A Bonus Matters More When Its Size Is a Pleasant Surprise: Sarah Green Carmichael
The yearly paying out of lump sums to reward top talent is such a standard, established practice, questioning it may seem a little quaint. More than three-quarters of U.S. companies use performance incentives of some kind. Yet the fact remains, we don’t really know how well they work. Do they encourage people to work harder and smarter?
‘Disappointing Tax Season’ Points Toward Smaller, Later Refunds
In what even the U.S. Treasury says will be a frustrating tax season, families claiming the child tax credit and newly self-employed Americans are among filers likely to see the biggest challenges this year.
Can You Afford to Join the Great Resignation?
Many of us fantasize about quitting our jobs. In 2021, more people than ever turned that dream into reality. The latest U.S. Bureau of Labor Statistics data show that 4.53 million Americans voluntarily left their jobs last November. This was both a new monthly record and the eighth successive reading above the pre-pandemic high.
Year of the Bookends
Today I’ll continue the annual forecast I began last week. New COVID developments are unfolding rapidly. If we’re lucky, they may carve out a nice bookend for us. But my worry is that rather than bookends it could be economicus interruptus. 2019 was not portending the most robust of economies. What if, in Groundhog Day fashion, we end up back where we were?
Smaller Gain in U.S. Producer Prices Is Hint of Cooler Inflation
Prices paid to U.S. producers decelerated in December as two key drivers of inflation in 2021 -- food and energy -- declined from a month earlier, representing a respite in the recent trend of sizable increases.
Four Mega-Trends Shaping the 2022 Outlook and Beyond
The global macro environment is ripe for EM assets outperformance as a combination of stronger growth in China, the end of exceptionalism in the US and less uncertainty on US interest rates, lead to a strong backdrop for EM assets.
Consumer Price Index: December Headline at 7.04%
The Bureau of Labor Statistics released the December Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 7.04%, up from 6.81% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 5.45%, up from 4.93% the previous month and is above the Fed's 2% PCE target.
Investing in a Fast‑Moving Cycle
Uncertainty has become an ongoing theme in markets, economies, and communities everywhere, and in this environment, PIMCO investment professionals gathered – virtually, once again – for our recent Cyclical Forum.
Investment Advice is not Financial Planning
Investment advice is not financial planning. This is an important distinction to understand when someone goes shopping for financial advice. Do they only need help with investment decisions, or do they need guidance on all aspects of their financial life?
Full-time and Part-time Employment: A Deeper Look
Let's take a closer look at Friday's employment report numbers on Full and Part-Time Employment.
A Tale of Two Real Estate Markets: US and China
Tracy Chen, Portfolio Manager with Brandywine Global, and Tim Wang, Head of Investment Research for Clarion Partners, join Head of the Franklin Templeton Investment Institute, Stephen Dover, to take a closer look at how the pandemic has impacted real estate markets in the United States and China.
December Markit Manufacturing: Production Growth Constrained
The December US Manufacturing Purchasing Managers' Index conducted by Markit came in at 57.7, down 0.6 from the final November figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Think Old Folks Are Too Scared of Inflation? Listen to This
For Americans under 50, inflation is little more than a theoretical concept. But for those of us born in the late 1950s and 1960s, the inflation of the 1970s was a formative experience we’d rather not repeat. Inflation was as much a part of our childhood as Covid is for today’s kids.
Defensive bubble stocks = umbrellas in a hurricane
In October, we published analysis demonstrating why it’s never too early to sell a bubble. Unsurprisingly, investors still seem reluctant to reduce their bubble exposure, preferring instead to move up in bubble quality.
In his latest report, Dan Suzuki shows that when a bubble collapses, everything in it goes down, including proven leaders and tomorrow's winners, regardless of valuation, beta or quality. Thus, the only way to protect from a bubble is to get as far away from it as you can.
A Revolt Against PE-Led Annuity Issuers
A Pittsburgh insurance broker and a Richmond, Virginia forensic accountant have developed an alternative rating system for measuring the ability of life/annuity companies to keep their promises even in market crises. They call it the transparency, surplus and riskier assets ratio, or “TSR” for short.
A Global Savings Glut Is Set to Anchor U.S. Yields Below 2%
Anyone gearing up for bond yields to surge in 2022 should think again. A global glut of saved cash has the potential to restrain an increase in rates, even as central banks dial back their pandemic stimulus.
U.S. Labor Market Dashboard
Employment metrics support the Fed's change of course.
The Big Four: Real Personal Income in November
Personal Income (excluding Transfer Receipts) in November rose 0.36% and is up 7.2% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was down 0.25%. The real number is up 1.4% year-over-year.
Inflation Is Soaring – Americans Rightfully Concerned
For most Americans under the age of 50, inflation has never been much of an issue. Yes, prices rose a little every year but that was considered normal. Price increases of 1-2% a year for most goods and services were to be expected.
CIO Outlook—Buckling Up for 2022
CIO Robert Horrocks, PhD, sees fascinating and surprising investment opportunities arising in the emerging markets and China next year. Fed actions to manage inflation and the ongoing challenges of the pandemic will be important factors but the performance of markets may ultimately depend on the success of well-managed companies in key sectors.
