While equity styles go in and out of favor, quality companies continue to serve clients as a core holding, resilient to economic headwinds and market drawdowns. For long-term investors searching for a durable equity solution, we believe quality is “the real McCoy"
Economic pain is likely in 2024, but that doesn’t mean stocks will struggle all year, especially if there is a continuation of the rolling recessions that have hit the economy.
At the time of the first major climate change conference, in Rio de Janeiro in 1992, China was one of the least developed nations. Its per capita income was below Haiti, Niger and Pakistan.
Home prices continued to trend upwards in September as the benchmark 20-city index rose for a eighth consecutive month. The S&P Case-Shiller Home Price Index revealed seasonally adjusted home prices for the 20-city index saw a 0.7% increase month-over-month (MoM) and a 3.9% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to 0.1% and the YoY was reduced to -2.9%.
Five of the eight indexes on our world watch list posted gains through November 27, 2023. Tokyo's Nikkei 225 finished in the top spot with a YTD gain of 28.18%. The U.S.'s S&P 500 finished in second with a YTD gain of 18.99% while France's CAC 40 finished in third with a YTD gain of 9.69%.
I'll share the impact healthcare costs have on financial plans, the critical healthcare information to include (such as medical tax deductions and IRMAA), how to budget for costs in a world of variables, and tangible strategies to implement during open enrollment and beyond to ensure clients are on the optimal coverage.
Our immense progress in improving society’s standard of living over the last several centuries was possible because of advances in the discovery and production of energy. To assume that will continue is a grave error.
ESG fund managers who turned to big tech as a low-carbon, high-return bet are growing increasingly anxious over the sector’s experimentation with artificial intelligence.
Food prices illustrate several challenges of containing inflation.
Every time interest rates go up there is a flurry of demand for a product that has been around at least since the Roman Empire — annuities. The insurance industry has already seen rapid growth in annuity sales since 2021 and if rates remain at or move above current levels, demand seems poised to explode.
VettaFi CMO Jon Fee hosted Cole Feinberg, a BondBloxx partner, in an episode of “Road to Exchange.”
Taxes can have a significant and ongoing impact on an investment portfolio. Advisors can help their clients minimize that impact with a tax-smart approach. Advisors can prepare for capital gains season now, and potentially maximize their clients’ after-tax returns.
The potency of monetary policy will weigh more heavily on activity in 2024.
Existing home sales fell further, remaining at their lowest level since 2010, as lack of inventory and high mortgage rates continued to impact sales. According to the data from the National Association of Realtors (NAR), existing home sales fell 4.1% from September to reach a seasonally adjusted annual rate of 3.79 million units. This figure came in lower than the expected 3.90 million. Existing home sales are down 14.6% compared to one year ago.
On this episode of the “ETF of the Week” podcast, Tom Lydon discussed the Global X SuperDividend ETF (SDIV) with Chuck Jaffe of “Money Life.” The pair talked about several topics regarding the fund to give investors a deeper understanding of the ETF overall.
Picking the “right” stock is akin to betting on a game; not only must one pick the right team (beta), but also by how much (alpha).
The run-off election looks tight in Argentina, where I’m attending a Young Presidents’ Organization (YPO) event in Buenos Aires.
At first blush, a record $100 billion flood into actively managed exchange-traded funds this year raises a tantalizing prospect: A revival of stock picking even as only Big Tech names outperform the market. Yet, a look under the hood of popular ETFs shows the boom is almost entirely taking place in passive-looking trades.
Year-to-date, technology has outperformed the broader market largely given the prevalence of low leverage, high profitability and consistent earnings across many names in the mega-cap tech space.
The latest Kansas City Fed Manufacturing Survey composite index declined again in November and the future outlook inched down. The composite index came in at -2, up from -8 in October, while the future outlook dropped to -1.
High mortgage rates continue to impact builder confidence as the National Association of Home Builders (NAHB) Housing Market Index (HMI) fell for a fourth consecutive month. With that said, recent macroeconomic data suggest improved conditions in the coming months. The index dropped 6 points from last month to 34, the index's lowest level since December 2022.
In our 2024 outlook, bonds emerge as a standout asset class, offering strong prospects, resilience, diversification, and attractive valuations compared with equities.
Third-quarter earnings announcements have almost come and gone, with yesterday being the last big burst of companies. Some key firms have yet to announce, like Nvidia and Walmart, but everything I’m seeing says it surpassed expectations.
Like some advances earlier this year, the market's current surge hasn't been defined by strong breadth underneath the surface—which will be key for a sustained, durable advance.
