BlackRock Inc. and other money managers spent years rolling out sustainable funds, seeking to capitalize on surging interest in ESG investing. Now they’re abandoning an increasing number of those products in the US amid political backlash and investor scrutiny.
The Franklin Templeton Fixed Income team believe that issuers that think critically about the environment in which they operate could outperform throughout the full market cycle compared with those who are slower to adapt.
Have you ever wondered why your closing ratio on seminar attendees rarely exceeds 40%?
In his latest memo, Howard Marks discusses the essential choice in both investing and sports. Should you go for more winners or try to eliminate losers? That is, should you emphasize aggressiveness or defensiveness? This is a key decision that every investor has to make thoughtfully, and the answer can be different for each person.
Higher yields on cash have allowed some de-risking.
Our commentary on household income distribution focuses on average household incomes over the 50+ year history of this data series. The analysis offers some fascinating insights into U.S. household incomes, but misses the implications of age for income. In this update, we examine household income from a different perspective with a focus on age bracket.
On the interest rate front, the Federal funds rate is now close to systematic benchmarks that have historically been consistent with prevailing core inflation, nominal GDP growth, and unemployment.
For some organizations, a partial outsourcing of their investment program is preferable to total outsourcing. Despite this, some OCIO providers will still try very hard to sell companies on a full OCIO solution.
Private credit lenders are just getting started in the world of consumer and asset based finance, according to Rob Camacho, Blackstone Inc.’s co-head of asset based finance within the firm’s Structured Finance Group.
I lost my dad, Alfred Munro Flaxington, this past weekend.
You’re nearly there! You’re nearing the age when you can finally stop working and enjoy some well-earned rest. But there are a few more steps you should take before officially retiring, which will ensure greater financial stability and peace of mind in your later years.
Fitch’s recent downgrade of the U.S. debt rating alarmed investors as the deficit and debt steadily increased. The downgrade sent 10-year Treasury bond yields above 4%, causing concern about America’s deteriorating financial condition.
If this is what a bad year for the dollar looks like, I'll take it. Widespread predictions of a significant retreat after a bumper 2022 haven't come to pass.
Entrenched long-term economic growth trends and low inflation, coupled with high and increasing leverage, all but ensure lower interest rates. This article defends that thesis and helps us better appreciate the bearish concerns weighing on bond traders.
Former Bridgewater Associates LP executive Bob Elliott’s plan for exchange-traded funds that employ hedge fund strategies has sharpened the debate about whether retail investors should have access to such approaches.
Financial journalism has a problem. Apart from a few writers such as Michael Lewis, it is essentially bought and paid for by the financial industry itself – especially, investment management.
I’ll share some of the insights my team has gathered in 2023.
Young workers are struggling to find jobs, despite labor shortages.
We maintain a neutral-duration posture overall. We prefer an up-in-quality bias and have become increasingly selective in non-investment grades.
I thought I’d lead with some really impressive statistics. I just finished reading our latest ADV Part 2 (the SEC disclosure document provided annually to clients) describing the firm.
Fitch Ratings unexpectedly downgraded the U.S. credit rating from AAA to AA+, only the second downgrade in U.S. history, citing debt limit standoffs and rising entitlement costs.
A member of Putnam's Fixed Income team since 2007, Onsel Gulbiten analyzes macroeconomic issues, including inflation, interest rates, and policy developments.
Many advisors are using longevity assumptions that are less conservative than they think.
UK gilts rally after headline and core inflation numbers surprise to the downside.
ESG scoring and mandates remain a subject we have contested since it sprang to life in 2020. The push of “woke activism” on, and by companies, to meet nebulous or artificial standards has led to various bad outcomes.
Investors willing and able to accept the illiquidity risk of CLOs should consider them as alternatives with attractive risk/reward characteristics.
Target-date funds, which make up over half of total 401(k) assets, are not following investment theory, exposing investors to excessive risk.
Transitioning to a green net-zero economy requires climate solutions that enable the economy to decarbonise, such as renewable energy, electric vehicles, and recycling technologies.
