Given the Fed's hawkish monetary policy agenda and its effect on asset prices, I thought it might be helpful to share my thoughts on Fed-based trend analysis.
I will demonstrate how financial advisors can combine behavioral finance and deep analytics to have a robust conversation with clients during financial turmoil, showing compassion and understanding on the one hand, while telling a compelling long-term story on the other hand.
Sustainable investing needs to adapt to new realities without compromising its core principles.
What to do in equity portfolios at the midyear point? Fundamental Equities CIO Tony DeSpirto assesses the backdrop and identifies three favored sectors.
If finance could be distilled into one idea, it likely would be that there should be a tradeoff between risk and reward: an investment with low risk should have a low expected return, while one that could make you rich should also be one that could lose you a lot of money. The Overnight Effect flies in the face of this core tenet.
Recent experience shows that a third mandate – preventing financial instability – trumps the Fed’s two congressional mandates of full employment and low inflation.
Persistent … or transitory? It’s the inflation question that has been weighing on financial markets over the last year. As each economic data point trickles out, it is analyzed and re-analyzed, with that focus in mind. But it may be the wrong question to ask.
As proxy season comes to a close, investors and advisors have grappled with company stewardship on a wide variety of issues. But what’s the best way to get a company to listen? Is divestment the way to go? Or must you engage with a company? And how do investors in ETFs and mutual funds make sure their voices are heard at the asset managers they invest with?
Engine No. 1 focuses on engaging with companies constructively to make sure they are taking the costs they impose on society and other stakeholders into account. It operates on the belief that climate and social concerns are economic issues and companies that fail to address them will underperform for the long term.
This article is relevant to financial professionals who are considering offering model portfolios to their clients.
Not all value strategies have benefited equally during value stocks’ recent outperformance versus growth stocks.
Will the plight of consumers drag GDP lower in the second quarter, resulting in a recession?
New research quantifies the implicit cost that investors incur when index funds, such as those tracking the S&P 500, are rebalanced. Those costs may be avoidable by adopting trading strategies that introduce the possibility of tracking error.
We strongly believe that the traditional benchmark-led approach to investing in emerging market debt can be far from optimal.
The tale of Bear Stearns’ rally and investors' myopic vision in the spring of 2008 is a valuable lesson for today.
For the year ending December 31, 2021, passive mutual funds and ETFs reported estimated net inflows totaling $958.43 billion, compared to estimated net inflows totaling $249.91 billion for actively managed funds.
The bear has ended a long hibernation.
Recent warnings from corporate executives and rapidly declining regional manufacturing surveys make me wonder if a recession has already started.
The terms "value" and "growth" have been blurred. What appears to be a value stock may be in its reputation only.
The U.S. debt cannot be paid, even in inflated dollars. Serious inflation is inevitable that will crash stock and bond markets, in addition to devaluing the dollar.
The geopolitical crisis in Ukraine creates a stagflationary shock for global economies. The plan to fight inflation just got far more complicated for global central banks.
Liquidity is fading due to the Fed, and therefore volatility is on the rise. Illiquid and volatile markets are not conducive to long-term wealth generation.
We assess risks and potential opportunities for multi-asset portfolios amid late-cycle dynamics, higher inflation, rising interest rates, and geopolitical uncertainty.
In the first quarter of 2022, financial markets abruptly reversed course and volatility increased significantly.
The BOJ is trapped. It is conducting unlimited QE to keep rates low and weaken the yen, which promotes inflation.
Regular readers of WisdomTree blogs know that we are firm believers in both asset class and risk factor diversification when building our Model Portfolios.
Forward-thinking advisors have been searching for and employing analytics very carefully. This series will explore some of these metrics, along with their benefits and pitfalls. Today’s topic is capital markets assumptions.
This post explains why we believe GARP Investing may be another powerful way to protect and grow capital amid a speculative frenzy that appears to be on its way out.