Dealing with the Demise of the 4% Rule
Media attention has focused on the long-standing “4% rule” and how economic and demographic realities have reduced that guideline. This article discusses related considerations and provides opportunities for retirees dealing with the new normal.
The 2022 List Issue, Part 1: Global Markets - Top 9 Investment Watchpoints
With 2021 almost finished, it's a good time to look ahead to the key questions and themes for 2022. Overall, we believe economic growth, inflation and investment returns should moderate through 2022, but expect growth to remain above trend, which should support the outperformance of equities over bonds.
The Wrongheaded Rhetoric on Climate Change
Celebrated venture capitalist John Doerr’s new book, “Speed and Scale,” offers a solution to the threats posed by climate change. But it is so mired in the swamp of the terms of the discussion that its proposed solutions will go unnoticed and have little impact.
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).
On My Mind: Inflation: Don’t You (Forget About Me)
The US Federal Reserve finally acknowledged inflation is not a “transitory” problem and signaled a greater degree of concern; but investors seem to think that the Fed will blink when markets balk.
7 Sources of Assets That Could Benefit From a Tax-Managed Approach
Taxable assets make up nearly half of the U.S. mutual fund universe. Helping your clients reduce the tax bite on these assets could help you differentiate your value proposition.
The Biggest Winning Stocks of the Last 30 Years
Picking the few "monster" stocks among the many thousands of underachieving ones is extremely difficult. But for those who guessed right and had the discipline to stick with those winners through bull and bear markets, the rewards have been truly remarkable. Here are the 20 best-performing stocks of the past 30 years.
Inflation Is the Biggest Threat to the Bedrock 60/40 Portfolio
Wall Street likes to warn that past performance doesn’t guarantee future results, but when it comes to the traditional 60/40 mix of stocks and bonds, it kind of has. Persistent inflation could bring that to an end.
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.
Impact Investing: Addressing Local Needs with Precision and Purpose
Impact investing, which seeks to make a direct—and measurable—social or environmental impact while generating a financial return, has historically been synonymous with the private debt and equity markets. But that ignores the hugely important public market of municipal finance.
The employers who kept DB plans without adequately funding them and/or generating returns sufficient to pay the promised benefits. It is a systemic problem that affects others. Today we’ll discuss this problem and some of its macro-level consequences.
Advisor Perspectives Launches Subscription-Based Communication Solution for Financial Professionals
Designed for financial professionals, Advisor Perspectives’ new premium membership service lets subscribers browse, white-label and share content from a robust library of articles, commentaries, market summaries and more created by leading industry experts. Members also have the ability to hand-pick their favorite articles from Advisor Perspectives and curate their own personal libraries.
Four ESG Myths About Emerging-Market Corporates
As one of the fastest-growing bond sectors, emerging-market (EM) corporate debt has become too big to ignore. With US$2.7 trillion outstanding across more than 600 companies, it’s now larger than the entire EM sovereign sector and is equal to the US-dollar and euro high-yield markets combined.
‘Pension Poachers’ Are Targeting America’s Elderly Veterans
During his second inaugural address, President Abraham Lincoln proclaimed that America should serve its soldiers long after they were done serving it. Coming just weeks before final victory in a gruesome civil war that killed at least 750,000, his words would become the motto for the Department of Veterans Affairs.
Could The Fed Trigger The Next “Financial Crisis”
Could the Fed trigger the next “financial crisis” as they begin to hike interest rates? Such is certainly a question worth asking as we look back at the Fed’s history of previous monetary actions.
8 Life and Health Insurance Dividend Growth Stocks
In this video I present 8 undervalued dividend growth stocks with dividend yields ranging from 2.51% to 5.11%. All these companies are undervalued in what is a very overheated stock market today.
Jeremy Siegel: The Market is Not in a Bubble; The S&P Could Reach 5,000 in 2022
Last year, Jeremy Siegel correctly predicted the bull market in stocks, the rise in inflation and interest rates and soaring home prices. In this year’s interview, he predicts another year of good performance for U.S. stocks – and identifies the risks investors will face.
The Winds of Change
The last 20 months have taught us to question everything. What is the future of work? Can American democracy survive? Will Baby Boomers keep consuming more than their fair share? And what comes after “trillion”? Howard Marks’s latest memo examines paradigm shifts that could reshape the economy, markets and the world for many years to come.
Wall Street’s $22 Trillion Carbon Time Bomb
The clock is ticking for banks, insurers and asset managers still providing support to oil, gas and coal producers. It’s not just the moral imperative—that fossil-fuel use is destroying the atmosphere and life on Earth with it. It’s that their financial health requires leaving such companies behind.
Counting Calories Helps Your Retirement Account, Too
Before those celebrating Thanksgiving reach for a second slice of pecan pie, they should consider this: A 55-year-old woman with Type 2 diabetes will pay an average of $3,470 more a year in medical-related expenses, or close to $160,000 in total, than if she didn't have the disease.