Perhaps taking a page from the US, where retirement funds have long made significant equity investments, the UK is hoping that adding lots of private equity to its pension pots will drive higher returns and superior growth outcomes.
Call me superstitious or contrarian — or maybe just a procrastinator — but I only started worrying about a recession last week.
Small business owners without workplace retirement plans now may take advantage of expanded tax credits if they establish one, according to John Kutz, National Retirement Plan Strategist at Franklin Templeton. He outlines recent regulatory and legal developments.
In 2022, the funded status of $20 billion club members reached its highest level since 2007 due to steep rises in discount rates.
Investment banking work has all but dried up and the private equity industry bears a lot of the blame. The bad news for those involved is that managers of buyout funds might struggle to get their flywheels spinning again even when the current economic uncertainty starts to clear up.
Tragically, the 75th anniversary of the UK’s National Health Service this week is less a cause for celebration and pride and more a grim reminder of the everyday reality of premature death.
“We do what we say and do the right thing, we have a service mindset.”
Optimism is the madness of insisting that all is well when we are miserable.
Bond traders are bracing for another tumultuous week in which key employment data could push yields on 10-year Treasuries toward 4%, a level that market watchers see luring investors into government debt.
India is rapidly transforming into a formidable global superpower and an increasingly attractive destination for investor capital. Amid rising geopolitical tensions and the impact of disruptive technologies, India's story is a beacon of opportunity in a challenging landscape.
Reading Brendan Ballou’s book, Plunder: Private Equity’s Plan to Pillage America, was to experience a continually reinforcing series of feelings of outrage.
Sam Weitzman of Western Asset Management highlights the overlooked potential of municipal bonds as a high-quality asset class. With fixed income yields reaching near-decade highs and higher tax rates impacting taxable fixed income investing, municipal bonds are offering above-average after-tax returns and downside protection, making them attractive for income seekers.
Few financial topics grab more media attention than money managers who make gobs of money while everyone else suffers. Scott Patterson’s The Chaos Kings centers on two colorful participants who regularly do just that, Nassim Taleb and Mark Spitznagel.
Imagine a new digital environment where our data is portable and democratized, challenging the current monopolies. Web3 promises to be such an environment, using blockchain technology.
This week I saw something I haven’t in a while: a brochure from Strutt & Parker advertising a price reduction on a rather charming Notting Hill house. It is now a mere £4,750,000 ($6 million) — down around 6% from its original listing price.
Central banks have ramped up their hawkish rhetoric this month but for bond bulls, that’s a good thing.
Imagine an investment with stock-like returns and cash-like stability, or close to it. Many investors believe they have found such a thing. It’s called direct lending, and like countless investments before it that promised big profits with little risk, it’s probably too good to be true.
Although once considered a niche strategy, secondaries have matured and now represent a vital cog in the private equity ecosystem, according to Franklin Templeton Institute’s Tony Davidow.
Hedge funds that deploy a basket of computer algorithms for trading are gaining popularity in China after many investors got burned by human stock pickers.
With interest rates elevated and the number of UK mortgage deals shrinking on a daily basis, many borrowers are seeking to shore up their finances by paying down their home loans early. However, just because you can doesn’t mean you should.
While the retirement of several high-profile CIOs has generated ample news, and headlines, there’s been very little press coverage about OCIO as a potential solution. We find this perplexing.
The UK has a complicated, punitive, badly constructed, and all-around dysfunctional tax system.
Tony Davidow, Senior Alternative Investment Strategist with Franklin Templeton Institute, illustrates the potential impact of adding alternative investments to pursue growth and income—as well as seek to dampen volatility—during the accumulation and distribution phases of retirement.
The private equity (PE) industry has been all the rage over the past 10 years.
The Federal Reserve’s higher interest rates, the work from home trend, ESG distractions, increases in crime, etc., are having far reaching effects on our economy and investors.