In propping up Japan's economy and financial markets, its central bank indirectly provided liquidity to the world's financial markets. But the BOJ could unleash a liquidity vacuum felt around the world.
In the span of just over two years, the world economy has been stricken by a pandemic and challenged by a military conflict in the heart of Europe. Major historical turning points are nearly always accompanied by fundamental shifts in the economy. The pace of history is accelerating with the global energy transition, urgency to secure reliable supplies of traditional energy, and locking in renewable alternatives. This shift will be driven by technology and innovation.
Does a risk-free bond with 7% yield interest you? If so, read about the red-headed stepchild of the bond world that is finally attracting investors.
When reviewing the current state of the global economy and investment markets, we recommend focusing on market signals and weeding out market noise.
Does the scenario below sound likely? If so, you are among the thousands of RIAs who are likely to lose significant assets over the next decade.
The Nasdaq Fund Network (NFN) recently announced the launch of model portfolios, separately managed accounts (SMAs) and unified managed accounts (UMAs) on the platform. The registration of model portfolios and managed accounts on NFN make them searchable on market data platforms, financial web portals and other similar media. Eversheds Sutherland published a whitepaper describing NFN's offerings, regulations in the space, and how the work is in accordance with applicable provisions of the New Marketing Rule and relevant SEC guidance.
The more the Fed decides to dance with inflation and ignore the bond market and economy, the more we should expect stock prices to fall.
Antti Ilmanen’s Investing Amid Low Expected Returns updates his 2011 Expected Returns, a volume considered by many the definitive work on the subject.
This article explores the problem vexing Russia and its trade partners. I explore how the threat and use of sanctions may force some countries to contemplate weaning off the world's reserve currency.
The poor performance of factor-driven value strategies over the past decade has raised the question of whether intangible assets, such as patents and proprietary software, are properly treated. New research confirms that intangibles indeed distort valuation metrices, but there is no consensus on how to address the problem.
Seeking resilience. 2022 started with rising interest rates, high inflation and unthinkable violence and human tragedy in Europe.
With QE finished and QT on the horizon, I answer a few questions to help you better appreciate what QT is, how it will operate, and discuss how draining liquidity will affect markets.
I’ll take an order of flat fees (otherwise known as retainers) with a side of financial planning. Customers are lining up out the door for this.
Here at Absolute Return Partners, our portfolio construction is driven by the six structural megatrends that we have identified.
“Cash Is Trash” is a common theme as of late as inflation rages from the massive monetary interventions of 2020 and 2021.
On August 24, 2021, I presented two attractively valued dividend growth stock portfolios. One portfolio emphasized growth over income, and the other emphasized income over growth.
Filling out your March Madness bracket provides insight into how investors select assets, structure portfolios, and react during volatile market periods.
The Windfall Profits Tax Bill doesn’t penalize energy companies. It punishes consumers with more inflation. Further, it uses a faulty assumption to help gain support from the public.
While the Russia-Ukraine conflict will likely remain uncertain for some time, we believe situations like this require cool heads from an investment perspective.
While higher gas prices may be welcome news to the oil industry, the rest of us should be concerned. It is a glaring recession warning. Over the last 40 years, higher gas prices have been linked to economic stagnation and recessions.
In this interview, Peter Essele, vice president, investment management and research, at Commonwealth Financial Network, explains why investors should view the volatility created by the pandemic and geopolitical events as an opportunity to add risk to their portfolios.
Fiscal spending is normalizing quickly, and the Fed is warning investors it is ready to remove the stimulus. Such a reversal of monetary and fiscal liquidity does not guarantee a reversal of asset prices, but the odds of a bear market are increasing.
Interest-only variable annuity policies have zero commissions, no surrender charges and low annual M&E and admin fees plus various subaccounts that span traditional and alternative investment strategies.
The 2022 investment year is now well underway and financial advisors and investors would be well advised to not, as the old saying goes, “fight the tape” of what is shaping up to be a difficult year for the stock market.
