More on Related Themes
2014-04-16 Every Portfolio Has Faith by William Smead of Smead Capital Management
At Smead Capital Management, we believe that everyone who invests has faith in someone or something. We also believe that who and what you put your faith into is greatly influenced by the time period involved. As we look out into the rest of 2014 and beyond, we would like to consider the kind of faith required by the largest pools of investment dollars in the US. This includes looking at who they are trusting, what they are trusting in, and what time frames they are operating under.
2014-04-16 A Classic Barometer by Richard Bernstein of Richard Bernstein Advisors
Investors seem a bit too eager to tout emerging market equities. Much as they did with technology stocks during the early-2000s, investors today are looking for the best re-entry point. Data clearly do not support anymore the notion that emerging markets are a superior growth story, yet investors seem to be ignoring the classic warnings signs for fear of missing out. One such classic warning sign is the slope of the yield curve. Historically, steeper yield curves have been reliable forecasters of stronger overall nominal economic growth and stronger profits growth.
2014-04-15 What\'s Next for Emerging Markets? by Nathan Rowader of Forward Management
Emerging markets (EM) have been an enduring growth story, but their recent stretch of underperformance and fears of a global economic slowdown are chilling investors’ enthusiasm. Pulled between opportunity and risk avoidance, many investors have been left uncertain as to what they should do next.
2014-04-11 Equities Appear Attractive in Years Leading Up to Fed Tightening by Kevin Mahn of Hennion & Walsh
Fed Chair Janet Yellen said her expectation for the first increase in the Federal Funds Rate would come approximately six months following the end of the asset purchase program.
2014-04-10 The Russians Are Coming by Jeffrey Saut of Raymond James
The Russians Are Coming, The Russians Are Coming is a 1966 American comedy film directed by Norman Jewison and based on Nathaniel Benchley’s book The Off-Islanders. The movie tells the Cold War story of the comedic chaos that happens when a Soviet submarine runs aground closely offshore a small island town near New England and the crew is forced to come ashore. Last Friday, however, rumors that the “Russians are coming” swirled down the canyons of Wall Street, causing a late Friday Fade that left the S&P 500 (SPX/1865.09) down an eye-popping 24 points.
2014-04-10 Assuage Your Fears of Rising Rates with Global Diversification by Julie Salsbery of PIMCO
?Although PIMCO believes interest rates are fairly anchored in the near term, we think investors can position their fixed income portfolios more defensively. Global diversification across developed and emerging markets can offer a defense against rising U.S. rates by reducing the concentration of risks within a portfolio, while also potentially lowering volatility and enhancing returns.
2014-04-10 March 2014 Pension Finance Update by Brian Donohue of October Three Consulting
Pension finances deteriorated slightly in March, and both ‘model’ plans we track ended the first quarter of 2014 in modestly negative territory. Traditional ‘Plan A’ lost about 1% last month and is now down almost 4% for the year, and ‘Plan B’ slid less than 1% during March, ending the quarter almost 2% in the red.
2014-04-09 Dare to be Great II by Howard Marks of Oaktree Capital
In September 2006, I wrote a memo entitled Dare to Be Great, with suggestions on how institutional investors might approach the goal of achieving superior investment results. I’ve had some additional thoughts on the matter since then, meaning it’s time to return to it. Since fewer people were reading my memos in those days, I’m going to start off repeating a bit of its content and go on from there.
2014-04-08 Asset Allocation Implications of a Flattening Treasury Yield Curve by Martin Pring of Pring Turner Capital Group
The Treasury yield curve has started to flatten in recent weeks. Based on historical relationships, this process is likely to have important implications for investors because it signals that the business cycle has moved to a more self-reliant and less Fed dependent state.
2014-04-07 The Doubt of Appearances by Dimitri Balatsos of Tesseract Partners
Households have made significant progress mending their balance sheet in the post-crisis period. Assets have been boosted on the back of higher home values and stock prices, while liabilities have been trimmed, mostly mortgages, thanks in large part to widespread home foreclosures.
2014-04-05 Investing for Retirement: The Defined Contribution Challenge by Ben Inker and Martin Tarlie of GMO
Target date funds are rapidly becoming the workhorse for DC plans. These funds have grown substantially in recent years, partly as a result of automatic enrollment made possible by the Pension Protection Act of 2006. By and large, current target date funds resemble the old investment advisor adage that stock weight should be about 110 minus a person’s age. While this satisfies the common-sense intuition that, all things being equal, weight in stocks should go down as a person ages, there are a number of problems with this approach. In this paper we focus on two in particular.
2014-04-03 Fiduciary vs. Suitability Standards-Your Need to Know the Difference by H. William Wolfson of American Financial Advisors
Beth Banker, a successful business woman, has been having ongoing neck and back issues. She decided to access web based information as to obtain self treatment options. Upon her reading, she realized that her condition, although appearing musculoskeletal in nature may be more involved with underlying pathologies. Although her intent was to heal herself, in reality she became more concerned and stressed as to the amount of research and data that existed…which she didn’t understand.
2014-04-01 Fundamental Tango by Scotty George of Alexander Capital
The economy and financial markets are forever sending out mixed, parallel, or confusing messages. Inflation or stagflation? Buy now, or take your profits? Proceed slowly, or go home? At this moment, the signals are hardly synchronized.
2014-03-27 The Media’s Incomplete Coverage of the Active/Passive Debate by Roger Nusbaum of AdvisorShares
Barron’s revisited the debate between active and passive portfolio management with it’s conclusion revealed in the article’s title; Go Active for Bonds, but Index Your Stocks. This is an important issue for market participants to explore and the revisit every so often.
2014-03-26 Hangman: The ETF Revolution by Cole Smead of Smead Capital Management
Financial innovation in the investment business is, in our opinion, sometimes just smoke and mirrors. The recent movie The Incredible Burt Wonderstone illuminates what this smoke and mirror façade can produce.
2014-03-26 Picture This by Jeffrey Saut of Raymond James
Picture this: you’re an investor starting out in the 1940s after World War II came to an end. Your own experience in the contemporary history of the stock market would've taught you that bonds were the safer, and superior, asset allocation over the long-term.
2014-03-24 Market Outlook by Scotty George of Alexander Capital
For those of us that have been around for awhile, we have come to recognize that each Federal Reserve Board Chairman has had a unique way of speaking and a unique personality. Remember the "Volcker Rules"? How about "Greenspan-speak"? Well, last week we had a chance to take a measure of the person, and her language, who currently presides over monetary policy, Fed Chair Janet Yellen. And while a snapshot is not necessarily a truism of the embodiment of the whole, there were a few takeaways, not the least of which was the market's (once again) overreaction to what was being said.
2014-03-21 Emerging Markets: Four Reasons for Caution, Not Abstinence by Russ Koesterich of iShares Blog
In the space of three years, emerging markets have gone from a key strategic asset class to persona non grata. But while Russ shares investors’ concerns on the near-term outlook for EM assets, he doesn’t agree that EM stocks should be completely shunned.
2014-03-19 What if Grantham is Right? by Roger Nusbaum of AdvisorShares
There were two articles recently both exploring the same possible outcome; that investor returns from capital markets could be much lower in the coming years. No matter what markets end up doing, advisory clients and do-it-yourselfers still have financial plans that likely require some amount of growth over time in order to have a chance of succeeding without something, such as desired lifestyle or working longer than hoped for, having to give.
2014-03-17 Market Outlook by Scotty George of Alexander Capital
What's another 200 point down day (Dow) when you're having fun? The violent and excessive overreactions of the week prior were added to by Asia and Europe on Thursday/Friday past, just for good measure.
2014-03-17 Frontier Markets: Weighing the Risks by Nathan Rowader of Forward Investing
Why would investors even think about investing in fledgling, so-called frontier economies half a world away? The quick answer is that some of the best-performing stock markets in the world can be found in places like Kenya, Bulgaria and Argentina. Annual equity returns topped 40% in all three countries in 2013 while a number of other frontier markets (FMs), including Romania, Serbia and Nigeria, experienced annual returns ranging from 25% to 35%. Although past performance is not a guarantee of future results, investors in search of portfolio growth and diversification are taking note.
2014-03-14 Dangerous Assumptions for Retirees by Rob Isbitts of Sungarden Investment Research
One of the main difficulties with MPT, is that by focusing on historical data to calculate asset allocation, it completely ignores extreme risk (2007-2008).
2014-03-12 The Bull Market Turns Five by Doug Ramsey of Leuthold Weeden Capital Management
The post-2009 stock market upswing now qualifies as only the sixth cyclical bull market since 1900 to last five years or more. Life expectancies at such an advanced age are limited; only three of the previous five-year-old bulls lived to see a sixth birthday. Many media and market pundits seem to believe a rising age somehow leads to rising life expectancy. The consensus opinion that a new secular bull market has begun is much more confident today than at the bull’s first, second, third or fourth birthdays.
2014-03-12 The Importance of Beta Management by Richard Bernstein of Richard Bernstein Advisors
Morningstar recently released “Mind the Gap-2014” which demonstrated that investors are generally very poor beta managers. The Morningstar data showed that investors’ performance lagged that of their funds by about 250 basis points per year for the past ten years because of poor beta management, i.e., investors tend to be very poor allocators of capital.
2014-03-11 10 Tax-Management Strategies to Consider in a Rising Tax Environment by of Eaton Vance
When it comes to investing, we believe the most important thing is determining not what you make, but what you keep. The goal of tax management in an investment program is to maximize after-tax returns. We believe this strategy is even more critical, with investors now waking up to the fact that tax rates have risen considerably.
2014-03-10 Market Outlook by Scotty George of Alexander Capital
The irascible, and sometimes irrational, actions of the major indices this year should confirm for all observers that there's something at work in the financial markets that goes way beyond "traditional" fundamental analysis and good stock picking.
2014-03-06 Volatility Returns as Crisis in Ukraine Creates Uncertainty by Kevin Mahn of Hennion & Walsh
Most investors have most likely never even heard of Ukraine prior to the last two weeks. Now the future of Ukraine and potential repercussions on other countries in the region appear to be at the forefront of investor minds across the globe. Overall, Ukraine is a relatively small country in Eastern Europe with a population of about 46 million people that borders the likes of Russia, Belarus, Poland, Slovakia, Hungary, Romania and Moldova.
2014-03-06 Emerging Markets: Distinguishing Opportunities by of Manning & Napier
The recent sell-off in emerging market currencies and equities is part of a broader move that has seen the asset class heavily underperform developed markets since mid-2012. Part of the underperformance can be attributed to disappointing economic performance, as actual growth in the emerging markets (EMs) has come in much lower than broader consensus expectations.
2014-03-05 Asset Allocation: The Conundrum of 2014 by Jeffrey Knight of Columbia Management
In 2013, both the S&P 500 Index and the yield on 10-year Treasury bonds finished the year at their highest levels of the calendar year. So ended a year when equity markets dominated the return landscape, while bonds and numerous other assets struggled. The environment apparently changed, though, with the turning of the calendar to 2014. In the New Year, bonds have performed quite well, with yields on 10-year Treasuries, as an example, falling from 3.03% to 2.67% so far this year. Stocks meanwhile, have been volatile, yet stand close to unchanged on a year to date basis.
2014-03-04 A Century of Policy Mistakes by Niels Jensen of Absolute Return Partners
A century ago Argentina ranked as one of the wealthiest countries in world. Today it is a shadow of its former self. A long string of policy errors explain the long slide from riches to rags. Europe, like Argentina 100 years ago, is facing enormous challenges - as well as potential pitfalls - and the management of those challenges will define the welfare path for many years to come. Unfortunately, the early signs are not good. Our political leaders, afraid to face public condemnation, have so far chosen to ignore them.
2014-03-03 Six Easy Pieces: Fundamentals of Asset Allocation Explained by Patrick Rudden of AllianceBernstein
Figuring out the best split for your assets often seems daunting. But it doesn’t have to be. This template can help you get started.
2014-03-03 Market Outlook by Scotty George of Alexander Capital
Whereas the "micro" details of ascribing corporate valuations are litigated every day through securities' trading on global bourses, there is very little "macro" disagreement that we are at a critical global inflection where recovery and purchasing power either expand or remain less than satisfactory. If it doesn't happen now, after all the intervention, debate, austerity and fiscal changes, it is not likely to take root at all.
2014-03-03 Stanford Wonk Argues In Favor Of Levered Equity Funds by Roger Nusbaum of AdvisorShares
A long-time reader sent a link to an article from Forbes titled Leverage Your Way To A Richer Retirement. The article considered research done by Jason Scott at Financial Engines which looked at completely revamping the 4% rule (the 4% rule pertains to the optimal withdrawal rate for a retiree take from their portfolio without exhausting their funds).
2014-02-26 A CAPE Crusader by James Montier of GMO
In a new white paper today, James Montier of GMO's asset allocation team reviews a range of valuation measures to assess current U.S. equity market valuations. He concludes: "We continue to believe that the weight of valuation evidence suggests the S&P 500 is significantly overvalued at its current levels."
2014-02-24 Secular Bull Or Bear? by Doug Ramsey of Leuthold Weeden Capital Management
At the January highs, the S&P 500 had gained almost 175% in just 58 months, while secondary stocks and equal-weighted market measures have gained considerably more. If it’s already over (and we don’t think it is), this cyclical bull will go down as a memorable one. But is this move the first leg of a new secular bull market? … We think the next cyclical bear market will drive the market to levels low enough that debate will rage over the true date of the secular bear market low: was it 2009, or 201X?
2014-02-24 Market Outlook by Scotty George of Alexander Capital
In the four and one-half year market recovery since the "Great Recession" there has been a remarkable transformation in the construction and analysis of corporate earnings. This is something that gives me pause for concern.
2014-02-20 Peer Group Analytics and Valuation, an Abstraction by David Kleinberg of Universal Orbit
Peer group analytics and valuation are essential components when assessing the optimal risk-return equation. As opposed to an efficient frontier populated with the regressed correlated expected future returns of conventional securities or asset classes perhaps one determined by business segment operations is more advantageous.
2014-02-20 Preparing for the Unexpected with Commodity Futures ETFs by Ryan Issakainen of First Trust Advisors
Three straight years of negative returns for broad commodity benchmark indices, such as the Dow Jones-UBS Commodity Total Return Index, have led some investment advisors (and their clients) to begin questioning the rationale for including commodity futures ETFs1 in their asset allocation models. Relatively tame inflation expectations seem to support these doubts, as commodities are often thought of as a hedge against inflation.
2014-02-18 Market Outlook by Scotty George of Alexander Capital
The new thinking amongst market analysts is that one must respond to every news flash, every short-term nuance, any variable that creates a daily ripple in prices or attitude, or risk having your portfolio drift in obscurity and underperformance. The new "keeping up with the Jones’" demands that we stay tuned to business news programming 24/7 to see if we’re conforming to expectations.
2014-02-14 Weather Related? by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab
The recent slowdown in economic data appears to be largely weather related and we believe decent growth will reassert itself. Stocks have bounced after a weak start to the year, but the threat of a further pullback remains, although our longer-term optimism has not been dented. Likewise, we believe Europe offers some attractive investment opportunities but we’re in a wait-and-see mode with Japan. Finally, we don’t see EM turmoil becoming overly contagious, but we are watching that situation closely.
2014-02-12 Harvard’s Endowment: Wise or Foolish? by William Smead of Smead Capital Management
Warren Buffett says, "What the wise man does in the beginning, the fool does in the end." In a Barron's feature over the weekend, writer Andrew Bary dug into the portfolio of Harvard's Endowment through an interview with their CIO, Jane Mendillo. After all, who could possibly be wiser than what many would argue is the most respected undergraduate and graduate university in the world? Using a combination of Bary’s article and our perspective, this missive will seek to determine whether the Harvard Endowment is wise or foolish.
2014-02-11 Focus on Income: The Illiquidity Premium: Opportunities for Investing in Credit Today by Jack Rivkin of Altegris
At a time when many investors are seeking income for their portfolios, traditional sources of fixed income - principally government bonds and high-grade corporate bonds - look less than compelling. Yields are low and there is an increasing risk that interest rates will rise, which would cause the value of existing bonds to fall.
2014-02-10 Bond Investing in a Rising Rate Environment by Kathleen Gaffney of Eaton Vance
After a transitional year like 2013, when a multidecade declining rate environment moved to a rising rate environment, we think it is important for investors to consider a multisector approach to finding value in the bond market. Finding bonds that can appreciate in price regardless of the interest-rate environment is what a multisector strategy generally seeks to accomplish.
2014-02-08 Why Majority of IFAs Struggle to Scale-Up Their Practice by Rajat Dhar of Cogent Advisory
With SEBI, the regulatory body coming up with wealth service guidelines for IFAs, it is evident that only those having larger scale of operations can adapt swiftly to the changing regulations and market conditions. But, large number of IFAs in India are finding it hard to scale up. This commentary outlines the generic reasons as to what stops IFAs to scale up their practices.
2014-02-07 2013 Year-End Investment Commentary by Team of Litman Gregory
We find ourselves with a more sanguine big-picture view, at least over the nearer term, than we have had in some time. U.S. and global economic fundamentals gradually improved over the past year across a number of dimensions, and seem poised for continued improvement or at least stability in 2014. However, as we look ahead, the longer-term risks related to excessive global debt, subpar growth, and unprecedented government policy that we have worried about since the aftermath of the 2008 financial crisis still remain largely unresolved.
2014-02-06 Divesting When Discomfited by Ben Inker of GMO
Ben Inker explains why, "for our asset allocation portfolios we generally try to trade slowly." He notes, "The slightly odd fact is that moving slowly on value-driven decisions has simply made more money historically than moving immediately would have."
2014-02-06 Year-End Odds and Ends by Jeremy Grantham of GMO
In a new quarterly letter to GMO’s institutional clients, chief investment strategist Jeremy Grantham offers "Year-End Odds and Ends": Fossil Fuels: Is Tesla a Tease or a Triumph?, Fracking and Yet More Technical Stuff on Fracking, Update on Metals, Fertilizers, and Food, Problems in Forecasting Short-term Prices for Resources, Another Look at U.S. GDP Growth, Investment Lessons Learned: Mistakes Made Over 47 Years
2014-02-06 EM Misery and US Large-Cap Euphoria by William Smead of Smead Capital Management
Many investors are wondering why emerging stock market misery currently equates to weakness in the US stock market as represented by the Dow Jones Industrial Average and the S&P 500 indexes (large-cap). Long time followers of our writing at Smead Capital Management are aware that we have been making the argument this would happen since 2010 and we are happy to review our thesis.
2014-02-05 2014 Market Outlook by Kevin Mahn of Hennion & Walsh
Some Bumps along the Road of Global Recovery
2014-02-05 The Importance of Taking a Long-Term Perspective by Jeffrey Knight of Columbia Management
For asset allocation decisions, we find great value in maintaining a long-term outlook for major asset classes. Twice a year, in fact, we conduct an extensive update of our five-year return forecasts for several asset classes. The purpose of this exercise is two-fold. First, taking a longer term perspective helps us to set strategic asset allocations and design portfolios for diverse investment goals.
2014-02-04 Challenging the Consensus by Niels Jensen of Absolute Return Partners
Investors are overwhelmingly bearish on bonds going into 2014. In this month’s Absolute Return Letter we challenge that view and look at various reasons why the bond market may surprise most people and deliver a positive return this year.
2014-02-03 Market Outlook by Scotty George of Alexander Capital
Despite the inverted gyrations of the stock market during the past three weeks, my market overview continues to be moderately bullish, of course with specific reservations about investors’ unbridled carryover of unrealistic expectations borne out of last year’s performance.
2014-01-31 The New Watchword-Deflation? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab
Equity markets have been shaky to start the year but we don’t believe it’s time to abandon ship. The fundamentals in the United States continue to look appealing and the recent pullback has helped to correct some sentiment and valuation concerns. We are watching the fight against deflation carefully in Europe and Japan, and believe both countries may need to do more via monetary policy stimulus. Meanwhile, some emerging economies are dealing with inflation, but we don’t believe the recent problems will morph into a widespread crisis at this point.
2014-01-27 Market Outlook by Scotty George of Alexander Capital
Despite projections that interest rates might enter a secular upswing if the economy continues to improve, the inescapable fact is that bonds, and other fixed-income securities, are not the place for investors to generate yield, stocks are. The way to improve upon dwindling dividend and interest investment objectives is to build a portfolio of high yield equities, and to protect against downside market volatility with select stop-loss support.
2014-01-27 Attractiveness of Municipal Bonds Should Not Be Overlooked in 2014 by Municipal Insight Committee of Eaton Vance
After a challenging year for the municipal bond (muni) market in 2013, we believe the underlying strength of munis has improved, making the asset class an attractive proposition heading into 2014. In our view, challenges and headwinds will continue in 2014; however, more palatable yields and the relative attractiveness of munis versus other taxable alternatives may help investors limit the volatility and downside witnessed over the past year.
2014-01-27 Rummaging for Yield - The Case of the Insurance Investor by Eugene Dimitriou of PIMCO
Since the height of the global financial crisis in 2008, insurance companies have faced three key challenges: First, insurance companies urgently needed to address new critical risk management issues as banking sector and peripheral sovereign credit risks significantly increased in Europe. Second, the prospects of longer-term low yields forced insurers to identify alternative sources of meaningful yield. And third, insurance companies needed to prepare for pan-European insurance regulation Solvency II.
2014-01-24 The Week by Jeffrey Saut of Raymond James
Arguably, the best magazine of recent times has been The Week, a publication that embraces magazine journalism in its most functional style. The Week is written in one-hundred synopses culled, for the most part, from other news organizations from around the world on all topics. If I had but one publication to read in order to stay informed on just about everything, it would be The Week. In this morning’s missive, however, I am referring to "the week" I experienced last week in South Florida.
2014-01-23 What\'s Your 2014 Market View? by Robert Horrocks of Matthews Asia
U.S. monetary policy seems likely to continue occupying center stage as people fret about interest rates. Last year was a somewhat instructive year for monetary policy theory in that it seemed to show that policies can be effective even when interest rates have no further room to be lowered. Can the nominal GDP in the U.S. grow at faster rates in 2014, and what would that mean for Asia? This month Matthews Asia’s Chief Investment Officer, Robert Horrocks, offers his insights into how reforms planned for China could be a key factor to change and what could lie ahead for the region overall
2014-01-22 Market Outlook by Scotty George of Alexander Capital
One of the most common themes we hear from political pundits and market observers these days is about either the demise or rise of the middle class, an amorphous, non-homogeneous group of people not quite rich but also not too poor. This class is often cited as the reason either to be for or against legislation, fiscal policy, social norms, or the price of a gallon of gasoline at the pump!
2014-01-22 What to Expect in 2014 (And Beyond) by Jack Rivkin of Altegris
Each year, I take Alfred Lord Tennyson’s advice and "ring out the old, ring in the new" by creating a list of expectations about the markets. My list involves events that the average investor thinks have only a one-in-three-chance of happening, but which I believe have more than a 50% chance of occurring. If this approach sounds familiar, it should. It’s modeled after Byron Wien’s annual list of "surprises." Like his, my expectations are designed to provoke thought and discussion.
2014-01-21 Turning Asset Allocation Upside Down by Roger Nusbaum of AdvisorShares
After the second 50% drawdown of the US equity market in one decade, the investment industry began to reassess the idea of what asset allocation should look like. Unlike the 1980’s and 1990’s, financial professionals can no longer rely on an almost static 60/40 or 70/30, watch the equity portion triple in 15 or 20 years and then flip the whole thing to fixed income for a safe 6%.
2014-01-14 Market Outlook by Scotty George of Alexander Capital
The stock market’s valuation expansion has left a bittersweet taste in the mouths of some who believe that this historic sequence of "new highs" is simply smoke and mirrors and accelerated expectations. Indeed, while the wealth effect is improving the lot of many, it is also exacerbating the gap between "reality" and "perceived-reality".
2014-01-08 I\'m Back by Jeffrey Saut of Raymond James
Well, I’m back after roughly a two-week hiatus where I didn’t do very many strategy calls, or strategy reports. I did, however, pen a letter regarding my forecast for 2014 dated 12/30/13. And for those who, like me, kicked back over the past two weeks to spend time with family and rejoice in the holidays, and did not read anything, I urge you to peruse my "2014" report.
2014-01-07 A Healing Economy by Richard Michaud of New Frontier Advisors
The quarter continued the theme of the year, with U.S. equities continuing their dramatic performance. For the quarter, the Dow was up 9.6%, the S&P 9.9%, and the NASDAQ 10.7%. The year’s returns substantially exceeded last year"s "expert predictions" and much of this year’s punditry with the Dow up 26.5%, S&P up 29.6%, and NASDAQ up 38.3%.
2014-01-07 Waiting for the Great Pumpkin by James Moore of PIMCO
Shortly before Thanksgiving, I had the privilege of being on an investor panel at Bank of America’s Debt Capital Markets and Derivatives Conference. On the panel before me was a trio of BofA’s chief strategists, among them Michael Hartnett, their chief investment strategist. Mr. Hartnett reminded the audience that he was the man who coined the phrase "The Great Rotation" and after much anticipation, at long last, it was here.
2014-01-06 ProVise Bullets by Ray Ferrara of ProVise Management Group
To say that 2013 was an interesting year would be a bit of an understatement. We learned a long time ago not to make predictions about the stock market because no matter what is predicted, it is likely to be wrong. Even if we get lucky one year, we are not likely to even get close the following year. We do try to give guidance, however. Last year we suggested that, given the late run in the market in 2012 and its 15% return, investors should be happy with a return of 8 to 10% in 2013. Obviously, investors enjoyed much better returns.
2013-12-31 A Look Ahead at 2014 by Russ Koesterich of iShares Blog
Last week, Russ shared his annual look back at his 2013 economic and investment calls. Now, it’s time for his annual look forward.
2013-12-31 2014? by Jeffrey Saut of Raymond James
Year-end letters are difficult to write because there is always a tendency to discuss the year gone by or, worse, attempt to forecast the coming year. Typically, when the media asks where the S&P 500 (SPX/1841.40) will be at the end of the new year, I tell them you might as well flip a lucky penny.
2013-12-27 The Risk Tolerance Paradox....And What You Can Do About It by Ken Mungan, Matt Kaufman of Milliman Financial Risk Management
The risk tolerance level many investors expect to achieve over the long-term rarely equals the same tolerance investors actually experience over shorter periods. This paper provides a brief introduction to this paradox, explores the main reason we think it exists, and introduces a risk management strategy that seeks to solve the problem.
2013-12-23 Welcome, Taper by Dianne Lob of AllianceBernstein
The Federal Open Market Committee’s statement that it will begin to taper its bond purchases in January is a good sign that the US economy continues to heal, in our view.
2013-12-20 Five Resolutions for 2014 by David Kelly of J.P. Morgan Funds
Entering 2014, the global investment environment is as challenging as ever. After a super 2013 in returns, U.S. equities can no longer be considered inexpensive and yet still look attractive relative to the prospective returns on savings accounts and long-term bonds. Long-term bond yields are higher than a year ago but could still rise further as the Federal Reserve begins to reduce quantitative easing.