Investors have been loading up on T-bills and money market funds this year, but according to our Total Return team, that is not a sustainable strategy as it exposes investors to both reinvestment risk and inflation while creating an asset/liability mismatch.
Transit has not made a complete recovery from the pandemic.
Over the past decade or so, there has been a broad trend in the industry toward closing and freezing defined benefit plans.
Most of us spent moments of our childhood, crayon in hand, connecting numbered dots that gradually revealed a picture that we couldn’t deduce simply by looking at the separate dots. With experience, we got better at looking at those isolated dots and mentally connecting them into a coherent “gestalt.”
Both domestic and external forces may limit China's growth prospects.
A better retirement stress test would focus on the standard of living in retirement and how spending would need to change in times of market turmoil or heightened inflation.
Social Security has always been born from political rather than financial necessity. The initial retirement age was not based on life expectancy but rather on the political and social realities of the time.
We often talk about technology’s influence on the economy. After the Strategic Investment Conference, though, I’ve decided that isn’t strong enough. It’s more correct to say technology is the economy.
Deep in the bowels of Wall Street, there’s a surprisingly successful counterfeiting operation underway: The world’s largest banks have created a booming business churning out imitation quant trades.
The current economic and investing environment remains one of the most challenging and difficult to navigate in recent times. We have stubborn inflation, economic resilience, geopolitical tensions, tight labour markets, rising interest rates, higher for longer monetary policy, QT, bank failures, overwhelming bearishness and now, issues surrounding the debt ceiling.
Muni investors have more reasons for optimism than concern as California tackles a projected $31.5 billion budget deficit.
Investments in a selection of private markets – also known as “alternatives” – reduced the volatility of portfolios in 2022.
Taking risks is no longer necessary to make a return on your savings.
VettaFi’s Dave Nadig and Host Nate Geraci debate a wide range of prospective ETF ideas offered by “Fintwit”.
The Fed and its loose monetary policy are to blame, according to Lacy Hunt, for high inflation, excessive risk taking, slow growth and other maladies afflicting our economy.
Next week also brings what could be a pivotal Federal Reserve policy meeting. We use this word “pivotal” to say an event is important. Taken literally, it means to turn in a different direction than you were previously going.
Economic fundamentals are lining up for a return of QE. Yes, inflation is still on the high side but falling so rapidly that at least some central banks will be willing to take action before inflation is back to 2%.
Amid the overabundance of economic opinion, unexamined clichés, and unverified assertions, and nutrient-free word salad dispensed by talking heads on television, market observers, and even Federal Reserve officials, I often wonder how many of them have ever taken the time to carefully examine historical data.
My guest today, Harin de Silva, is one of the leaders of the quantitative investing community and the winner of several Graham Dodd Awards for institutional research. He is a member of the Q Group and a pioneer in factor investing.
It’s believed that to meet this goal, two out of every three passenger vehicles manufactured in the U.S. would need to be electric models.
Despite recent headwinds, structural drivers underpinning China’s growth remain intact. Sectors that will benefit from the structural trends include healthcare, industrial automation, and domestic brands targeting increased spending by Chinese consumers.
Senior Fixed Income Analyst Bedford Lydon shares three factors that may affect states' creditworthiness in a downturn.
Emerging Markets (EM) have faced a challenging environment over the past five years, due to a series of global shocks that have triggered elevated market volatility and led the MSCI EM equity benchmark to experience its most protracted drawdown in history.
The Silicon Valley Bank collapse may be an extreme event, but it gives us a preview at a 100x magnification of what other banks are facing.
The changes inside SECURE 2.0 range from new rules related to 529 college savings plans to when retirees should take their required minimum distributions (RMDs). With so much to sort through, advisors may be overlooking some of the details of the act.
A simple annuity can effectively replace bond holdings in a retirement plan that are earmarked to meet the lifetime spending goal. The question is why should a retiree hold any bonds in the portion of their asset base designed to cover ongoing retirement spending goals?
Annie Duke, once one of the best female poker players in the world, helped me understand why people work longer than they need to. This got me thinking about the decumulation problem more broadly and planning to live to age 100.