I propose a strategy that can produce larger price gains or losses than bonds and higher yields than traditional bond funds or ETFs. If yields decline soon, investors can expect double-digit returns in a relatively short period.
The term “value” is being grossly misapplied.
The Federal Reserve signaling a shift in monetary policy is causing a shift in the markets that have run hot on many years of stimulus and low rates.
As we examine the municipal bond “board” at the start this new year, it looks to us to be a more challenging one than a year ago. More like chess than checkers. Winning will likely require a more complex, multi-faceted strategy than in 2021.
Market volatility is a given, but that doesn’t make its inevitable appearance any less stressful.
The strike price on the Fed put has moved significantly. The Fed may sit idly by if markets voice displeasure with abrupt changes in monetary policy.
I examine two biases that often handcuff investors and push them to make the wrong decisions at the wrong time.
Large asset managers provide model portfolios for many purposes — as options in 401(k) plans, as blueprints for institutional clients and affiliated financial advisors, and as suggestions for unaffiliated investment advisors. These have the “lather, rinse, repeat” conflict of interest.
The Fed is walking a tightrope between instability and inflation. Can it successfully tame inflation without causing severe market dislocations?
A booming $4.9 trillion branch of the U.S. asset management industry is funneling investor cash into funds that are pricier and worse-performing than alternatives, new research claims.
What insights can we glean beyond last year’s impressive 28% return? How did it compare it to global equities? I will show you some of the winners and losers, and finish with a few observations on the VIX.
Stocks are priced for perfection. Bonds trade at historically low yields despite 7% inflation. What could go wrong?
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.
Long before supply chain issues and soaring consumer prices made the headlines, I warned readers that massive monetary expansion made persistent inflation inevitable.
While no one knows what 2022 holds in store for investors, my concern is that it should not foster the same optimism as 2021.
Talent is quitting. And new talent is hard to hire.
Rising inflation is troubling bond investors worldwide, but European bond markets will likely experience comparatively weaker inflation pressures and stronger central bank support.
Here is how I nudge clients (sometimes not so gently) to where they should be on their portfolio.
MMT offers a new "logic" that allows the government to spend without facing the traditional constraints of debts and deficits. Is MMT too good to be true?
To obtain the best long-term risk-adjusted performance, investors should combine multiple trend-following factor strategies into a single portfolio.
In this interview, Spencer Logan discusses Harbor Capital’s recent launch of an active transparent ETF that uses a scientific approach to fixed income investing.
The dollar is on the rise, and with it comes underappreciated consequences.
Russ discusses the recent volatility and how to hedge the risk in the current environment.
The extreme volatility from November 26 to December 3 caused many clients to panic. By using deep analytics, advisors can illustrate that this episode – and others like it – were not that unusual.
Investors have no idea the most considerable risk to their portfolio is if the Fed cannot continue to be a market magician.
While I’m a huge proponent of passive and factor investing, the argument that direct indexing is akin to active management is imprecise.
This article contrasts the valuations and environments now and in 2000 to ask if it's time to leave the party or stay and rock on. I provide a statistical analysis showing the downside risk facing the S&P 500.
In high yield specifically, investors tend to think about it as a risky way to play fixed income. But we like to turn that thinking on its head, actually: that you should think about it as a way to de-risk your overall portfolio rather than to re-risk your fixed-income side.
The financial services field is one of the most regulated in the U.S. Our regulations are as complex as those in the medical field. This makes sense; our health and our money are two important pillars of wellbeing. Preventing harm to either can be a matter of life and death.
BlackRock Portfolio Manager, Russ Koesterich, CFA, JD discusses his preference for the US dollar over a long Treasury hedge in the current markets.
It was another tough week in a brutal year for bears. Despite being right about many aspects of inflation, monetary policy and the persistence of the coronavirus, equity bears who were expecting anything to put a meaningful brake on the stock market were again denied.