2013-12-18 Three Investments that Could Return to Favor in 2014 by Jeffrey Knight of Columbia Management
When investors lose confidence in an asset class, especially one that had been popular enough to attract outsized allocations, subsequent rebalancing generally leads to prolonged periods of underperformance. Technology stocks after 1999, for example, underperformed the S&P 500 in eight of the next 10 years and by a cumulative total of more than 40 percentage points. Today, many believe that interest rate sensitive bonds might have just begun a similar era of waning investor confidence, portfolio reallocation and underperformance.
2013-12-17 Gaining Perspective by Jerry Wagner of Flexible Plan Investments
This weekend we were honored to have Steve Finn, the owner of our largest custodian, Trust Company of America, and his lovely wife, Kelly, join us for our annual Holiday Party (see more about the party in the "What’s Happening" section). On Sunday, at a post-party brunch, Kelly (who studied art at the International Academy of Art in Nice, France, and at the Brera Art Academy in Milan, Italy and has many years of patient craftsmanship with oil paint and easel) was telling us about how she goes about creating her exquisite paintings.
2013-12-16 Absolute Return Letter: Squeaky Bum Time by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners
QE has led to asset price inflation. That much we established in the November Absolute Return Letter. In this month’s letter we go one step further and look at whether we are now in bubble territory. Considering the strong bull-run we have experienced in 2012-13 it is perhaps surprising to learn that, in a historical context, it is not an outsized rally, nor are equity markets - with the possible exception of the United States - particularly expensive.
2013-12-05 Another Step Forward for US DC Plans: Managing Volatility by Daniel Loewy of AllianceBernstein
We’re seeing more US defined contribution (DC) plan sponsors looking at a variety of ways to help their participants manage volatility-and the accompanying anxiety and doubts that can often push participants to abandon their long-term investing goals.
2013-12-05 No Silver Bullets in Investing by James Montier of GMO
In a new white paper today, James Montier of GMO’s asset allocation team reviews recent "innovation in our industry." He argues, "one of the myths perpetuated by our industry is that there are lots of ways to generate good long-run real returns, but we believe there is really only one: buying cheap assets."
2013-12-04 Why Investing in High Quality Companies is More Important Today than Ever by Kendall Anderson of Anderson Griggs
One of the first rules a new financial advisor learns is that success in the business has nothing to do with how well your clients do in creating or maintaining wealth. Success is measured by how much wealth the advisor creates for him or herself. The same rule extends beyond the local advisor to the great halls of institutional management.
2013-12-03 Is the Fed Increasingly Monetizing Government Debt? by Axel Merk of Merk Investments
Fed Chair Bernanke vehemently denies Fed "monetizes the debt," but our research shows the Fed may be increasingly doing so. We explain why and what the implications may be for the dollar, gold and currencies.
2013-11-29 From the Taj Mahal to Westminster Abbey: Notes from a Global Investor by Frank Holmes of U.S. Global Investors
I recently returned from India, a nation where an incredible 600 million people are under the age of 25. That’s nearly double the entire population of the U.S.
2013-11-20 No Madness and No Crowds by Pamela Rosenau of HighTower Advisors
Charles Mackay’s book Extraordinary Popular Delusions and the Madness of Crowds, chronicles some of history’s greatest financial manias, including the South Sea bubble and the Dutch tulip mania, among many others. As the stock market continues to make new highs, discussion of a market bubble has been capturing many of the recent headlines. For those that suggest this is the case, they may need to refresh themselves with Mackay’s book, which highlights the “mania” phase a phase that we have yet to encounter.
2013-11-19 Asset Class Allocation and Portfolios: Critique and Complication by Adam Jared Apt (Article)
In Part 1 of this essay, I explained that for asset class allocation to become an investment practice, it required a foundation of theory. And Modern Portfolio Theory was that foundation. But today, most financial journalists and investment advisors who proffer advice centered on asset class allocation are—if I may judge from their writings—oblivious of this. And why shouldn’t they be? Theory is abstract and difficult to apprehend.
2013-11-19 Breaking News! U.S. Equity Market Overvalued! by Ben Inker of GMO
In GMO’s quarterly letter to institutional clients today, co-head of asset allocation Ben Inker outlines the reasoning behind GMO implementing a new forecast methodology for the U.S. stock market. While the new methodology has slightly increased GMO’s seven-year forecast for U.S. equity returns, Ben notes, "The basic point for us remains the same -- the U.S. stock market is trading at levels that do not seem capable of supporting the type of returns that investors have gotten used to receiving from equities."
2013-11-15 Are You Prepared for Economic Recovery? by Nanette Abuhoff Jacobson of Hartford Funds
Nanette Abuhoff Jacobson discusses how many portfolios are out of balance today and explains why investors should consider increasing their equity exposure.
2013-11-14 This May Sting Just a Bit: Global Diversification by Jeff Hussey of Russell Investments
Russell Investments’ global chief investment officer argues that times when global diversification falls out of favor might provide opportunities for investors.
2013-11-12 Dream to Outperform the Market by Bill Smead of Smead Capital Management
If you dream about investment market outcomes which are already popular in the marketplace, your dreams can turn into nightmares. The Everly Brothers 1958 hit song, “All I have to do is Dream” tells us a great deal about the long-term posture of investors in late 2013 and how dreams can turn to nightmares. On the other hand, if you dream about an outcome which most experts aren’t expecting, the rewards can be explosive.
2013-11-08 Asset Allocation: Pie in the Face? by Robert Isbitts of Sungarden Investment Research
The typical approach to spreading one’s assets in order to diversify and conquer, is to have the client complete a risk tolerance questionnaire. That survey is important not only to establish guidelines for how the assets will be managed, but also because some form of it is required by securities regulators to make sure advisors know who their clients are. The magical conclusion usually includes a color pie chart, representing a variety of asset classes that are assumed to be a path toward asset growth and preservation of capital.
2013-11-07 Upgrading Non-U.S. Equities by Jeffrey Knight of Columbia Management
Two performance trends have stood out across world markets during 2013. The first is the strong outperformance by equities over bonds. The second is the strong returns of the U.S. stock market relative to other stock markets around the world. The Table breaks down year to date performance for the S&P 500, Eurostoxx 50, FTSE 100, Topix and MSCI Emerging Market indices. Notice that as of the end of July, equity returns in the Unites States were handily outpacing all other regions except Japan.
2013-11-07 Absolute Return Letter: Euthanasia of the economy? by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners
QE has had two noticeable and positive effects. It has saved the world from a financial meltdown not once, but twice, and it has had an overwhelmingly positive impact on asset prices, so in that respect QE has been a success. However, there are growing signs that QE may be beginning to impair economic growth and it may even cause dis-inflation, precisely the opposite of what was widely expected. For these reasons we believe it is time to call it quits and begin to tackle the root problem a banking industry still suffocating from bad loans.
2013-11-06 Permabull? by Jeffrey Saut of Raymond James
A permabull is defined as somebody who is always upbeat about the future direction of the stock market and the economy. Recently I have been called a permabull by certain members of the media, which may be true since March of 2009, but certainly not true over the past 14 years.
2013-11-01 Risk Management: An Ounce of Prevention by Seth Masters, Daniel Loewy, Martin Atkin of AllianceBernstein
They say an ounce of prevention is worth a pound of cure. But if the sickness is excessive portfolio volatility, “prevention” can entail more than one step.
2013-10-30 The S&P 500 Has Not Been Particularly Difficult to Beat by Kendall Anderson of Anderson Griggs
I know this statement is in direct conflict with the teachings of modern finance. Modern finance provides us with multiple studies that, if taken at face value, offer a pretty convincing case that the ability to earn better than average returns is a fool’s game. Yet, our human nature cannot accept being average.
2013-10-26 Why U.S. Dollar Will Remain World\\\'s Reserve Currency, Despite Political Brinkmanship by Tatjana Michel of Charles Schwab
The U.S. dollar is not likely to lose its premier world reserve-currency status anytime soon. But continuing U.S. political brinkmanship could drive foreign countries into other currencies faster. With the market focus shifting to monetary policy and growth, we expect a Fed taper delay to give foreign currencies some time to recover.
2013-10-24 Putting Tax-Deferred Accounts to Best Use by Kathleen Fisher, Tara Thompson Popernik of AllianceBernstein
The common wisdom about retirement planning is to fund tax-deferred vehicles such as 401(k) plans and IRAs to the maxand we agree. But how to put these accounts to best use is more complicated.
2013-10-24 Glory Days: Could They Come Back for US Equities? by Liz Ann Sonders of Charles Schwab
A "great rotation" may not be underway by individual investors; even amid record-breaking outflows from bond funds this summer. But fund flow data do show some shift in preferences and highlight the sensitivity of investors to any rise in longer-term interest rates. A more interesting place to look is at the fiduciary community; that has decidedly shifted its attention away from traditional equities (and fixed income) over the past decade.
2013-10-17 Investing in Retirement: Bonds Aren't Enough by Kathleen Fisher, Tara Thompson Popernik of AllianceBernstein
What should you invest in after the spigot of earned income is turned off? It’s a vexing question, especially since we expect lower stock and bond returns going forward.
2013-10-17 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
October 17th looms large as a critical inflection point in our economic/political discourse. On that date the U.S. Congress is supposed to “raise the debt limit”, which simply means allocating the funds to cover debts already incurred by the Federal government. The date is being held hostage by both political parties in order to relegitimize the previous election (2012) and to dial-up the rhetoric of disparate political ideology.
2013-10-15 A Better Way to Measure Risk Tolerance by Joe Tomlinson (Article)
In building financial plans, asset-allocation recommendations must recognize the client’s ability to absorb risk. To aid in this assessment, advisors often use risk-tolerance questionnaires, but these tools have shortcomings. The evolving field of brain science can help to design better questionnaires.
2013-10-15 Why Customized Content Beats Canned Content by Neil Rhein (Article)
If you’re communicating syndicated (“canned”) content that is similar (or identical) to what every other advisor is saying, you’re just adding to the noise.
2013-10-15 Letters to the Editor by Various (Article)
Readers respond to Robert Huebscher’s article, The Futility of the Endowment Model, which appeared last week.
2013-10-08 The Futility of the Endowment Model by Robert Huebscher (Article)
In the past two decades, the so-called endowment model has been adopted by hundreds of endowments, foundations and advisors – particularly those serving ultra-high-net-worth clients. By aggressively allocating to illiquid alternative asset classes, those investors hoped to duplicate the results of Yale and other top-tier institutions. New research exposes the futility of those efforts.
2013-10-08 Listen to the 10th Man by Kristina Hooper of Allianz Global Investors
There’s no shortage of short-term risks in today’s market or conventional wisdom on how they will play out. But prepping for the unexpected could limit the number of surprises and better insulate investors’ portfolios, writes Kristina Hooper.
2013-10-08 Absolute Return Letter: Heads or tails? by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners
Demographics captivate me. There are around 7.1 billion of us occupying planet earth today, going to 10 billion by 2050. I often think about how good old mother earth will cope with the additional 3 billion people we are projected to produce between now and 2050. More people translate into increased pressure on already scarce resources, but that is only part of the story and a story well covered by now.
2013-10-04 The Economy, the Fed, and Politics by Richard Michaud of New Frontier Advisors
It was a good quarter to invest in equities, and despite a down second quarter, overall a good year as well. The Dow was up 1.5%, the S&P 4.7% and the NASDAQ 10.8%. Year-to-date returns were very positive with the Dow up 15.5%, S&P up 17.9%, and NASDAQ up 24.9%. International equities were also positive for the quarter and year with the MSCI ACWI ex US up 9.4% and up 7.5% year-to-date. While emerging market equity indices were up 5% for the quarter they remained negative -6.4% for the year.
2013-10-02 The Math is Pretty Straightforward... by Blaine Rollins of 361 Capital
Congress and the White House must be pretty fired up that D&D2 started filming last week. The new movie might be the only thing more stupid than our elected leaders failing to negotiate and reach a deal. Most everyone either wants to spend our tax dollars like drunken professional athletes or hold our economy and financial markets hostage via a government shutdown and failure to raise the debt ceiling.
2013-10-01 The Eight Principles of Value Investing by Scott Clemons and Michael Kim (Article)
In any environment, but especially one characterized by uncertainty, eight principles of investing are critical. These bedrock beliefs help guide our thinking at the levels of asset allocation, security selection and identification of the third-party managers we engage to help manage our clients’ assets.
2013-09-26 One Trick Pony: Whipping the GDP Donkey into a Stallion by Cliff Draughn of Excelsia
The difficulty since 2012 has been that if you are not significantly overweight US equities, then your returns are less than stellar. Employing a diversified, risk-averse investment strategy in 2013 has in hindsight been the wrong thing to do, given that every other asset class is negative year-to-date, while US stocks are up double digits. The combination of the Fed’s Zero Interest Rate Policy and the artificial bubble in Treasury bonds has forced conservative investors into riskier positions in order to find risk-adjusted returns.
2013-09-25 After the Fed's Surprise: 4 Asset Allocation Implications by Russ Koesterich of iShares Blog
The Fed’s surprise no-taper announcement confirmed Russ’ expectation that the global recovery remains soft and that interest rates are likely to remain contained this year. What does this mean for investors? There are four implications for asset allocations, says Russ.
2013-09-25 More Than a “Sugar High” by Pamela Rosenau of HighTower Advisors
The recent decision by the Fed to delay any tapering may be a preview of what to expect by a “Yellen Fed”. As the Fed appeared to remove “virtually every yardstick or goal post” that they have provided recently, one thing is certain, “they seem determined to keep the accelerator nailed to the floor as they drive the economy at full speed.” According to Cornerstone Macro, based on the Fed’s move, it appears increasingly likely that “growth is more likely to reaccelerate.”
2013-09-24 Why Retirees Should Choose DIAs over SPIAs by Wade Pfau (Article)
Retirement portfolios can be constructed from a mix of asset classes, including stocks, bonds and annuities. In the past, I’ve shown that retirees achieve some of the best outcomes by allocating a portion of those assets to SPIAs. In this column, I extend my analysis to show that DIAs work even better than SPIAs, by providing more liquidity and better longevity protection at a lower cost.
2013-09-23 Happy Anniversary? Perspectives on the Financial Crisis Five Years Later by Nanette Abuhoff Jacobson of Hartford Funds
Since 2008, there’s been slow but steady improvement in the global economypolicy makers’ unconventional tools have helped stabilize ﬁnancial markets and bought time for economies to rebalance. Expectations are too low for developed-market growth and inﬂation, in our view. As such, we think this environment will be positive for developed-equity marketsparticularly in Europe and Japan.
2013-09-16 Investment Reality as Told Through the Most Interesting Man in Baseball by Rob Isbitts of Sungarden Investment Research
You probably haven’t heard of Greg Dobbs. If you have, you are either a big Major League baseball fan, a casual fan of the Miami Marlins baseball team, or you know Greg Dobbs personally. He is a solid Major League player, but will not be mentioned alongside Ruth, Mays and Ripken. He is a great team player, a great media interview and was briefly featured on a national TV program last year as “the most interesting man in baseball,” a moniker given to him by one of his teammates.
2013-09-13 What's Happening to Bonds and Why? by Mohamed El-Erian of PIMCO
To say that bonds are under pressure would be an understatement. Over the last few months, sentiment about fixed income has flipped dramatically: from a favored investment destination that is deemed to benefit from exceptional support from central banks, to an asset class experiencing large outflows, negative returns and reduced standing as an anchor of a well-diversified asset allocation.
2013-09-11 Absolute Return Letter: A Case of Broken BRICS? by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners
EM currencies, stocks and bonds have struggled since the Fed signalled its intent to change course in late May. This has seemingly triggered an exodus of speculative capital from emerging markets but, as is always the case, there is more to the story than that. EM countries (ex. China) no longer run a current account surplus with the rest of the world, and this hurts global liquidity. It is not yet a re-run of the 1997-98 Asian crisis, but it has the potential to become one with all sorts of consequences for bond yields in developed markets, currency wars, etc.
2013-09-10 Raising the Bar on Target Date Due Diligence by Manning & Napier/Strategic Insight of Manning & Napier
Deeming whether target date fund investments are appropriate for a specific participant population is an arduous and imperfect task, made more complicated by a lack of full transparency. Fiduciaries should question whether the underlying securities of target date funds are appropriate to meet the retirement saving needs of plan participants. However, the question itself raises concern about what it would take to examine the funds in such detail.
2013-09-10 Taper Vs. No Taper - Let\'s Meet Somewhere In The Middle by John Rothe of Riverbend Investment Management
Volatility in the US equity and bond markets has risen since Ben Bernanke and the rest of the Federal Reserve Board mentioned the possibility of tapering its bond purchase program - in other words, a potential end to the "free ride" the Fed has been giving investors. However, economic data is still weak and a reduction in economic stimulus by the Fed may harm the US economy.
2013-09-09 Moving On - Five Years After Lehman by John Petrides (Article)
This month marks the fifth anniversary of the Lehman Brothers failure and the start of worst financial crisis in American history since the Great Depression, and yet to some investors, it seems like only yesterday. Investors still hold onto that period of volatility as if it will happen again tomorrow, paralyzing and confusing their investment decisions. Consequently, many investors have watched from the sidelines as the stock market has recovered solidly year after year.
2013-09-06 Will Gold Follow Its Seasonal Pattern This Year? by Frank Holmes of U.S. Global Investors
There are factors beyond Syria this week driving gold. That’s the Love Trade. This group gives gold as gifts for loved ones during important holidays and festivals. This is the time of the year that we are in the midst of right now. Historically, September has been gold’s best month of the year. Looking at more than four decades of monthly returns, the precious metal has seen its biggest increase this month, averaging 2.3 percent.
2013-09-04 Weekly Market Review Notes by Team of Tuttle Tactical Management
In August the US Stock Market had its worst month since May 2012 and there are a bunch of interesting issues going into September, including Syria, Problems in Emerging Markets,and Fed tapering.
2013-09-03 The Impact of Severe Drawdowns on Safe Withdrawal Rates by Lloyd Nirenberg, Ph.D. (Article)
A Google search for “safe withdrawal rates” produces 30 million results, but none answers a question that is critical to advisors and investors: How would a sudden market downturn – a “return shock” – impair a retiree’s forecast withdrawals?
2013-09-03 How a Menu of Services Generates Revenue by Teresa Riccobuono (Article)
Very few advisors do as good a job as possible articulating their value proposition and the ways they can be of service to their clients. If clients purchase products or services from competitors, it may be because they are unaware of the full range of your offerings.
2013-08-29 Monthly Investment Commentary by Litman Gregory Research Team of Litman Gregory
U.S. stocks resumed their positive streak in July (after a slightly negative June). Large-cap stocks rose in three out of the four weeks and were up 5% for the month. Smaller companies generally outperformed their larger-cap counterparts. After Federal Reserve comments regarding the timing of its stimulus withdrawal upset markets in May and June (particularly the bond market), investors seemed to take comfort in the Fed’s more recent comments. Among other points, Chairman Bernanke reiterated that a decision to taper bond purchases is different from raising the federal funds rate
2013-08-28 Weekly Market Review Notes by Team of Tuttle Tactical Management
Yesterday was a pretty big down day for the market. The media blamed it on fear about a war in Syria. If the market sold off every time there was a war or fear of a war in the Middle East then the Dow would be at 100 by now. What you had was a market that was slightly overbought in the short term, a week when tons of people are on vacation, and an excuse to take profits. Moves like this are disconcerting but at the end of the day they are just noise. For Syria to cause a real market decline it would have to morph into a massive war that engulfs the entire Middle East.
2013-08-27 Why Bad Decisions Happen to Good People: An Introduction to Behavioral Finance by Scott Clemons (Article)
Cognitive biases frequently cause even skilled investors to make irrational decisions. Thankfully, irrationality is fairly predictable. Here are four behavioral biases that investors face and techniques for recognizing and overcoming them.
2013-08-21 Trickle-Up Economics by Bill Smead of Smead Capital Management
Major magazines have a history of putting a topic on their cover at the end of a long-term trend. For example, “The Death of Equities” was a Business Week cover in late 1979, near the end of a miserable stretch in the US stock market. Time’s recent cover story, “The Childfree Life”, got us wondering about the economics of childbearing in the US? Does Time’s cover mark the end of a trend? Can the US economy succeed without homegrown population increases? Will economic success driven by the current demographics in the US trickle down to unemployed blue collar
2013-08-20 Epic Climb Up and to the Right... by Blaine Rollins of 361 Capital
Interest rates continue to make an epic climb up and to the right...
2013-08-16 Using Equities to Hedge Inflation? Tread With Care by Bob Greer, Raji Manasseh of PIMCO
Historically, broad equity returns have not intrinsically provided a good hedge against inflation. Three key attributes may help companies withstand inflationary environments - pricing power, supply side advantages and a willingness and ability to sustain dividend hikes at a rate faster than inflation. To realize equities’ long-term potential as a key source of portfolio returns, investors should consider enlisting active managers who select stocks with a view on inflation and its effect on specific companies.
2013-08-16 Attention Investors: Don't Fear Rising Rates; Fear Perpetually Low Rates by J.J. Abodeely of Sitka Pacific Capital Management
This month’s Insight will take a look at the performance of bonds during two previous inflationary periods, the 1940s and the 1970s, and illustrate two very different total return experiences. Through these examples, we will show that bond investors-- and by extension, any investor with a traditional balanced portfolio, should not fear rising rates as much as they should fear perpetually low rates.
2013-08-13 Envisioning the Planning Firm of the Future by Bob Veres (Article)
Virtually all advisors operate with a value proposition built on bettering their clients’ financial future through management of their assets. But trends in the workforce and capital markets will force advisors to rethink those assumptions and, if Richie Lee is right, the planning firm of the future will adapt a four-factor service model that places much greater emphasis on helping clients maximize their human capital.
2013-08-13 China's Government Can't Stop the Bust by Bill Smead of Smead Capital Management
On a recent trip to Europe we participated in a forum in Milan of five stock picking organizations. Two were from Brazil, one was from Malaysia and one was picking stocks inside China via the Shanghai Stock Exchange. We believe what they said was an enticement to investors for the purpose of getting them excited about stocks in their country. To us, this reveals a great deal about where prices in emerging stock markets and commodities are headed over the next five to seven years.
2013-08-08 What is Risk? by Chris Engelman of Cedar Hill Associates
There are no rewards from investing without some measure of risk. Risk management, a process for recognizing, assessing and prioritizing a variety of risks, is an essential part of managing a portfolio successfully. Cedar Hill takes a holistic approach to risk management by identifying each client’s objectives, preferences and constraints, then creating specific asset allocation and implementation strategies to minimize the effects of negative events.
2013-08-08 Quarterly Letter by Team of Grey Owl Capital Management
To begin, let us state that we are tired of writing about macroeconomic issues. We suspect you are tired of reading about them. We would like nothing more than to send out a quarterly letter full of updates on the companies we own and the rationale for individual buy and sell decisions. Nevertheless, we must address the market action following Federal Reserve Chairman Ben Bernanke’s May 22nd testimony before Congress, where he merely floated the idea of “tapering” the Fed’s quantitative easing efforts.
2013-08-08 Investment Advice Technology and How to Lose Money in the Coming Years by Kendall Anderson of Anderson Griggs
Adventures are good for my soul. They create wonderful memories, both of where I have been and all the effort it took to get there. All of us have memories, both good and not so good. I am a bit worried about the near term future.
2013-08-07 Weekly Market Commentary by Team of Tuttle Tactical Management
As I write this the S&P 500 futures are indicating a down open setting us up for possibly three down days in a row. If you watch the financial media someone will undoubtedly talk about how the sky is falling.
2013-08-06 Unlocking the Two Mysteries behind SPIAs by Wade Pfau (Article)
Two mysteries confound planners who purchase single-premium immediate annuities (SPIAs) for their clients: Why does the present value of a SPIA often exceed its cost, and why do equity allocations appear to increase when a SPIA is purchased? Unlocking those mysteries requires advisors to use a different framework – based on the household balance sheet – for the withdrawal phase of retirement.
2013-08-06 Human Capital in the Digital Economy by Alan Winger (Article)
Human capital is a key asset that planners manage as they strive to maximize consumption throughout clients’ lives. Human capital, or lifetime income, often peaks in value early in their careers. Moreover, today’s digital economy means human capital is more volatile and less predictable than in the past, and that carries important implications for financial planners.
2013-08-01 July 2013 Market Commentary by Andrew Clinton of Clinton Investment Management
Fixed income investors have enjoyed a steady move higher in bond prices over the past five years. Given the consistency with which bond values have increased, it is understandable if bond investors were surprised by the just over 0.60%, or 60 basis point rise in ten year Treasury yields and corresponding movement down in bond prices during the second quarter.
2013-07-31 The Context of Price by Pamela Rosenau of HighTower Advisors
While the stock market has enjoyed a recent rally, some investors are experiencing some “weakness in the knees” as they continue to ascend the climb. These new all-time highs in the market compound the problem for some investors as they suffer from the recency effect, or the not-too-distant memory of significant market losses.
2013-07-30 The Power of Diversification and Safe Withdrawal Rates by Geoff Considine (Article)
When Bill Bengen published his seminal research in 1994, a 4% safe withdrawal rate (SWR) was clearly attainable with a variety of asset allocations. But bond yields are lower now than they were then, and equity returns for the next 20 years are unlikely to exceed those of the prior two decades. Indeed, a new paper by three highly respected researchers showed that SWRs for stock-bond portfolios are well below 4%. But as I will demonstrate, a 4% SWR is still possible with a more diversified portfolio – and without subjecting clients to additional risk.
2013-07-30 A Strategy for Reducing Volatility While Increasing Returns by Steven Farber (Article)
The product on every advisor’s wish list would have the low volatility of fixed income while providing equity-like returns. Although such a product does not exist, equity options, when used properly, will give you the ability to achieve pre-defined goals and objectives.
2013-07-30 Economic & Capital Market Summary by Gregory Hahn of Winthrop Capital Management
We are approaching the five year anniversary of the beginning of the Financial Crisis. By this time in 2008 we had already experienced the complete seizure of the Auction Rate Preferred securities market and the takeover of Bear Stearns by JP Morgan Chase. In August of 2008, we would see the collapse of Lehman Brothers and the government takeover of AIG. We stand here today, shoulders slumped, and heads bowed mourning the lack of real progress in addressing the structural problems that are impeding sustained economic growth and private credit expansion.
2013-07-26 Attention 3-D Shoppers by John West of Research Affiliates
Why do retail shoppers love a sale while capital markets flee from falling prices? Investors should consider starting to fill their shopping carts while inflation hedges are cheap....
2013-07-23 Dear Bernanke - You Can\'t Have Your Cake And Eat It Too by John Rothe of Riverbend Investment Management
The U.S. stock market continues its euphoric rise into record territory despite continuing weakness in economic data. Recent comments from Federal Reserve Board Chair, Ben Bernanke, indicating that the Fed does not have a predetermined plan to stop its stimulus plan has investors increasing their allocations to equities.
2013-07-22 What the *&%! Just Happened? by Ben Inker of GMO
In a new quarterly letter to GMO’s institutional clients, head of asset allocation Ben Inker highlights the period from May 22 to June 24 characterized by "the universality of the declines" across asset classes.
2013-07-22 The Purgatory of Low Returns by James Montier of GMO
This might just be the cruelest time to be an asset allocator. Normally we find ourselves in situations in which at least something is cheap; for instance when large swathes of risk assets have been expensive, safe haven assets have generally been cheap, or at least reasonable (and vice versa). This was typified by the opportunity set we witnessed in 2007.