Inflation cooled in October with both headline and core CPI readings coming in lower than expected. According to the Bureau of Labor Statistics, the headline figure for the Consumer Price Index dropped to 3.2% year-over-year, slightly lower than the 3.3% forecast. The core CPI reading came in at 4.0%, just below the 4.1% forecast.
Treasury yields have dropped as weak economic data suggests the Federal Reserve may begin cutting the federal funds rate target earlier than previously expected.
A China ‘Recovery’: How important is the loss of confidence within China itself?
Travel on all roads and streets increased in September. The 12-month moving average was up 0.1% month-over-month and was up 1.4% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was unchanged MoM and up 0.2% YoY.
The third quarter was a more favorable environment for active managers in U.S. Large and Small Caps, Japan, Australia, and Canada equities, while being more challenging for Global, Global ex-U.S., Emerging Markets, Europe, UK and Long/Short managers.
New investors are overwhelmingly choosing ETFs as their investment vehicle of choice. Between June 13 and June 28, Charles Schwab conducted a comprehensive survey of 2,200 investors for its 2023 ETFs and Beyond Study.
The bond market giveth and the bond market taketh away. The S&P 500 Index closed in the red Thursday, blowing its widely-hyped chance at a nine-day winning streak, which would have been its best run since 2004.
Moody’s Investors Service recently released a report bluntly entitled, “Private equity exposure increases credit risk for universities with limited wealth.”
The potential for a Fed pause presents an opportunity for investors to consider adding duration back into their portfolios. In this market regime, we believe duration serves well as hedge and equity diversifier.
The direction of interest rates was the biggest factor moving markets in the third quarter. Sentiment on technology stocks appeared to shift. Money market assets reach historic high, but returns lag stock market.
In this period of higher interest rates, the quest to capture alpha and mitigate risk in corporate credit requires a more refined approach.
Our monthly workforce analysis has been updated to include the latest employment report for October. The unemployment rate rose to 3.9% and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 150K.
I’ll share some important insights gleaned from many decades of working in the advisory profession and being both an insider and an outsider.
Following a strong first half of 2023, third-quarter returns were more challenged across almost all asset classes. One outlier was high-yield debt, which often serves as a way to de-risk equity exposures when stocks are under pressure.
Multiple jobholders account for 5.3% of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the relative sizes of which we've illustrated in a pie chart.
The S&P 500 Index’s best week in a year has brought the broad equities benchmark to a decisive point where stocks can make a significant break higher or find their gains capped.
What does the ratio of unemployment claims tell us about where we are in the business cycle and recession risk?
Financial markets have changed dramatically since balanced portfolios were introduced to investors decades ago. As markets evolve and grow more complex, active management plays a greater role in the success of these strategies, which offer a mix of 60% equities and 40% fixed income.
The so-called dividend aristocrats have an impressive track record. But much of that outperformance can be attributed to its exposure to certain factors.
What’s the most important price in the global economy? The price of oil? The price of semiconductors? The price of a Big Mac? More important than any of these is the price of money. For more than three decades it was falling.
While often difficult, investing rules can help us maintain our focus and investment discipline in volatile or uncertain markets.
The S&P 500’s pitch is simple. Own it and get exposure to the biggest of the big among US firms. Lately, it’s gotten harder to maintain that point of distinction.
The Institute of Supply Management (ISM) has released its October services purchasing managers' index (PMI). The headline composite index is at 51.8, which was below the 53.0 forecast. The latest reading marks the 10th straight month the index has been expansion territory.
The October US services purchasing managers' index (PMI) conducted by S&P Global came in at 50.6, just below the 50.9 forecast. The latest reading keeps the index in expansion territory for the 9th straight month.
While bond prices are generally down, the income they provide is up, providing potential opportunities for fixed income investors.
In Q3, the strongest performance among factors was seen in developed ex-U.S. large cap and small cap and U.S. small cap, where Value outperformed by 4.9%, 3.3% and 3.3%, respectively. The weakest performance among factors was in U.S. small cap, where the Size factor underperformed by -2.4%.
Higher macro and market volatility, along with greater dispersion, creates a favorable environment for active trading, according to K2 Advisors. Get the team’s latest hedge-fund strategy outlook.
Investment taxes can have a real impact on a portfolio. Investors should be aware of four key tax realities they currently face. Without a plan to manage these taxes, investors may find their ability to retire comfortably could be compromised.