Regardless of which side of the aisle you are on, the Infrastructure Investment and Jobs Act affects everyone financially and mentally, and advisors should prepare client money and minds for this historic (albeit non-transformational) event.
It’s not uncommon for stakeholders in large organizations to have different views on the meaning of ESG and the importance of its pillars in defining organizational success. That’s understandable, and in fact, diverse perspectives can be a source of strength when making investment decisions.
As investors and financial advisors approach the end of 2021 and consider their annual recalibration of portfolio mix for the coming year, they would be prudent to factor in some difficult economic realities that can no longer be ignored–that will alter stock and bond performance into and well past 2022.
The economy is at maximum employment. Inflation is running red hot and increasingly showing signs it is persistent. Having neglected one mandate and largely fulfilled the other, why is the Fed so slow to reduce asset purchases and unwilling to contemplate hiking interest rates?
This article is relevant to financial professionals who are considering offering Model Portfolios to their clients.
This year marks our seventh annual ESG manager survey. Our survey of active managers assesses the integration of ESG considerations in investment processes among equity, fixed income and private market managers and spotlights firmwide policies, use of data, engagement and integration.
If easy money is the bedrock of valuations and the Fed is getting ready to shift the bedrock, investors best pay attention to market forecasts and how the Fed ultimately acts.
Portfolio Building
Don't Fight the Trend
Given the Fed's hawkish monetary policy agenda and its effect on asset prices, I thought it might be helpful to share my thoughts on Fed-based trend analysis.
A Deep Analytic Perspective of the 2022 Market Correction
I will demonstrate how financial advisors can combine behavioral finance and deep analytics to have a robust conversation with clients during financial turmoil, showing compassion and understanding on the one hand, while telling a compelling long-term story on the other hand.
Of War And ESG
Sustainable investing needs to adapt to new realities without compromising its core principles.
Taking Stock: Q3 2022 Equity Market Outlook
What to do in equity portfolios at the midyear point? Fundamental Equities CIO Tony DeSpirto assesses the backdrop and identifies three favored sectors.
Night Moves: Is the Overnight Drift the Grandmother of All Market Anomalies?
If finance could be distilled into one idea, it likely would be that there should be a tradeoff between risk and reward: an investment with low risk should have a low expected return, while one that could make you rich should also be one that could lose you a lot of money. The Overnight Effect flies in the face of this core tenet.
Will the Fed’s Third Mandate Derail Markets?
Recent experience shows that a third mandate – preventing financial instability – trumps the Fed’s two congressional mandates of full employment and low inflation.
Inflation Risk: Persistent or Transitory is the Wrong Question
Persistent … or transitory? It’s the inflation question that has been weighing on financial markets over the last year. As each economic data point trickles out, it is analyzed and re-analyzed, with that focus in mind. But it may be the wrong question to ask.
Engine No. 1 and Its Compelling Approach to ESG Investing
As proxy season comes to a close, investors and advisors have grappled with company stewardship on a wide variety of issues. But what’s the best way to get a company to listen? Is divestment the way to go? Or must you engage with a company? And how do investors in ETFs and mutual funds make sure their voices are heard at the asset managers they invest with?
Engine No. 1 focuses on engaging with companies constructively to make sure they are taking the costs they impose on society and other stakeholders into account. It operates on the belief that climate and social concerns are economic issues and companies that fail to address them will underperform for the long term.
The Current and Future State of Model Portfolios
This article is relevant to financial professionals who are considering offering model portfolios to their clients.
Why Some Value Strategies Struggle When Value Stocks Surge
Not all value strategies have benefited equally during value stocks’ recent outperformance versus growth stocks.
Consumer Weakness Signals a Recession
Will the plight of consumers drag GDP lower in the second quarter, resulting in a recession?
The Problems with Market-Cap Weighted Index Funds
New research quantifies the implicit cost that investors incur when index funds, such as those tracking the S&P 500, are rebalanced. Those costs may be avoidable by adopting trading strategies that introduce the possibility of tracking error.