2013-07-19 Opportunity in Europe by Team of Neuberger Berman
A striking feature of this year’s global stock market rally is that international markets have significantly trailed U.S. stocks. Nevertheless, Neuberger Berman’s Asset Allocation Committee (AAC) recently made the contrarian call of upgrading its view for international developed markets, particularly Europe. In this Strategic Spotlight, we provide an update on the European economy and lay out some reasons for optimism despite the dour growth outlook.
2013-07-16 Venerated Voices™ Awards for the Second Quarter of 2013 by Advisor Perspectives (Article)
We announce our Venerated Voices awards for commentaries published in Q2 2013. Rankings were issued in three categories: The Top 25 Venerated Voices by Firm, The Top 25 Venerated Voices by Author and The Top 10 Venerated Voices by Commentary.
2013-07-16 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
After having had a tremendous first half of the year, what direction might the market take into the next few quarters? On the one hand, trend analysis has indeed turned “positive” and would suggest that the throttle is in full “go” mode. However, we know from historical and economic analysis that markets cannot sustain linear acceleration indefinitely, and that even the most robust trend is susceptible either to linear reversion or cyclical unraveling.
2013-07-12 Making Sense of the Bond Market by Phelps McIlvaine of Saturna Capital
The great challenge for investors and advisers today is to forecast where interest rates and bond prices will be once the influence of radical central bank intervention dissipates. Measures of inflation expectations are declining, and deflation remains the dominant influence on interest rates. In assessing whether to trim bond allocations, it is important to revisit the reasons for selecting a particular asset allocation before modifying or abandoning it.
2013-07-10 Weekly Market Review Notes by Team of Tuttle Tactical Management
The Bulls returned to stocks this week and bonds got crushed again. Comments out of the ECB, strong data out of Japan, and a good jobs number contributed to the rally, but at the end of the day the market had gotten a bit oversold. Bernanke is scheduled to speak today so if past history repeats itself things could get interesting again. Next week we will get a bunch of Q2 corporate earnings to that could also have quite an impact on the market either way.
2013-07-09 The Five Best New Investment Ideas: New Age Paradigms for the Post-MPT World by Bob Veres (Article)
Over the past four years, I’ve been collecting the most tangible, concrete post-Modern Portfolio Theory insights offered by professional investors.
2013-07-09 A Mid-Year Letter to Clients: A Positive Outlook on America by Dan Richards (Article)
Each quarter I’ve posted templates to serve as a starting point for advisors looking to send clients an overview of the three months that just ended and the outlook for the period ahead. This quarter’s letter focuses on why the U.S. is expected to be the leader among global economies.
2013-07-08 Absolute Return Letter: Much Ado about Nothing by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners
A 300 bps rise in bond yields across the term structure would, according to their calculations, do substantial damage to financial institutions’ balance sheets. Holders of U.S. Treasuries alone would lose in excess of $1 trillion on such a move in rates, equal to 8% of U.S. GDP. Other countries would fare even worse. Losses on JGBs would equal 35% of the Japanese GDP, effectively wiping out its banking industry in the process. Holders of U.K. bonds wouldn’t do much better, losing the equivalent of 25% of U.K. GDP.
2013-07-03 Weekly Market Review Notes by Team of Tuttle Tactical Management
Last month was the first down month for the market this year. The next few weeks ought to be interesting, we have the monthly jobs number on July 5th when most people are probably on vacation and then corporate earnings start in two weeks. No telling at this point about whether the market will want good news or more of the Goldilocks, not to hot, not too cold, news that could keep Quantitative Easing going. Going forward investors will continue to analyze anything the Fed says for clues.
2013-07-02 Stay the Course as Mixed Signals Move Markets by Frank Holmes of U.S. Global Investors
Traders stampeded out of gold, emerging markets and bonds this month, setting record monthly outflows in June. Ever since the Federal Reserve hinted in May that signs of a stronger economy could allow for a slowdown of stimulus, markets have protested the news.
2013-07-01 All of the Above by John Hussman of Hussman Funds
Market internals remain broken here. That may change, and it might even change soon. Until it does, we would be inclined to tread carefully, because this may be the highest level investors will see on the S&P 500 for quite some time. Choosing between potential catalysts - credit strains in China, the risk of disappointing earnings, or economic weakness, the incoming data is consistent with one conclusion: all of the above.
2013-06-28 Stay the Course As Mixed Signals Move Markets by Frank Holmes of U.S. Global Investors
We maintain that gold is in extremely oversold territory and mathematically due for a reversal toward the mean. Yet when gold prices plummet, fear takes over and some investors forget the fundamental reasons to own gold: Gold is a portfolio diversifier and a store of value. It is a finite resource with increasing global demand.
2013-06-27 Welcome Back, Mr. Bond by Jeffrey Saut of Raymond James
“We’ve been expecting you Mr. Bond.” The phrase is itself a variant and joins the phrase “Play it again Sam” as a phrase attributed to a film or TV series. I have used said quip over the past few years, having been wrong-footedly expecting a backup in interest rates. While I did finally target the yield low of last July, the ensuing rate rise has been far slower than I would have thought, that is until the past few weeks.
2013-06-26 The Fed\'s Dirty Little Secret: QE Does Not Work by Gary Halbert of Halbert Wealth Management
Today I hope to dispel the myth that the Fed’s massive quantitative easing (QE) policy has driven long-term interest rates lower. I will argue that the opposite is true and demonstrate that the yield on the 10-year Treasury note has actually risen during QE-1, QE-2 and QE-3. This flies in the face of most market commentators.
2013-06-26 Trampled By the Crowd? Logic Briefly Abandoned Creates Opportunity by Scott Colyer of Advisors Asset Management
The past two week slide in asset prices has caused a resurgence of doomsday pundits warning of impending calamity. The negative interpretation of Fed Chairman Bernanke’s comments regarding the U.S.economy’s future upgraded prospects is simply not logical. A careful review of what Bernanke said at his press conference was entirely consistent with what the Fed has said and done in the past.
2013-06-25 The Price Your Clients Pay for Using Safe Withdrawal Rates by David B. Loeper (Article)
Safe-withdrawal rates (SWRs) are perhaps the most extensively studied topic in financial planning literature. But applying a single SWR-driven methodology to all clients neglects their unique and individual needs. A better approach is for advisors to assist clients in defining their ideal and acceptable goals and the relative priorities among them. Then they can demonstrate through Monte Carlo simulation the likelihood of the recommended plan becoming over- or under-funded relative to those goals.
2013-06-25 How Not to Invest in Dividend Stocks: Seven Mistakes Investors Commonly Make by David Ruff of Forward Management
While investors may assume that dividend investing is relatively straightforward, they commonly make mistakes that may undercut the potential income and total return of their investments.
2013-06-19 Efficient Pension Investing by Jared Gross of PIMCO
Adapting the Sharpe ratio to pension portfolios can help plan sponsors choose among a multitude of investment options designed to achieve the same goal. In our experience, the most significant efficiency gains have come from shifting from intermediate bonds to long-term bonds and introducing lower-volatility substitutes to equities.
2013-06-19 Changes in our Asset Allocation by Gregory Hahn of Winthrop Capital Management
We believe that valuations in publicly traded securities are stretched, and, although we have seen a move higher in interest rates and stocks have sold off from their high levels, investors are faced with choices that offer generally lower expected returns based on historic measures of return. Today, with the S&P 500 hitting 1650 and the yield on the 10 year US Treasury Note moving abruptly from 1.70% to 2.15%, there are generally two schools of thought on the minds of investors.
2013-06-18 GMO’s Montier on Why to Hold Cash by Robert Huebscher (Article)
Central bank policies have distorted markets to such a degree that investors are devoid of any buy-and-hold asset classes, according to James Montier. But according to Richard Bernstein, the flood of liquidity unleashed through quantitative easing (QE) now offers investors compelling opportunities.
2013-06-18 Help Clients Fill the Income Void by Sponsored Content from Legg Mason Global Income Survey (Article)
Affluent investors all over the world just aren’t getting what they want from their income investments, according to Legg Mason’s recently released Global Income Survey. Yet there is good news: most say they want to become more knowledgeable about income investing, and they’re eager for financial professionals to point out fresh opportunities.
2013-06-18 Unconstrained Bond Funds Fail to Deliver by Chris Maxey, Ryan Davis of Fortigent
There have been an incessant number of articles in the past year addressing a “Great Rotation” by investors the seismic shift in asset allocation predicted to result from a transition to a rising rate environment. Individual investors “spoiled” by a 30-year secular decline in interest rates, it is thought, will run to new alternatives in the face of this structural headwind for a significant chunk of their portfolios.
2013-06-14 Searching For Value And Finding It In Today's Market - Sector By Sector by Chuck Carnevale of F.A.S.T. Graphs
“I think the market is overvalued now,” is a common refrain that I’m hearing from most of the individual investors I have recently been coming in contact with. Consequently, many of these same investors are also currently eschewing investing in common stocks because of that fear. Although I do not agree that the market is currently overvalued, I believe I understand why so many people think it is. Individual investors currently believe the market is overvalued because of two common fallacies that at first blush appear to be logical.
2013-06-14 Global Small Cap Investing: Unconstrained Opportunities by Blake Pontius of William Blair
Equity asset allocations have become more global in recent years as investors have sought to reduce the long standing home country bias in their portfolios. Further propelling this trend has been the growing aversion to traditional asset class structures and indeed, conventional asset class definitions, in the aftermath of the 2008-2009 global fi nancial crisis. Against this backdrop, global equity strategies have continued to garner asset fl ows in Europe and have slowly begun to gain traction in the U.S. after years of tepid demand.
2013-06-14 A Taste of Rising Rates by Team of Neuberger Berman
The mantra "sell in May and go away" has taken on a new twist this year. Equity markets saw mixed returns last month but bonds took a beating, with losses materializing in nearly every fixed income segment. The reason? Interest rates rose significantlyand rather unexpectedlyover the course of the month. What implications would rising rates have for the market? We consider what’s ahead.
2013-06-11 Risk Parity - New Thinking or New Packaging? by Chris Maxey, Ryan Davis of Fortigent
Ever since Harry Markowitz brought forth the notion of mean-variance optimization in 1952, academics and practitioners alike have sought ways to build more robust asset allocation methodologies. Recently, the most talked about approach in the institutional world is risk parity, which seeks to focus on risk as its primary input. Risk parity is intuitively appealing, but suffers many pitfalls that investors need to consider.
2013-06-11 How Asia's Growth Transitions and Policy Experiments Are Shaping the Global Outlook by Ramin Toloui, Tomoya Masanao, Robert Mead of PIMCO
Our view is that Chinese GDP growth will downshift, averaging 6%-7.5% for the next five years as net exports and investment are reaching their limits. In Asia, Japan is perhaps the economy closest to the “T-junction” described in PIMCO’s global secular outlook: The destination of Japan’s journey looks increasingly uncertain, with multiple potential outcomes that could stabilize or destabilize the global economy and markets.
2013-06-10 Emerging Market Opportunities by Patrick OShaughnessy, Ashvin Viswanathan of OShaughnessy Asset Management
Emerging market equities present both unique opportunities and also unique risks. Unlike more mature economies, emerging markets’ economies have the potential for impressive growth rates. But emerging markets also have the potential for damaging socio-economic and political instability. Equity returns in these countries are often impressive, but to earn these returns investors must deal with considerably higher volatility than in the developed equity markets.
2013-06-10 DC Solutions: Adding Global Bonds to Target-Date Funds by Alison Martier, Seth Masters of AllianceBernstein
Within US defined contribution (DC) target-date funds (TDFs), whether we’re considering customized TDFs for larger plans or packaged solutions for smaller plans, our research shows that having a bond allocation that is not US-centric can lead to better outcomes and enhance the effectiveness of the glide path.
2013-06-07 Portfolio Comfort in Stock Splits by Bill Smead of Smead Capital Management
We have noticed that there has been a dearth of stock splits among the S&P 500 index companies in the last 5 years. Our observation is that the natural habitat for stock splits is normally a multiple-year market upswing and numerous stocks trading over $60 per share. What does the history of stock splits tell us about where we are in the long-term stock market cycle for the S&P 500 index? Who will the marginal buyer of common stocks be in the near term and what do stock splits teach us about who the marginal buyer is?
2013-06-06 But We Want Goldilocks-Like Growth by Blaine Rollins of 361 Capital
While the equity markets would enjoy a bit of the great rotation out of the 20+ year outperformance in bonds and into equities, the move in May has been too much, too quick for even equity investors to stomach. So while the Long Treasury ETF (TLT) fell -6.8% in May, the size of the move even scared investors in REITs (IYR), Junk Bonds (JNK/HYG), and Utilities (XLU).
2013-06-06 The REAL Great Rotation by Richard Bernstein of Richard Bernstein Advisors
The phrase "Great Rotation" has come to mean a sizeable shift in asset allocation from bonds to stocks. We, too, believe that stocks are likely to secularly outperform bonds, but we don’t think that is the "great rotation" about which investors should be concerned.
2013-06-06 The Wisdom of Crowds by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners
Are markets efficient? This is a debate that has been on-going for decades. In one corner you have the proponents of the Efficient Markets Hypothesis. In their world alpha does not exist, or at the very least it is not sustainable. In the other corner you have the supporters of behavioural finance who see investors as being mostly irrational and suffering from all sorts of behavioural biases which create alpha opportunities galore. Out of this long lasting stand-off a new paradigm is emerging called the Adaptive Markets Hypothesis which aims to reconcile the two.
2013-06-04 The Role of Cash in Multi-Asset Portfolios by Ashish Tiwari, Andrew Spottiswoode of PIMCO
Determining the optimal allocation to cash is as challenging as ever in today’s unusually uncertain markets. When allocating to cash, investors should consider a multi-dimensional framework to assess the liquidity of the underlying cash instruments. In our view, the most attractive risk-adjusted opportunities for cash investors lie just outside the traditional money market space.
2013-06-03 Following the Fed to 50% Flops by John Hussman of Hussman Funds
One of the most strongly held beliefs of investors here is the notion that it is inappropriate to “Fight the Fed” reflecting the view that Federal Reserve easing is sufficient to keep stocks not only elevated, but rising. What’s baffling about this is that the last two 50% market declines both the 2001-2002 plunge and the 2008-2009 plunge occurred in environments of aggressive, persistent Federal Reserve easing.
2013-05-31 In an Era of Uncertainty and Lower Returns, It\'s Time for Alternatives by Sabrina Callin, John Cavalieri of PIMCO
The initial economic and capital market conditions of the 1980s set the stage for a multi-decade bull market for stocks and bonds. Times have changed, however, and traditional investment portfolios are unlikely to deliver returns as healthy as those enjoyed for much of the last 30 years. It’s time to think alternatively about asset allocation and index construction, sources of alpha and beta, and risk and return objectives to increase the probability of success in what we believe is a new era for investors and financial markets.
2013-05-30 Global DC Plans: Similar Destinations, Distinctly Different Paths by Stacy Schaus, William G. S. Allport, Justin Blesy of PIMCO
DC plans in in the U.S., Australia and the U.K. may benefit from better aligning asset allocation defaults to workers’ needed outcome: purchasing power in retirement. Focusing on needed outcomes would suggest a higher allocation to real assets, earlier de-risking and consideration of tail risk hedging.
2013-05-29 Weekly Market Commentary by Team of Tuttle Tactical Management
Last week we talked about the market being overbought in the short term, so the three day selloff (Wednesday-Friday) was to be expected. The media will blame the Fed but they didn’t tell us anything we didn’t already know. Bottom line, when the market gets extremely overbought traders will use anything and everything as an excuse to take profits. Interestingly, last week was the first streak of three down days this year. The S&P 500 seemed to find some support at 1640.
2013-05-28 Decisive: How to Make Better Choices in Life and Work by Justin Kermond (Article)
The rock-and-roll star David Lee Roth devised a test using a bowl of M&Ms to ensure that he thoroughly prepared for concerts. He wanted every performance to be perfect, and the framework he used to accomplish that goal provides a decision-making process that is applicable to financial advisors.
2013-05-28 Solving the Public Pension Plan Funding Crisis by John T. Hausladen (Article)
Current proposals to address public pension underfunding will not provide any significant relief because of the continued assumption of investment and longevity risk by plan sponsors. I propose a combination of liability-driven investing and a risk-transfer mechanism to gradually eliminate plan liabilities.
2013-05-28 Forward-Looking Broad-Market Investing by Team of AdvisorShares
The following is a research study that provides compelling data on a more efficient way to invest in broad markets. Many people have called the equity market of the last 10 years the “lost decade” due to its lack of net change. Madrona Funds research shows that it would have been possible to have profited by over 200% over the last decade by using their forward looking methodology, which is based on future expected earnings, not past performance.
2013-05-24 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
The two Asian giants have a challenging year ahead. The Fed will be challenged to keep the bond market under control.
2013-05-22 Is There Value in Today's Stock Market by Bill Smead of Smead Capital Management
Due to the recent strength in the US stock market, we thought it would be helpful to followers of Smead Capital Management to understand the history of our core investment beliefs and where our portfolio is in relation to those core beliefs. A review of the ongoing tension between valuation mattering dearly and the enormous benefits of long-term business ownership is especially interesting after a significant upward move in the stock market. How do you keep turnover and trading expense low, while maintaining a meaningful margin of safety?
2013-05-22 Cyprus and the Eurozone...Still Stuck in the Middle by Gregory Hahn of Winthrop Capital Management
The debt crisis in the Eurozone turned another chapter as Cyprus finally reached the point of requiring a bailout from the European Union. The wisdom of Gerry Rafferty’s hit song “Stuck in the Middle with You” which was written in 1973, rings true today as we watch the EU and the European Central Bank navigate the mess in Europe. With each attempt at containment, there appears some plot twist, the proposed Cyprus bank bailout is no exception. While the bailout of Cyprus and its banks is not large in size, only 10 billion, relative to the Cyprus economy, it is significant.
2013-05-22 Is Japan's Economic Rebound For Real? by Daisuke Nomoto of Columbia Management
The two phrases “Abenomics” and the “BOJ’s Shock and Awe Monetary Easing” are all over the headlines about Japan. Prime Minister Abe unveiled his economic policy late last year calling for a 3% annual nominal gross domestic product (GDP) growth target and an aggressive monetary easing by the BOJ (The Bank of Japan) to achieve 2% inflation. The BOJ unleashed the world’s most intense burst of monetary stimulus last month promising to double the monetary base to 270 trillion yen ($2.7 trillion) by the end of 2014 to defeat deflation.
2013-05-21 DC Plan Sponsors Should Look Further than Their Own Backyard by Alison Martier, Seth Masters of AllianceBernstein
US defined contribution (DC) plan sponsors large and small are seeking ways to help plan participants achieve better outcomes. Over the last 30 years, compelling evidence has accumulated that suggests currency-hedged global bonds may be an important part of the solution.
2013-05-20 Alpha, Beta! by Jeffrey Saut of Raymond James
I had a somewhat lengthy conversation with Rich Bernstein last Friday. I have been on TV with Rich over the years, but have never really had a one-on-one talk with him. Recall that Richard Bernstein was the Chief U.S. Strategist at Merrill Lynch for years before becoming the eponymous captain of Richard Bernstein Advisors (RBA). I was speaking with Rich because I have developed an interest in a few of the funds he manages for various entities. Rich began by stating he is extremely bullish, believing we are in one of the biggest “bull markets” ever.
2013-05-17 Opportunistic Investing: Making the Most of Your Cash in Today's Market by Chris Engelman of Cedar Hill Associates
With the Standard and Poor’s 500 Index rising more than 20% since last June, some people are reluctant to invest now, fearful that stocks are poised to tumble again. By focusing on their long-term investment objectives rather than short-term market fluctuations, however, investors can plan for a sound financial future. Here, Cedar Hill Managing Director Chris Engelman offers strategies for building a portfolio that helps to limit market risks and increases the likelihood of achieving your long-term goals.
2013-05-16 Where Are the Bears? Evidence vs. Anecdotes in Assessing Market Sentiment Over a Full Market Cycle by JJ Abodeely of Sitka Pacific Capital Management
Imagine the stock market as a national park with just three kinds of animals: bulls, bears, and pigs. The saying “bulls make money, bears make money, pigs get slaughtered” conveys the idea that one can be bullish or bearish and be successful depending on the market environment, whereas greedy pigs are almost always set up for catastrophe.
2013-05-15 Yen Weakness: Buffett\'s \"Shot Heard Round the World\'\" by Bill Smead of Smead Capital Management
We returned recently from the Berkshire Hathaway Annual Shareholder Conference. The most exciting and profound comment to us was what Warren Buffett said about the unprecedented actions the last three years by the Federal Reserve Board. Buffett was asked about the risks of the Federal Reserve’s current plan to buy Treasuries to keep interest rates very low.
2013-05-14 David Rosenberg – My Love Affair with Bonds is Over by Robert Huebscher (Article)
The chorus of rate-spike-fearing inflationists has a new member. David Rosenberg, a stalwart advocate of fixed-income investing for the last quarter century, publicly declared on May 3 that his “love affair with the bond market has come to an end.” Prepare for a redux of 1970s stagflation, he said, and he advised investors how to construct portfolios to prepare for that scenario.
2013-05-08 Deflation Is OverPlease Come Out by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management
A blooper reel of 20th century history would likely include a feature on Japanese soldier Hiro Onoda. Posted to a small island in the Philippines during the waning days of World War II, when Onoda’s mission proved unsuccessful he was ultimately forced to flee into the woods, where he survived on a steady diet of coconuts and bananasfor almost 30 years after the end of the war.
2013-05-08 Monthly Letter to Our Clients and Friends by Kendall Anderson of Anderson Griggs
It has been years since we have seen new highs on the Dow Jones Industrial Average and the S&P 500. Although the wait can be traumatizing, it’s nice to get proof that market prices ultimately recognize growth of business value.
2013-05-08 Absolute Return Letter: In the Long Run We Are All in Trouble by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners
In the long run we are all dead, said Keynes. Maybe so, but we could be in trouble long before then. Investors appear preoccupied with central bank policy. We argue that investors are quite right in keeping their eye on the ball but, to us, it looks as if they are focusing on the wrong ball. The real worries for the long term are demographics and negative real interest rates and the effect these factors may have on equity returns.
2013-05-07 How to Construct a Low-Cost Conservative Portfolio by Geoff Considine (Article)
One of the greatest challenges for investors today is constructing low-risk portfolios that provide the best returns using low-cost funds or ETFs. Doing so requires advisors to define risk as the potential for retirees to fail to achieve their financial goals, instead of as volatility, as it is traditionally measured. I will show how to construct a low-cost portfolio that minimizes this definition of risk while generating a reasonable real return.
2013-05-06 Aligning Market Exposure With the Expected Return/Risk Profile by John Hussman of Hussman Funds
Some risks and market conditions are more rewarding than others. My objectives for this week’s comment are very specific. First, to demonstrate using a very simple model that investment returns do indeed vary systematically with market conditions. Second, to demonstrate that overvalued, overbought, overbullish conditions have historically dominated trend-following measures when they have emerged. Third, to demonstrate the impact of accepting investment exposure in proportion to the return/risk profile that is associated with a given set of market conditions.
2013-05-03 Pring Turner Approach to Business Cycle Investing by Team of AdvisorShares
Like the seasons of the year, the environment for bonds, stocks, and commodities progress in a repeatable and sequential fashion. A gardener understands it is difficult to plant in the winter because nothing grows. The same is true for the financial seasons in the business cycle, where investors can use knowledge of the sequence to create a financial market roadmap. This paper from Pring Turner Capital Group, one of our valued sub-advisors, takes you through the six-stages of the business cycle.
2013-05-02 A Case for Owning Commodities When No One Else Is by Frank Holmes of U.S. Global Investors
Sometimes following where money is being invested is a solid course of action to gain alpha; other times, a better opportunity lies in going the opposite direction, i.e., thinking contrarian.
2013-04-30 The Most Underappreciated Threat to the Advisory Business by Bob Veres (Article)
Financial advisors have often heard the warning that their investment management services are going to become commoditized – so often, in fact, that you can forgive them for ceasing to pay attention. But if you don’t believe that an online algorithm can replace the sophisticated advice offered by a flesh-and-blood advisor, then check out the Wealthfront USA website.
2013-04-30 Implementing Behavioral Portfolio Management by C. Thomas Howard, PhD (Article)
Behavioral portfolio management is based on the notion that if the advisor can redirect his or her emotions and mitigate the impact of client emotions, it is possible to build superior portfolios by harnessing market emotions. This article describes how this can be done and presents evidence of the superiority of focusing on investor behavior when constructing and managing portfolios.
2013-04-26 An Update on the Global Business Cycle by Investment Strategy Group of Neuberger Berman
Understanding where we are in the an important aspect of investing, as the behavior of asset classes may vary throughout that cycle. Recent data indicate that the U.S. remains in its fourth year of expansion, but payroll and retail numbers have disappointed. Outside the U.S., Europe continues to be mired in recession while China’s growth rebound recently has appeared to sputter. In this edition of Strategic Spotlight, we review what these developments mean for the global business cycle and how to position portfolios accordingly.
2013-04-25 Safe Harbor Is Safe for Secure Lifetime Income Default Investments by Daniel Notto of AllianceBernstein
The new frontier in US defined contribution (DC) plans involves qualified default investment alternatives (QDIAs) with a secure lifetime income component. Will such vehicles retain their safe-harbor protections? Yes.
2013-04-23 Venerated Voices™ Q1 2013 by Advisor Perspectives (Article)
Advisor Perspectives, a leading publisher serving financial advisors and the financial advisory community, has published its Venerated Voices awards for articles published in Q1 2013.
2013-04-19 The Pharaoh's Dream by Andrew Bosomworth of PIMCO
As yields on assets decline, central banks’ ultra-loose monetary policies are effectively forcing investors further out the concentric circles into lower quality, more illiquid sectors in search of positive yielding assets after deducting inflation. In order to achieve 6%-7% returns in the future, investors may be required to take on more risk. Allocating part of a portfolio away from “middle circle” asset classes into assets with higher return potential as well as assets offering liquidity is the right strategy in our opinion.
2013-04-18 The Lure of Hedge Funds by John West of Research Affiliates
Investors often buy what they think is exciting, sophisticated, and complex with the embedded assumption that all of these attributes will lead to greater returns. We see this today where we witness the continued explosive growth of hedge funds. But, a careful examination of the data reveals that these fancy lures fail to hook as much in excess, after-fee returns as more time tested strategies.
2013-04-17 What\'s Driving Emerging Markets? by James McDonald, Daniel Phillips, Phillip Grant of Northern Trust
Emerging market (EM) equities have historically outperformed as the global economy gained momentum, as shown in Exhibit 1. After a great catch-up rally in the second half of 2012, the stocks finished the year as global outperformers only to lose that momentum in the first quarter of 2013. What is behind the recent underperformance, and what does it say about the outlook? Our research points to a number of contributors to the recent weakness.
2013-04-16 What the Bull Giveth, the Bear Taketh Away by Adam Butler, Mike Philbrick, Rodrigo Gordillo of Butler|Philbrick|Gordillo & Associates
The question of whether to commit new funds to stocks here is nuanced and complex, not least because it isn’t obvious that traditional alternatives - bonds or cash - offer any better value. We are very near all-time low interest rates across most developed government bond markets, credit spreads are near all-time tights, and rates are negative out to 5 or more years in real terms.