Companies with healthy balance sheets are some of the best performing stocks this year, and their shares could keep rising, according to Piper Sandler & Co. strategists led by Michael Kantrowitz.
As with most new expressions, “smart beta” is in the process of seeking an established meaning. It is fast becoming one of the most overused, ill-defined, and controversial terms in the modern financial lexicon.
The Fed kept rates unchanged at today’s meeting, but whether they are done with rate hikes or simply at a pause is yet to be determined.
In smart beta, we find that factor returns—net of changes in valuation levels—are much lower than recent performance suggests. In fact, many of the most popular new factors (some 458 at last count) have succeeded solely because they have become more expensive.
Less than a third of Gen Z feels financially secure while just more than half feels “very or extremely worried about not having enough money,” according to a recent study by consulting firm EY. “Welcome, the water’s warm!” says every American millennial.
Here is the latest update of a popular market valuation method, Price-to-Earnings (P/E) ratio, using the most recent Standard & Poor's "as reported" earnings and earnings estimates, and the index monthly average of daily closes for the past month. The latest trailing twelve months (TTM) P/E ratio is 22.1 and the latest P/E10 ratio is 28.7.
The Institute for Supply Management (ISM) manufacturing purchasing managers index (PMI) fell to 46.7 in October. The latest figure marks the 12th straight month the index has been in contraction territory after a 29-month period of growth dating back to June 2020. The October reading was below the forecast of 46.7.
The October S&P Global US Manufacturing PMI™ rose to 50.0 from 49.8 in September, signaling a stabilization in the health of operating conditions. The October reading was consistent with expectations.
Harness the power of neuroscience and psychology to help your clients reach their long-term planning goals.
A Federal Reserve pause, seasonal tailwinds, an earnings-led rally. Many of the reasons that got Wall Street strategists increasingly bullish coming into the end of the year now look like wishful thinking.
The financial world’s computer-loving crowd is preparing for the dawn of a new AI-powered era — but that doesn’t mean they’re ready to fully embrace the technology just yet.
New research found that the stocks of companies that have invested heavily – especially if that was not financed through organic growth – underperformed an appropriate benchmark.
If you believe that an easy solution to improve lower-class standards of living is to raise the minimum wage, or you are curious about what university presidents spend their time on, Angus Deaton’s new book provide insightful answers to those and many more questions that, taken together, challenge the relevance of modern economics and the capitalism it supports.
On October 27, 2023, VettaFi hosted an Income Strategy Symposium that saw nearly 900 advisors and investors register for the event. The symposium was a success for everyone involved, and included some of the top firms and individuals in the industry offering their insights into several different income-related topics.
VettaFi hosted an Income Strategy Symposium that saw nearly 900 advisors and investors register for the event. The symposium was a success for everyone involved and included some of the top firms and individuals in the industry offering their insights into several different income-related topics.
VettaFi’s vice chairman Tom Lydon discussed the RiverFront Strategic Income Fund (RIGS)on this week’s “ETF of the Week” podcast with Chuck Jaffe of “Money Life.”t
While environmental, social, and governance criticism remains elevated (and loud) and interest rates are affecting the performance of the related equities and exchange traded funds, ESG-committed investors can find relief on multiple fronts.
Despite progress on bringing down inflation from mid-2022 highs, data from online job postings suggests that wage pressures may be reaccelerating. Beneath the surface, growing divergence in wage gains across occupation categories may be adding a layer of complexity to the outlook for labor markets.
You won’t find this term in any serious economics textbook, but the only clinical way to describe the US housing market is bananas. Affordability is at record lows and mortgage rates are the highest since 2000.
With the release of September's report on personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.22% month-over-month change in disposable income comes to -0.13% when we adjust for inflation. The year-over-year metrics are 6.52% nominal and 2.98% real.
The National Association of Realtors® (NAR) released the latest monthly data for its pending home sales index. The index inched up 1.1% in September to 72.6, a surprising increase compared to the expected 1.8% decline. Despite the growth, pending home sales remain low as the latest index reading is the third lowest in the historical series. Pending home sales are down 11.0% compared to one year ago.
There are reasons to be cautious in many markets, but low volatility and high/sustainable dividend stocks can help mitigate risk while providing income and equity exposure. The Franklin Templeton Investment Solutions Team weighs in.
The relationship and the recent divergence between real rates and stock valuations is critical. Be ready for the historical trend to reassert itself.
Investments in alternative energy have become unattractive due to higher interest rates, not changes in government policies, adoption or pricing of green technologies.
