowing from global growth of 3.8% in 2017. The primary driver of the slowdown has been a retrenchment in global trade and business investment in response to the ratcheting up of trade tariffs since early 2018.
The economic calendar is a light one in sharp contrast to last week’s. That was a good time to observe the market reaction to a wide range of news. Now is the time for investors to use the information.
Covered call strategies in a closed-end fund may help long-term investors manage short-term volatility.
Read our key takeaways from our 2019 Asset Allocation Midyear Update, including how we are positioning multi-asset portfolios in light of our outlooks for the global economy and markets.
Economic uncertainty has spiked given the escalating U.S.-China trade war; with increasing risk it weakens the dividing line between the manufacturing and consumer sectors.
The economic calendar is normal, featuring housing starts, retail sales, and Michigan sentiment. The CPI will be important someday, but only when it breaks the recent path of gentle increases. With summer vacations in full swing (even Congress is on a five-week recess) the punditry turns to tried and true topics...
If the signs of a recession prove true, the Fed will be in panic mode, according to Jeffrey Gundlach. The economy will weaken, rates will go up and the Fed will have to “do something,” to protect against a “spiral” of higher rates feeding and slower growth.
Despite record inflows into fixed income ETFs, concerns around the growth of these funds leading to an outsized impact on the fixed income market and the distortion of bond prices are still overblown, according to the data.
Investors are not always told the full story before they invest. In this case, we are constantly told that electric vehicles offer the way forward, but evidence is mounting that they are actually polluting more than petrol or diesel cars. The penny just needs to drop as far as our political leadership is concerned.
Fees are the root of most client conflicts. Clients say they are too high and you defend them based on the value being added. An interesting study provides insight for how to handle these (and other) conflicts.
Does exposure to unlisted infrastructure benefit the average portfolio?
Closed End Funds
Consumer Weakness Signals a Recession
Will the plight of consumers drag GDP lower in the second quarter, resulting in a recession?
FOMC Inflation Test Coming
In January Goldman Sachs projected that the FOMC would increase the federal funds rate at every other meeting (each meeting is 6 weeks apart) starting with the March meeting.
Global Convertible Market Update: Portfolio Manager Q&A
Diverse opportunities in Global Convertibles, as well as structural features, provide tailwinds to counter rising rates and equity volatility. In rising rate environments, convertibles have historically done quite well relative to longer-duration traditional fixed income investments.
Clearing the Inbox: ETFs that Hold Only Russian Equities
Exchange-Traded Funds (ETFs) holding only Russian equities have had creations suspended and trading halted since the war in Ukraine commenced.
Female Financial Advisors: Breaking Biases and Barriers
This year, the theme for International Women's Day is #BreakTheBias. This theme celebrates the achievements that women have made, takes action for equality, and raises awareness against bias. What better way to honor the holiday than to examine how women are breaking down barriers in the financial services industry?
Schwab’s Quick Take: Russia Invades Ukraine
Markets have already reacted to the threat of a Russian invasion of Ukraine in a textbook manner akin to prior similar events that we have outlined in prior articles on January 31 and February 22.
The Strategy for a Bull Market in Bonds
I propose a strategy that can produce larger price gains or losses than bonds and higher yields than traditional bond funds or ETFs. If yields decline soon, investors can expect double-digit returns in a relatively short period.
Selling Out
Howard Marks’s latest memo considers one of investing’s most fundamental questions: when to sell. Howard explains that it’s foolish to sell because prices are up and because they’re down – and why, most of the time, staying invested is ultimately “the most important thing.”
NewsLetter - December 2021
We hope you enjoy the latest newsletter from Harold Evensky.
How to Repel the Wrong People from Your Company
The best marketing doesn’t just attract people to your business. It also repels the people you don’t want to work with.
Press Release: Osterweis Emerging Opportunity Fund Receives Five-Star Five-Year Morningstar Rating
The fund is rated 5 stars in the Small Cap Growth category for the 5-Year, 3-Year, & Overall Periods. As of November 30, 2021, the fund was rated against 507 small cap growth funds in the 5-year category and 574 funds in the 3-year and overall categories, based on total returns.
Finding Opportunities in the Closed-End Fund Market
Historically, fourth quarter tax loss selling of closed-end funds (“CEFs”) has been prevalent in the market. CEFs may be more susceptible to tax loss selling given they trade on a stock exchange and market prices (investor return) can deviate from underlying net asset values (“NAVs”) (fund return).