2013-04-15 Valuation Based Equity Market Forecasts - Q1 2013 Update by Doug Adam Butler, Mike Philbrick, Rodrigo Gordillo of Butler|Philbrick|Gordillo & Associates
Click to viewWe endorse the decisive evidence that markets and economies are complex, dynamic systems which are not reducible to normal cause-effect analysis. However, we are willing to acknowledge the likelihood that the future is likely to rhyme with the past. Thus, we believe there is substantial value in applying simple statistical models to discover average estimates of what the future may hold over meaningful investment horizons (10+ years), while acknowledging the wide range of possibilities that exist around these averages.
2013-04-15 The Counter-Inflation Playbook Part 1 by Jeffrey Jones of Cornice Capital
One of the most important lessons I learned during my days at UCLA came from my freshman philosophy professor. He told us that should you find yourself engaged in a debate, the surest way to defeat your opponent is to attack his base principles. If those base principles aren’t fundamentally sound, any case built on top of it, no matter how convincing, is at risk of crumbling all at once.
2013-04-09 MLPs: Winning Streak Broken, Growth Story Intact by Sponsored Content from Legg Mason ClearBridge
by Chris Eades, Portfolio Manager (Article)
After an off year clouded by investors’ concerns about future tax policy, ClearBridge’s outlook for MLPs is again brightening. Oil and natural gas production are both ahead of estimates and the resulting infrastructure build-out is continuing.
2013-04-09 PIMCO Cyclical Outlook for Asia: How Leadership Changes Are Shaping Asia's Outlook by Q&A with Ramin Toloui, Tomoya Masanao and Robert Mead of PIMCO
For Asia, “slow but not slowing” global growth will likely keep external demand neutral, and policy developments will therefore help shape the economic outlook. In Japan, we see a significant boost to aggregate demand coming from the concerted monetary and fiscal expansion of the new Abe government. In China, concerns about inflation, housing market excesses, and long-term financial stability are prompting policy restraint that should keep growth below 8% this year.
2013-04-04 Absolute Return Letter: The Need for Wholesale Change by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners
The seeds of the next crisis have probably already been sown as a consequence of the lax monetary policy currently being pursued. Frustrated with the lack of direction from political leaders, most recently witnessed in the handling of the crisis in Cyprus which was a complete farce, central bankers from around the world are likely to demand change, but politicians will have to be pushed into a corner before they will respond to any such pressure. Hence nothing decisive will happen before the next major crisis erupts.
2013-04-03 Weekly Market Review Notes by Team of Tuttle Tactical Management
After hitting a record close last week the market is showing some warning signs, which is to be expected. You don’t typically break through an important resistance point without testing it and re-testing it so some volatility around a record high is normal. We are also slightly concerned that small and mid cap stocks have drastically underperformed the S&P 500 over the past two days.
2013-04-02 The Online Advantage: Findings from the Advisor Perspectives Mutual Fund-Site Survey by Nina Eisenman and Jeff Briskin (Article)
New research from Advisor Perspectives shows that offering outstanding online research and due-diligence capabilities is key for fund companies that wish to win the competitive battle for the time and attention of financial advisors.
2013-04-01 Again and Again. by Scotty George of du Pasquier Asset Management
My work has always been predicated upon using quantitative modifiers to enhance portfolio value through greater efficiency of information processing and the creation of momentum-driven asset allocation models. But because so many investors quizzically suffer from a herd mentality, they find it difficult to digest common sense solutions to diffuse problems. And yet, our methodology and its consistent point of view has enabled clients to benefit without compromising investment expectations.
2013-03-28 Today's Good News Isn't Bad for US Stocks by Daniel Loewy of AllianceBernstein
Believe it or not, recent US housing market gains, the slight reduction in jobless rates and other signs of a revival in US economic growth are making some investors bearish about US stocks. We think their fears are misplaced.
2013-03-27 Mark Hulbert: Our Kindred Spirit by Bill Smead of Smead Capital Management
Mark Hulbert and I started in the investment business in 1980. He chose to create a business out of analyzing the results and psychological implications of investment newsletter writers. At Smead Capital Management, we formed a business to analyze publicly-traded US common stocks through the prism of our eight proprietary criteria. We enjoy his unbiased third-party opinions on current circumstances and his consistently good historical perspective.
2013-03-26 A Cry for Help from Income Investors by Legg Mason Global Income Survey (Article)
Confronted with the stark realities of income investing now, affluent investors all over the world are rethinking their approach, notes Legg Mason’s just-released Global Income Survey. Yet the Survey also found income investors hungry for more knowledge and ideas -- creating opportunities for savvy financial advisors.
2013-03-26 Adapting the Yale Model for Clients by C. Thomas Howard, PhD and Lambert Bunker (Article)
The Yale University endowment fund is one of the most successful in the country, with a 10-year return besting the endowment universe average return by 300 basis points and the Wilshire 5000 return by 400 basis points. David Swensen is the architect of this program, and his guiding principles are widely used to manage large endowments. They are equally useful for client portfolios.
2013-03-22 US Stocks: Third Time’s the Charm by Seth Masters of AllianceBernstein
At 1550, the S&P 500 has regained the peak it reached in March of 2000 (when the tech bubble burst) and again in October of 2007 (before the credit crunch hit). But we think the third time’s the charm: We think the stock market still has room to rise because equities are now more attractively valued and of higher quality than they were at previous peaks.
2013-03-19 Understanding the Role of SPIAs in a Retirement Portfolio by David B. Loeper (Article)
Wade Pfau’s recent article, Breaking Free from the Safe Withdrawal Paradigm, was well researched. Its goal was to accurately calculate the benefits of using SPIAs based on certain assumptions. I fear, however, that many readers may have not fully grasped the impact of a few key assumptions that drive his results.
2013-03-15 Reducing the Risk from Adding Stock Exposure by Seth Masters of AllianceBernstein
Adding other sources of diversification could significantly reduce the risk from increasing stock exposure, our research suggests.
2013-03-14 DC Plan Sponsors: Now's the Time to Get More From Bonds by Stacy Schaus of PIMCO
Long on equities and light on bonds, today’s DC plan lineups may expose participants to extreme market risks. Plan sponsors could potentially improve retirement outcomes by trimming choices for stocks and considering additional options for bonds. The inclusion of active fixed income strategies with global exposure or additional income opportunities could help participants reach their retirement goals.
2013-03-12 The Retirement Income Problem by Rob Isbitts of Sungarden Investment Research
The most vital and pervasive issue investors will face in the next decade is how to wring out enough income from the savings they have amassed to maintain or enhance their lifestyle. To do so, they will need to be far more flexible in their investment approach. They also must adapt to an environment for "high quality bonds" (Treasuries, Municipals and Corporates) that does not at all resemble that which they are accustomed to.
2013-03-11 Forecasting Bond Returns in the New Normal by Saumil Parikh of PIMCO
PIMCO has a detailed framework for deriving a forecast for secular bond returns based on our most current expectations of policy rates and the inflation-adjusted (or real) bond risk premium. We start by defining the expected secular real policy rate as the expected average rate of the fed funds rate after adjusting for inflation over the next 10 years.
2013-03-07 Weekly Market Review Notes by Team of Tuttle Tactical Management
Yesterday saw a new record close on the Dow Jones Industrial Average and a renewal of the panic buying we saw earlier in the year. While it is great to see that the Dow has retraced all of the losses from the 2008 decline I am concerned about what message will be directed towards individual investors. The asset allocation/buy and hold crowd will use this milestone to "prove" that markets always come back so that their approach is still valid. This is true, but it ignores the fact that it took the market almost 6 years to come back and the lost opportunity cost associated with that.
2013-03-07 How Much Risk Does Adding Stocks Pose? by Seth Masters of AllianceBernstein
Investors have good reasons for their recent net increase in stock fund purchasesand good reasons to remain anxious, in our view. While market volatility has returned to normal, memories of the wild market swings of the past five years loom large. Here's what we think about the risk of increasing stock exposure now.
2013-03-06 Smooth Returns by Bill Smead of Smead Capital Management
Harry Markopolos was working for a hedge fund of funds and attempting to put a portfolio together that would "smooth" long-term returns. In the process of marketing what his company was doing, he ran into a client who already had a money manager doing that for him. The money manager the client used was Bernie Madoff. When Markopolous looked at the long-term track record of Madoff's client, he instantly knew that it was mathematically impossible to have a return that high with as little year-to-year variance in the return. We at Smead Capital Management would like to ask a few questions.
2013-03-05 Is Now the Time to Diversify? by Chris Maxey, Ryan Davis of Fortigent
The use of global diversification in constructing client portfolios has come under fire in recent years due to the underperformance of many risk assets. Traditionalists who stuck to their familiar S&P 500 and BarCap Aggregate Bond index blends generally outperformed their diversified peers in 2011 and 2012, as historic risk premiums failed to materialize and various alternative investment strategies faced headwinds.
2013-03-05 Absolute Return Letter: Expect the Unexpected by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners
With real interest rates being negative in many countries we expect low returns on both equities and bonds going forward. Many investors have responded to that by allocating more and more of their assets to passive strategies such as ETFs. We believe it is the wrong approach for this type of environment.
2013-03-04 Living in the Past: Investors Finally Putting Away the Rear-View Mirror? by Liz Ann Sonders of Charles Schwab
With a very strong January in the books for stocks, and hefty inflows into stock mutual funds, are we finally seeing the investor class become believers?
2013-03-04 Forecasting Bond Returns in the New Normal by Saumil Parikh of PIMCO
PIMCO has a detailed framework for deriving a forecast for secular bond returns based on our most current expectations of policy rates and the inflation-adjusted (or real) bond risk premium. We start by defining the expected secular real policy rate as the expected average rate of the fed funds rate after adjusting for inflation over the next 10 years.
2013-03-01 Wait for Your Pitch in Today's Market by John West of Research Affiliates
Great hitting in baseball depends in part on waiting for the right pitch. In today's market, most asset classescoming off their impressive 2012 recordare "high and outside" the valuations necessary for future big league returns. Patience is the name of the game today.
2013-03-01 Is It Time to Get Back into Stocksor Too Late? by Seth Masters of AllianceBernstein
After five years of fleeing stocks for the perceived safety of bonds, US mutual fund investors became net buyers of stock funds in January. While some see the return of the retail investor as a negative indicator for stocks, we say, "Better late than never."
2013-02-28 Jeremy Siegel on Why Stocks Are -- and Will Remain -- the Best Bet by Team of Knowledge @ Wharton
Though stock market volatility continues to rattle investors' nerves, the future looks bright for equities in the U.S. and many emerging markets, according to Wharton finance professor Jeremy Siegel. That's not so for bonds, which could become money-losing investments as rising interest rates drive bond prices down. In an interview with Knowledge@Wharton, Siegel says that investors should think about reducing their bond holdings, buying more stocks and keeping just enough cash for a rainy day and other liquidity needs, since interest rates on cash are near zero.
2013-02-27 Is This Market "For the Birds"? by Jerry Wagner of Flexible Plan Investments
Last week, the stock market hit one of those gusts of headwind that seemed to stop the 2013 rally in its tracks and push it backward. When that happens, as it is again today, it is like watching the gull traverse just a few feet in front of us on the beach. What happens in the short run can be progress or retreat.
2013-02-27 The Great Migration by Herbert Abramson, Randall Abramson of Trapeze Asset Management
We are value investors dedicated to creating portfolios for clients, whether growth (equities), income or a balanced blend of both, of undervalued securities with meaningful upside potential and a margin of safety to guard against permanent loss. For us, the bottom-up factors are the most compelling, but we are also mindful that we need to take account of the top-down macro factors. We know how the Crash of ꞌ08 and the accompanying recession created havoc for investors, including us, no matter how undervalued stocks were.
2013-02-26 Five Ways to Improve Your Investing Decision Making by Robert Huebscher (Article)
Successful investing requires a contrarian mindset; anything else is, at best, a recipe for mediocrity. This is especially true for an investment committee, the core of an advisory firm's decision-making process. Five prominent advisors – Harold Evensky, John Hill, Steve Cassaday, Steve Kaye and Berk Nowak – are embracing unconventional approaches to ensure that their investment committees operate in the most effective ways possible.
2013-02-26 A Permanent Investment by Jeffrey Saut of Raymond James
The Buying Power, and Selling Pressure, indicators continue to suggest no major top is in the works. Ditto the Advance/Decline line traded to a new high before the mid-week pullback, also confirming the upside. The major averages continue to reside above their respect 50-DMAs and 200-DMAs; and, those moving averages are rising, another bullish sign. Then there is Berkshire Hathaway (BRK.A/$152,009/Not Covered), which is somewhat of a proxy for the stock market, as it traded to a new all-time last Friday.
2013-02-26 2013, Losing the Bid by Bill Smead of Smead Capital Management
Many times in my 32-year career people ask me to comment on whether an established trend for a popular investment will stay intact. My answer is always the same. We don't know when the hot streak will end for the popular investment and we don't feel comfortable with popular securities. In our view, there is a dramatic difference in what you do with popular investments based on whether they areto use terms borrowed from Warren Buffett currency assets, unproductive assets, or productive assets. It has to do with the ability to sell and the liquidity you have when the popularity disappears.
2013-02-22 Muscle Memory or Muscle Training by Bill Smead of Smead Capital Management
Interest rates have gone down on US Treasury bonds off and on for 31 years. This means that the coupon you are being paid has been joined by significant capital gains. Jim Grant argues that the only thing going for bonds is how well handlers of money have done on them; Warren Buffett calls it "rear-view mirror investing".
2013-02-22 January 2013 Market Commentary by Andrew Clinton of Clinton Investment Management
The municipal bond market continues to perform well in the face of significant political, financial and economic uncertainty, once again, demonstrating the importance of consistent, competitive tax-free cash flow. Municipal bonds proved to be one of the best performing asset classes during 2012.
2013-02-22 A Test of Strength for Gold by Frank Holmes of U.S. Global Investors
This week, we saw the gold bears growling louder and gaining strength, as the worlds largest gold-backed ETF, the SPDR Gold Trust, experienced its largest one-day outflows since August 2011. The Fear Trade fled the sector following the Federal Reserves meeting that revealed a growing dissension among some of its members over the central banks bond-buying program.
2013-02-20 Trying And Failing To Make The Math Work For Long-Term Bonds by Doug Ramsey, Eric Weigel of Leuthold Weeden Capital Management
For the past 31 1/2 years, owners of 10-year U.S. Treasury bonds have earned "real" total returns of 6.7%on par with the long-term real return to equities. Long before government bonds matched real stock returns, they suffered a 55-year period that offered investors a real return of zero. The short-term implications of higher U.S. Treasury rates on asset allocation decisions.
2013-02-19 Asset Class Allocation and Portfolios by Adam Jared Apt (Article)
Asset class allocation has been so thoroughly absorbed into the culture of investing that today, most investment guidance is built around it, and you may even have heard that it is the foundation of an investment plan. And like nearly all respectable investment ideas, it is misunderstood and abused. One misconception is that asset class allocation and portfolio management are the same thing. I'll explain why they aren't later, but let's start by considering another misconception.
2013-02-19 Expanding the Toolkit for Monitoring Your Equity Managers by Markus Aakko, Andrew Pyne of PIMCO
Investors may want to consider active share when assessing whether and how their active equity managers add value beyond a passive benchmark. The methods for monitoring investment managers are well established. But given the importance of getting portfolio allocation right in a low-growth, low-return world, it's worth examining new ways to assess risk and value added. While tracking error has been held as a key measure for active risk, it may include elements that reflect market conditions rather than managers' actual decisions on risk.
2013-02-15 In Defense of Commodity Futures by Seth Masters, Jon Ruff of AllianceBernstein
Several prominent pension funds have slashed their commodity futures investments for delivering poor returns with higher volatility than usual, while failing to diversify equity exposures as expected, The Wall Street Journal recently reported. If inflation rises, they may regret it.
2013-02-15 Hyperinflations, Hysteria, and False Memories by James Montier of GMO
In the past, Ive admitted to macroeconomics being one of my dark, guilty pleasures. To some value investors this seems like heresy, as Marty Whitman1 once wrote, Graham and Dodd view macro factors...as crucial to the analysis of a corporate security. Value investors, however, believe that macro factors are irrelevant. I am clearly a Graham and Doddite on this measure (and most others as well).
2013-02-14 Understanding Derivative Overlays, in All Their Forms by Markus Aakko, Rene Martel of PIMCO
Passively managed overlays are typically based on a simple formula, while active approaches involve more complex algorithms or decision-making. Overlay examples include portable alpha, LDI, currency, completion, rebalancing, and tactical asset allocation overlays -- as well as tail-risk hedging and hedge fund replication. Potential benefits include the ability to effectively manage cash, reduce costs and risk exposure, simplify manager transitions and express tactical views.
2013-02-13 The Next Step to Increasing DC Plan Participation by Seth Masters of AllianceBernstein
Defined contribution (DC) plans can deliver benefits only if workers choose to participate. Unfortunately, about one in every five eligible US employees chooses not to, according to research from Aon Hewitt. So it's encouraging that 77% of DC plan sponsors stress the importance of increasing participation in their plans, according to a recent survey we conducted. Automatic enrollment has helped lift participation in many DC plans. But how can plans take the next step toward 100% participation?
2013-02-12 Currency Wars? What Currency Wars? by Christian Thwaites of Sentinel Investments
There's much talk of currency wars right now. We think they're way overblown. The source of the problem lies with Japan, which has made explicit a strategy to lower the yen, increase domestic demand and increase inflation. It needs to do all three. The twenty year old balance sheet recession and deflation in Japan has been a costly error in targeting inflation and not much else.
2013-02-07 Investing in a Low-Growth World by Jeremy Grantham of GMO
This quarter I will review any new data that has come out on the topic of likely lower GDP growth. Then I will consider any investment implications that might come with lower GDP growth: counter intuitively, we find that investment returns are likely to be more or less unchanged a little lower only if lower growth brings with it less instability, hence less risk. Finally I will take a look at the reaction to last quarter's letter, specifically about my outlook for lower GDP growth.
2013-02-07 We Have Met the Enemy, and He Is Us by Ben Inker of GMO
If modern portfolio management has a single defining urge, it is almost certainly diversification. We look for diversifying assets, strategies, and managers. A thoughtful investor can argue against almost any asset class stocks, bonds, hedge funds, private equity, commodities, you name it but arguing against diversification is like arguing against indoor plumbing. I dont want to sound like I'm calling for a return to chamber pots and outhouses, so I'm not actually going to argue against diversification.
2013-02-05 Comparing Advisors to Jim Cramer: Measuring your Professional Alpha by Bob Veres (Article)
Jim Cramer, Suze Orman and other so-called investment pundits and gurus are constantly telling consumers that they can do a great job of managing their portfolios on their own. Let's look at what the research has to say about the various investment performance benefits that advisors should be able to give their clients during the accumulation phase of their lives – excess returns above what do-it-yourself investors could obtain on their own. I call those excess returns 'professional alpha.'
2013-02-05 Currency War or Something Altogether Different? by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners
"Who is afraid of currency wars?" asks Gavyn Davies in the FT. I have known Gavyn for 25 years and have to confess that he is way out of my league intellectually. He is one of the smartest people I have ever met and, thankfully, also one of the humblest. He rarely gets things wrong so, when I occasionally disagree with him, it always makes me slightly uneasy.
2013-02-04 What's the Best Asset Allocation When the Business Cycle Moves to Stage IV? by Martin Pring of Pring Turner Capital Group
History shows that the business cycle, which has been with us since recorded economic history began, experiences a set series of chronological sequences. The calendar year progresses through seasons, one of which is literally ideally suited for making hay. The business cycle also has seasons or phases, where certain sectors of the economy fall in and out of favor. For investors, the key lies in the fact that the cyclical turning points of bonds, stocks and commodities are all part of the business cycle progression.
2013-02-01 Q412 Portfolio Commentary by Jay Compson of Absolute Investment Advisers
While much of the fundamental picture has played out as we expected over the past 18-24 months, the financial markets appear to be concerned solely with the existence or non-existence of macro headlines and events. There seems to be a disconnect between market movements and fundamentals which means doing real work based on intellectual honesty and logic puts you at a disadvantage. Chasing momentum and profiting from central bank market manipulation appear to be the current winning strategies.
2013-02-01 The Myth of the Nest Egg by Seth Masters of AllianceBernstein
For decades we've focused on the nest-egg notion as the goal for retirement saving, benchmarking our progress in relation to that lump sum. But it has no context other than probably being the single biggest "paycheck" most of us will ever see. That lump sum may sound great to me, but what does it mean for my spending over 20 or even 30 years without a paycheck?
2013-02-01 Dow To 14,000 and Beyond? by Frank Holmes of U.S. Global Investors
So will the Dow go beyond 14,000? Although you cant predict how hot the weather will be this summer, the clouds appear to be parting to reveal the sun today. Make sure your asset allocation positions your portfolio to shine.
2013-02-01 Look at the Bears! Look at the Bears! by Christine Hurtsellers, Matt Toms and Mike Mata of ING Investment Management
Yes, the grumbling of bond bears is reverberating in Treasury yields, but that sound isnt the death knell of a grizzly; at this point, the closest ursine analogue is Boo-Boo Bear.
2013-01-30 Fiscal Cliff: Making Decisions in Crisis Part I by Brian Singer of William Blair
Having lost touch with mainstream America, neither the Republican nor the Democratic Party enjoys much governing ability. Second, politicians struggle to function as leaders, regardless of competence, as a result of party disengagement. Third, left to their own devices, politicians will respond to their individual incentives. Bringing these observations together, neither party platform nor leadership vision will provide as much guiding force as the incentives of each politician, sometimes individually and other times in coalition.
2013-01-30 Expanding Horizons: The Most Difficult Environment for Generating Income in 140 Years by Ehren Stanhope, Travis Fairchild of O'Shaughnessy Asset Management
In the most difficult environment for generating income in 140 years, we survey the landscape of income-generating options, review lessons from the previous bond Bear Market, and demonstrate why we believe global, dividend-paying equities deserve a prominent role in investor portfolios.
2013-01-29 Are Planners Worth the Fees they Charge? by Wade Pfau (Article)
Could financial advisors who offer comprehensive services be doing a better job? Two recent studies shed a positive light on the potential of the financial planning profession to do right by their clients.
2013-01-28 Is the Fed Doing the Right Thing? by Mark Oelschlager of Oak Associates Funds
After a strong 2012, the stock market is off to a good start in 2013, rising more than 5% so far in January and currently riding an eight-day winning streak (the longest since 2004). Encouraging economic data has a lot to do with this. Unemployment claims are at a 5-year low, home sales and prices are up, and consumer credit and retail sales are growing. Research firm ISI says that the current level of unemployment claims is consistent with 4% real GDP growth for the first quarter, which would be an acceleration from the sluggish growth of recent years.
2013-01-25 Feeding the Dragon: Why China's Credit System Looks Vulnerable by Edward Chancellor, Mike Monnelly of GMO
Edward Chancellor and Mike Monnelly, members of GMO's Asset Allocation team, write to institutional clients in a new white paper about China's credit boom and outlines some worrying recent developments in its financial system. In GMO's view, "China's credit system exhibits a large number of indicators associated with acute financial fragility," including China's debt and real estate bubbles, the belief that the government is underwriting financial risk, the shadow banking system, a proliferation in credit guarantees, among others.
2013-01-25 Pension Liabilities Time to Get Real by Christian Stracke of PIMCO
Creeping pension liabilities are an increasing concern for credit investors. Companies should provide more granular information on both sides of their pension balance sheets, as well as use more realistic assumptions. A few companies have improved their disclosures in recent years, but in general the information available to investors is still far from what we need.
2013-01-24 Quick Takes on the Investing Year Ahead by Sam Wardwell of Pioneer Investments
We covered a lot of market and investment topics at Pioneer's National Sales and Marketing Meeting last week. Here are some notes on a few that were popular: GDP Growth for the U.S.. Expectations for rates: Fed Funds Rate and the 10-year Treasury, EM equities favored over U.S. Equities?, Things that keep us up at night (outside of the debt ceiling, Europe, and Middle East tension.
2013-01-24 Tail Risk Hedging: It Pays to Be Countercyclical by Vineer Bhansali of PIMCO
The cost of hedging in absolute terms is back to pre-crisis lows. Quiet markets, low volatility and a lack of visible risks on the horizon can lead to complacence and increasingly dangerous, leveraged positions. Many credit markets have been direct beneficiaries of the belief in seemingly lower tail risks in equity markets, and could also end up suffering if there is a re-emergence of widespread fear of, and upward repricing of, these tails. Investors should consider taking this opportunity to reload their hedges as soon as they can.
2013-01-23 PIMCO's Secular Forum Preview by Mohamed El-Erian of PIMCO
It is almost time again for PIMCO's Secular Forum a critical part of the firm's investment process. This annual event, which takes place each May, brings together our investment professionals from around the world to debate and specify the key themes that we believe will affect the global economy and, consequently, our investment strategies over the next three to five years from asset allocation and relative value positioning to returns expectations and risk management.
2013-01-23 It's What You Learn After You Know It All That Counts. by Jeffrey Saut of Raymond James
January is the time of year when strategists, economists, gurus, etc. all join in on the annual nonsense of predicting "What's going to happen in the markets for 2013?" For many, this ritual is an ego trip, yet as Benjamin Graham inferred forecasting where the markets will be a year from now is nothing more than rank speculation. Or as I have noted, "You might as well flip a lucky penny."
2013-01-22 Ten for '13 by Investment Strategy Group of Neuberger Berman
Last year, despite the noise surrounding the U.S. elections and the ongoing European debt crisis, the main drivers of asset prices arguably were the large-scale bond-buying programs put in place by global central banks to alleviate systemic pressures. In 2013, we anticipate fewer aggressive central bank actions as the pace of global growth gradually picks up. We believe the largest influential factors to our outlook are premature fiscal tightening in the U.S. and a potential resurgence of eurozone problems.
2013-01-15 Demographics and the Decline of Equity Mutual Funds by Paul Franchi (Article)
Until the last few years, mutual fund flows followed performance. Recently, however, money has flowed disproportionately into bond funds and out of US equity funds despite a strong rally in the equity markets. Changing demographics explain this shift, which has important implications for advisors and the mutual fund industry.
2013-01-15 It's Not What Happens That Matters by Bill Smead of Smead Capital Management
Late in 2008 and in early 2009, a group of what we like to call "brilliant pessimists" hit the airwaves with their economic theories. The prognosticators' vision of the future was and is predicated on the history of similar situations and the mathematical realities of the huge debt overhang from the prior ten years of profligate economic behavior. They put very effective names on their visions like "new normal" and "seven lean years". They marketed their visions incredibly well to the point of shaming anyone who might disagree with their theories.
2013-01-14 The More Things Change... by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab
One crisis averted...another one on the way? Of course, but we're still positive on the US economy and stock market.
2013-01-10 Market Perspectives Q4 2012: Politics vs. Economics by Richard Michaud of New Frontier Advisors
The major news of the quarter was that a fiscal cliff deal passed in the final hours of the 112th Congress and was signed by President Obama. The deal averts tax increases on most Americans and prevents large indiscriminate cuts in spending in many government programs. It also averted, by nearly universal consensus among macroeconomists, tipping the American economy into recession with attendant global implications.