No Stone Unturned
We strongly believe that the traditional benchmark-led approach to investing in emerging market debt can be far from optimal.
Bear Stearns: A Lesson in Bear Market Bounces
The tale of Bear Stearns’ rally and investors' myopic vision in the spring of 2008 is a valuable lesson for today.
The Death of Active Management Has Been Greatly Exaggerated
For the year ending December 31, 2021, passive mutual funds and ETFs reported estimated net inflows totaling $958.43 billion, compared to estimated net inflows totaling $249.91 billion for actively managed funds.
The Mother Of All Bear Markets
The bear has ended a long hibernation.
Snap Goes the Economy
Recent warnings from corporate executives and rapidly declining regional manufacturing surveys make me wonder if a recession has already started.
The Hazy Line Between Value and Growth
The terms "value" and "growth" have been blurred. What appears to be a value stock may be in its reputation only.
Our Debt Cannot Be Inflated Away
The U.S. debt cannot be paid, even in inflated dollars. Serious inflation is inevitable that will crash stock and bond markets, in addition to devaluing the dollar.
A Stagflationary Shock
The geopolitical crisis in Ukraine creates a stagflationary shock for global economies. The plan to fight inflation just got far more complicated for global central banks.
Watch Out: The Fed is Removing Liquidity from the Markets
Liquidity is fading due to the Fed, and therefore volatility is on the rise. Illiquid and volatile markets are not conducive to long-term wealth generation.
Late‑Cycle Strategies
We assess risks and potential opportunities for multi-asset portfolios amid late-cycle dynamics, higher inflation, rising interest rates, and geopolitical uncertainty.
Grey Owl Capital's Q1 Letter
In the first quarter of 2022, financial markets abruptly reversed course and volatility increased significantly.
Japanese Inflation – Liquidity Crisis in the Making (Part 2)
The BOJ is trapped. It is conducting unlimited QE to keep rates low and weaken the yen, which promotes inflation.
The WisdomTree Q2 2022 Asset Class and Risk Factor Review and Outlook
Regular readers of WisdomTree blogs know that we are firm believers in both asset class and risk factor diversification when building our Model Portfolios.
Using Analytics in Wealth Management: The Good and Bad (Part 2)
Forward-thinking advisors have been searching for and employing analytics very carefully. This series will explore some of these metrics, along with their benefits and pitfalls. Today’s topic is capital markets assumptions.
GARP Stocks: Common Sense in an Age of False Narratives
This post explains why we believe GARP Investing may be another powerful way to protect and grow capital amid a speculative frenzy that appears to be on its way out.
Liquidity Crisis in the Making – Japan's Role in Financial Instability
In propping up Japan's economy and financial markets, its central bank indirectly provided liquidity to the world's financial markets. But the BOJ could unleash a liquidity vacuum felt around the world.
Which Sectors Will Outperform Under Inflation
In the span of just over two years, the world economy has been stricken by a pandemic and challenged by a military conflict in the heart of Europe. Major historical turning points are nearly always accompanied by fundamental shifts in the economy. The pace of history is accelerating with the global energy transition, urgency to secure reliable supplies of traditional energy, and locking in renewable alternatives. This shift will be driven by technology and innovation.
I-Bonds: At 7%, It's Hard to Go Wrong
Does a risk-free bond with 7% yield interest you? If so, read about the red-headed stepchild of the bond world that is finally attracting investors.
The WisdomTree Q2 2022 Economic and Market Outlook in 10 Charts or Less
When reviewing the current state of the global economy and investment markets, we recommend focusing on market signals and weeding out market noise.
Why RIAs Are Going to Lose in Retirement-Income Planning
Does the scenario below sound likely? If so, you are among the thousands of RIAs who are likely to lose significant assets over the next decade.