The importance of Biden’s veto to save the DOL rule was not about assessing ESG factors. It was about affirming the role of the fiduciary in investment advice.
Some of the world’s biggest investors are looking beyond interest-rate hikes, bank failures and the threat of recession to one of the greatest fears of all money managers — missing out on the next big rally.
The simplest thing that can be said about current financial market and banking conditions is this: the unwinding of this Fed-induced, yield-seeking speculative bubble is proceeding as one would expect, and it’s not over by a longshot.
For years I’ve used a sandpile metaphor to describe complex systems like banking. Keep dropping grains of sand long enough and you will eventually trigger an avalanche.
Sixty-six million Americans currently receive monthly benefits from Social Security, which, if nothing changes, is expected to be insolvent by 2035 at the latest. It’s time for Americans to take a greater role in their own retirement planning.
The extreme “tail” risk ahead may be disorienting.
The high-profile collapse of Silicon Valley Bank last week is a story about bad debt, just not in the way most people think.
Silicon Valley Bank became the biggest US lender to fail in more than a decade, creating fears of contagion in tech and finance sectors in the US and around the world.
The long-term outlook for stocks remains questionable, as most of my leading indicators of risk assets suggest sub-par performance over the next year or so.
While 2023 has started on shaky ground for the municipal bond market, there are reasons to be optimistic for more stability ahead, according to Jennifer Johnston, Franklin Templeton Fixed Income’s Director of Municipal Bond Research. She explains why California’s issues don’t reflect all states, and offers reasons for optimism.
Defined Benefits
BlackRock, State Street Among Money Managers Closing ESG Funds
BlackRock Inc. and other money managers spent years rolling out sustainable funds, seeking to capitalize on surging interest in ESG investing. Now they’re abandoning an increasing number of those products in the US amid political backlash and investor scrutiny.
Weathering the Storm: Exploring Climate Change Adaptation and the Investor’s Imperative
The Franklin Templeton Fixed Income team believe that issuers that think critically about the environment in which they operate could outperform throughout the full market cycle compared with those who are slower to adapt.
How Pre-Screening Avoids “Plate Lickers” at Seminars
Have you ever wondered why your closing ratio on seminar attendees rarely exceeds 40%?
Fewer Losers, or More Winners?
In his latest memo, Howard Marks discusses the essential choice in both investing and sports. Should you go for more winners or try to eliminate losers? That is, should you emphasize aggressiveness or defensiveness? This is a key decision that every investor has to make thoughtfully, and the answer can be different for each person.
Higher Rates: Positive Values
Higher yields on cash have allowed some de-risking.
Median Household Incomes by Age Bracket: 1967-2022
Our commentary on household income distribution focuses on average household incomes over the 50+ year history of this data series. The analysis offers some fascinating insights into U.S. household incomes, but misses the implications of age for income. In this update, we examine household income from a different perspective with a focus on age bracket.
Central Bankers Wandering in the Woods
On the interest rate front, the Federal funds rate is now close to systematic benchmarks that have historically been consistent with prevailing core inflation, nominal GDP growth, and unemployment.
What Do Investment Outsourcing and Ice Cream Have in Common?
For some organizations, a partial outsourcing of their investment program is preferable to total outsourcing. Despite this, some OCIO providers will still try very hard to sell companies on a full OCIO solution.
Blackstone Says Private Credit Is Coming for Asset-Based Debt
Private credit lenders are just getting started in the world of consumer and asset based finance, according to Rob Camacho, Blackstone Inc.’s co-head of asset based finance within the firm’s Structured Finance Group.
In Memory of My Dad, Alfred Munro Flaxington
I lost my dad, Alfred Munro Flaxington, this past weekend.
Transitioning Into Retirement: Financial Strategies For The Final Stretch
You’re nearly there! You’re nearing the age when you can finally stop working and enjoy some well-earned rest. But there are a few more steps you should take before officially retiring, which will ensure greater financial stability and peace of mind in your later years.