2013-01-08 The Forecast for Risk in 2013 by Geoff Considine (Article)
With the new year upon us, pundits are issuing their forecasts of market returns for 2013 and beyond. But returns don't occur in a vacuum – meeting clients' goals requires an asset allocation that appropriately balances return and risk. So what follows are my predictions for risk across major asset classes, based on a theoretically sound approach that has proven to be reliable in the past.
2013-01-07 Fixed Income Asset Allocation Post-Apocalypse by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management
December 21, 2012 the day the Earth was prophesized to collide with a black hole of kaputness has come and gone in defiance of the Mayan calendar. The more upbeat interpretation of the 5,125-year Mayan cycle, however, is that the end date doesn't signify Armageddon but rather the beginning of a new time for positive change here on earth. So allow us to suggest an investment playbook to cash in on this silver lining. In short, the sweetness of the metaphorical fortune cookie in your hand will depend on how you allocate your fixed income assets in 2013.
2013-01-04 Newsletter by Harold Evensky of Evensky & Katz
As always I hope you will enjoy this issue, as much as I have enjoyed putting it together. Most important though I wish one and all a very happy, prosperous and healthy new year!
2013-01-03 Grin and Bear It. by Scotty George of du Pasquier Asset Management
Without question, the financial markets yielded better in 2012 than what most had believed possible at the beginning of the calendar year. At that time, embroiled in a U.S. Presidential election and ongoing turmoil in the Middle East, many analysts would have been happy if we simply avoided catastrophe.
2013-01-02 Getting the Most from Your Investment Committee by Bob Veres (Article)
Investment committees are a little bit like fingerprints: they come in all shapes and sizes, and no two are exactly alike in form or function. So advisory firms that have investment committees – or are considering creating one – can learn a lot from one another. My research has identified some best practices for this flexible management tool, by comparing notes among advisors on how they are managing their IC teams.
2013-01-02 Brian McMahon on Thornburg’s Investment Income Builder Fund by Robert Huebscher (Article)
Brian McMahon is the chief executive officer and chief investment officer for Thornburg Investment Management, where he the co-portfolio manager for the $11.4 billion Thornburg Investment Income Builder Fund (TIBAX). The fund's goal is income production, and it has outperformed its benchmark, the Morningstar Moderate Target Risk, over the last ten years (10.87% versus 2.88%). In this interview, he offers his views on the economy and the markets, and how he has positioned his fund.
2013-01-02 How Much Hedge Fund Exposure Makes Sense? by Daniel Eagan of AllianceBernstein
Our research suggests that a well-diversified allocation to hedge funds might improve portfolio returns, but their greatest benefit is the risk reduction that comes from their low correlation to stocks. Here's why.
2012-12-27 The Best Investment-Related Quotes by Glenn Frank (Article)
I've compiled a list of my favorite investment-related quotes. They come from a range of sources – including many outside the world of finance. I hope that they provide wisdom and inspiration for the year ahead.
2012-12-27 Saving for Retirement Stage 3: Making Retirement Funds Last as Long as You Do by Team of Franklin Templeton Investments
So you're finally ready to retire. You've worked hard. You've planned. You've saved. You're ready to toss the business section and flip to the travel pages. You hope the investment decisions you've made have positioned you to meet your future needs. You may be retired, but your money has to keep working, and luck, as they say, tends to favor the prepared. In this third installment of our "Saving for Retirement" series, we take a look at some considerations and strategies for those fortunate folks beginning or living in retirement.
2012-12-26 The Ten Key Benefits of Investment Committees by Bob Veres (Article)
In this first part of a two-part report, I'll identify ten core purposes that investment committees serve in different types of firms, ranking them in order of the number of responses I received. If your investment committee is serving all ten purposes, based on the survey, you're among a select minority - which means that many advisors may find new ways to use this versatile new tool in their RIA practices.
2012-12-26 Putting Clients' Cash to Work by Dan Richards (Article)
A central challenge advisors face are is clients who need mid- to high-single-digit returns to achieve their long-term goals, but who have an overweight position in cash. A recent luncheon with a group of highly successful advisors highlighted this challenge and illuminated a way to overcome it.
2012-12-26 Assessing ISG's "Ten for '12" by Investment Strategy Group of Neuberger Berman
Earlier this year, we offered a forward-looking view of 10 macro themes that we anticipated for 2012. These ideas were meant not to be "surprises" but rather guideposts within the context of a longer-term strategic allocation. At year-end, we are pleased to note that seven of our 10 themes fully materialized. We provide a brief look below.
2012-12-20 Rolling Tail Hedges: The Dynamic Tradeoff between Cost and Potency by Vineer Bhansali of PIMCO
In our hypothetical illustration, rebalancing tail risk hedges more frequently than once a year offers some benefit under all volatility curves (ignoring transaction costs) but the benefits are greatest when the volatility curve is flat or steep. Some of the benefits of rebalancing can quickly disappear if the transactions costs are large. Two key points for investors to consider: Hedging has to be a systematic, repeated, asset allocation decision to obtain best long-term benefits, and the hedge program has to be active and consider pricing levels so efficient rebalancing can be implemented.
2012-12-20 2012 in Review by Investment Strategy Group of Neuberger Berman
As we approach the New Year and contemplate the opportunities the investment landscape may offer in 2013, it helps to look back at the performance trends of 2012. Overall, the year-to-date period has seen impressive results from various risk assets, which is in line with the projections of our Asset Allocation Committee. However, ongoing concerns about volatility and Europe hampered the markets at times. Here, we provide a performance scorecard and consider potential developments in the year ahead.
2012-12-19 PIMCO's Cyclical Outlook for Asia: Awaiting the Policy Breakthrough by Tomoya Masanao, Robert Mead, Ramin Toloui of PIMCO
Our base case for China includes incremental policy reform, but we also see an increased chance of a potential positive surprise on reform, resulting from the recent changes in leadership. Japan's new government will likely focus on reflating the structurally impaired economy, but policy effectiveness will remain questionable. Australia is being burdened by the unintended consequences of the policy responses of others, accompanied by the impending rebalancing of the Chinese economy.
2012-12-18 Pulling Back the Lens in Emerging Markets by Western Asset Management (Article)
Emerging markets remain resilient, according to Western Asset Portfolio Manager Rob Abad. But in the face of so much global uncertainty, investors would be wise to consider the latest trends and dynamics impacting this maturing asset class.
2012-12-15 Saving for Retirement Stage 2: The Sandwich Generation by Team of Franklin Templeton
Youve probably heard of the term sandwich generation, a time at mid-life when many individuals find themselves caring simultaneously for their children and their aging parents. Its a time when investment dollars can get squeezed out by day-to-day and unexpected expenses, a mortgage and possibly even a college savings plan. In this second of our three-part Investing for Retirement series, we take a look at some retirement savings strategies for individuals coping with these mid-life challenges as they themselves begin to look toward transitioning into retirement.
2012-12-13 2012 in Review by Investment Strategy Group of Neuberger Berman
As we approach the New Year and contemplate the opportunities the investment landscape may offer in 2013, it helps to look back at the performance trends of 2012. Overall, the year-to-date period has seen impressive results from various risk assets, which is in line with the projections of our Asset Allocation Committee. However, ongoing concerns about volatility and Europe hampered the markets at times. Here, we provide a performance scorecard and consider potential developments in the year ahead.
2012-12-12 Does China Pass the Smell Test? by Bill Smead of Smead Capital Management
We at Smead Capital Management believe that prolonged faith in China's economy and the belief that emerging market growth will be an elixir for developed market multi-national companies is the erroneous gift that just keeps giving. If China's economy has been successfully soft landed from its boom, why is the internal Shanghai Composite index making new lows as recently as last week (November 29th, 2012)?
2012-12-11 The Next Generation of Income Guarantee Riders: Part 3 (The Income Phase) by Wade Pfau (Article)
In this third and final installment in my series on guarantee riders, I'll focus on the post-retirement income supported by income guarantee riders for variable annuities (VA/GLWBs), stand-alone living benefit riders (SALBs), and an unguaranteed portfolio of mutual funds. I'll highlight how differences among these products affect their end results, while also investigating what roles guarantees can most appropriately play in a retirement portfolio.
2012-12-11 Fine Wine - Why it's for More than Just Drinking by Mark E. Ricardo, JD, LLM, AAMS (Article)
For many investors, an ideal asset class would combine superior long-term absolute and risk-adjusted returns with a hedge against inflation and stock market volatility. There's a way to get all of that, in an asset class you might never have thought of until now: fine wine. Investment-grade wine deserves careful consideration, particularly now that - unlike other collectibles, such as art and rare books - it can be traded on a regulated exchange.
2012-12-11 Up, Then Down by Jerry Wagner of Flexible Plan Investments
Five losses in a row for my Detroit Lions, and every one a heartbreakerin most of the games they led by at least ten points at one time. Getting ahead but still losing is a pattern that is not restricted to sports, but is also encountered in investing. It's surprising that conventional stock market investing has not seemingly developed any effective ways to counter it. Yet with profits in most of our strategies so far this year, it's important to seek to do so.
2012-12-10 Secular Bear Markets - Volatility Without Return by John Hussman of Hussman Funds
There is enormous risk, in my view, in the temptation to accept zero interest rates and low single-digit prospective market returns as an enduring characteristic of the financial markets while ignoring the unsustainable distortions that have produced this environment.
2012-12-10 13 for '13 by Richard Bernstein of Richard Bernstein Advisors
Each December we publish a list of investment themes that we feel are critical to the coming year. We continue to believe that US equities are in the midst of a major bull market that could ultimately rival 1982's bull market. It is hard to be bearish when one considers the following.
2012-12-07 Saving for Retirement: Stage 1 by Team of Franklin Templeton
Most of us have certain expectations about our retirement. We may daydream of the golden years as a time to explore exotic locales, perfect a golf swing, or just relax. The reality is often quite different, particularly for those whove done more daydreaming than planning, or who have suffered setbacks to their portfolios in 2008-2009 and feel a sense of paralysis. Knowing where to begin can be confusing, and as with most things, overcoming inertia to take that first step certainly isnt easy.
2012-12-04 In Search of the Holy Grail by Niels Clemen Jensen of Absolute Return Partners
This month's letter focuses on the short to medium term factors that drive our asset allocation and portfolio construction. All research suggests that financial markets are not driven by economic fundamentals in the short to medium term, so why should the investment process be?
2012-12-04 Economics 101: Little Return without Risk by Bill Smead of Smead Capital Management
A tremendous amount of energy and effort has been expended in the US on behalf of wealthy investors to secure returns while reducing risk. Like any useful endeavor, it started out as a wise thing and reached its stride in the late 1990s as a way to deal with a massive asset misallocation. As Warren Buffett always says, What the wise man does at the beginning, the fool does at the end. It appears to us that the efforts to eliminate risk in the US capital markets have reached the foolish point.
2012-12-01 Are Corporate Bonds Expensive? by Team of Neuberger Berman
As in the case of Treasury bonds, yields for U.S. corporate credits have fallen to historic lows as prices have risen. The yield on the Barclays Aggregate U.S. Investment Grade Bond Index was recently at 2.8%far below levels achieved during the heady days of 2007. Obviously, this reflects overall interest rates, but is it also a sign that corporate issues may be overvalued? We explore the issues and consider how investors should position their portfolios for the current environment.
2012-11-30 Active Management: Don't Drop the Pilot by Patrick Rudden of AllianceBernstein
For years, we've advised clients to hold diversified portfolios with balanced allocations to stocks, bonds and other assets. Lately, it's been a hard sell, especially after years of underperformance by active equity managers. But the tide may be turning.
2012-11-29 The 13th Labour of Hercules: Capital Preservation in the Age of Financial Repression by James Montier of GMO
James Montier, a member of GMO's asset allocation team, writes to institutional clients in a new white paper on the prospects for preserving and growing capital in a world of slowing growth. Defining financial repression loosely "as a policy that results in consistent negative real interest rates," Mr. Montier poses the question "how does a value investor respond to this? It certainly appears as if the assets one would normally associate with capital preservation are expensive. So can and/or should you substitute other assets such as equities into the role of safe-haven value store?"
2012-11-29 Are E&Fs Jeopardizing Their Missions? by Seth Masters of AllianceBernstein
Many US endowments and foundations (E&Fs) still plan to spend 5% of their assets each year, despite unusually low expected returns. We think few understand how likely it is that this will limit their ability to fulfill their missions in perpetuity.
2012-11-29 Sizing Up the Fiscal Cliff by Team of Neuberger Berman
As year-end approaches, the U.S. is inching closer to a potentially defining moment in its post-debt crisis economic recovery. A series of expiring tax cuts, spending reductions and new taxes equating to over $600 billion (or 4% of GDP), popularly known as the "fiscal cliff," are slated to take effect in early 2013.
2012-11-29 "Bond Deer" in the Headlights by Mike Temple of Pioneer Investments
An insightful client exclaimed to me last week, after I had enumerated the many risks facing bond market investors that he felt like a deer in the headlights. "Bear" with me for a paragraph or two while I elaborate. . .
2012-11-20 The Fallacies in Today’s Retirement Plan Assumptions: Putting the Hedonic Pleasure Index to Work by Bob Veres (Article)
Are you dramatically underestimating your clients' retirement lifestyle expenditures when you use Monte Carlo software? If you stop and look at a number of important assumptions hidden in the current models, you'll suddenly have a lot less confidence in the retirement plans you’re mapping out for your clients.
2012-11-16 The REIT Stuff: How REIT Investors Have Benefited from the Real Estate Recovery by Steve Benyik of Lord Abbett
In an otherwise slow-growth economy, real estate investment trusts' (REITs) strong returns and yields have attracted considerable investment in recent years. Steve Benyik, Lord Abbett REIT analyst, provides perspective on the sector's key trends.
2012-11-15 November 2012 Market Commentary by Andrew Clinton of Clinton Investment Management
In light of the approaching fiscal cliff and likely changes to the US tax code, we continue to believe that municipal bonds offer some of the most attractive risk- adjusted return potential available in the market today.
2012-11-13 How Well Does the Next Generation of Guarantee Riders Protect Your Income? Part 2 - Starting the Inc by Wade Pfau (Article)
Unlike traditional VA/GLWBs, the future payments from stand-alone income riders are tied to 10-year Treasury rates. That's bad news for retirees, who may find their future benefits compromised if interest rates remain at historically low levels - regardless of how the stock market performs.
2012-11-13 Emerging Markets: Maintaining Perspective by Robert O. Abad (Article)
In this Q&A, Western Asset Portfolio Manager Robert Abad discusses the latest dynamics and trends within emerging markets (EM). Although EM continue to demonstrate resiliency, Mr. Abad believes that given the amount of global uncertainty today, it is important that investors evaluate opportunities alongside a manager equipped to guide them through the risks and rewards of this evolving asset class.
2012-11-12 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
And so, we move on. Not simply the collective "we" of the markets, nor the political parties, nor any special agenda groupings, but, really, the global tapestry which can now divert its attention from American politics and focus once again on capitalism, peace-making and common ground solutions.
2012-11-06 ClearBridge Advisors - Market Commentary Q312 by Harry “Hersh” Cohen (Article)
Vibrant end demand is missing, as consumers have neither the wherewithal nor the will to spend as they did in prior periods.
2012-11-06 Asset Location: Nine Tips to Create “Tax Alpha” by Glenn Frank (Article)
With campaign season finally over, taxes are going to dominate the debate in Washington in the months ahead – however things shake out at the polls today. It's going to be confusing; it's going to be uncertain. But many of the most critical questions advisors will ask can be answered with an analytical approach to deciding where to 'house' assets – in taxable or tax-sheltered accounts.
2012-11-06 The Absolute Return Letter: The Era of Kakistocracy by Neils Jensen of Absolute Return Partners
We are now five years into a crisis that just doesn't want to go away. Paraphrasing Charles Gave of GaveKal who wrote a supremely succinct paper on this topic only last week, policy makers continue to tamper with interest rates, foreign exchange rates and asset prices in general. They continue to permit deposit-taking banks to operate like casinos. They issue new debt to pay for expenditures when we are already drowning in debt. They just don't seem to get it. Albert Einstein once defined insanity as doing the same experiment over and over again, expecting a different result.
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.
2012-10-30 Building Portfolios that Beat their Benchmark: Measuring Nanometers with a Yardstick by Bob Veres (Article)
Using tools he co-developed with the Nobel-prize winning economist Bill Sharpe, one advisor has found that he can reliably outperform an appropriate benchmark. His work proves it is possible to build a portfolio knowledgably. You just need the right tools to get the job done.
2012-10-30 The Next Generation of Income Guarantee Riders: Part 1 - The Deferral Phase by Wade Pfau (Article)
Clients no longer need to move their assets to a variable annuity with a rider to guarantee lifetime withdrawal benefits, thanks to the RetireOne stand-alone living benefit (SALB) rider from Aria Retirement Solutions, which can be applied to a portfolio of mutual funds and ETFs. Despite this enticing promise, however, the SALB may not offer as much downside protection as advisors and clients expect.
2012-10-29 5 Ways for Incumbent Advisors to Get -- And Keep -- Their Clients' Vote of Confidence by Rob Isbitts of Sungarden Investment Research
Obama and Romney are asking for four years to deliver results -- ask your clients for three. First, a brief disclaimer: Nothing in this article is intended to be politically motivated. OK, with that out of the way, let's talk about a most critical issue in our industry that is easily forgotten in today's madcap, have-it-now, sensationalized world: investment evaluation horizon.
2012-10-24 Policy at a Crossroads by Investment Strategy Group of Neuberger Berman
On September 13, the Federal Reserve announced a third round of quantitative easing, dubbed QE3, in the hope of providing an additional boost to the slow U.S. economic recovery. Although this latest policy action reinforces the notion that the U.S. is prepared to support its economy for as long as needed, some economists question whether the stimulus can really make a difference. In this issue of Strategic Spotlight, we consider the recent effects of loose monetary policy and whether the Fed has "reached its limit."
2012-10-24 Voluntary Exile by Bill Smead of Smead Capital Management
We at Smead Capital Management (SCM) believe that institutional and individual investors have moved their asset allocation away from large cap US stocks. Institutions are in exile in private equity, hedge funds and all things commodity and BRIC-trade related.
2012-10-22 Eggs Are Not Enough: The Truth About Diversification by Feifei Li of Research Affiliates
We learn in finance theory that diversification simply means not putting all your eggs in one basket. Simple as the idea is, most investors do not hold portfolios that are even close to being truly diversified. Two reasons make this sensible objective difficult to achieve. First, most investors are not disciplined enough to implement diversification. To illustrate my point, pause and check whether you are willing to reduce equities when the trailing 12-month return on stocks is 20+ percentage points higher than bonds?
2012-10-22 3 Investment Strategies for the New World by Russ Koesterich of iShares Blog
No doubt about it the investment climate has changed, and it's unlikely to change back anytime soon. Russ K gives 3 possible solutions for investors seeking to adjust to the new investment world.
2012-10-18 Investment Outlook 2013: "ABCD" Investing: Anything Bernanke Cannot Destroy by Cliff Draughn of Excelsia Investment Advisors
The Ben Bernanke and Mario Draghi concert gave the markets a double shot of their love in the month of September by promising to print as much money as needed to finance the debts of their respective countries. Ever since the financial fraternity party ended in 2008 and the world began deleveraging its massive credit hangover, the global markets have been hooked on the next shot of love from the central bankers.
2012-10-16 When Strong Client Relationships Aren’t Enough by Beverly Flaxington (Article)
Building strong personal relationships with your clients and consistently exceeding their expectations for direct, personal service – these traditionally were the best ways to generate referrals. But what if that's no longer enough?
2012-10-11 Inflation Regime Shifts: Implications for Asset Allocation by Nicholas Johnson, Sebastien Page of PIMCO
Investors who are concerned about inflation should focus on increasing their exposure to asset classes that provide a positive beta to changes in inflation. We believe that asset prices are much more sensitive to inflation surprises than actual inflation levels themselves. Given the current macro environment, investors face the possibility that low growth and high inflation may coexist. Commodities provide a levered response to inflation. Investors can hold a relatively small amount of commodities to hedge a much larger portfolio.
2012-10-11 When Averting Loss Can Lead to Averting Gains by Team of Franklin Templeton Investments
Think about something you'd really hate to lose, something of value to you such as a treasured possession. Now imagine you're told that if you lay that object on the line in a bet, you have a good shot at doubling its value, but there's also a possibility you'll lose it. How low would the chance of loss have to be before you'd be willing to take the risk? Maybe 10 percent? Less than that? The answer may lie in a behavioral economic theory called "loss aversion."
2012-10-11 Alternative Investments Offer Strategies to Avoid Fed-Inflated Bond Bubble by Team of Emerald Asset Advisors
Over the past several years, investors have shifted hundreds of billions of dollars out of stocks and into investment grade corporate bonds and U.S. Treasuries. To date, this strategy has delivered solid results for many investors, as bond prices have generally continued to rally while bond yields have continued to fall.
2012-10-09 Is Gluskin's David Rosenberg Right about Utilities? by Geoff Considine (Article)
They're not the sexiest property on the Monopoly board, but in today's market, there's plenty of evidence mounting that utilities are a great source of income. Indeed, Gluskin Sheff's David Rosenberg made the case for utilities in a recent commentary.
2012-10-09 Dividend Income: Music to Our Ears by ClearBridge Advisors (Article)
The hunger for income among investors is helping put dividends in the spotlight, say Hersh Cohen and Mike Clarfeld of ClearBridge.
2012-10-09 We Need a Bold Solution to Fix the Retirement System by Joe Tomlinson (Article)
Our retirement system is broken. The average American isn't saving enough to comfortably retire, and the fault lies in our reliance on defined-contribution (DC) plans, such as 401(k)s. Tinkering with DC plans won't solve the problem, and the other extreme - a federally mandated guarantee - isn't likely to gain support. But a number of compromises that lie between those approaches offer a better way forward for future generations.
2012-10-09 Letter to the Editor by Various (Article)
A reader responds to Rob Arnott's commentary, The Glidepath Illusion, which was published on September 25.
2012-10-09 ETFs for Tax Planning by Ryan Issakainen of First Trust Advisors
Exchange-traded funds are often regarded as more tax-efficient than traditional mutual funds largely due to the fact that many ETFs have been able to avoid the annual capital gains distributions that often frustrate investors in traditional mutual funds. As we progress toward the end of another tax year, many investment advisors are also finding ETFs to be effective tools for tax planning purposes.
2012-10-05 Market Performance and the Party in Power: Is There Really a Connection? by Team of Janus Capital Group
The relationship between domestic securities market returns and U.S. Presidential elections is a favored topic of Wall Street commentators. As the 2012 Presidential election heads toward the tape, the pundits are in full swing once again, and claims about the impact of a Democratic or Republican victory on U.S. stock and bond markets pop up almost as frequently as political ads. In this paper, we address the question, Should investors take these prognostications to heart and, more importantly, apply them to their asset allocations?
2012-10-05 Election Preview by Investment Strategy Group of Neuberger Berman
Our Investment Strategy Group sizes up the approaching U.S. election and its potential impact on the "fiscal cliff."
2012-10-05 Market Respite by Richard Michaud of New Frontier Advisors
In a period of looming macroeconomic risks and great investor uncertainty the quarter resulted in solid gains in most global equity markets. The Dow was up 4.3%, the S&P 500 5.8% and the NASDAQ 6.2% for the quarter. Year-to-date the Dow was up 10%, the S&P 14.5% and the NASDAQ 19.6%. The news internationally was encouraging though mixed with European indices up 8% for the quarter and 11.8% for the year while Pacific indices were up 2% for the quarter and 7.4% for the year.
2012-10-04 Thrown in Over Their Heads: Understanding 401(k) Participant Risk Tolerance vs. Risk Capacity by Stacy Schaus, Ying Gao of PIMCO
Our analysis suggests as investors in target-date strategies near retirement they become more attuned to market swings. We believe 401(k) plans cannot succeed if participants jump out of markets at the bottom and possibly miss a rebound. Plans need to have tolerable downside risk, so participants can ride the market waves. The way to manage target-date assets, in our view, is to focus first on the risk capacity of participants relative to meeting an income goal. We ask, how much of one's final income will need to be replaced in retirement?
2012-10-04 When Career Risk Reigns by Neils Jensen of Absolute Return Partners
In this month's Absolute Return Letter we pick up the baton from last month. How does the current crisis actually affect financial markets? How do you overcome the low returns? What can you do to protect the downside risk in a high correlation environment? We argue that career concerns often lead to irrational decisions by professional money managers and that this provides opportunities for those who can afford to deviate from the norm.
2012-10-04 Nothing's Perfect by Jerry Wagner of Flexible Plan Investments
On September 21, the Apple iPhone 5 made its debut simultaneously on four continents. Its first weekend saw over five million in sales! And the current inventory was sold out within a week a perfect product introduction. Wellnot quite. Soon articles like iPhone 5′s Biggest Problems started showing up, talking about scratching, chipped exteriors, lens flares and others. Then there were complaints about its faulty Maps application that even drew a rare corporate apology last week. It just proves the point of this weeks Hotline: Nothings Perfect.
2012-10-03 Circle the Wagons on GLD by Bill Smead of Smead Capital Management
We spoke to two small groups in Spokane on September 21st, 2012. For better or worse, when I think of Spokane I think of my cousin Gary. It was 1981 and yours truly was a young stockbroker at Drexel Burnham Lambert. Gold had been in a wonderful bull market ride in the prior five to ten years. Gary was interested in participating in gold through a gold-mining stock traded on the Spokane Stock Exchange. Spokanes proximity to the Northern Idaho mining towns and closeness to the Canadian border made it a natural place for commodity traders and mining enthusiasts to gather to transact business.
2012-10-03 Monthly Letter to Our Clients and Friends by Kendall Anderson of Anderson Griggs
Warren Buffett, Ben Graham's most famous student has said, "[Ben Graham] also taught me to see a stock not as something with a ticker symbol that wiggles around but to think about it as part of a business. Dont get elated because something had gone up or depressed because it went down. If I knew the facts, and it went down, I bought more of it". Although these two forces of investment beliefs are in constant battle, there is one common belief; Both believe that any attempt to "time the market" is not an intelligent approach to investment management.
2012-09-28 The Permanent Portfolio Turns Japanese by Adam Butler, Mike Philbrick of Butler|Philbrick|Gordillo & Associates
Our last few articles dealt with the Permanent Portfolio, a widely embraced static asset allocation concept proposed by Harry Browne in 1982. To review, the simple Permanent Portfolio consists of equal weight allocations to cash (T-bills), Treasuries, stocks and gold to ward against the four major financial states of the world.
2012-09-27 Growing Pains in the BRICs by Investment Strategy Group of Neuberger Berman
The "BRIC" countries have been a focal point of investor interest since the early 2000s. Brazil, Russia, India and China account for about half of the world's population, boast vast natural resources and are among the fastest-growing economies in the world. That said, progress at times has been uneven. Since 2010, the MSCI BRIC Index has largely underperformed the S&P 500 as economic growth flagged. In this edition of Strategic Spotlight, we discuss current conditions and the outlook for these markets.
