More by the Same Author
2013-06-06 The Risk of Government Policies and the Rationing of Retirement by Jason Hsu of Research Affiliates
In late April, a group of leading economists and investment practitioners assembled in La Jolla, California, for Research Affiliates’ 2013 Advisory Panel. Our theme this year touched on two topics that have been front-and-center in recent public debates: the risk of government intervention and the potential rationing of retirement.
2013-03-27 Does Blame Predict Performance? by Jason Hsu of Research Affiliates
As an econometrician and a fund-of-funds portfolio manager, I spend much time researching quantifiable metrics to help me identify managers who can outperform consistently. There is, in fact, a rich body of literature exploring different manager selection criteria. Academic papers have considered portfolio manager attributes, such as tenure, the CFA designation, advanced degrees, and even SAT scores; they have also examined fund characteristics, such as portfolio turnover, expense ratios, and assets under management.
2013-02-07 From QE to Queasy: Fiscal Policy and the Risk of Inflation by Jason Hsu of Research Affiliates
Quantitative easing does not directly cause inflation. Rather, by enabling the government to issue low-cost debt, it fosters undisciplined spending, says Jason Hsu, CIO of Research Affiliates, LLC in this commentary. This spending, in turn, generates inflation, transferring wealth from future taxpayers to the current generation. Hsu argues that Americans are more likely to follow the European model of insufficient saving than to imitate the Japanese practices of private sector belt-tightening, high savings rates, and international lending.
2012-12-21 Year-End Capital Markets Forecast by Jason Hsu of Research Affiliates
What looks best for 2013? Given financial repression in developed marketspolicies that prolong negative real interest ratesemerging market local currency sovereign bonds are likely to outperform their developed market counterparts. For equities, both developed (ex-U.S.) and emerging markets offer more attractive valuations and better dividend yields than U.S. stocks.
2012-10-31 The Role of Risk in Asset Allocation by Jason Hsu of Research Affiliates
A traditional asset allocation framework allocates to various asset classes with the goal of matching important risk exposures. In reality, many asset classes share exposures to common risk factors and thus are highly correlated, particularly with equities. This article explains how investors can achieve more intuitive and perhaps more sensible portfolios with an approach based on risk factors.
2012-07-24 Why We Don't Rebalance by Jason Hsu of Research Affiliates
Research makes a compelling case that investors should rebalance their portfolios, yet most investors do not do so. Why not? The answer is less about behavioral mistakes and more about the fact that rational individuals care more about other things than simply maximizing investment returns.
2012-06-21 Selling Hope by Jason Hsu of Research Affiliates
Many of us in the investment management business are fond of telling our clients that "hope is not a strategy." Ironically, selling hope has worked out to be a fantastic strategy for investment managers. In our new newsletter, "Simply Stated," I suggest that investors may want to think twice about how much they are willing to pay for hope.
2012-03-29 Should you be Concerned About the U.S. Government Debt? by Jason Hsu of Research Affiliates
Should investors be concerned about the size of the U.S. government debt? Does it matter who owns the debt? This months Fundamentals, authored by Research Affiliates CIO Jason Hsu, examines the implications for future consumption and investors portfolios.
2011-06-24 The 3-D Hurricane and the New Normal by Jason Hsu of Research Affiliates
Debt, deficit, and demographics—the 3-D hurricane— is heading to the shores of all developed economies. It threatens to derail the economic recovery and to alter forever the heretofore path of robust growth for the developed world.Emerging economies with healthy government and household balance sheets, responsible fiscal policies, and young labor forces will be the drivers for global growth and will compete with their developed counterparts for economic and political leadership. More importantly, the emerging economies will demand their fair share in the consumption of resources and goods.