Deficit Surge Will Lead To Lower Rates, Not Higher
Fitch’s recent downgrade of the U.S. debt rating alarmed investors as the deficit and debt steadily increased. The downgrade sent 10-year Treasury bond yields above 4%, causing concern about America’s deteriorating financial condition.
The Dollar Is the Fortress China Struggles to Breach
If this is what a bad year for the dollar looks like, I'll take it. Widespread predictions of a significant retreat after a bumper 2022 haven't come to pass.
Why Bond Traders Have it All Wrong
Entrenched long-term economic growth trends and low inflation, coupled with high and increasing leverage, all but ensure lower interest rates. This article defends that thesis and helps us better appreciate the bearish concerns weighing on bond traders.
Is a Hedge Fund-Style Investment Right for You?
Former Bridgewater Associates LP executive Bob Elliott’s plan for exchange-traded funds that employ hedge fund strategies has sharpened the debate about whether retail investors should have access to such approaches.
Financial Journalism Fails its Readers
Financial journalism has a problem. Apart from a few writers such as Michael Lewis, it is essentially bought and paid for by the financial industry itself – especially, investment management.
Four Important Lessons (so far) in 2023
I’ll share some of the insights my team has gathered in 2023.
Putting Young People To Work
Young workers are struggling to find jobs, despite labor shortages.
Munis Maintain Summer Heat in July
We maintain a neutral-duration posture overall. We prefer an up-in-quality bias and have become increasingly selective in non-investment grades.
Harold Evensky’s NewsLetter Vol. 16, No. 3 – August 2023
I thought I’d lead with some really impressive statistics. I just finished reading our latest ADV Part 2 (the SEC disclosure document provided annually to clients) describing the firm.
The Implications Of Fitch Ratings’ U.S. Credit Downgrade
Fitch Ratings unexpectedly downgraded the U.S. credit rating from AAA to AA+, only the second downgrade in U.S. history, citing debt limit standoffs and rising entitlement costs.
The Debt Ceiling Is Raised, but the Debt Problem Persists
A member of Putnam's Fixed Income team since 2007, Onsel Gulbiten analyzes macroeconomic issues, including inflation, interest rates, and policy developments.
You Are Underestimating Longevity… and How Uncertain It Is
Many advisors are using longevity assumptions that are less conservative than they think.
UK Disinflation Under Way
UK gilts rally after headline and core inflation numbers surprise to the downside.
ESG Is Dying Its Inevitable Death
ESG scoring and mandates remain a subject we have contested since it sprang to life in 2020. The push of “woke activism” on, and by companies, to meet nebulous or artificial standards has led to various bad outcomes.
The Opportunity in CLO Investments
Investors willing and able to accept the illiquidity risk of CLOs should consider them as alternatives with attractive risk/reward characteristics.
The Big Fat 401(k) Fake Out
Target-date funds, which make up over half of total 401(k) assets, are not following investment theory, exposing investors to excessive risk.
Weighted Average Green Revenue (Wagr): Integrating Climate Solutions into Portfolio Construction
Transitioning to a green net-zero economy requires climate solutions that enable the economy to decarbonise, such as renewable energy, electric vehicles, and recycling technologies.
Our Pensions Shouldn’t Be Used to Juice the Economy
Perhaps taking a page from the US, where retirement funds have long made significant equity investments, the UK is hoping that adding lots of private equity to its pension pots will drive higher returns and superior growth outcomes.
Yes, a Recession Is Still a Possibility
Call me superstitious or contrarian — or maybe just a procrastinator — but I only started worrying about a recession last week.
An Attractive Deal Awaits Small Businesses When Starting a Workplace Retirement Plan
Small business owners without workplace retirement plans now may take advantage of expanded tax credits if they establish one, according to John Kutz, National Retirement Plan Strategist at Franklin Templeton. He outlines recent regulatory and legal developments.
$20 Billion Club Strategy Series – Funding Policy
In 2022, the funded status of $20 billion club members reached its highest level since 2007 due to steep rises in discount rates.