2012-09-27 How Can Balanced Investors Mitigate Their Equity Risk? by Daniel Loewy of AllianceBernstein
Over the past three decades, bonds have provided balanced investors with the best of both worlds. As 10-year Treasury yields fell from a high of 13.7% in 1980 to less than 2% today, bonds provided both strong returns and a great cushion in times when equities were weak. Bonds are still important, but investors shouldn't expect more of the same.
2012-09-25 The Beginning of Fall Blues by Jerry Wagner of Flexible Plan Investments
I only have time for a short note today. It's probably a reflection of the shorter days that fall ushers in or maybe the increased pace of business that the end of summer vacations seems to ignite. Speaking of seasons, the market weakness we saw last week is just what our Political Seasonality Index has been suggesting that the stock market might have in store for us in this period.
2012-09-21 Growth for the Long Run by Jonathan Coleman, Brian Demain, Nick Thompson of Janus Capital Group
"I skate to where the puck is going, not where its been." Wayne Gretzky. Many investors would love to be as successful as The Great One when it comes to their portfolios. Yet investors are often heavily influenced by the past, losing sight of where they need to be going. This seems to be especially true today: mistrust of equities is running high after a decade of disappointing returns and excessive volatility.
2012-09-21 The Volatility Risk Premium by Graham Rennison, Niels Pedersen of PIMCO
Amid elevated global macroeconomic uncertainty and market turbulence, investors are searching for ways to diversify portfolios with non-traditional asset classes. Volatility risk premium strategies aim to capture a return premium over time as compensation for the risk of losses during sudden increases in market volatility. We believe investors seeking to diversify their equity risk exposures should consider adding volatility risk premium strategies to their portfolios, albeit with appropriate diversification across major option markets, active risk management and prudent scaling.
2012-09-18 Recognize the Relative Advantages of Natural Resource Equities vs. Commodities by RS Investments (Article)
This RS Investments research brief examines how shifts in commodity fundamentals presents the case for employing natural resource equities as a means to benefit from favorable long-term secular trends, while achieving superior risk-adjusted returns, similar diversification benefits, and more reliable inflation protection relative to commodities.
2012-09-17 Charlie Dreifus on the Global Economy and Its Impact on Stocks by Charlie Dreifus of The Royce Funds
Portfolio Manager Charlie Dreifus examines the data from Europe, China, and the U.S. and discusses how it may affect domestic stock prices.
2012-09-12 Housing's 'Green Shoots' by Investment Strategy Group of Neuberger Berman
Headwinds in the housing market appear to be abating as the U.S. economy gradually heals.
2012-09-12 Investing is Like Duck Hunting by Pamela Rosenau of HighTower Advisors
The discussion of additional monetary easing by the Federal Reserve has been the topic du jour in recent weeks. As a result of potential additional monetary stimulus, the US dollar has experienced a decline. Also, after a weaker than expected jobs report last week, US treasuries initially rallied given an increased expectation of Fed action. However, as pointed out by the market commentators at Sober Look, the Treasury curve has begun to steepen with the "30-year bond and other longer dated treasuries steadily selling off."
2012-09-11 Can Our Retirement System be Fixed? by Robert Huebscher (Article)
Google 'Teresa Ghilarducci' and you'll find countless references to her as the most dangerous woman in America. That dubious distinction stems from her 2008 book, When I'm Sixty-Four, in which she advocated replacing voluntary 401(k) plans with government-mandated savings accounts. Ghilarducci was attempting to address a problem that thus far has eluded solution, so it's important to consider her arguments, which have drawn praise from some quarters, too.
2012-09-11 US Stock Market Sentiment in a World of Wide Asset Allocation by Bill Smead of Smead Capital Management
Our long-time readers are aware that we are stingy when it comes to trading and big believers of keeping trading costs low at Smead Capital Management. Despite these natural inclinations, we do try to keep the pulse of sentiment in the US stock market.
2012-09-06 Laboring a Point by Jerry Wagner of Flexible Plan Investments
Right before Labor Day each year we are treated to a major policy speech at the Federal Reserve Board's meeting of the Fed's Open Market Committee. In 2010, we were treated to suggestions from Chairman Bernanke that a new period of Quantitative Easing was near. And sure enough, the Federal Reserve announced QE2 on October 22nd of that year.
2012-09-06 How to Unscramble an Egg by Niels Jensen, Nick Rees,Tricia Ward, Thomas Wittenborg of Absolute Return Partners
This month we take a closer look at the root problems behind the current crisis. Too often root problems are confused with symptoms and the wrong medicine is prescribed as a result. We identify five root problems, all of which must be addressed before we can, once and for all, leave the problems of the past few years behind us.
2012-09-04 The Ultimate Income Strategy - Higher Yield and Lower Volatility by Geoff Considine (Article)
Investors, especially those in the de-accumulation phase of their retirement, count on high income and low volatility. Achieving the best possible tradeoff between yield and risk is a major challenge for advisors. Over the last two years, I've shown how to construct a low-risk portfolio - the ultimate income portfolio (UIP) - that yields over 9.0%. Let's look back at how those portfolios performed and the components of this year's UIP.
2012-09-04 New Research - How to Help Clients Make Better Decisions by Joe Tomlinson (Article)
Making decisions is not something human beings are very good at. We do a poor job of predicting what will make us happy in the future, we often misjudge our ability to handle risk, and our decisions are plagued by subtle biases that throw us unwittingly off course. Because the essence of financial planning is making decisions about the future, it's critical that clients and advisors understand how decision-making biases can be identified and overcome.
2012-09-04 Risk Mitigation by Bill Smead of Smead Capital Management
How did the job of an asset allocator move from seeking out undervalued asset classes and securities to one of seeking to mitigate risk? Is risk mitigation a worthy goal or even possible without abandoning real return goals? When and why did wealth creation become wealth management? What opportunities exist today for those who seek wealth creation through intelligent risk taking?
2012-09-01 Schwab Market Perspective: Back to Work by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab
As summer winds down, we expect things to heat up as policymakers get back to work, resulting in a challenging investment environment.
2012-08-31 Prepare Now for the Looming Fiscal Cliff by Russ Koesterich of iShares Blog
The general election season is finally upon us, and investors should begin shifting their focus from theoretical discussions about the impending fiscal cliff of potential tax hikes and spending cuts to more concrete action plans of what to do about it.
2012-08-30 The Calm Before the Storm? by Jerry Wagner of Flexible Plan Investments
I know these are the dog days of summer, a time that Jack London captured perfectly in the quote here. Nothing much is happening in the financial world as summer draws to a close. There was little news from Europe. The last of earnings reporting season is behind us, and while the results were the worst since the rally began in March of 2009, they were not terrible.
2012-08-28 Tomatoes and the Low Vol Effect by Ryan Larson of Research Affiliates
For the past 40 years, investors have focused on how much their returns varied from both a benchmark and their peers. Given the volatility of recent years, some investors are thinking about returning to a different approach to riskthe risk of losing money. This shift in thinking requires a very different approach to equity investing.
2012-08-28 Permanent Portfolio Shakedown Part 2 by Adam Butler and Mike Philbrick of Butler|Philbrick|Gordillo & Associates
In our Permanent Portfolio Shakedown Part 1 we investigated the history of the approach, tracing it back to Harry Browne in 1982. The company he helped to found, The Permanent Portfolio Family of Funds, has been running their version of the strategy in a mutual fund for almost 30 years, with fairly impressive results. Harry's thoughts about the portfolio are worth repeating in this second installment.
2012-08-27 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
For many weeks, I have received feedback from readers of my commentary that I am "too negative," "too pessimistic" in my views about the markets. While it is true that my objective quantitative science leaves little room for interpretation, let me dispel the notion that it is I, not my data, that is contemptuous of the "next move."
2012-08-24 Taking Stock of Corporate Earnings by Team of Neuberger Berman
The corporate earnings season for the second quarter of 2012 has just about ended. Investors entered this period with much apprehension as the global economic slowdown set expectations for disappointing earnings. However, U.S. numbers surprised on the upside, contributing to a rally in equity markets worldwide. Given the importance of the corporate sector to the current economic recovery, we take a deeper look at recent earnings data to highlight important trends.
2012-08-21 The Profession's Faulty Assumptions: A Top Ten List by Bob Veres (Article)
In the financial planning profession, we make a lot of assumptions about the world in order to run spreadsheet models, retirement projections and sufficiency analyses, and generally determine how much a client should save and invest for the future. But many of the industry-standard inputs into our models are (how can I say this delicately?) garbage. Here are my top ten garbage inputs, with an explanation of how we might possibly improve on them.
2012-08-21 Stocks and Bonds: Comparing the Range of Potential Outcomes by Seth Masters of AllianceBernstein
Investors fleeing stocks have mostly sought shelter in bonds. That's understandable, given their relative stability and reliable income. But it's important to compare long-term expected returns, too. While bonds can be volatile in the short term, over longer time horizons, expected returns for bonds are easy to project: they are close to the starting yield, and the range of possible outcomes is narrow. Today, yields are extraordinarily low.
2012-08-21 Permanent Portfolio Shakedown Part 1 by Adam Butler, Mike Philbrick of Butler|Philbrick|Gordillo & Associates
The Permanent Portfolio is an asset allocation concept first introduced by Harry Browne in 1982. The Permanent Portfolio Family of Funds website has this to say about the strategy, which they have been running in mutual fund format for about 20 years.
2012-08-14 Blind Faith by Michael Lewitt (Article)
Central banks are facing political and practical obstacles that will render it very difficult for them to deliver anything more than anodyne words and actions as summer moves into the always dangerous August holiday season. IPhones should be kept on alert at the beach through Labor Day.
2012-08-13 The Fundamental Case for the 20,000 Dow by Seth Masters of AllianceBernstein
While some people deem stocks expensive relative to 10-year trailing earnings, we take a forward-looking approach. It starts with the premise that the stock market is not a casino and stock prices are not pulled out of thin air: they reflect the intrinsic value of companies' future earnings.
2012-08-10 Dividend Taxation and Stock Returns by Team of Neuberger Berman
With bond yields declining globally, stocks with high dividends have become increasingly popular as income seekers face a narrowing set of investment choices. The increased demand has caused dividend-paying stocks to outperform broader markets over the past few years, but as the expiration of the Bush tax cuts looms ever larger heading into year-end, investors are concerned that these stocks might grow less attractive. We explore the potential impact of higher taxes on dividend-paying stocks and how investors should be positioned in the months ahead.
2012-08-10 Dog Days by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab
We now appear to be firmly in the dog days of summer. Low volume and little conviction may dominate but investors need to stay vigilant and now is a good time to prepare for the fall. The recent Fed meeting yielded no new action, but policy makers reiterated that they will act if necessary. We are skeptical that more stimulus measures will have a lasting impact. A waiting game has ensued in Europe as investors look for action following hopeful comments from various officials. But despite concerns over corn prices, central banks will continue to ease, helping to support global growth.
2012-08-06 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Markets are so fixated on anecdotal and factual imagery like jobs' reports and sentiment meters that they are experiencing mania and panic over the least things. While reaction to hype tends to lead to price exaggerations, I also see a "so what?" response to data that sometimes borders on boredom. I prefer to believe that analytics can be useful in cutting through the ambient noise, to place an identity upon sectors' trends and their probability of trend maintenance.
2012-08-03 Real Assets Replication: Solving the Capital Call Conundrum by Andrew Hoffmann, Niels Pedersen, Mihir Worah of PIMCO
Risk factors help to identify the fundamental value drivers of real assets and explain differences in the reported returns of public and private equity investments that hold substantially similar assets. By combining the fundamentals of real asset valuations with the statistical tools required to unlock the component risk factors of asset classes, it is possible to replicate the returns of private real asset investments using liquid publicly traded instruments.
2012-08-01 The Vanishing Treasury Yield by Team of Neuberger Berman
Although Treasury bonds have performed well in recent years, investors should be aware of increasing risks as yields decline. Yields for 10-year Treasury Inflation-Protected Securities have been persistently negative since the fourth quarter of 2011 and continue to trend lower, implying that investors are paying increasingly higher prices for the relative safety these investments are supposed to provide.
2012-07-31 Beyond the Ultimate Death Cross by Georg Vrba, P.E. (Article)
Last week, I showed why the 'ultimate death cross' is not a bearish signal. But the methodology behind that signal - what's known as a 'golden-cross trigger' - can indeed offer a reliable guide to investors. And one can do even better with a simple improvement to the trigger that I have devised.
2012-07-31 Venerated Voices by Venerated Voices (Article)
We published our quarterly update for the Venerated Voices awards. Rankings were issued in three categories: The Top 25 Venerated Voices by Firm, The Top 25 Venerated Voices by Advisor and The Top 10 Venerated Voices by Commentary.
2012-07-27 Are Investors Worried About the Right Risk? by Seth Masters of AllianceBernstein
Individual and institutional investors alike have been shifting their capital from stocks to cash and bonds at a rapid rate in recent years, despite extraordinarily low interest rates. But if investors stop to weigh the importance of two different types of risk, they'll see they still need stocks. We think that 10 years from now, investors who don't will wish they had stayed in stocks or added to them
2012-07-27 Secular Outlook: Implications for Investors by William Benz of PIMCO
For investors, the biggest challenge now is moving from a world of normal distributions, with expected occurrences around the mean, to one of bi-modal distributions where more extreme scenarios prevail. Key institutions, including governments and central banks, were previously stabilizing forces but are now helping to accelerate underlying, destabilizing trends in the global economy and financial markets.
2012-07-27 Treading Water by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab
Stocks seem to be biding time until the action heats back up as summer winds down, but market-moving events can happen at any time. The US economy continues to slow and Bernanke had a relatively dour outlook before Congress. But it appears things would have to get worse before another round of easing is initiated; the effectiveness of which we continue to question. Yields in Spain and Italy indicate action may be needed sooner rather than later, but we did get positive remarks by the ECB, which led to market rallies and a big drop in yields, providing a measure of hope.
2012-07-24 Optimal Strategies for Secular Market Cycles by Michael Kitces (Article)
With alternative investments and active management strategies growing ever more popular, an advisor recently told me, 'It's just a fad and will end with heartache as all investment fads do. I've watched it play out over and over during my 30-year career.' But I am not persuaded. The secular market cycle today is different from the bear market 30 years ago, and not all market cycles favor the same investment strategies.
2012-07-24 The Upside of Low Interest Rates for Pension Plans: Issuing Debt to Fund Pension Liabilities by Jared Gross, Seth Ruthen of PIMCO
Issuing debt allows a sponsor to de-risk without waiting for market events or cash contributions to reach the level of funding that triggers a shift in asset allocation. There are a number of ways in which a sponsor may benefit from replacing inefficient debt (in the form of a pension deficit) with the tax and accounting advantages of marketable debt.
2012-07-24 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
I want to dispel the notion that I am an investment bear. There is nothing wrong with expressing an opinion, bullish or bearish, particularly when the consensus says its alright. Proof of one's courage, though, lies at the margins, during undetectable inflection points, before the consensus has arrived. My track record versus the benchmarks demonstrates a successful delineation between bearishness and being opportunistic.
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.
2012-07-24 Litman Gregory Mid-Year Commentary by Team of Litman Gregory
High debt levels in developed countries create headwinds that are likely to hamper global economic growth in the years ahead. Europe's debt woes raise the risk of a damaging financial crisis, and global stock markets reflected these concerns in the second quarter. Why are we discussing this now? It is partly a reflection on having reached a quarter of a century in business and thinking about how we have conducted our business.
2012-07-23 Quarterly Market Overview by Robert Carey of First Trust Advisors
While it is nice to get the news in real time, the need for speed on the information superhighway can lead to incomplete or erroneous reporting. Look no further than the current election campaign season where the finger pointing has already started between President Obama and Mitt Romney. Good thing the Internet has also brought us some fact-checkers to help sort things out. Helping to sort things out is what we strive to do for our clients, as well.
2012-07-22 How 5 Seriously Overworked Buzzwords Can Come Between You and Your Client by Rob Isbitts of Sungarden Investment Research
In my experience, several investing buzzwords have done more harm than good for investors. While they are important concepts, they have been so commoditized by the financial planning industry that their true meaning has been misinterpreted. All the while, Wall Street firms have reaped the benefits by mass-customizing portfolio management. What started as a concerted effort to help investors has been reduced to a marketing pitch and investors keep falling for it.
2012-07-16 High Yield and Bank Loan Outlook - July 2012 Sector Report by Team of Guggenheim Partners
After a strong first quarter for high yield bonds and bank loans, the mixed performance of the second quarter has conjured up memories of 2011s volatility. While the lack of clarity in Europe and the looming U.S. fiscal cliff will continue to weigh on the economy, the current macro-induced price dislocations present attractive long-term opportunities for investors with patient capital.
2012-07-16 Rethinking Asset Allocation by Curtis Mewbourne of PIMCO
As risk and return characteristics evolve, we believe investors need to adapt the way they think about using asset classes. Asset classes are likely to be affected by the situation in Europe and, more broadly, by high debt levels in developed countries. The related political debate about austerity vs. growth is also critical. Fixed income investors should note whether countries control their own currencies and can monetize their debts. Those that can may be greater inflation risks.
2012-07-16 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
In order to achieve optimal portfolio returns, particularly in un-optimal market periods, it is vital to adopt an ongoing strategy/methodology that is consistent. Attention to details, without capitulation, is the hallmark of a professional portfolio manager. Ideally, one is seeking durable results over the course of a long-term, and not a reflex change to short cycle events.
2012-07-12 Math, History and Psychology - Part 3 by Bill Smead of Smead Capital Management
Over the years, we have heard Charlie Munger state that Psychology is the most underrated and underutilized of the major academic disciplines in business and investing. Andy Grove backed this up in a Fortune magazine interview by telling about the best business advice he had ever received. His City College of New York professor told him, When everybody knows that something is so, it means nobody knows nothin.
2012-07-10 A Mid-Year Client Letter: Wisdom from Three Wall Street Veterans by Dan Richards (Article)
Here is a template for a letter to serve as a starting point for advisors looking to send clients an overview of the past 90 days and the outlook for the period ahead.
2012-07-09 The 4 Biggest Investment Performance Myths - and How They Can Torpedo Advisor-Client Trust by Robert Isbitts of Sungarden Investment Research
In 26 years in the investment industry, I have seen investor and advisor behavior from many different angles: as an advisor, portfolio manager, strategist, author and proprietor. Two things have been quite consistent during that quarter-century: 1) That clients and advisors both care deeply about investment performance and 2) that investment performance is rarely evaluated with proper perspective.
2012-07-09 Mixed Picture for the Consumer, ISM Numbers Weak Data on Factory and Service Sectors by John Buckingham of AFAM
While the major market averages ended in the red, though only modestly so, there was plenty of volatility in a holiday-shortened trading week that was replete with the release of quite a few economic statistics.
2012-07-06 Eurozone Slowly Inching Forward by Investment Strategy Group of Neuberger Berman
The European Union (EU) summit last week in Brussels surprisingly yielded some promising outcomes. EU leaders agreed to important short-term measures that can ease the recapitalization of banks but structural issues, such as increasing banking and fiscal integration in the euro area, remain unresolved. Without longer-term measures, the volatile nature of the debt crisis, as evidenced by the Greek elections on June 17, will continue to impact confidence.
2012-07-05 Looking for Bubbles by Niels Jensen, Nick Rees, Tricia Ward, Thomas Wittenborg of Absolute Return Partners
This month's Absolute Return Letter picks up on the question we left hanging in the air back in May - is Asia a potential re-run of Europe? Although policy rates appear to be dangerously low, and thus encouraging further borrowing, Asia has come a long way since 1997 and there is no immediate risk of a financial meltdown. Australian property prices and commodity prices - in particular crude oil prices - are more likely 'credit event' candidates in our opinion.
2012-07-03 Bond Funds: You Get What You Don't Pay For by Michael Edesess (Article)
Innumerable studies have shown that it's well-nigh impossible to beat the averages consistently investing in equity funds. But what about bonds? Bonds, after all, have more structure - perhaps there are ways an expert fund manager could exploit that structure and gain an edge over other investors. Is it possible to predict how well a bond fund will perform relative to other funds?
2012-07-02 This film is rated "R" by Scotty George of du Pasquier Asset Management
This is not your fathers stock market. Nor really is it yours, the one you envisioned two decades ago. Instead we may have leveraged, in a literal sense, all the financial details to our heirs. The bad news is that we have become marginalized. Our goals and expectations have been sequestered, postponed, for another time.
2012-06-27 Q3 2012 Outlook by Asset Allocation Committee of Neuberger Berman
The second quarter experienced a return to volatility as heightened concerns over the European sovereign debt crisis and an aura of pessimism around the pace of global economic growth have reverberated through financial markets. The year began on a positive note, with all major equity indices posting strong double-digit gains.
2012-06-19 Is China Running Out of Steam? by Matthew Rubin, Ing-Chea Ang, Justin Gaines of Neuberger Berman
The Chinese growth story is especially impressive. At a time when many economies have struggled, China has continued to expand rapidly, helped by its dominant position in manufacturing, growing middle class and, after the 2008 credit crisis, its successful injections of capital and stimulus to ward off recession. Nevertheless, recent data have suggested that the Chinese expansion is now slowing more quickly than most investors expected.
2012-06-19 The Known Unknowns by Ronald Roge of R. W. Roge & Company
On Friday, June 1, 2012 we had an all day investment strategy meeting. The purpose of this semi-annual meeting is to review our current portfolio strategy and evaluate it against the current state of the global economy...Easier said than done.
2012-06-18 Choosing the Right Asset Class in Emerging Markets: Why it Matters by Ignacio Sosa, Christopher Getter of PIMCO
Depending on individual risk tolerances during the past five years, it may have made more sense to overweight one or two EM asset classes and at times to avoid one or two EM asset classes altogether. In general, asset classes are better viewed as carriers of risks rather than each being considered a risk in its own right. This phenomenon is readily apparent in the emerging market space. We have advocated that asset allocation in EM should be dynamic with respect to both segment and country.
2012-06-15 Speed Up or Slow Down--Don't Exit the Commodities Highway by Frank Holmes of U.S. Global Investors
A positive signal received this week came from Goldman Sachs, when the firm recommended stepping back into the markets in its latest Commodity Watch. Goldman is anticipating a 29 percent return for the S&P GSCI Enhanced Commodity Index over the next 12 months and suggests investors might want to increase their position in commodities.
2012-06-14 Chart of the Week: Growth Dichotomys Diminished Influence by Team of American Century Investments
Despite weaker-than-expected U.S. employment data for May (released June 1) and other signs of slow economic growth, the Fixed Income Macro Strategy Team at American Century Investments does not believe the U.S. economy is headed toward another recession (though the marginal possibility of recession has increased). Rather, the team believes the economy remains on a sub-par recovery/slow (1-3%) growth path, with headwinds.
2012-06-12 The Problems with Trying to Benchmark Unconstrained Portfolios by Ken Solow (Article)
Benchmarking unconstrained, 'go-anywhere' managers is difficult. Common methods to determine an appropriate benchmark - such as an ex-post regression of how the fund was invested - can obscure the actions of the manager. Is the only solution to simply select an arbitrary benchmark and proceed accordingly?
2012-06-12 Asia's Role in Global Economic and Portfolio Rebalancing by Tomoya Masanao, Robert Mead, Ramin Toloui of PIMCO
We expect that the reallocation of global investor portfolios toward more balanced allocations to emerging market bonds the Great Migration to support Asia in the coming years. To pivot to a growth model that emphasizes domestic demand, China must alter government policy on taxes, profits of state-owned enterprises as well as make other structural changes. Japans growth will continue to be challenged by secular dynamics, and by the countrys inability to respond to them.
2012-06-11 Looking Over the U.S. Fiscal Cliff by Team of Neuberger Berman
Absent congressional intervention prior to year-end, over $600 billion (about 4% of U.S. GDP) of fiscal tightening is scheduled to take effect in the United States in early 2013. Dubbed the fiscal cliff by those in the financial community, the negative impact on growth caused by expiring spending and tax provisions has the potential to derail the ongoing recovery and, according to some observers, even tip the U.S. economy back into recession.
2012-06-07 The Absolute Return Letter - First Mover Advantage by Niels C. Jensen of Absolute Investment Advisers
Contrary to conventional wisdom, the eurozone crisis has always been a banking crisis. It only morphed into a sovereign crisis because of political incompetence. Given the rather stubborn approach of the German government to its beleaguered eurozone partners, the crisis is rapidly moving towards some sort of crescendo. It is only a question of time before one of the Southern European countries come to realise that they might be better off outside the eurozone, particularly if they are the first mover.
2012-06-06 Liquidity Lessons: The Critical Importance of Budgeting for Overlay Strategies by Markus Aakko, Jared Gross of PIMCO
One approach is to tier liquidity into current and contingent tiers, where some assets are kept in more liquid form and others are kept in higher-yielding investments. Quantifying how much of the immediate category is needed is a relatively straightforward risk-management exercise involving estimating the potential mark-to-market change in value of the overlay. Our view is that locating the liquidity pool internally has a number of potential advantages over an external model.
2012-06-04 It's All Relative by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab
Equities have pulled back and are flirting with correction (-10%) territory. We believed this was a needed process, and remain modestly optimistic that economic data will rebound and the market will eventually resume its move higher over the next several months. The Federal Reserve has made clear that it stands ready to act should the US economy deteriorate, or the European debt crisis escalate, but we remain skeptical. The more important issue in our view is how the coming "fiscal cliff" is addressed.
2012-06-04 Selling Your Business Before Taxes Rise by Daniel Eagan of Alliance Bernstein
Planning to sell your business? Try to wrap up the deal before year end, when todays highly favorable US capital gains tax rate is scheduled to expire. The federal long-term capital gains tax rate now tops off at 15%. If Congress does not act, on January 1, 2013, it will shoot up to 23.8%, including a 3.8% healthcare surcharge for individuals with incomes over $200,000.
2012-06-01 Asset Allocation: Does Macro Matter? Part II by Sebastien Page of PIMCO
We see the conventional, valuation-based approach to asset allocation as akin to looking in the rearview mirror, which may lead to suboptimal investment outcomes when important macroeconomic shifts take place. We believe an econometric framework to assess the impact of shocks to GDP growth and inflation provides the missing link between macroeconomic forecasts and portfolio performance. Investors should constantly complement, review and revise qualitative and quantitative macroeconomic analyses with judgment, experience and a view on current events.
2012-05-31 The Case for Short Duration High Yield by Greg Hahn of Winthrop Capital Management
Valuations in the domestic high yield market appear stretched and we are concerned that opportunities for incremental return are fewer over a near term horizon. In this article we provide an analysis of the structure of the high yield market and a rationale for investing in specific short duration and callable high yield bonds which offer investors a better risk/reward trade-off in the current environment.
2012-05-31 Institutionalizing Courage by Robert Arnott of Research Affiliates
Most investors measure wealth in terms of the value of their portfolio. We believe it is better to measure wealth in terms of the portfolios ability to support sustainable spending. This months Fundamentals explores why this approach requires courage.
2012-05-29 A Way to Save for College by Robert Huebscher (Article)
Funding your child's education is perhaps the most important investment you will make, but unfortunately, the investment industry offers few helpful options. Conventional 529 plans are saddled with high fees and force participants to take on an inappropriate degree of risk, as I've written in the past. But a good alternative is now available for funding a private college education.