The Problem with Open-Ended Life-Settlement Funds
For life settlements, open-ended funds offer more liquidity than closed-end funds, but they also have lower returns and the management and performance fees are often based on the net asset value of the fund – which can be hard to accurately assess for assets with unlevel cashflows.
2022 Schwab Market Outlook: Ebb Tide
The S&P 500 index is up more than 20% so far this year, but more than 90% of its member stocks have had “correction” level drawdowns—more than 10% from a peak—at some point this year. In short, while overall stock market performance has been strong, there has been a lot of churn beneath the surface.
There is No “Safe Withdrawal Rate”
The justification for the 4% rule was based upon historical investment performance from 1925 to 1995. But what is the value of relying on those results when today’s economy is so different?
New Junk-Bond ETFs Are Born of Fed Moral Hazard: Brian Chappatta
In case there was any uncertainty about the moral hazard created by the Federal Reserve’s decision to buy junk-bond exchange-traded funds, a group of former senior leaders at BlackRock Inc., JPMorgan Asset Management and HSBC is leaving no room for doubt.
Creative Holiday Marketing Ideas
Here are a few ways that advisors can show their clients that they care this holiday season.
The Four Drivers of Client Emotions
The four emotions that I encounter in client interactions are fear, guilt, shame and envy. By anticipating and learning how to address them, we can tailor solutions to each client.
Five Cost-Effective Strategies to Reach Millennials
Here are five cost-effective strategies advisors should use to reach Millennials:
How SMAs and Interval Funds Can Help Meet Municipal Investor Needs
There are many potential advantages to investing in tax-exempt municipal bonds, but not all advisors are aware of additional strategies and investment vehicles that can help them meet muni-focused client needs.
Why It’s So Hard to Choose ESG Funds and ETFs
Choosing a fund or ETF with a positive ESG profile is fraught with risk. New research shows how carefully investors must weigh considerations such as screening criteria, factor exposures, industry concentration and expenses.
TINA Is Stupid
TINA has been applied to investing. You must buy stocks because TINA. You can’t make money any other way. Just close your eyes, buy and hold forever. Or at least through a full market cycle. Frankly, I think that’s stupid.
Why Secular Growth Matters, and How We Find It
Growth stocks have lagged cyclicals so far in 2021, but we remain steadfast in our belief that secular growth is the key to generating long-term returns. In this piece, we discuss how we find attractive opportunities in the small cap universe.
Total Return Perspectives: May 2021
Treasury yields fell again in May and credit spreads approached recent tights as the virus continued to recede, allowing the reopening of the economy to progress. Economic data was noisy this month, largely due to base effects, but confirms the ongoing trend of renewed growth and signs of inflation.
Transitory Inflation? Not so Quick
Transitory is defined as being of brief duration, tending to pass away and not persistent
Vaccines and the West’s Credibility Crisis
Trust is a precious commodity.
Game Changer: How the American Rescue Plan Improved the Outlook for Munis
In a complete reversal from what was expected roughly a year ago, the outlook for muni issuers is much brighter.
Short Selling Keeps Markets Efficient
High-profile episodes, such as that involving GameStop, have led some to advocate for banning short selling. But new research confirms that short sellers play a valuable role in keeping markets efficient and preventing prices from overshooting their intrinsic value.
What’s Working? Two Ideas For Investors
In recent months, two investment themes have been rewarding investors with outperformance: defense sector companies and those participating in share buybacks.
Lessons for Advisors (and Life) From Emery Kertesz (Part Four)
This is the fourth part in a series about my late partner, Emery Kertesz. I’ve summarized his management principles. They have broad applicability
Strategic Income Opportunities Fund
A flexible bond strategy can deliver strong performance with low volatility by diversifying across global markets.
Making More by Losing Less
Covered call strategies can help investors manage short-term volatility and may provide better long-term outcomes while seeking to provide attractive monthly income to investors.
Total Return Perspectives: February 2021
Treasury yields rocketed higher in February, with the move again concentrated in longer maturities. Volatility spiked as liquidity dried up in the Treasury market, especially after a very weak 7-year auction that briefly pushed 10-year Treasury yields to 1.60%. The news flow was largely the same direction: an improving economy, increased vaccine rollout with deaths and hospitalizations turning sharply lower, and a continued march toward a substantial fiscal stimulus plan.