The Private Equity Machine Will Be Tough to Unjam
Investment banking work has all but dried up and the private equity industry bears a lot of the blame. The bad news for those involved is that managers of buyout funds might struggle to get their flywheels spinning again even when the current economic uncertainty starts to clear up.
A Death Letter to Loved Ones Makes Financial Sense
Tragically, the 75th anniversary of the UK’s National Health Service this week is less a cause for celebration and pride and more a grim reminder of the everyday reality of premature death.
A Service Mindset
“We do what we say and do the right thing, we have a service mindset.”
Three Reasons to Moderate Your Optimism
Optimism is the madness of insisting that all is well when we are miserable.
Dizzying Bond Moves Put 4% Yield in Play to Win Over Investors
Bond traders are bracing for another tumultuous week in which key employment data could push yields on 10-year Treasuries toward 4%, a level that market watchers see luring investors into government debt.
The Rise Of India: A Powerhouse In The Making
India is rapidly transforming into a formidable global superpower and an increasingly attractive destination for investor capital. Amid rising geopolitical tensions and the impact of disruptive technologies, India's story is a beacon of opportunity in a challenging landscape.
Gaining Wealth and Prestige Through Meanness
Reading Brendan Ballou’s book, Plunder: Private Equity’s Plan to Pillage America, was to experience a continually reinforcing series of feelings of outrage.
Municipal Bonds, Powered by Tax-Exemption, Earn Renewed Appeal
Sam Weitzman of Western Asset Management highlights the overlooked potential of municipal bonds as a high-quality asset class. With fixed income yields reaching near-decade highs and higher tax rates impacting taxable fixed income investing, municipal bonds are offering above-average after-tax returns and downside protection, making them attractive for income seekers.
Of Black Swans and White Chipmunks
Few financial topics grab more media attention than money managers who make gobs of money while everyone else suffers. Scott Patterson’s The Chaos Kings centers on two colorful participants who regularly do just that, Nassim Taleb and Mark Spitznagel.
Exploring Web3, Artificial Intelligence And The Digital Asset Revolution
Imagine a new digital environment where our data is portable and democratized, challenging the current monopolies. Web3 promises to be such an environment, using blockchain technology.
The Bank of England Owes Mortgage Payers a Big Apology
This week I saw something I haven’t in a while: a brochure from Strutt & Parker advertising a price reduction on a rather charming Notting Hill house. It is now a mere £4,750,000 ($6 million) — down around 6% from its original listing price.
Traders Can’t Get Enough of Treasuries Even With Hawkish Fed
Central banks have ramped up their hawkish rhetoric this month but for bond bulls, that’s a good thing.
Looks Like Cash and Acts Like Stocks, But It Has a Catch
Imagine an investment with stock-like returns and cash-like stability, or close to it. Many investors believe they have found such a thing. It’s called direct lending, and like countless investments before it that promised big profits with little risk, it’s probably too good to be true.
Alternative Allocations: The Growth and Diversification of Secondaries
Although once considered a niche strategy, secondaries have matured and now represent a vital cog in the private equity ecosystem, according to Franklin Templeton Institute’s Tony Davidow.
Quant Funds That Spread Bets Are Having a Moment in China
Hedge funds that deploy a basket of computer algorithms for trading are gaining popularity in China after many investors got burned by human stock pickers.
Reducing Your Mortgage May Not Be the Smartest Strategy
With interest rates elevated and the number of UK mortgage deals shrinking on a daily basis, many borrowers are seeking to shore up their finances by paying down their home loans early. However, just because you can doesn’t mean you should.
What’s Your Succession Strategy for Managing Your DB Plan?
While the retirement of several high-profile CIOs has generated ample news, and headlines, there’s been very little press coverage about OCIO as a potential solution. We find this perplexing.
The Case for Getting Rid of Inheritance Taxes
The UK has a complicated, punitive, badly constructed, and all-around dysfunctional tax system.