Bloomberg's James Seyffart offers the latest on the spot bitcoin ETF race and also discusses ether futures ETFs, spot ether ETFs, and crypto equity ETFs. VettaFi's Todd Rosenbluth highlights Vanguard's ETF success and covers a range of other topics including recent launches from Morgan Stanley and iShares.
Wild swings in the “world’s safest asset” are once again acting as a driver for volatility across global markets.
U.S. equities have ruled the roost for the better part of the last decade, but another region may emerge as the leader if the business cycle changes.
Using a new database that isolates the activity of retail investors, new research documents their poor performance
Restrictive monetary conditions, from higher yields and tighter lending conditions, are the Fed’s “Waterloo.”
We have been looking at big historical/economic/political cycles for the past two months.
Active ETFs have gained in popularity in recent years. However, some pundits have prematurely taken out their shovels for some funds. Even as these products show signs of vitality.
As investors face continued macroeconomic and market uncertainty, evolving the 60/40 portfolio of stocks and bonds to include alternative investments may help build portfolio resiliency.
Japanese profits have benefited from the prolonged deleveraging of Japan Inc. The reduction in debt coupled with exceptionally low interest rates has allowed cash flow to impact the bottom line.
The US Federal Reserve’s efforts to quell inflation have sent long-term interest rates to their highest level in a generation, putting a lot of stress on banks, companies and anyone looking to finance a new home.
According to Gary Gensler, chair of the SEC, a market crash caused by artificial intelligence is “nearly unavoidable.” Like many other regulators, he has called for new regulations on AI to prevent such dire scenarios.
Dimensional’s new ETFs are good news for investors but raise issues for advisors.
Muni bond ETFs gathered $6.3 billion in the first nine months of 2023. However, a healthy $1.4 billion flowed in during September alone. According to Columbia Threadneedle, there is good reason to focus on the asset category.
Interest expense is a large and growing issue for both the economy and stock market, which reinforces why investors should stay up in quality amid interest-rate-driven headwinds.
Factor-Based Investing
Quality: The Real McCoy
While equity styles go in and out of favor, quality companies continue to serve clients as a core holding, resilient to economic headwinds and market drawdowns. For long-term investors searching for a durable equity solution, we believe quality is “the real McCoy"
U.S. Outlook: One Thing Leads to Another
Economic pain is likely in 2024, but that doesn’t mean stocks will struggle all year, especially if there is a continuation of the rolling recessions that have hit the economy.
China Is a Rich Country. It Can No Longer Cry Poor on Climate
At the time of the first major climate change conference, in Rio de Janeiro in 1992, China was one of the least developed nations. Its per capita income was below Haiti, Niger and Pakistan.
S&P Case-Shiller Home Price Index: Continues to Trend Upward in September
Home prices continued to trend upwards in September as the benchmark 20-city index rose for a eighth consecutive month. The S&P Case-Shiller Home Price Index revealed seasonally adjusted home prices for the 20-city index saw a 0.7% increase month-over-month (MoM) and a 3.9% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to 0.1% and the YoY was reduced to -2.9%.
World Markets Watchlist: November 27, 2023
Five of the eight indexes on our world watch list posted gains through November 27, 2023. Tokyo's Nikkei 225 finished in the top spot with a YTD gain of 28.18%. The U.S.'s S&P 500 finished in second with a YTD gain of 18.99% while France's CAC 40 finished in third with a YTD gain of 9.69%.
The Missing Piece to Advisors’ End-Of-Year Planning Strategies
I'll share the impact healthcare costs have on financial plans, the critical healthcare information to include (such as medical tax deductions and IRMAA), how to budget for costs in a world of variables, and tangible strategies to implement during open enrollment and beyond to ensure clients are on the optimal coverage.
The Physical Limits to Society’s Progress
Our immense progress in improving society’s standard of living over the last several centuries was possible because of advances in the discovery and production of energy. To assume that will continue is a grave error.
‘AI Blowback’ Angst Grips ESG Investors Who Bet Big on Tech
ESG fund managers who turned to big tech as a low-carbon, high-return bet are growing increasingly anxious over the sector’s experimentation with artificial intelligence.
Food, For Thought
Food prices illustrate several challenges of containing inflation.
Annuities Are Back in Fashion, But Are They Safe?
Every time interest rates go up there is a flurry of demand for a product that has been around at least since the Roman Empire — annuities. The insurance industry has already seen rapid growth in annuity sales since 2021 and if rates remain at or move above current levels, demand seems poised to explode.