Memorandum regarding SMAs/UMAs/Model Portfolios and the Nasdaq Fund Network
The Nasdaq Fund Network (NFN) recently announced the launch of model portfolios, separately managed accounts (SMAs) and unified managed accounts (UMAs) on the platform. The registration of model portfolios and managed accounts on NFN make them searchable on market data platforms, financial web portals and other similar media. Eversheds Sutherland published a whitepaper describing NFN's offerings, regulations in the space, and how the work is in accordance with applicable provisions of the New Marketing Rule and relevant SEC guidance.
Will the Fed Ignore the Economy to Fight Inflation?
The more the Fed decides to dance with inflation and ignore the bond market and economy, the more we should expect stock prices to fall.
Antti Ilmanen: Investing Amid Low Expected Returns
Antti Ilmanen’s Investing Amid Low Expected Returns updates his 2011 Expected Returns, a volume considered by many the definitive work on the subject.
Will War in the Ukraine Undo the Dollar as the Reserve Currency?
This article explores the problem vexing Russia and its trade partners. I explore how the threat and use of sanctions may force some countries to contemplate weaning off the world's reserve currency.
Do Intangibles Explain the Failure of the Value Factor?
The poor performance of factor-driven value strategies over the past decade has raised the question of whether intangible assets, such as patents and proprietary software, are properly treated. New research confirms that intangibles indeed distort valuation metrices, but there is no consensus on how to address the problem.
Taking Stock: Q2 2022 Equity Market Outlook
Seeking resilience. 2022 started with rising interest rates, high inflation and unthinkable violence and human tragedy in Europe.
Will Quantitative Tightening Overwhelm the Markets?
With QE finished and QT on the horizon, I answer a few questions to help you better appreciate what QT is, how it will operate, and discuss how draining liquidity will affect markets.
The Price Advisors Will Pay for Ignoring Flat Fees
I’ll take an order of flat fees (otherwise known as retainers) with a side of financial planning. Customers are lining up out the door for this.
A New Era Of Globalisation
Here at Absolute Return Partners, our portfolio construction is driven by the six structural megatrends that we have identified.
Is Cash Trash As Inflation Rages?
“Cash Is Trash” is a common theme as of late as inflation rages from the massive monetary interventions of 2020 and 2021.
2 Dividend Growth Portfolios Built August 2021: One Focused On Income The Other Growth
On August 24, 2021, I presented two attractively valued dividend growth stock portfolios. One portfolio emphasized growth over income, and the other emphasized income over growth.
What if Investing Were Run Like March Madness?
Filling out your March Madness bracket provides insight into how investors select assets, structure portfolios, and react during volatile market periods.
The Senseless War on Big Oil
The Windfall Profits Tax Bill doesn’t penalize energy companies. It punishes consumers with more inflation. Further, it uses a faulty assumption to help gain support from the public.
Ukraine Investment Considerations: Time in the Market Beats Timing the Market
While the Russia-Ukraine conflict will likely remain uncertain for some time, we believe situations like this require cool heads from an investment perspective.
Higher Gas Prices Predict a Recession
While higher gas prices may be welcome news to the oil industry, the rest of us should be concerned. It is a glaring recession warning. Over the last 40 years, higher gas prices have been linked to economic stagnation and recessions.
Lessons from Turmoil: Taking Advantage of Volatility
In this interview, Peter Essele, vice president, investment management and research, at Commonwealth Financial Network, explains why investors should view the volatility created by the pandemic and geopolitical events as an opportunity to add risk to their portfolios.
Bear Market Strategies – Are You Ready?
Fiscal spending is normalizing quickly, and the Fed is warning investors it is ready to remove the stimulus. Such a reversal of monetary and fiscal liquidity does not guarantee a reversal of asset prices, but the odds of a bear market are increasing.
Investment-Only Variable Annuity – A “Back-to-the-Future” Variable Annuity Vehicle
Interest-only variable annuity policies have zero commissions, no surrender charges and low annual M&E and admin fees plus various subaccounts that span traditional and alternative investment strategies.