2012-05-25 Loss Capacity Drives 401(k) Investment Default Evaluation by Stacy Schaus and Ying Gao of PIMCO
Based on our research, we believe retirement plan participants capacity for loss may be much lower than many investment default options accept as tolerable. Regardless of asset allocation structure, an investment default option should maximize the likelihood that each plan participant will meet his or her retirement income needs. One of the keys to meeting a set income replacement goal is to understand how much plan participants can afford to lose at every age as they approach retirement.
2012-05-24 Measuring Active Management: The Basics of Active Share and Tracking Error by Team of American Century Investments
Every investor needs to understand the basics of portfolio management. In a broad sense, portfolio management can be divided into actively managed and passively managed categories. Although we describe both approaches at the outset, we fasten our attention on active portfolio management in this piece. Specifically, we focus on the Active Share and Tracking Error approaches to measuring active management in equities. The goal is to further develop an appreciation for the multi-faceted complexion of active portfolio management.
2012-05-23 The Three-Part Case for Commodities by Russ Koesterich of iShares Blog
With both gold and broader commodity indices down significantly month to date, many investors are asking if they should lower or even remove their commodity exposure. I believe the answer is no. First, its useful to put the recent weakness in perspective. Both gold and a broad basket of commodities are down roughly 10% over the past three months. While the losses represent a significant correction, they are in line with the performance of equity markets over the same time period. Even more importantly, here are three reasons for maintaining a strategic exposure to commodities.
2012-05-22 Life-cycle Finance and the Dimensional Managed DC® Pension by Wade Pfau (Article)
Pension plans are like cars, according to Nobel laureate Robert Merton. People want a car they can drive and a pension that will maintain their standard of living in retirement; they do not care about what goes on under the hood. Advisors, however, must care. So when a new pension-like option hits the market, as DFA's recently did, it's important to go beyond simply kicking the tires and carefully examine how it works as a retirement-saving vehicle.
2012-05-22 Assessing the European Elections by Team of Neuberger Berman
In the two years since the onset of the European sovereign debt crisis, policymakers have struggled with the issue of fiscal integration and the tradeoff between growth and austerity. Although many observers hoped that some clarity would emerge from the recent elections in Greece, France and Germany, political paralysis continues throughout Europe. In this edition of Strategic Spotlight, we discuss the fiscal and growth outlooks for key eurozone countries and the region overall.
2012-05-22 Goodbye Planet Rates, Hello Planet Quantity: Credit Markets in a Zero Rate World by Luke Spajic of PIMCO
There is a sense that developed market economies are somehow undergoing a reversed metamorphosis reverting from butterfly back to caterpillar where growth is crawling as opposed to flying. The fear of credit destruction, perhaps triggered by deflationary scares, becomes a bigger obsession for central banks. The culture of credit risk-taking changes as rates go lower and approach zero with a perennial risk of the economy tipping into deflation.
2012-05-17 Our Fixed Income Insights on Yield Traps by Team of American Century Investments
From a fixed income perspective, we explain why aggressive yield-enhancing strategiesresulting from this extended period of historically low U.S. interest rates and yieldscan threaten the potentially valuable long-term portfolio benefits from holding fixed income positions. In particular, chasing yieldand stumbling into yield trapscan derail the important volatility reduction and diversification benefits offered by carefully selected and well-managed fixed income holdings.
2012-05-16 The Vision Thing II by Bill Smead of Smead Capital Management
In May of 2010 we wrote about how important it was for the companies which meet our eight criteria to have a strong vision and clear agenda for their business. We believe that every five to ten years those who manage money need to "cast a vision" of where they want to take investors and then backtrack from there to put a portfolio together to best take advantage of the vision cast. We believe there are three main roadblocks to the casting of a vision for the execution of a portfolio plan. In the absence of more attractive titles, we will call these roadblocks fog, bog and smog.
2012-05-16 Quarterly Review: 1st Quarter 2012 by Robert L. Worthington of Hatteras Funds
Overall economic conditions are slowly improving in certain developed markets like the U.S. This could result in decent and probably better than expected earnings results for Q1 2012, which of course are announced throughout the early-mid part of the coming quarter. Risks are still prevalent and meaningful in regards to the European debt crisis and may continue to mute economic activity for this part of the world. Finally, while evidence suggests that the major developing economies of China, India and Brazil are slowing, risk of hard landings in these countries is small.
2012-05-15 Balance, Grasshopper by Jeffrey Saut of Raymond James Equity Research
The stock market has been consolidating its huge gains from the October 4 undercut low for roughly three months in a ~75 point range (1350-1420). That consolidation has allowed the markets internal energy to be rebuilt and the oversold condition to be worked off. Because of that process, I continue to think the odds that we will see a move below the 1320-1340 zone remain pretty dim. Accordingly, I suspect the stock market is going to put in an intermediate bottom probably this week.
2012-05-15 James Montier on the Failures of Modern Finance by Robert Huebscher (Article)
The seeds of the next crisis have already been sown, according to James Montier - and they are fundamental flaws buried deep within the current theory and practice of finance. Bad models were the root of the financial crisis, Montier said, and a slew of behavioral biases are reinforcing financial instability.
2012-05-15 A Growing Attraction to Municipal Bonds by Team of Hennion & Walsh Asset Management
For income oriented investors, bonds can provide for a dependable and consistent stream of income, and principal protection when held to maturity. Bonds, whether they are Municipal, Government or Corporate bonds, can also provide for compounded growth opportunities when the income received from the bonds is reinvested. Additionally, for growth-oriented investors, fixed income securities can provide investors with downside protection and diversification within a growth portfolio especially in a highly volatile market where additional, measured, short-term flights to quality are likely.
2012-05-15 Policy Confusions & Inflection Points by Mohamed A. El-Erian of PIMCO
During this important annual event, PIMCO colleagues from around the world debate the major trends that will play out over the next three to five years, focusing not on what should happen, but what is likely to happen. Based on the 2012 Secular Forum discussions, we expect three themes to play out: continued policy and political confusion, overly incremental public and private sector responses and, therefore, greater potential for inflection points. In terms of regions, the status quo is no longer an option for Europe.
2012-05-14 Adaptive Asset Allocation: A True Revolution in Portfolio Management by Adam Butler and Mike Philbrick of Butler, Philbrick, Gordillo & Associates
Modern Portfolio Theory has been derided by practitioners, academics, and the media over the past ten years because the dominant application of the theory, Strategic Asset Allocation, has delivered poor performance and high volatility since the millennial technology crash. Strategic Asset Allocation probably deserves the negative press it receives, but the mathematical identity described by Markowitz in his 1967 paper is axiomatic in the same way Pythagoras' equations describe the properties of right triangles, or Schrodinger's equations describe the positional probabilities of electrons.
2012-05-11 Spring Quarterly Commentary by John G. Prichard of Knightsbridge Asset Management
U.S. GDP rose at a disappointing 2.2% annual rate during the first quarter of 2012; so far this recovery has been too weak to reduce relative government debt levels through growth. A step toward austerity is next years fiscal cliff which features automatic spending cuts and tax increases. We have been told one-third of the entire tax code is expiring at the end of this year, with payroll, income, capital gain and dividend tax burdens all set to increase. Simultaneously, automatic cuts to defense and other discretionary areas of the Federal budget are set to take effect.
2012-05-10 Diversification 301: Tailored Solutions for Your Portfolio by Team of American Century Investments
We continue our discussion of diversification and its application to investor portfolios. We explain how there is no single universal diversified portfolio suited to all investors and occasions. Instead, diversification is a highly customizable framework that can and should be uniquely tailored to suit each individual investors goals and risk tolerances. Earlier articles in the series discussed the basic benefits and rationale for diversification and a discussion of alternative investments that can be used to diversify a traditional balanced portfolio of stocks and bonds.
2012-05-10 Benchmarking Tail Risk Management by Vineer Bhansali of PIMCO
While tail risk hedging is a critically important area of modern portfolio management practice, the relative newness of the area means standard frameworks for benchmarking such portfolios have not developed. In fact, weve found that once the framework for proper tail hedge construction is defined based on key guidelines (including exposures, attachment, cost, and basis risk), the task of creating a proper index becomes relatively straightforward. To compensate for insufficient real-time performance measurement, tail hedges need to be evaluated on the basis of scenario analysis.
2012-05-10 Q112 Portfolio Commentary for the Absolute Strategies Fund by Jay Compson of Absolute Investment Advisers
It is no secret the structural problems and crises throughout the global economy stem from excess debt. This letter attempts to explain why we think the global economy is in this situation, why the process for creating the problems continues to this day, why financial markets are not out of the woods. We are extremely optimistic about the future investing climate, but only after we get through the final stage of the credit bubble. In our view, the root of the problem stems from the willingness of a broad swath of investors and money managers to bid up asset prices to extreme levels.
2012-05-09 Going Global Can Pay Dividends by Brad Kinkelaar, Cliff Remily and Raji Manasseh of PIMCO
In todays low yield environment, many investors now include dividend-oriented equities in their portfolios in an effort to reach their income goals. U.S. investors with home market bias risk severely limiting their income potential because in the U.S., dividend payout ratios are on the decline, taxes are potentially on the rise, and valuations in sectors that typically offer attractive dividends are near historical highs. In our view, global equities can provide more attractive dividend income opportunities and offer potential for additional benefits, including diversification
2012-05-08 Richard Bernstein: US Assets will Outperform over the Next Decade by Robert Huebscher (Article)
Prior to founding the firm that now bears his name, Richard Bernstein was the chief investment strategist at Merrill Lynch & Co. In this interview, he discusses why he expects US assets - both equities and fixed income - to be the outperformers among global markets over the next decade.
2012-05-08 Annuities versus Systematic Withdrawals: Understanding Tax Effects by Joe Tomlinson (Article)
Given the complexity of most annuities, analysis of them typically only considers pre-tax results. But taxes matter. As we will see, tax impacts vary by the specific type of annuity you're considering, and will make the difference between annuities being cost effective or a drain on cash flow.
2012-05-08 Why the Best Conductors Sent Us Home Early by Justin Locke (Article)
As a professional speaker, I focus on leadership and management. But I have a major handicap to overcome: the conventional wisdom that a core goal of leadership is to motivate greater effort.
2012-05-08 Dont Fight the Last War Lessons from the Battlefields of Risk Management by Niels C. Jensen of Absolute Return Partners
Investors often behave as if they operate in a world of logic and certainty even when that is not the case. For that reason, history is littered with investors who have failed miserably. In this month's Absolute Return Letter we look at many of the pitfalls facing risk managers and we take a stab at where the next big crisis is going to surface. Our conclusion may surprise a few readers.
2012-05-04 Trading Volumes in Perspective by Team of Neuberger Berman
NYSE Euronext recently reported a 44% decline in quarterly earnings, due largely to a 23% drop in the exchange operators trading volumes from a year earlier. The development confirmed something already known to many in the investment communitythat equity trading volumes have been depressed, which is traditionally a technical indicator of bearish sentiment. Curiously, this light volume has come in the midst of a 29% advance by S&P 500 since its October 4, 2011 market low. In this edition of Strategic Spotlight, we discuss the reasons for the meager volume and what it could mean for investors.
2012-05-03 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
As markets regroup from their phenomenal start to the year, certain groups have transformed the conversational dynamic. Focusing as I do upon longer term demographics, I have noticed a shift from traditional consumer cyclical brands toward epic population issue sectors, such as agriculture, healthcare, energy and infrastructure. Beyond the obvious significance of these topics, trading machinations within those secular themes have transformed during the last year. One notices a steadier stochastic pulse to equities within these sectors, emblematic of a longer attention span.
2012-05-03 Rethinking Best Practices for Bank Investment Portfolios by Sabrina Callin and Justin Ayre of PIMCO
The turmoil in capital markets and changes in the regulatory environment have sparked changes in bank investment portfolios and caused many banks to reevaluate portfolio management practices. Banks without the resources to develop new processes may be forced to limit their investment opportunity set, possibly limiting earnings and diversification potential in the securities portfolio. The investment portfolio may represent an opportunity to improve bank revenues and risk-adjusted performance by expanding into investments with improved return and diversification potential.
2012-05-02 A New Wave of Foreclosures Could Challenge the Housing Market by Team of American Century Investments
The most recent data on the U.S. housing market suggests we may have reached a bottom. However, most experts anticipate the housing market will be hit by a large new wave of foreclosures that will substantially affect the current supply-demand balance for the remainder of this year and possibly into 2013. As a result, we may be looking at one more phase of price declinesparticularly in local markets where the housing bubble grew largest before it burstbefore we truly find the bottom to our five year housing crisis.
2012-05-01 Why MLPs Belong in Your Portfolio by Geoff Considine (Article)
One would think that an asset class yielding 7% and carrying less volatility than do equities would be popular with investors. Yet, despite those attributes, master limited partnerships (MLPs) remain unknown or ignored by large numbers of investors. The case for MLPs is compelling, so it's time for a deep examination of the special properties of this asset class.
2012-05-01 Wind Shear Avoidance: Why There Is Value in Momentum by Vineer Bhansali of PIMCO
Explicit tail hedges that look expensive in a normal world may indeed turn out to be cheap if the unimodal morphs into the bimodal. When faced with bimodal outcomes, momentum as a risk factor becomes potent, and cost-efficient exposure to momentum becomes critical to proper portfolio construction. In this world of low, pegged interest rates, an investor who is going to take risk needs other means to make the portfolio more inured to unforeseen shocks and market storms. Investors should look at effective alternative beta strategies, such as momentum, that can be implemented efficiently.
2012-04-26 The Newlyweds Dilemma by John West of Research Affiliates
Before marriage, men and women enjoy a lot more free time. Married life represents a huge shift in their habits and schedules. Similarly, a new world of lower expected returns signals a major break from mainstream investment approaches. This months Fundamentals examines how investors can position their portfolios for the future.
2012-04-26 The Global Fiscal & Monetary Policy Shift Moves Markets by George Bijak of GB Capital
The powerful macro forces that drive global economy and move stock markets have changed direction post the peak of the Global Financial Crisis. Governments are tightening their Fiscal Policies and Central Banks are expending their Balance Sheets (also known as quantitative easing or money printing) as part of globally synchronized deleveraging process. The two opposing forces pull the global economy in different directions. The fiscal cuts are slowing economic growth but are counter-balanced by a stimulative nature of the Central Banks easing.
2012-04-25 Avoiding Equity Market Exposure by Team of American Century Investments
The year 2012 finds the search still on for income and capital appreciation with acceptably low volatility. Many investors remain leery of stocks and are also interested in opportunities that possess low correlation to equity markets. In addition, the low interest rate environment presents difficulties for those trying to achieve total return goals by relying on fixed income investments. Given these issues, some may wish to learn more about the techniques utilized by many equity market-neutral (EMN) strategies.
2012-04-24 65+5+Dividends: The case for quality dividend stocks in the first five years of retirement by Legg Mason ClearBridge Advisors (Article)
Retirees are living longer than ever before, and for many, outliving their money is a real concern. A good reason to consider quality large-cap dividend stocks in the early years of retirement - which have historically offered higher returns than fixed income with lower volatility than equities overall.
2012-04-24 Why a 60/40 Portfolio isn’t Diversified by Alex Shahidi (Article)
Maintaining a balanced portfolio is critical, especially when predictions of growth and inflation vary as widely as they do today. Investors are always better off spreading risk than aggressively betting on one economic outcome, and that's especially true when the range of possible economic outcomes is so wide.
2012-04-24 Real Career Risk by Bill Smead of Smead Capital Management
Real career risk is too many people doing what you do for a living. Granthams problem is that every day three million brilliant people get up and spend most of their waking hours trying to practice wide asset allocation. Most of those three million brilliant people have strong backgrounds in economics and lean on their ability to make macroeconomic predictions. Too many people are doing the same thing at the same time for a living. Therefore, they need to either move to another town or wait patiently for most of the other bright people to take up another profession.
2012-04-24 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
As markets regroup from their phenomenal start to the year, certain groups have transformed the conversational dynamic. Focusing as I do upon longer term demographics, I have noticed a shift from traditional consumer cyclical brands toward epic population issue sectors, such as agriculture, healthcare, energy and infrastructure. Beyond the obvious significance of these topics, trading machinations within those secular themes have transformed during the last year. One notices a steadier stochastic pulse to equities within these sectors, emblematic of a longer attention span.
2012-04-20 Maybe Diversification Is Not All It's Cracked Up To Be by Chuck Carnevale of F.A.S.T. Graphs
As I began digging into the many faces of diversification, I quickly learned that it is a much more complex concept than at first meets the eye. I feel I learned that there is no one-size-fits-all or even a set of universally applicable rules or principles. To a great extent, diversification turns out to be a very personal issue. How much or how little depends more on your goals and objectives, the knowledge and experience you possess, the time you can allocate to your investment portfolio, and of course, your tolerance for risk. Some of us need a great deal of diversification.
2012-04-20 Monthly Investment Commentary by Team of Litman Gregory
Stocks and other risk assets surged in the first quarter, continuing the strong run that began in the fourth quarter of last year. In each of the past two quarters, domestic stocks gained about 12%, marking one the strongest runs over the October-March span going back to the 1920s. Developed foreign stocks increased nearly 12% in the quarter, emerging-markets stocks gained 14, small-cap U.S. stocks were up 12%, high-yield bonds rose 5%, and emerging-markets local-currency bonds added 8%.
2012-04-20 Whats Ahead for the Fed? by Team of Neuberger Berman
Although growth could slow from here, we do not believe economic conditions will deteriorate enough to provoke further accommodative measures from the Fed. The Fed may be on hold for the time being, but we also believe that Bernanke is acutely aware of the potential consequences of reversing monetary policy too quickly. As a result, interest rates may stay lower for longer. In this type of yield-constrained environment, we continue to favor segments like high yield fixed income and emerging market debt, which both offer attractive sources of income and upside potential.
2012-04-19 Current Conditions Cater to Our Rigorous Muni Investment Process by Team of American Century Investments
The last four years have been a remarkable period in municipal bond (muni) market history. The 2008 Financial Crisis and the Great Recession transformed the high-grade U.S. muni market and how people invest in it. What was once a relatively homogenous bond sector in terms of its credit quality and ratings became much more heterogeneous. Under these conditions, we believe experienced professional credit research and portfolio management are now crucial to investment success. This article outlines our muni investment processes.
2012-04-19 My Sister's Pension Assets and Agency Problems by Jeremy Grantham of GMO
Investment behavior is driven by career risk. In the professional investment business we are all agents, managing other peoples money. The prime directive, as Keynes knew so well, is first and last to keep your job. To do this, he explained that you must never, ever be wrong on your own. To prevent this calamity, professional investors pay ruthless attention to what other investors in general are doing. The great majority go with the flow, either completely or partially. This creates herding, or momentum, which drives prices far above or far below fair price.
2012-04-19 Huge Dilemma: Do You Protect Your Job or Your Clients' Money? by Mike "Mish" Shedlock of Sitka Pacific Capital Management
I feel like a broken record. Jeremy Grantham, John Hussman, and Lance Roberts of Streettalk Live surely feel the same way. I have been preaching the "low returns for a decade" concept for quite some time. It is very tough preaching caution, when caution is routinely tossed to the winds. Yet history has proven time and time again, that such times are precisely when caution is warranted, even though timing the precise moment is simply impossible.
2012-04-18 Stock Picking in a World of Profit Margin Mean Reversion by Bill Smead of Smead Capital Management
We feel investors should avoid capital intensive companies which are tied to commodities or emerging markets. As interest rates rise and capital becomes dear, those who eat capital lose and those with strong balance sheets and who generate high and consistent free cash flow, should win. As Buffet, Grantham, Hutchinson and Stein pointed out, someone loses in the reversion to the mean of profit margins when compared to GDP. Lastly, dont be fooled by those who are bearish on the stock market because of their belief in profit margin reversion.
2012-04-18 Balancing Perception, Reality, Equities and Fixed Income by Team of Franklin Templeton
Never underestimate the power of perception to influence peoples fiscal behavior. Perception is such a significant influence, in fact, that economic tea-leaf readers have developed a myriad of surveys and indicators to monitor individuals perceptions of the investing environment because perceptions canand domove markets. When sentiment is negative, investors tend to shift out of assets they perceive as risky and into assets they perceive as safe. Ed Perks, portfolio manager of Franklin Balanced Fund and Franklin Income Fund, is well aware of the role perception plays in the markets.
2012-04-17 Rethinking Safe Withdrawal Rates: The Meaning of Failure by Wade Pfau (Article)
Merely knowing the probability that an investor's wealth will be depleted at some point is not enough to build a retirement strategy. That is the traditional measure of failure in safe withdrawal studies, and it's time to move beyond it.
2012-04-17 The Rebalancing Problem by Michael Nairne (Article)
Selling winning asset classes to buy losers runs counter to human nature. But doing so with discipline can increase the potential return of a portfolio while critically maintaining its risk profile. The rebalancing premium is an important and often overlooked addition to returns of properly managed portfolios.
2012-04-17 Investor Question: Gold or Gold Miners? by Russ Koesterich of iShares Blog
The Fed may be the best friend gold investors ever had. The most important factor for gold is actually not inflation or the dollar, but rather the level of real interest rates. In fact, the relationship between gold and real rates is so critical that since 1990, the level of real rates explains roughly 60% of the annual performance of gold. Gold generally does best in an environment in which real rates are low to negative as this means no opportunity cost to holding gold. Since 2003 when gold began its long-term outperformance we have been in just such an environment.
2012-04-13 Diversification Remains Difficult by Richard Bernstein of Richard Bernstein Advisors
Our firm believes three principles build long-term wealth: Extend the investment time horizons. Compound dividend income. And truly diversify portfolios. Although obvious, few investors actually follow them consistently. In particular, we remain quite concerned that investors appear grossly under-diversified. Diversification is not dependent on the number of asset classes, but rather it depends on the correlations among those asset classes. Because correlations among asset classes have been so high, investors must be extra careful to ensure portfolios are indeed well-diversified.
2012-04-12 Diversification 201: Implications of Diversification for Investor Behavior by Team of American Century Investments
Here we look at diversification as a tool to address many classic failings identified by the science of behavioral finance. Earlier we explained the rationale behind diversification and how it can be used for structuring a portfolio to help manage risk and maximize risk-adjusted performance. We also provided an Intro to Alternatives meant to highlight the types of strategies that can be used to diversify a traditional portfolio. In future months well address such topics as diversification in a post-Financial Crisis world, and what types of diversification strategies make the most sense.
2012-04-12 Evolution, Impact and Limitations of Unusual Central Bank Policy Activism by Mohamed A. El-Erian of PIMCO
I will speak in a central bank and to central bankers about the role of their institutions particularly the Federal Reserve and the European Central Bank in todays highly complex, perplexing and historically unusual policymaking environment. I will go further and try to link actions to motivations. And, when it comes to implications, I will attempt to put forward questions and hypotheses that, I believe, are critical for the future of the U.S. and global economies but for which I, like others, have only partial answers.
2012-04-12 Global Investment Outlook - March 2012 by Team of Aberdeen Asset Management
Global economic growth sustains its momentum for now. Fiscal policy remains a global focus. Further monetary policy accommodation should support markets. Recent positive momentum within the U.S. economy is driving the global economic recovery, overwhelming the negative sentiment emanating from peripheral Europe. Real incomes, boosted by employment growth and easing inflation, are showing signs of turning positive in the U.S., feeding through to the broader economy.
2012-04-12 Volatility Is Not Risk by Chuck Carnevale of F.A.S.T. Graphs
Rogers blog dealt with his feelings about a recurring theme in Barrons over the weekend referencing peoples complacency for risk. The first part of his writing dealt with the risks associated with the utilization of puts. On this subject, Roger and I are in agreement. However, the second part of his blog talked about what he felt was the great risk of using dividend paying equities as an alternative investment choice. The following analysis utilizing the F.A.S.T. Graphs earnings and price correlated research tool illuminates the important parts that I feel Roger left out.
2012-04-11 Will Baby Boomers Wreck the Market? (The Sequel) by Gary D. Halbert of Halbert Wealth Management
The basic premise behind the idea that Baby Boomers might lay waste to the stock market makes sense intuitively. The idea is that as Boomers retire, they will shift assets away from stocks to less risky alternatives such as bonds, annuities, CDs, etc. and begin living on the interest. All of this selling activity, the story goes, will put downward pressure on stock prices and lead to a major selloff.
2012-04-10 Allocating to Real Assets: Why Diversification Matters by Cohen & Steers (Article)
One way to extend the long-term purchasing power of a traditional stock and bond portfolio is through an allocation to real assets. But individually, categories like commodities, natural resource equities and REITs can be volatile. Cohen & Steers meets the challenge with a focus on broad asset-class diversification.
2012-04-10 Which Stocks Win on Main Streets Comeback? by Bill Smead of Smead Capital Management
We are very excited about the next three to five years because we believe it is likely that Main Street will start to compete with Wall Street for capital and economic growth will accelerate. Unemployment rates would fall in that scenario and pent-up demand for goods and services could come out of the woodwork among average American households. What we mean by saying this is that capital will begin being demanded for business activities. As capital gets demanded for business activities ranging from housing to business expansion, the cost of capital will rise and bond prices would fall.
2012-04-09 How high is up? by Scott Brown of du Pasquier Asset Management
Europe hopes the latest (bailout and reg) moves will help it get its act together. (Good luck with that.) China applies the brakes. Labor looks strong, but can it continue? The Fed debates the need for more stimulus (without any consensus). Facebook moves closer to IPO (and investors beg to participate). The world lectures Iran and finally takes harsh measures (stand by to help Saudi). Investors hope to keep the mo going for another quarter, while being tempted to take profits along the way. Can we finally start focusing on Obama vs. Romney?
2012-04-09 How high is up? by Scott Brown of du Pasquier Asset Management
Although performance in our portfolios was good during the first quarter, it is likely that my defensiveness might be costing us during the current rally. Right now, my allocations reflect a lack of conviction that the rally can sustain, so while cash is king is a handy catchphrase, in our case it is our best defense against the kind of draw-down that ruins portfolios. Our methodology is not to have one or more security rupture the probability of continued portfolio progress, point A to point B. In that sense, we successfully continued our steady climb in valuation appreciation.
2012-04-09 An Update on U.S. Manufacturing by Team of Neuberger Berman
On April 2, the Institute for Supply Management reported that the ISM Manufacturing Index had increased to 53.4 in March from 52.4 in February, slightly ahead of consensus forecasts. Although this often-watched indicator has flirted with contraction territory (below 50) at different points throughout the economic recovery, it has now expanded for 32 consecutive months since August 2009 and continues to point to strengthening economic growth. Here, we discuss our expectations for the manufacturing sector and its potential impact on financial markets.
2012-04-05 Calm After the Storm by Richard Michaud of New Frontier Advisors
The Fed has announced that it stands ready to promote economic growth with all the tools at its disposal. The Fed policy of low interest rates and cheap credit may still be needed to help the job market heal for some time to come. However, the inevitability of a rise in interest rates at a foreseeable point may encourage investors to avoid fixed income securities. The financial reality is that markets clear and prices depend on buyers as well as sellers. Time horizons and global forces are always considerations. The importance of diversification is always prudent for long-term investors.