Why BondBloxx is on the “Road to Exchange”
VettaFi CMO Jon Fee hosted Cole Feinberg, a BondBloxx partner, in an episode of “Road to Exchange.”
The 4 A’s of Preparing for Capital Gains Season
Taxes can have a significant and ongoing impact on an investment portfolio. Advisors can help their clients minimize that impact with a tax-smart approach. Advisors can prepare for capital gains season now, and potentially maximize their clients’ after-tax returns.
The Weight Of High Interest Rates
The potency of monetary policy will weigh more heavily on activity in 2024.
Existing Home Sales Fall Further, Still at Lowest Level Since 2010
Existing home sales fell further, remaining at their lowest level since 2010, as lack of inventory and high mortgage rates continued to impact sales. According to the data from the National Association of Realtors (NAR), existing home sales fell 4.1% from September to reach a seasonally adjusted annual rate of 3.79 million units. This figure came in lower than the expected 3.90 million. Existing home sales are down 14.6% compared to one year ago.
Global X SuperDividend ETF (SDIV)
On this episode of the “ETF of the Week” podcast, Tom Lydon discussed the Global X SuperDividend ETF (SDIV) with Chuck Jaffe of “Money Life.” The pair talked about several topics regarding the fund to give investors a deeper understanding of the ETF overall.
The New “New” Alpha
Picking the “right” stock is akin to betting on a game; not only must one pick the right team (beta), but also by how much (alpha).
A Time of Gratitude and Opportunity
The run-off election looks tight in Argentina, where I’m attending a Young Presidents’ Organization (YPO) event in Buenos Aires.
A $100 Billion ETF Flood Offers Little Solace to Active Managers
At first blush, a record $100 billion flood into actively managed exchange-traded funds this year raises a tantalizing prospect: A revival of stock picking even as only Big Tech names outperform the market. Yet, a look under the hood of popular ETFs shows the boom is almost entirely taking place in passive-looking trades.
Mega-Cap Tech a Safe Haven
Year-to-date, technology has outperformed the broader market largely given the prevalence of low leverage, high profitability and consistent earnings across many names in the mega-cap tech space.
Kansas City Fed Manufacturing Activity Declined Again in November
The latest Kansas City Fed Manufacturing Survey composite index declined again in November and the future outlook inched down. The composite index came in at -2, up from -8 in October, while the future outlook dropped to -1.
NAHB Housing Market Index: Builder Confidence Down Again
High mortgage rates continue to impact builder confidence as the National Association of Home Builders (NAHB) Housing Market Index (HMI) fell for a fourth consecutive month. With that said, recent macroeconomic data suggest improved conditions in the coming months. The index dropped 6 points from last month to 34, the index's lowest level since December 2022.
Prime Time for Bonds
In our 2024 outlook, bonds emerge as a standout asset class, offering strong prospects, resilience, diversification, and attractive valuations compared with equities.
VettaFi Voices On: Third-Quarter Earnings Season
Third-quarter earnings announcements have almost come and gone, with yesterday being the last big burst of companies. Some key firms have yet to announce, like Nvidia and Walmart, but everything I’m seeing says it surpassed expectations.
Roller Coaster: Markets Take a Ride
Like some advances earlier this year, the market's current surge hasn't been defined by strong breadth underneath the surface—which will be key for a sustained, durable advance.
Consumer Price Index: Inflation Drops to 3.2% in October
Inflation cooled in October with both headline and core CPI readings coming in lower than expected. According to the Bureau of Labor Statistics, the headline figure for the Consumer Price Index dropped to 3.2% year-over-year, slightly lower than the 3.3% forecast. The core CPI reading came in at 4.0%, just below the 4.1% forecast.
Bond Market: What Happened to "Higher for Longer"?
Treasury yields have dropped as weak economic data suggests the Federal Reserve may begin cutting the federal funds rate target earlier than previously expected.
Confidence
A China ‘Recovery’: How important is the loss of confidence within China itself?
America's Driving Habits as of September 2023
Travel on all roads and streets increased in September. The 12-month moving average was up 0.1% month-over-month and was up 1.4% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was unchanged MoM and up 0.2% YoY.
Q3 Active Management Review: Value Dominates
The third quarter was a more favorable environment for active managers in U.S. Large and Small Caps, Japan, Australia, and Canada equities, while being more challenging for Global, Global ex-U.S., Emerging Markets, Europe, UK and Long/Short managers.