Alts Angle: Rethinking Retirement With Alternative Investments
Tony Davidow, Senior Alternative Investment Strategist with Franklin Templeton Institute, illustrates the potential impact of adding alternative investments to pursue growth and income—as well as seek to dampen volatility—during the accumulation and distribution phases of retirement.
Private Equity Has a Problem
The private equity (PE) industry has been all the rage over the past 10 years.
The Far-Reaching Effects of Commercial Real Estate’s Downward Spiral
The Federal Reserve’s higher interest rates, the work from home trend, ESG distractions, increases in crime, etc., are having far reaching effects on our economy and investors.
The Risk of Playing It Safe
Investors have been loading up on T-bills and money market funds this year, but according to our Total Return team, that is not a sustainable strategy as it exposes investors to both reinvestment risk and inflation while creating an asset/liability mismatch.
Mass Transit Is Facing Massive Challenges
Transit has not made a complete recovery from the pandemic.
$20 Billion Club Strategy Series – Benefits Policy
Over the past decade or so, there has been a broad trend in the industry toward closing and freezing defined benefit plans.
Money, Banking, and Markets – Connecting the Dots
Most of us spent moments of our childhood, crayon in hand, connecting numbered dots that gradually revealed a picture that we couldn’t deduce simply by looking at the separate dots. With experience, we got better at looking at those isolated dots and mentally connecting them into a coherent “gestalt.”
The View From China
Both domestic and external forces may limit China's growth prospects.
How Stress Testing Retirement Plans Builds Client Confidence
A better retirement stress test would focus on the standard of living in retirement and how spending would need to change in times of market turmoil or heightened inflation.
Social Security is Not a Retirement Safety Net
Social Security has always been born from political rather than financial necessity. The initial retirement age was not based on life expectancy but rather on the political and social realities of the time.
Technology Turning
We often talk about technology’s influence on the economy. After the Strategic Investment Conference, though, I’ve decided that isn’t strong enough. It’s more correct to say technology is the economy.
Wall Street Built a $370 Billion Business Cloning Quant Trades
Deep in the bowels of Wall Street, there’s a surprisingly successful counterfeiting operation underway: The world’s largest banks have created a booming business churning out imitation quant trades.
Your Complete Guide Through The Current Macro Landscape
The current economic and investing environment remains one of the most challenging and difficult to navigate in recent times. We have stubborn inflation, economic resilience, geopolitical tensions, tight labour markets, rising interest rates, higher for longer monetary policy, QT, bank failures, overwhelming bearishness and now, issues surrounding the debt ceiling.
Will California's Budget Woes Have a Hollywood Ending?
Muni investors have more reasons for optimism than concern as California tackles a projected $31.5 billion budget deficit.
Alternative Investments for Volatile Markets
Investments in a selection of private markets – also known as “alternatives” – reduced the volatility of portfolios in 2022.
Taking Risk No Longer Necessary. But That Is A Problem.
Taking risks is no longer necessary to make a return on your savings.
ETF "Shark Tank"
VettaFi’s Dave Nadig and Host Nate Geraci debate a wide range of prospective ETF ideas offered by “Fintwit”.
Lacy Hunt – Fed Policy is Destroying Growth
The Fed and its loose monetary policy are to blame, according to Lacy Hunt, for high inflation, excessive risk taking, slow growth and other maladies afflicting our economy.
Pivot to the Fourth Turning
Next week also brings what could be a pivotal Federal Reserve policy meeting. We use this word “pivotal” to say an event is important. Taken literally, it means to turn in a different direction than you were previously going.
The Return of QE
Economic fundamentals are lining up for a return of QE. Yes, inflation is still on the high side but falling so rapidly that at least some central banks will be willing to take action before inflation is back to 2%.
Fabricated Fairy Tales and Section 2A
Amid the overabundance of economic opinion, unexamined clichés, and unverified assertions, and nutrient-free word salad dispensed by talking heads on television, market observers, and even Federal Reserve officials, I often wonder how many of them have ever taken the time to carefully examine historical data.