Don’t Fight The Tape In 2022 – Hedge The Tape Before It’s Too Late
The 2022 investment year is now well underway and financial advisors and investors would be well advised to not, as the old saying goes, “fight the tape” of what is shaping up to be a difficult year for the stock market.
The Strategy for a Bull Market in Bonds
I propose a strategy that can produce larger price gains or losses than bonds and higher yields than traditional bond funds or ETFs. If yields decline soon, investors can expect double-digit returns in a relatively short period.
Value Stock Funds Are Lacking Value
The term “value” is being grossly misapplied.
Implications of the Fed’s Policy Shift for Investors
The Federal Reserve signaling a shift in monetary policy is causing a shift in the markets that have run hot on many years of stimulus and low rates.
2022 Municipal Market Outlook: Checkers vs. Chess
As we examine the municipal bond “board” at the start this new year, it looks to us to be a more challenging one than a year ago. More like chess than checkers. Winning will likely require a more complex, multi-faceted strategy than in 2021.
Insight And Action Items For Volatile Stock Markets
Market volatility is a given, but that doesn’t make its inevitable appearance any less stressful.
Did Powell Let the Fed Put Expire?
The strike price on the Fed put has moved significantly. The Fed may sit idly by if markets voice displeasure with abrupt changes in monetary policy.
Fear and Greed: An Investor’s Worst Enemies
I examine two biases that often handcuff investors and push them to make the wrong decisions at the wrong time.
Wall Street's Model Portfolios Are Misunderstood
Large asset managers provide model portfolios for many purposes — as options in 401(k) plans, as blueprints for institutional clients and affiliated financial advisors, and as suggestions for unaffiliated investment advisors. These have the “lather, rinse, repeat” conflict of interest.
Will the Fed Choose Financial Instability or Inflation?
The Fed is walking a tightrope between instability and inflation. Can it successfully tame inflation without causing severe market dislocations?
The WisdomTree Q1 2022 Economic and Market Outlook in 10 Charts or Less
When reviewing the current state of the global economy and investment markets, we recommend focusing on market signals and weeding out market noise.
Wall Street’s ‘Model Portfolio’ Boom Gets Slammed in New Paper
A booming $4.9 trillion branch of the U.S. asset management industry is funneling investor cash into funds that are pricier and worse-performing than alternatives, new research claims.
Deep Analytic Market Insights for 2021
What insights can we glean beyond last year’s impressive 28% return? How did it compare it to global equities? I will show you some of the winners and losers, and finish with a few observations on the VIX.
2022 Investment Outlook (Part 2) – Stocks and Bonds
Stocks are priced for perfection. Bonds trade at historically low yields despite 7% inflation. What could go wrong?
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.
US Growth Has Peaked Inflation Will Persist
Long before supply chain issues and soaring consumer prices made the headlines, I warned readers that massive monetary expansion made persistent inflation inevitable.
The 2022 Outlook Part 1 - Tailwinds Shift to Headwinds
While no one knows what 2022 holds in store for investors, my concern is that it should not foster the same optimism as 2021.
The Great Resignation: Has it Increased the Risk That Comes From Portfolio Manager Exits?
Talent is quitting. And new talent is hard to hire.
European Fixed-Income Outlook: Euro Markets Will Stand Out in 2022
Rising inflation is troubling bond investors worldwide, but European bond markets will likely experience comparatively weaker inflation pressures and stronger central bank support.
The 10 Toughest Client Objections to Overcome
Here is how I nudge clients (sometimes not so gently) to where they should be on their portfolio.
MMT's Fatal Flaw
MMT offers a new "logic" that allows the government to spend without facing the traditional constraints of debts and deficits. Is MMT too good to be true?
Enhancing Investment Performance by Combining Factor-Based Stock Selection with Multi-Indicator Trend Following
To obtain the best long-term risk-adjusted performance, investors should combine multiple trend-following factor strategies into a single portfolio.