Schwab Survey Reveals Strong Investor Preference for ETFs
New investors are overwhelmingly choosing ETFs as their investment vehicle of choice. Between June 13 and June 28, Charles Schwab conducted a comprehensive survey of 2,200 investors for its 2023 ETFs and Beyond Study.
S&P 500’s Busted Winning Streak Was a Mirage Anyway
The bond market giveth and the bond market taketh away. The S&P 500 Index closed in the red Thursday, blowing its widely-hyped chance at a nine-day winning streak, which would have been its best run since 2004.
Universities Shouldn’t Be Punished for Betting on Private Equity
Moody’s Investors Service recently released a report bluntly entitled, “Private equity exposure increases credit risk for universities with limited wealth.”
Rotation to Duration: Seeking a More Resilient Portfolio
The potential for a Fed pause presents an opportunity for investors to consider adding duration back into their portfolios. In this market regime, we believe duration serves well as hedge and equity diversifier.
Q3 Economic and Market Review: All Eyes on the Direction of Interest Rates
The direction of interest rates was the biggest factor moving markets in the third quarter. Sentiment on technology stocks appeared to shift. Money market assets reach historic high, but returns lag stock market.
Portfolio Construction for Alpha Generation and Risk Mitigation
In this period of higher interest rates, the quest to capture alpha and mitigate risk in corporate credit requires a more refined approach.
U.S. Workforce Analysis: October 2023 Update
Our monthly workforce analysis has been updated to include the latest employment report for October. The unemployment rate rose to 3.9% and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 150K.
A Birthday Reflection – Five Life Lessons
I’ll share some important insights gleaned from many decades of working in the advisory profession and being both an insider and an outsider.
4Q: 2023 Capital Markets Outlook
Following a strong first half of 2023, third-quarter returns were more challenged across almost all asset classes. One outlier was high-yield debt, which often serves as a way to de-risk equity exposures when stocks are under pressure.
Multiple Jobholders are 5.3% of All Employed
Multiple jobholders account for 5.3% of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the relative sizes of which we've illustrated in a pie chart.
S&P 500 Nears Its Next Roadblock After the Best Week in a Year
The S&P 500 Index’s best week in a year has brought the broad equities benchmark to a decisive point where stocks can make a significant break higher or find their gains capped.
The Civilian Labor Force, Unemployment Claims, and the Business Cycle
What does the ratio of unemployment claims tell us about where we are in the business cycle and recession risk?
Balance and Ballast: A Strategy for Uncertain Markets
Financial markets have changed dramatically since balanced portfolios were introduced to investors decades ago. As markets evolve and grow more complex, active management plays a greater role in the success of these strategies, which offer a mix of 60% equities and 40% fixed income.
Why Have the Dividend Aristocrats Performed So Well?
The so-called dividend aristocrats have an impressive track record. But much of that outperformance can be attributed to its exposure to certain factors.
The Price of Money Is Going Up, and It’s Not Only Because of the Fed
What’s the most important price in the global economy? The price of oil? The price of semiconductors? The price of a Big Mac? More important than any of these is the price of money. For more than three decades it was falling.
Investing Rules To Navigate Volatile Markets
While often difficult, investing rules can help us maintain our focus and investment discipline in volatile or uncertain markets.
Winner-Take-All Rally Spurs Big Distortion Among S&P 500 Members
The S&P 500’s pitch is simple. Own it and get exposure to the biggest of the big among US firms. Lately, it’s gotten harder to maintain that point of distinction.
ISM Services PMI Expands for 10th Straight Month
The Institute of Supply Management (ISM) has released its October services purchasing managers' index (PMI). The headline composite index is at 51.8, which was below the 53.0 forecast. The latest reading marks the 10th straight month the index has been expansion territory.
S&P Global Services PMI: Marginal Expansion in October
The October US services purchasing managers' index (PMI) conducted by S&P Global came in at 50.6, just below the 50.9 forecast. The latest reading keeps the index in expansion territory for the 9th straight month.
High Bond Yields: Answers to 5 Top Questions
While bond prices are generally down, the income they provide is up, providing potential opportunities for fixed income investors.
Equity Factor Report - Q3 2023: Value Strategies Rally as Bullish Sentiment Dampens
In Q3, the strongest performance among factors was seen in developed ex-U.S. large cap and small cap and U.S. small cap, where Value outperformed by 4.9%, 3.3% and 3.3%, respectively. The weakest performance among factors was in U.S. small cap, where the Size factor underperformed by -2.4%.