Cathie Wood’s ARKK Struggles in Early Trading After 20% Retreat
The main fund from Cathie Wood’s Ark Investment Management slipped in pre-market trading on Thursday, as it struggles to stabilize following a 20% drop from its February peak.
The Harmful Side of Coaching
Those of us in the coaching business may be doing some harm, notwithstanding our good intentions.
Reports of Value's Death May Be Greatly Exaggerated
Rob Arnott: “There hasn’t been a better time to be a value investor at any other time in my career. I look back at the tech bubble and I never thought I would see valuations stretched the way they were then. We're back to that, and then some." We invite you to revisit “Reports of Value’s Death Have Been Greatly Exaggerated” now published in the Financial Analysts Journal.
Schwab Market Perspective: Disconnection
Hope is high that economic growth will accelerate as more people are vaccinated against COVID-19, but so far economic data has been lackluster. Meanwhile, bond investors are expecting inflation despite signs that the economic recovery’s momentum may be stalling. Why does everything seem so disconnected?
Total Return Perspectives: January 2021
Treasury yields continued to march higher in January, with the move again concentrated in longer maturities. Mortgage spreads tightened slightly, while corporate bond spreads were mostly mixed. The market remains stuck between the push/pull of the prospect for greater fiscal stimulus and ongoing vaccine rollout versus continued lockdowns and the greatest one-month mortality rate since the pandemic began nearly a year ago.
ETFs, Message Boards and Volatility
Internet message boards are lighting up and certain stocks have seen some unusually dramatic price moves. David Mann, our Head of Global Exchange Traded Funds (ETFs) Capital Markets, ponders whether ETFs could be subject to similar volatility.
Some Worries May Be Inflated
Inflation will likely heat up in the coming months, but not to worrying levels.
More and Less in 2021 (Part Three)
In my third and last article in this series, I identify the two most powerful steps I’d like to see advisors take to get more clients.
The Debt Dogs that Didn’t Bark
If global growth resumes in 2021, aided by the rollout of vaccines and the Fed’s continued commitment to ultra-low interest rates, some developing countries may be able to avoid default, because yield-hungry investors will continue to buy their bonds. But other countries will not be so lucky.
Las Vegas Non-Profits and the COVID Crisis
Despite the overwhelming challenges Las Vegas and Southern Nevada have faced in 2020, the help, assistance, and contributions from a variety of local charities have not only positively impacted the lives of many grateful beneficiaries, but also fulfilled the lives of those in a position to give.
Elections and the Bond Market
There are many major policy decisions that will influence the outlook—trade, energy, taxes and budget deficits, and pandemic relief. However, it’s difficult to assess how these issues will be addressed post-election, and even more unpredictable how the market will react.
Gundlach Predicts Trump Victory; David Rosenberg Not So Sure
Jeffrey Gundlach, who famously predicted Trump’s victory in 2016, says the president will secure another term. David Rosenberg acknowledged that possibility, but is not so sure of the outcome. Both offered their predictions for the post-election economy and markets.
NewsLetter October 2020
Enjoy Harold Evensky's latest Newsletter.
Activist Investors are Distorting the Closed-End Fund Market
The Investment Company Act of 1940 contains a loophole providing institutional investors an advantage over individual investors that some are using to the detriment of closed-end funds and their retail investors.
The Role of Bonds in a New Era of Low Yields
Resiliency and diversification potential remain critical in a world with meaningful uncertainty ahead.
First ETF for CLOs Is Ultra-Safe. No, Seriously
The snarky comments about financial engineering practically write themselves: An exchange-traded fund investing in collateralized loan obligations? What could go wrong?
The Right Time to Implement a Fee Increase
There are many clients who might resist the fee increase but most of the ones I believe will do so would be fine if they left the firm.
Investment Grade Credit Update: An Exceptionally Eventful Year That Has Created Opportunities
The investment grade fixed income market has been unusually active in 2020. Initial concerns about Covid-19 triggered a sharp selloff, but sentiment abruptly reversed when the Fed announced plans to purchase corporate bonds. Spreads have nearly returned to their pre-pandemic levels, but not all sectors have recovered equally, creating interesting opportunities for savvy investors.
Virtual Communication is Failing
How do I keep my team working together effectively in this remote environment?