Minimize Risk and Participate in the Market Upside
My guest today, Harin de Silva, is one of the leaders of the quantitative investing community and the winner of several Graham Dodd Awards for institutional research. He is a member of the Q Group and a pioneer in factor investing.
The Transition To Electric Vehicles And Renewables Will Test Global Commodity Supply
It’s believed that to meet this goal, two out of every three passenger vehicles manufactured in the U.S. would need to be electric models.
Taking a Long-Term View on China Equities
Despite recent headwinds, structural drivers underpinning China’s growth remain intact. Sectors that will benefit from the structural trends include healthcare, industrial automation, and domestic brands targeting increased spending by Chinese consumers.
State Governments Face Diverging Outcomes in a Downturn
Senior Fixed Income Analyst Bedford Lydon shares three factors that may affect states' creditworthiness in a downturn.
Five Reasons to Buy Emerging Markets Equities
Emerging Markets (EM) have faced a challenging environment over the past five years, due to a series of global shocks that have triggered elevated market volatility and led the MSCI EM equity benchmark to experience its most protracted drawdown in history.
What to Expect After the Silicon Valley Bank Collapse
The Silicon Valley Bank collapse may be an extreme event, but it gives us a preview at a 100x magnification of what other banks are facing.
What Most Advisors are Missing About SECURE 2.0 Act
The changes inside SECURE 2.0 range from new rules related to 529 college savings plans to when retirees should take their required minimum distributions (RMDs). With so much to sort through, advisors may be overlooking some of the details of the act.
The Fundamental Logic of Annuities with Lifetime Income
A simple annuity can effectively replace bond holdings in a retirement plan that are earmarked to meet the lifetime spending goal. The question is why should a retiree hold any bonds in the portion of their asset base designed to cover ongoing retirement spending goals?
On Quitting Early, the Decumulation Problem and Living to 100
Annie Duke, once one of the best female poker players in the world, helped me understand why people work longer than they need to. This got me thinking about the decumulation problem more broadly and planning to live to age 100.
The Fiduciary is the "Decider"
The importance of Biden’s veto to save the DOL rule was not about assessing ESG factors. It was about affirming the role of the fiduciary in investment advice.
Biggest Fear for Trillion-Dollar Funds Is Missing Next Rally
Some of the world’s biggest investors are looking beyond interest-rate hikes, bank failures and the threat of recession to one of the greatest fears of all money managers — missing out on the next big rally.
Edge of the Edge
The simplest thing that can be said about current financial market and banking conditions is this: the unwinding of this Fed-induced, yield-seeking speculative bubble is proceeding as one would expect, and it’s not over by a longshot.
Another Unstable Finger
For years I’ve used a sandpile metaphor to describe complex systems like banking. Keep dropping grains of sand long enough and you will eventually trigger an avalanche.
Pension Reform Showdown: Will The U.S. Follow France’s Bold Retirement Age Changes?
Sixty-six million Americans currently receive monthly benefits from Social Security, which, if nothing changes, is expected to be insolvent by 2035 at the latest. It’s time for Americans to take a greater role in their own retirement planning.
Headed For The Tail
The extreme “tail” risk ahead may be disorienting.
Treasuries: "Risk Free" or "Risk Unlimited"?
The high-profile collapse of Silicon Valley Bank last week is a story about bad debt, just not in the way most people think.
Here’s How SVB’s Collapse Is Reverberating Around the World
Silicon Valley Bank became the biggest US lender to fail in more than a decade, creating fears of contagion in tech and finance sectors in the US and around the world.
Is Now The Time To Buy Stocks?
The long-term outlook for stocks remains questionable, as most of my leading indicators of risk assets suggest sub-par performance over the next year or so.
Muni Bond Update: Credit Quality Still Looks Strong
While 2023 has started on shaky ground for the municipal bond market, there are reasons to be optimistic for more stability ahead, according to Jennifer Johnston, Franklin Templeton Fixed Income’s Director of Municipal Bond Research. She explains why California’s issues don’t reflect all states, and offers reasons for optimism.