K2 Hedge Fund Strategy Outlook: Fourth Quarter 2023
Higher macro and market volatility, along with greater dispersion, creates a favorable environment for active trading, according to K2 Advisors. Get the team’s latest hedge-fund strategy outlook.
Four Tax Realities Every Investor Should Know
Investment taxes can have a real impact on a portfolio. Investors should be aware of four key tax realities they currently face. Without a plan to manage these taxes, investors may find their ability to retire comfortably could be compromised.
Investor Fears of 'Zombies' Create Bubble in Companies With High Cash Flow
Companies with healthy balance sheets are some of the best performing stocks this year, and their shares could keep rising, according to Piper Sandler & Co. strategists led by Michael Kantrowitz.
What “Smart Beta” Means to Us
As with most new expressions, “smart beta” is in the process of seeking an established meaning. It is fast becoming one of the most overused, ill-defined, and controversial terms in the modern financial lexicon.
Pause...For Now
The Fed kept rates unchanged at today’s meeting, but whether they are done with rate hikes or simply at a pause is yet to be determined.
How Can “Smart Beta” Go Horribly Wrong?
In smart beta, we find that factor returns—net of changes in valuation levels—are much lower than recent performance suggests. In fact, many of the most popular new factors (some 458 at last count) have succeeded solely because they have become more expensive.
Sorry, Gen Z, But Economic Anxiety Isn’t Going Away
Less than a third of Gen Z feels financially secure while just more than half feels “very or extremely worried about not having enough money,” according to a recent study by consulting firm EY. “Welcome, the water’s warm!” says every American millennial.
P/E10 October Update: Is The Stock Market Expensive?
Here is the latest update of a popular market valuation method, Price-to-Earnings (P/E) ratio, using the most recent Standard & Poor's "as reported" earnings and earnings estimates, and the index monthly average of daily closes for the past month. The latest trailing twelve months (TTM) P/E ratio is 22.1 and the latest P/E10 ratio is 28.7.
ISM Manufacturing Index Contracts for 12th Straight Month
The Institute for Supply Management (ISM) manufacturing purchasing managers index (PMI) fell to 46.7 in October. The latest figure marks the 12th straight month the index has been in contraction territory after a 29-month period of growth dating back to June 2020. The October reading was below the forecast of 46.7.
S&P Global US Manufacturing PMI™: Conditions Stabilize in October
The October S&P Global US Manufacturing PMI™ rose to 50.0 from 49.8 in September, signaling a stabilization in the health of operating conditions. The October reading was consistent with expectations.
A Subtle Way to Get Clients to Follow Your Plan
Harness the power of neuroscience and psychology to help your clients reach their long-term planning goals.
Wall Street Cuts S&P 500 Expectations as Geopolitical Risk Rises
A Federal Reserve pause, seasonal tailwinds, an earnings-led rally. Many of the reasons that got Wall Street strategists increasingly bullish coming into the end of the year now look like wishful thinking.
Quants With $23 Trillion See AI Takeover Even as They Hold Back
The financial world’s computer-loving crowd is preparing for the dawn of a new AI-powered era — but that doesn’t mean they’re ready to fully embrace the technology just yet.
The Underperformance of High-Investment Firms
New research found that the stocks of companies that have invested heavily – especially if that was not financed through organic growth – underperformed an appropriate benchmark.
The Perilous Fate of Modern Capitalism
If you believe that an easy solution to improve lower-class standards of living is to raise the minimum wage, or you are curious about what university presidents spend their time on, Angus Deaton’s new book provide insightful answers to those and many more questions that, taken together, challenge the relevance of modern economics and the capitalism it supports.
What You Might Have Missed at Friday’s Income Strategy Symposium
On October 27, 2023, VettaFi hosted an Income Strategy Symposium that saw nearly 900 advisors and investors register for the event. The symposium was a success for everyone involved, and included some of the top firms and individuals in the industry offering their insights into several different income-related topics.
What You Might Have Missed at Friday's Income Strategy Symposium
VettaFi hosted an Income Strategy Symposium that saw nearly 900 advisors and investors register for the event. The symposium was a success for everyone involved and included some of the top firms and individuals in the industry offering their insights into several different income-related topics.
RiverFront Strategic Income Fund (RIGS)
VettaFi’s vice chairman Tom Lydon discussed the RiverFront Strategic Income Fund (RIGS)on this week’s “ETF of the Week” podcast with Chuck Jaffe of “Money Life.”t
ESG Still Priority Among CFOs
While environmental, social, and governance criticism remains elevated (and loud) and interest rates are affecting the performance of the related equities and exchange traded funds, ESG-committed investors can find relief on multiple fronts.