Gundlach – Trump will Defeat Biden; Avoid the Bond Market
Jeffrey Gundlach, who famously predicted Donald Trump’s victory in 2016, said that the president will defeat the presumptive Democratic nominee, Joe Biden, in November. He also dimmed the expectations of fixed-income investors when he said to avoid short- and long-term bonds.
CEF Yields and More
Closed-end funds are known for leveraged income generation, but yields can come from a range of sources, strategies and products. John Cole Scott, founder of the Active Investment Company Alliance and chief investment officer of CEF Advisors, offers his perspective on the current CEF landscape and challenges presented by the coronavirus, not to mention the presidential election and recession recovery. Scott also shares his excitement about the AICA online CEF conference on Aug. 13, featuring the “best and brightest” minds in the CEF industry.
Muni Closed-End Funds Update With Dave Lamb
Municipal Bond Closed-end Funds, like most investments, have felt the impact of the coronavirus-stricken economy. But Dave Lamb of Nuveen says Muni CEFs have rebounded well, especially those with higher quality credits. Despite potential concern of a recession-driven shortfall of taxes supporting munis, Lamb is optimistic about the future. He says it’s an “opportune time to invest in closed-end funds.” He expects discounts to continue to narrow and notes the low cost of leverage has helped lead many funds to increase distributions.
Earnings Season Begins with Low Expectations; Will it Be a Catalyst?
It is safe to say that expectations are low as the bottom up consensus for the S&P 500 calls for a year over year earnings decline of about 45% in the 2Q. This would be the largest year over year decline since 2008. But that is well understood at this point.
The Five Worst Copywriting Bloopers
Be wary of these five common copywriting mistakes I see advisors make on their websites.
An Oldie but a Goodie: The Global Balanced Portfolio
Having trouble helping your clients appreciate a balanced portfolio? These charts may help.
Roadblocks to Recovery
The economic calendar is a normal one and is beginning to include data from after the start of the crisis. This week includes small business and consumer sentiment surveys, as well as April data for retail sales and industrial production. I will also be watching jobless claims, both new and continuing.
Markets See Light at the End of the Tunnel: Recovery by July, Says CPLIX’s Grant
While predicting that “economic activity in March and April will be the worst of our professional careers,” Grant nonetheless says markets see light at the end of the tunnel that includes economic recovery by July.
Curb Your Enthusiasm
The economic calendar is light and provides little post-COVID19 data. Continuing jobless claims takes on a new importance, and we may get some useful information from the components of the University of Michigan sentiment survey.
Discount Double Check in CEFs
Closed-end funds are currently trading at a discount as equity markets have dropped. Here’s where to spot opportunities.
This Multi-Phase Crisis Can Be Navigated if We Join Forces to Thread the Needle
Matt provides a framework that he and his team use to make sense of the headlines and the price bids flashing on their monitors. His realistic, yet hopeful outlook provides a roadmap for successfully navigating this universal crisis together.
Indiscriminate Selling Has Driven Closed-end Fund Discounts, Creating Compelling Value
Even with all the benefits attributable to closed-end funds—intraday trading, low financing costs of leverage, ability to be fully invested, and consistent source of income—they have some idiosyncrasies that present challenges, especially during extreme volatility
The Road Back to 3000
Michael Grant is preparing for rebound in equities and has positioned the long/short portfolio accordingly. To use a Wayne Gretzky analogy, he is skating to where the puck will be, not where it is.
Times of Turmoil and Trouble Keeping ETF Score
During these turbulent times, how does one track and value the performance of an exchange-traded fund? David Mann, Head of Capital Markets, Global Exchange-Traded Funds, opines on ways to “keep score.”
In the Search for Income, Consider Municipal Closed-End Funds
Municipal closed-end funds (“CEFs”) currently offer high levels of tax advantaged income and can often be purchased at a discount to their current net asset value.
Gundlach: Recession Probability is 80% to 90%
Gundlach’s survey of the economic and financial destruction wrought by the coronavirus shows problems abound.
ETF Trading and Volatility: It’s All Relative
When markets turn volatile, some question the role of exchange-traded funds (ETFs) in exacerbating market moves. David Mann, our Head of Capital Markets, Global ETFs, offers some perspective.
The Fed Has Another Lever to Pull
The Fed could give the economy a powerful boost by maintaining the mix of assets on its balance sheet.
Passive and Buy-and-Hold Investing Don't Work Unless!