The Scientific Approach to Fixed Income Management
In this interview, Spencer Logan discusses Harbor Capital’s recent launch of an active transparent ETF that uses a scientific approach to fixed income investing.
A Strong Dollar is Threatening the Global Economy
The dollar is on the rise, and with it comes underappreciated consequences.
Why Stocks Need a Calmer Bond Market
Russ discusses the recent volatility and how to hedge the risk in the current environment.
Using Deep Analytics to Align Risk Perception
The extreme volatility from November 26 to December 3 caused many clients to panic. By using deep analytics, advisors can illustrate that this episode – and others like it – were not that unusual.
An Investment Plan for When the Fed Magic Fails
Investors have no idea the most considerable risk to their portfolio is if the Fed cannot continue to be a market magician.
In Defense of Direct Indexing
While I’m a huge proponent of passive and factor investing, the argument that direct indexing is akin to active management is imprecise.
Can the Stock Market Crash Like it Did in 2000?
This article contrasts the valuations and environments now and in 2000 to ask if it's time to leave the party or stay and rock on. I provide a statistical analysis showing the downside risk facing the S&P 500.
Rethinking High Yield
In high yield specifically, investors tend to think about it as a risky way to play fixed income. But we like to turn that thinking on its head, actually: that you should think about it as a way to de-risk your overall portfolio rather than to re-risk your fixed-income side.
Financial Regulations Protect Consumers – Sometimes
The financial services field is one of the most regulated in the U.S. Our regulations are as complex as those in the medical field. This makes sense; our health and our money are two important pillars of wellbeing. Preventing harm to either can be a matter of life and death.
The Dollar: Still the Better Hedge
BlackRock Portfolio Manager, Russ Koesterich, CFA, JD discusses his preference for the US dollar over a long Treasury hedge in the current markets.
Wall Street Pros Were Bullish for 2021, Just Not Bullish Enough
It was another tough week in a brutal year for bears. Despite being right about many aspects of inflation, monetary policy and the persistence of the coronavirus, equity bears who were expecting anything to put a meaningful brake on the stock market were again denied.
Portfolio Positioning for the $1.2 Trillion Infrastructure Bill
Regardless of which side of the aisle you are on, the Infrastructure Investment and Jobs Act affects everyone financially and mentally, and advisors should prepare client money and minds for this historic (albeit non-transformational) event.
Making ESG Second Nature in Asset Allocation
It’s not uncommon for stakeholders in large organizations to have different views on the meaning of ESG and the importance of its pillars in defining organizational success. That’s understandable, and in fact, diverse perspectives can be a source of strength when making investment decisions.
Investors and Advisors Are Compelled to Consider the Hard Economic Realities Facing the Financial Markets
As investors and financial advisors approach the end of 2021 and consider their annual recalibration of portfolio mix for the coming year, they would be prudent to factor in some difficult economic realities that can no longer be ignored–that will alter stock and bond performance into and well past 2022.
Why the Fed Isn’t Tightening
The economy is at maximum employment. Inflation is running red hot and increasingly showing signs it is persistent. Having neglected one mandate and largely fulfilled the other, why is the Fed so slow to reduce asset purchases and unwilling to contemplate hiking interest rates?
Checking In on Risk Factor Diversification
This article is relevant to financial professionals who are considering offering Model Portfolios to their clients.
2021 Annual ESG Manager Survey: The Red Flag Is Raised on Climate Risk
This year marks our seventh annual ESG manager survey. Our survey of active managers assesses the integration of ESG considerations in investment processes among equity, fixed income and private market managers and spotlights firmwide policies, use of data, engagement and integration.
Gauging the Likelihood of a Fed Funds Hike
If easy money is the bedrock of valuations and the Fed is getting ready to shift the bedrock, investors best pay attention to market forecasts and how the Fed ultimately acts.