Charting a Course in Choppier Waters
Despite progress on bringing down inflation from mid-2022 highs, data from online job postings suggests that wage pressures may be reaccelerating. Beneath the surface, growing divergence in wage gains across occupation categories may be adding a layer of complexity to the outlook for labor markets.
The US Needs More Housing. Americans Don’t Want to Build It.
You won’t find this term in any serious economics textbook, but the only clinical way to describe the US housing market is bananas. Affordability is at record lows and mortgage rates are the highest since 2000.
Real Disposable Income Per Capita Falls for Fourth Straight Month
With the release of September's report on personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.22% month-over-month change in disposable income comes to -0.13% when we adjust for inflation. The year-over-year metrics are 6.52% nominal and 2.98% real.
Pending Home Sales Remain Low Despite September Growth
The National Association of Realtors® (NAR) released the latest monthly data for its pending home sales index. The index inched up 1.1% in September to 72.6, a surprising increase compared to the expected 1.8% decline. Despite the growth, pending home sales remain low as the latest index reading is the third lowest in the historical series. Pending home sales are down 11.0% compared to one year ago.
The Case for Low Volatility and High Dividend Equities in International Markets
There are reasons to be cautious in many markets, but low volatility and high/sustainable dividend stocks can help mitigate risk while providing income and equity exposure. The Franklin Templeton Investment Solutions Team weighs in.
Real Rates Drive Stock Prices
The relationship and the recent divergence between real rates and stock valuations is critical. Be ready for the historical trend to reassert itself.
What Happened to ESG Stocks?
Investments in alternative energy have become unattractive due to higher interest rates, not changes in government policies, adoption or pricing of green technologies.
Bloomberg’s James Seyffart Offers Latest on Crypto ETFs
Bloomberg's James Seyffart offers the latest on the spot bitcoin ETF race and also discusses ether futures ETFs, spot ether ETFs, and crypto equity ETFs. VettaFi's Todd Rosenbluth highlights Vanguard's ETF success and covers a range of other topics including recent launches from Morgan Stanley and iShares.
The Charts Revealing Treasuries Switching to Headache From Haven
Wild swings in the “world’s safest asset” are once again acting as a driver for volatility across global markets.
Expanding (Investment) Horizons: The Case for Investing Globally
U.S. equities have ruled the roost for the better part of the last decade, but another region may emerge as the leader if the business cycle changes.
Proof that Retail Investors Perform Poorly
Using a new database that isolates the activity of retail investors, new research documents their poor performance
Restrictive Yields Will Be The Fed’s Waterloo
Restrictive monetary conditions, from higher yields and tighter lending conditions, are the Fed’s “Waterloo.”
Supercycle of Debt
We have been looking at big historical/economic/political cycles for the past two months.
Semi-Transparent ETFs Are Alive and Well
Active ETFs have gained in popularity in recent years. However, some pundits have prematurely taken out their shovels for some funds. Even as these products show signs of vitality.
Targeting Resilient Portfolio Construction With Alternatives
As investors face continued macroeconomic and market uncertainty, evolving the 60/40 portfolio of stocks and bonds to include alternative investments may help build portfolio resiliency.
Japan: The Land of the Rising Profits
Japanese profits have benefited from the prolonged deleveraging of Japan Inc. The reduction in debt coupled with exceptionally low interest rates has allowed cash flow to impact the bottom line.
The Fed Still Has a Lot of Quantitative Tightening to Do
The US Federal Reserve’s efforts to quell inflation have sent long-term interest rates to their highest level in a generation, putting a lot of stress on banks, companies and anyone looking to finance a new home.
Stop Worrying That AI Will Cause the Market to Crash
According to Gary Gensler, chair of the SEC, a market crash caused by artificial intelligence is “nearly unavoidable.” Like many other regulators, he has called for new regulations on AI to prevent such dire scenarios.
Dimensional’s New ETFs Signal Trouble for Advisors
Dimensional’s new ETFs are good news for investors but raise issues for advisors.
Why You MUST Consider Muni Bond ETFs
Muni bond ETFs gathered $6.3 billion in the first nine months of 2023. However, a healthy $1.4 billion flowed in during September alone. According to Columbia Threadneedle, there is good reason to focus on the asset category.
Debt: Hard to Handle
Interest expense is a large and growing issue for both the economy and stock market, which reinforces why investors should stay up in quality amid interest-rate-driven headwinds.