Legendary investor and mentor to many investing greats Benjamin Graham once aptly stated that: “investing is most intelligent when it is most businesslike.” Personally, I agree which is why I refer to what I personally adhere to and practice with my own investing as “business perspective investing.”
Investors Can Always Learn Something from Mr. Buffett
We have a big economic calendar including important data on consumer confidence, personal income and spending, and inflation. There will also be another round of housing news – two measures of prices, new home sales, and pending home sales. While it is not expected to change, the second estimate of Q4 GDP will be reported.
The Power of Becoming a Legend in Your Own Mind
Let's talk about visualization: The ability to mentally rehearse successful outcomes in a relaxed state before they actually happen.
Does Historical Analysis Improve Market Forecasts?
The economic calendar is normal in another week split by a holiday. Many market participants will not show up until Thursday – and perhaps not even then. The ISM reports, manufacturing and non-manufacturing, are both post-holiday. My guess is that the financial media will continue the attention to 2020 outlook ideas. Some reporters will take a look instead at events from the past decade.
Monthly Municipal Market Update, November 2019
A brief monthly update on what's happening in the municipal bond market.
All Asset All Access, December 2019
Research Affiliates discusses why they believe value investing is still alive and well and explains how changes to the display of expense ratios seek to enhance clarity for investors.
Sifting Through the Froth
Positive returns across asset classes in 2019 may limit tax loss selling in closed-end funds, but we see potential long term value in select sectors where investors can still buy assets at a discount.
Navigating U.S. Wealth Management: Seven Ideas for Financial Advisors and Individual Investors in 20
We aim to support wealth management firms, advisors, and investors as they assess portfolio strategy and navigate the shifting trends we face in the new year.
Weighing the Week Ahead: All Eyes on Black Friday
The economic calendar is loaded with data and we have a holiday-shortened week. In some circumstances the many economic reports and the Washington stories would dominate. This week the market and economic context suggests a different theme.
Macro Factors and Their Impact on Monetary Policy, the Economy, and Financial Markets
In October the International Monetary Fund (IMF) lowered its 2019 GDP forecast to 3.0% from 3.2% in July. This represents a marked slowing from global growth of 3.8% in 2017. The primary driver of the slowdown has been a retrenchment in global trade and business investment in response to the ratcheting up of trade tariffs since early 2018.
Weighing the Week Ahead: A Time for Investors to Act
The economic calendar is a light one in sharp contrast to last week’s. That was a good time to observe the market reaction to a wide range of news. Now is the time for investors to use the information.
Looking for Cover
Covered call strategies in a closed-end fund may help long-term investors manage short-term volatility.
Asset Allocation Views: Easing Into Slowing Growth
Read our key takeaways from our 2019 Asset Allocation Midyear Update, including how we are positioning multi-asset portfolios in light of our outlooks for the global economy and markets.
War (What is it Good For?)
Economic uncertainty has spiked given the escalating U.S.-China trade war; with increasing risk it weakens the dividing line between the manufacturing and consumer sectors.
Weighing the Week Ahead: Get Out, Hide Out, or Ride It Out?
The economic calendar is normal, featuring housing starts, retail sales, and Michigan sentiment. The CPI will be important someday, but only when it breaks the recent path of gentle increases. With summer vacations in full swing (even Congress is on a five-week recess) the punditry turns to tried and true topics...
Gundlach: Fed will be in "Panic Mode" When a Recession Hits
If the signs of a recession prove true, the Fed will be in panic mode, according to Jeffrey Gundlach. The economy will weaken, rates will go up and the Fed will have to “do something,” to protect against a “spiral” of higher rates feeding and slower growth.
Worried Index-Based Strategies are Distorting the Bond Market? The Data Says You Shouldn’t Be
Despite record inflows into fixed income ETFs, concerns around the growth of these funds leading to an outsized impact on the fixed income market and the distortion of bond prices are still overblown, according to the data.
Energy Misconceptions
Investors are not always told the full story before they invest. In this case, we are constantly told that electric vehicles offer the way forward, but evidence is mounting that they are actually polluting more than petrol or diesel cars. The penny just needs to drop as far as our political leadership is concerned.
How to Respond To Complaints about Fees
Fees are the root of most client conflicts. Clients say they are too high and you defend them based on the value being added. An interesting study provides insight for how to handle these (and other) conflicts.
Building Unlisted Infrastructure into Your Portfolio – Overcoming Four Key Obstacles.
Does exposure to unlisted infrastructure benefit the average portfolio?