2012-04-03 Gassed Up but No Place to Go by Geoff Considine, PhD (Article)
When a great investor points to a vastly underpriced asset, a natural first reaction is to devise the best strategy for buying it. Sometimes, however, the impediments to that strategy prove too great, something anyone will soon discover who listens to Jeremy Grantham's assertion that 'everyone who has a brain should be thinking of how to make money' long-term on natural gas.
2012-04-03 A Q1 Letter to Clients: Bernanke, Buffett and Siegel on the Prospects Ahead by Dan Richards (Article)
Here is a template for a letter to serve as a starting point for advisors looking to send clients a summary of what's happened in the past 90 days and the outlook for the period ahead.
2012-04-03 Beyond Bonds: The Role of Risk Assets in Liability-Driven Investing by Sebastien Page of PIMCO
In liability-driven investing, unless the plan is fully immunized or significant leverage is employed, the bond portfolio only hedges part of the liabilities. Overall, when diversifying across risk assets, there are choices that may be more attractive to pension plans than they are to liability-agnostic investors, such as risk assets with exposure to duration. Plan sponsors who choose to maintain a short duration stance on a total portfolio basis should consider alternative sources of diversification beyond equities.
2012-04-02 1Q 2012: Why The Rally Can Last by Chuck Royce of The Royce Funds
We're seeing one of those rare occasions when one of our predictions for the market as a whole worked out almost exactly the way we thought it would. For a while now, we have been noting the disjunct between the very negative and alarmist headlines and the more optimistic view our own analyses and contacts with managements were revealing. It seemed to us as early as last September that the economy was in better shape than the conventional wisdom was suggesting.
2012-03-29 1Q2012 Japan Commentary by Patricia Higase of Rising Funds Capital Management
As the Japanese equity markets enter the last week of the first quarter, the TOPIX has gained approximately 19.8% year to date. Translating this into U.S dollars, investors gain approximately 12% in returns year to date. The primary change moving the Japanese equity market has been the yen weakening approximately 8% from the end of 2011. General global stabilization and risk aversion abating have also contributed towards the markets recent moves.
2012-03-29 Asset Allocation Committee Outlook by Team of Neuberger Berman
The resurgence of risk appetite witnessed in late 2011 has continued, with most major equity indices up in double digits for the year-to-date. In contrast, fixed income indices have posted very modest and, in some cases, negative returns in the first quarter. Much has been accomplished in the U.S. and globally that has contributed to the now six-month-old equity rally. However, concerns remain. Given this picture, the Asset Allocation Committee's core view remains steadyunderweight bonds, overweight equities.
2012-03-27 GMO: Two Questions We Can't Answer by Robert Huebscher (Article)
Its reputation was built on stellar returns achieved with long-term bets on undervalued asset classes. Current market conditions, however, pose two unanswerable questions for GMO – leaving the firm with an uncertain strategy for its equities and fixed-income allocations.
2012-03-23 Whats Next for Equities? by Matthew Rubin and Justin Gaines of Neuberger Berman
In 2011, the S&P 500 finished essentially flat on a price-return basis. That return, however, would not have been achieved without a 15% gain over the last three months of the year. Equities have since picked up where they left off and, year-to-date, most major indices are up by double digits. Front-of-mind for investors is whether this momentum can be maintained. We offer the bear and bull cases as well as our thoughts on what may lie ahead.
2012-03-21 The Scarcity of Income: A Hobsons Choice by Alan Dorsey, Juliana Hadas and Leah Modigliani of Neuberger Berman
The post-global financial crisis environment has resulted in rock-bottom yields for U.S. Treasuries and other sovereign debt deemed to be either liquid or low risk. This situation leaves income seekers in some markets with a negative real yield (inflation adjusted), which could become more manifest during periods of rising interest rates in eventually recovering global economies. Alternatively, these investors may want to consider migrating a portion of their asset allocation to less senior income-producing securities.
2012-03-21 Why Convertible Bonds Should Be Part of Your Asset Allocation by Gary D. Halbert of Halbert Wealth Management
Im going to let you hear from Greg Miller about convertible bonds. Not only will Greg tell you how they work, but also why they can be an important diversification technique in your portfolio even now when other types of bonds are falling out of favor. I believe that many of you will want to have convertible bonds in your portfolio before long. The interest rate increases weve seen over the last couple of weeks may be a sign that the long bull market in traditional bonds is rolling over to the downside. Convertible bonds offer opportunity even during periods of rising interest rates!
2012-03-20 Has Anybody Seen My Old Friend Doomsday? by Bill Smead of Smead Capital Management
Commodities have never been more popular or seen wider participation in my 32 years in the investment markets. The idea that more people existing is justification for higher commodity prices has constantly been refuted over the last 100 years. For example, we feel that if more people means perpetually rising commodity prices, they would have gone up all the time. In our opinion, China's hard landing is already happening. When China's debacle is obvious to everyone, commodities and stocks related to them will be the lepers of the investment world.
2012-03-19 Did You See The 10-Year? by John Petrides (Article)
This week the US 10 year Treasury note spiked from 2% yield on Monday to 2.4% by the end of Wednesday. Around the office we were marveling at this move. Given the recent volatility in the equity market, that might not seem like much to stock investors, but to those in the fixed income world thats quite a change. The sudden spike in Treasuries has several implications: 1. Those investors who rushed into U.S. Treasuries over the past four months out of fear and panic (presumably not in hopes of achieving income) in search of safety, actually have an unrealized loss in their position!
2012-03-16 The Real Debate: Preservation of Capital vs. Preservation of Purchasing Power by Chris Clark of The Royce Funds
Investments in high-quality companies that have embedded pricing power and high returns on their invested capital look to us to be some of the best investments to protect and grow purchasing power, and we believe they need much broader representation in investors' asset allocation. We think that the period of exclusively focusing on the preservation of capital has passed and that now is the time to be focused on the preservation of future purchasing power.
2012-03-15 Diversification 101 by Rich Weiss of American Century Investments
In this edition of Weekly Market Update, Rich Weiss, discusses diversification-the rationale, the benefits, and ways to apply this approach. This is the first in a series of monthly write-ups on the topic with future pieces devoted to topics such as the state of diversification in a post-financial crisis world; portfolio rebalancing; and when and what types of diversification strategies make the most sense, among other topics. Outfitted with this information, investors can make better investment choices, improving portfolio diversification and risk-adjusted performance now and into the future.
2012-03-15 Mr. BRIC Trade is on Our Side by Bill Smead of Smead Capital Management
A recent article in "The National" quoted Jim O'Neil as saying that current supply and demand for oil indicates that $80 to $100 per barrel for Brent Crude would be a fair price. O'Neil is a very savvy economist for Goldman Sachs, who coined the phrase BRIC trade back in 2001. Since that qualified him as an investment "Wayne Gretsky", we believe his thoughts are worthwhile. O'Neil argues that there are no winners in a war over Iran's nuclear capability. Therefore, he argues that the $25-35 premium in the price per barrel, would disappear by summer. We agree wholeheartedly.
2012-03-15 You Can No Longer Say Corporates Without EM by Brigitte Posch and Ignacio Sosa of PIMCO
In our view, the risk profile for EM corporates has improved thanks to stronger sovereign balance sheets and economic growth prospects compared with developed markets. While EM corporates generally have not garnered as much attention as sovereigns, PIMCO expects that significantly more assets will be managed against an EM corporate bond index this year. The road ahead for risk assets may be bumpy. But PIMCO believes the case for focused EM corporate bond investing remains compelling based on improved credit fundamentals, a solid macro backdrop, and potentially attractive yields.
2012-03-14 Systemic Risk, Multiple Equilibria and Market Dynamics What You Need to Know and Why by Mohamed A. El-Erian and A. Michael Spence of PIMCO
In assessing the possibility, duration and impact of systemic risk factors, we need to analyze the interaction of expectations with market (endogenous) and policy (exogenous) circuit breakers. In the current environment, the prevalence of some subjective bimodal expectation distributions (e.g. Europe related) speaks to the multiple equilibrium features of sovereign debt markets. Multiple equilibria give rise to a range of scenarios, each quite different and each with its own distribution of returns, risks, correlations, and market functioning.
2012-03-13 Letter to the Editor - Tactical Asset Allocation v. Behavioral Finance by Various (Article)
Ken Solow, Michael Kitces and Sauro Locatelli respond to Christopher Sidoni's article, The Conflict between Tactical Asset Allocation and Behavioral Finance, which appeared on February 21.
2012-03-13 Checking In With the Municipal Market by Team of Neuberger Berman
In 2011, many investors appeared concerned about the potential for widespread defaults in the U.S. municipal bond marketsomething that failed to materialize. Now, we check in with the municipal markets and find that the outlook is greatly improved; however, in the wake of recent robust performance, it may also be a good time to exert some caution.
2012-03-09 Why Equities Are Attractive Today by Matthew OConnor of Hartland & Co.
Is today the right time to invest in equities? Equity investors have experienced a roller-coaster ride. As a result, many investors have run as far as they can from equities, pulling out roughly $135 billion from U.S. stock mutual funds last year. Even with the S&P 500 Index off to its best start in 25 years and inching closer to its 2008 high*, investors continue to withdraw money from U.S. stock mutual funds. So, where are we? Is it the right time to invest in equities? Due to a combination of reasons, we believe equities do look particularly attractive today and for the long term.
2012-03-06 New Tools to Manage Longevity Risk by Joe Tomlinson (Article)
If you could guarantee yourself an inflation-protected stream of income for the rest of your life, would you take it? For many retirees, the answer is yes, and that is rightfully sparking new interest in deferred-income annuities (DIAs). By combining a DIA with a TIPS ladder or more aggressive equity-centric investments, retirees can obtain inflation-protected lifetime income. But they will face important tradeoffs, as I will explain.
2012-03-06 Defining Risk: Warren Buffetts Three Kinds of Investments by Bill Smead of Smead Capital Management
In his 2011 letter, Warren Buffett explained the purpose behind investing, the real definition of risk, and the three types of investments which congregate the marketplace. We believe Mr. Buffett struck at the core of the problem that most investors are having. They are defining risk primarily by what happens in the next twelve months, while the Oracle of Omaha is thinking in five to ten-year time frames, at a minimum. These short time frames are combined with eyes locked on the rearview mirror, inhibiting investors from participating in wealth creation as we look out into the future.
2012-03-02 The Protein Bomb by Niels C. Jensen of Absolute Return Partners
Population will grow from 7-8.3 billion people over the next decade. Meanwhile, arable land across the world will shrink and living standards will continue to rise, with the OECD projecting 3 billion new middle class consumers over the next 20 years. Many of these people will change their diets in favor of more animal protein. Livestock is quite inefficient in terms of converting grain to energy, so the pressure on farmers to deliver more will be immense. We conclude that agriculture should be represented in every long-term portfolio, but farm land has already risen a lot in value.
2012-02-28 The Problem with Target-Date Fund Glide Paths by James A. Colon, CFA (Article)
The attack on target-date funds (TDFs) continues to gain steam, and for good reason. Virtually all TDFs offer a mechanical approach to glide-path management, unnecessarily exposing investors to risk - most noticeably when they are on the verge of retirement. A superior approach would keep the long- and short-term volatility of an investor's portfolio within appropriate ranges by actively managing the glide path.
2012-02-28 Letters to the Editor by Various (Article)
Readers respond to Christopher Sidoni's article, The Conflict between Tactical Asset Allocation and Behavioral Finance, which appeared last week, and to Simon Johnson's commentary, Too Big to Jail, which appeared on February 21.
2012-02-28 Fun, Fun, Fun by Jeffrey Saut of Raymond James Equity Research
There have now been 37 trading sessions in 2012 and so far the S&P 500 has yet to experience a 1% Downside Day. This 37-session skein has occurred 11 other times in the past 84 years and has on every occasion except one seen the equity markets higher by the end of the year. Still, the rise since the buying stampede ended, which stopped on January 26, 2012 at Dow 12841.95, has felt unnatural to me. Surprisingly, the Industrials reside only 141 points above their intraday high of January 26th, causing one market maven to exclaim, no wonder I feel like were in the Trading Twilight Zone.
2012-02-28 Black: Swans and Crude by Liz Ann Sonders of Charles Schwab
Economic/financial "black swans" are generally more dire than geopolitical ones. The Middle East is today's hotbed for potential geopolitical crises. Oil is taking the brunt of the pressure, but it's not necessarily the death knell for stocks or the economic recovery.
2012-02-27 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Spread amongst positive innuendo about the Eurozone austerity discussions and strength in the global oil markets, was consternation about contentious earnings reports and a build up in selling pressure upon equities whose values are bumping up against relative strength resistance points. The state of the financial markets is net-neutral. The most important characteristic of the markets today is the aging of intermediate recovery trends and the high number of equities that amble along laterally. Any entry into long term probabilities would be done today at high risk.
2012-02-27 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
As I have written, the early-season rally is growing tired and overextended. While there is nothing specific which might have accounted for last weeks stall, the evidence is clearer that relative strength quotients in equities are growing outside sustainable levels. Usually, such valuations precede a reversal in equity direction. Last week also saw a continuation of mediocre earnings acceleration patterns. The number of companies that actually beat analysts estimates is at its lowest since the credit crisis in 2008.
2012-02-21 The Conflict between Tactical Asset Allocation and Behavioral Finance by Christopher J. Sidoni, CFA, CFP (Article)
How’s this for irony? Certain investor behavior creates the conditions for a tactical asset allocation strategy to succeed – but the same behavior simultaneously Increases the likelihood that clients will not follow the strategy. Recent research by Ken Solow, Michael Kitces and Sauro Locatelli identified a promising approach to tactical portfolio strategy, but our firm’s experience indicates clients will be reluctant to follow this approach –particularly when the expected payoff is highest.
2012-02-21 Good News Cant Keep a Lid on Investor Fear by Kristina Hooper of Allianz Global Investors
The outlook for the stock market keeps getting brighter, but investors are still letting fear cloud their judgment. In the United States, the jobs picture a rather bleak scenario less than a year ago has improved substantially. The euro-zone debt crisis has also improved. We havent seen any real contagion from Greece, as evidenced by sovereign debt yields. And despite prominent investors such as Warren Buffett and Jeremy Grantham favoring stocks over bonds, a lot more money flowed into bond funds in January. This disconnect reveals a continued tug-of-war between fear and fundamentals.
2012-02-16 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Last weeks performance was distracting. Spread amongst positive innuendo about the Eurozone austerity discussions and strength in the global oil markets, was consternation about contentious earnings reports and a build up in selling pressure upon equities whose values are bumping up against relative strength resistance points. The state of the financial markets is net-neutral.The most important characteristic of the markets today is the aging of intermediate recovery trends and the high number of equities that amble along laterally. Entry into long term probabilities would be high risk.
2012-02-14 The Safety-first, Goals-based Approach to Financial Planning by Wade Pfau (Article)
Little of what is taught in traditional investment textbooks is of value in personal financial planning. Risk is not standard deviation; it is the probability and consequences of not meeting one's goals. That real-world perspective animates a new book by Zvi Bodie and Rachelle Taqqu that implores advisors and their clients to lock in the funding of their essential expenses before worrying about their discretionary goals.
2012-02-14 Letters to the Editor by Various (Article)
A reader responds to Larry Siegel's article, Jeremy Siegel, Rob Arnott and Other Experts Forecast Equity Returns, and another reader responds to Joe Tomlinson's article, An Innovative Solution to Retirement Income, both of which appeared last week.
2012-02-10 Inflation Outlook 2012: Benign, But Watch the Tails by Mihir P. Worah and Nicholas J. Johnson of PIMCO
Headline inflation, as measured by the Consumer Price Index (CPI) in the U.S., ran at 3.0% in 2011, up from 1.5% for 2010. Our base case is for inflation to moderate this year, heading to slightly below 2%. Longer term our bias is toward higher inflation, and we feel any deflationary episode is likely to be short-lived. Faced with this possibility of higher inflation, many investors may need to examine their allocations to assets associated with real return potential, including Treasury Inflation-Protected Securities (TIPS), real estate, commodities and equities.
2012-02-07 Jeremy Siegel, Rob Arnott and Other Experts Forecast Equity Returns by Laurence B. Siegel (Article)
A forecast of the equity risk premium (ERP) tells you how much to save, how to allocate assets between equities and fixed income, and how much you can consume. Given its great importance, the CFA Institute recently convened a group of top-level academics and practitioners to forecast future ERPs - and to reflect on similar predictions they had made a decade ago.
2012-02-03 The Unlikely Bull Market by Niels C. Jensen of Absolute Return Partners
Europe is going from crisis to crisis at the same time as stock markets climb higher. Meanwhile, investors are left confused. The key to understanding the apparent disconnect between stock market behavior and economic fundamentals is the aggressive policy being pursued by the ECB which has eased credit conditions in the crisis-stricken European banking industry. With more QE from the ECB in the pipeline, we expect equity prices to benefit.
2012-02-03 Strong January, Strong 2012? by Kevin D. Mahn of Hennion & Walsh
We are encouraged by the strong start to the New Year and some of the recent economic data reports. Yet, with all of this mounting optimism, we are mindful that the first half of 2012, at a minimum, is still likely to be volatile as headwinds still persist in our view.
2012-02-02 2011: The US Year by Richard Bernstein of Richard Bernstein Advisors
The market generally proves the consensus wrong, and 2011 certainly adhered to that historical precedent because the consensus "must owns" at the beginning of 2011 generally underperformed during the year. What is somewhat startling to us, however, is that conviction has yet to be shaken. The consensus continues to favor commodities, emerging markets, and "any-bond-but-treasuries".
2012-02-01 Will I be able to retire ever? Answers to our clients #1 question! by David Edwards of Heron Financial Group
Our clients are divided between those who are at least 65 and already retired (30%) and those clients aged 35-65 for whom retirement seems like an ever receding mirage. In this commentary, we will concentrate on the mechanism that we use to implement a clients retirement income strategy, review how this strategy has performed since January 2000, and review the lessons learned.
2012-01-31 Why Target-Date Funds Fail by Robert Huebscher (Article)
New research explains why target-date funds have failed to meet investors' objectives. While most of the criticism has been directed to overly aggressive glide paths, that is merely a symptom of the underlying problem - the misalignment of incentives between investors and fund companies.
2012-01-31 2012 Tale of Two Bond Markets Handicapping the Bull and Bear Case for Bonds by Scott Colyer of Advisors Asset Management
2012 will likely be the tale of two bond markets. You have the high-grade debt market that has been the recipient of a huge flight to quality and fear trade. The prices of these obligations have skyrocketed and yields plummeted. Additionally, the Fed has turned out to be the biggest buyer of longer-dated Treasuries in the markets today. It is rumored that they might engage in a mortgage buying campaign later this year. That would have the effect of lowering mortgage rates further than the record lows where they are at. In short, the world has sought refuge in the U.S. bond high-grade market.
2012-01-30 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
In recent discussions with clients, I have answered questions about good new versus bad news and short-term versus long-term probabilities. As my readers are aware, I have become increasingly bearish in my asset allocations, a factor which derives from a combination of very short-term information along with macro, secular data. In short, my analysis quantifies policies, valuations, and fundamentals which have dragged down the prospects for global earnings acceleration (in the near-term). Notice that I refer to these statistics as decelerators, not necessarily absolute impediments.
2012-01-26 Is There Value in U.S. Equities? by Team of Emerald Asset Advisors
The importance of asset allocation and timing was again evident last year. After rallying earlier in the year, stocks took investors on a gut-wrenching ride over the summer before rallying again in the fall. And for all of the twists and turns, in the end the S&P 500 essentially ended the year where it began. But that's history. What do we expect looking ahead? As we examine today's investment landscape, we believe opportunities can be found in U.S. stocks, particularly large-cap stocks. There are several trends in place that support our view.
2012-01-24 Michael Lewis on the True Depth of the Crisis in Europe by Larry Siegel (Article)
Michael Lewis is a financial writer and author, most recently of Boomerang: Travels in the New Third World, in which he reported on the European debt crisis from several of the affected countries. In this interview, he discusses a range of topics, including the future of Wall Street and the challenges of great financial writing.
2012-01-24 New Tools to Help Clients with Retirement Decisions by Joe Tomlinson (Article)
Our clients face a range of financial planning issues, and the arrival of retirement typically involves making numerous decisions. Here is a set of tools that provide useful information to professionals who work with clients on the verge of retirement - especially financial advisors, accountants and lawyers.
2012-01-17 GMO: Something's Fishy in China by Robert Huebscher (Article)
A wide gulf separates the two most prominent views regarding China's future. Faced with slowing economic growth, one side says its leaders will deftly navigate a soft landing, while the other claims it will face an implosion similar to those that befell Japan 20 years ago and the US in 2008. Count GMO, a firm that has built its reputation on its ability to identify a bubble about to pop, in the latter camp.
2012-01-17 Letter to the Editor - GLWBs by Various (Article)
A reader responds to Wade Pfau's article, GLWBs: Retiree Protection or Money Illusion?, which appeared on December 13, 2011.
2012-01-13 2011 An Anomaly? by Sean Hanlon of Hanlon Investment Management
The dictionary defines anomaly as; something anomalous: something different, abnormal, peculiar, or not easily classified. Looking back at the economic, political and market activity of 2011 it could be described as an anomaly. I hesitate to label a markets action as odd, or unusual, because markets by their nature will always be independent, potentially odd and unusual. Be 2011 certainly was a rare year. A major cause for this anomalous market activity was the rarely seen occurrence of a large portion of an entire continent running the risk of sovereign debt default.
2012-01-12 Global Investment Outlook by Team of Aberdeen Asset Management
Policy makers globally face the challenge of supporting growth while managing debt levels, and still remaining aware of inflation. The Eurozone crisis is a further complication, and has the potential to make matters more difficult. That being said, there is still growth in the world economy, though perhaps more disparate than in previous cycles. Given the inter-connected nature of countries in the globalized world, there are few areas truly insulated from turmoil. However, there are safer-havens where clearer policy frameworks and the ability to enact solutions more robustly are helpful.
2012-01-10 Safe Withdrawal Rates: A Do-It-Yourself Approach by Wade Pfau (Article)
Reconciling the assumptions that underpin safe withdrawal rate studies with one's own capital market expectations and constraints is a daunting task, since those studies rarely reflect the practical realities of an advisory practice. But new research now provides a generalized framework for determining a safe withdrawal rate for a given retirement duration, acceptable failure probability, asset allocation and capital market expectations. Advisors no longer must be constrained by the assumptions and choices of others.
2012-01-10 Using the ECRI WLI to Flag Recessions by Dwaine van Vuuren (Article)
In September 2011, the ECRI proclaimed a new U.S recession would begin sometime in the coming year. It based its prediction on a host of its own internal long-leading indexes, together with its widely followed weekly leading index (WLI). I want to focus on the proper use of the WLI and examine its accuracy in recession dating, in order to put this current recession call into context.
2012-01-10 2011: The Famine That Followed the Feast That Followed the Fiasco by Ron Surz (Article)
Ron Surz provides his award-winning commentary on the US and global markets.
2012-01-06 Doing Nothing Nothing Done by Cliff W. Draughn of Excelsia Investment Advisors
Somehow, this is about the only time of year when most people reflect on the past, ponder the present, and plan/predict the future. There are several themes we have identified that will affect our asset-allocation discipline for 2012. As I commented in November, the market risks are geopolitical and the sentiment is driven by government policies. Our themes for 2012: Germanys Euro, Inflation versus Deflation, Election Year and It Isnt All Bad . For the year 2011, stocks basically broke even, although the 37 days where the Dow was plus or minus 200 points certainly made for a wild ride.
2012-01-06 Have Winds Shifted to Provide Relief to Investors? by Frank Holmes of U.S. Global Investors
We believe the winds are shifting to bring needed relief to global investors. Weve seen improving economic data from the U.S. lately, and this positive news from the worlds largest economy, along with an improving Chinathe worlds most populated countryoffsets the negativity in Europe.
2011-12-27 The Ten Best Articles You Probably Missed by Robert Huebscher (Article)
Great articles don't always get the readership they deserve. Here are 10 articles that you might have missed, but I believe merit reading.
2011-12-27 The Ten Most-Read Articles in 2011 by Robert Huebscher (Article)
As is our custom, we conclude the year by reflecting on the 10 most-read articles over the past 12 months.
2011-12-27 Letters to the Editor by Various (Article)
Readers respond to three recent articles and commentaries: Wade Pfau's article, GLWBs: Retiree Protection or Money Illusion?, which appeared on December 13; PIMCO's commentary, Hot Potato, which appeared on December 21; and Kay Conheady's commentary, Does the Trend Matter?, which appeared on December 20.
2011-12-23 Rebalancing Resurrected, Part 3 by Adam Butler and Mike Philbrick of Butler Philbrick & Associates
This is a 'Canadian-ized' version of anarticlewe published on Monday, December 19, 2011, which featured a study of US equity and fixed-income markets. As we are located in Canada, we were motivated to see how well the same techniques work in our home market using the S&P/TSX Composite. As expected, it turns out that they work quite well.
2011-12-21 Seeking Absolute Return: Finding Opportunity in Overly Hyped Alternatives by Team of Litman Gregory
This commentary references and updates views originally shared in our 2003 whitepaper on hedge-fund strategies. Today, we have similar concerns about a low-return environment for stocks in the years ahead. As we concluded eight years ago, hedge-fund strategies do have the potential to add value to a portfolio. However, finding funds that are skillfully managed and offered at a reasonable cost remains a difficult challenge.
2011-12-21 Rebalancing Resurrected, Part 2 by Adam Butler and Mike Philbrick of Butler Philbrick & Associates
This is a 'Japan-amized' version of an article we published on 12/19, which featured a study of US equity and fixed-income markets. The Japanese experience since 1993 was dramatically different than the U.S. Japanese investors endured a seemingly endless series of intermediate term extremes of hope and despair as markets oscillated wildly above and below their long-term negative trend. Japans multi-decade crash and stagnation is unique among modern market economies (so far), so we wanted to see how well our volatility adjusted rebalancing framework worked in this difficult environment.
2011-12-20 Letters to the Editor by Various (Article)
Readers respond to several articles: GLWBs: Retiree Protection or Money Illusion?, Did Congress Cash In on Insider Stock Trading?, and Can this be Serious?, all which appeared last week, and to John Mauldin's commentary, The Center Cannot Hold, which appeared on Saturday.
2011-12-20 Does the Trend Matter? by Kay Conheady of Apropos Financial Planning
More research into making asset allocation decisions based on the trend of the P/E10 ratio might prove worthwhile. Such future research might include statistical significance testing, calculating up and down trend Sortino ratios, measuring the Sharpe and Sortino ratios for tactically allocated stock+bond portfolios and studying how trend-sensitive asset allocation strategies would have fared in the past. Finally, Kitces recent JFP article also suggests that studying the P/E5 ratio may also have some value.
2011-12-19 Rebalancing Resurrected by Adam Butler and Mike Philbrick of Advisor Perspectives (dshort.com)
This is part 1 of a 3 part series that explores optimal methods of dynamic rebalancing between stocks and bonds. This study examines these methods in the context of a US equity / Treasury basket. The next 2 posts will explore the impact of our proposed techniques on Japanese and Canadian equity / bond baskets. The investment community is in the midst of an identity crisis, though admittedly many in the industry don't know it yet. At the heart of the matter is the following misconception: Investors perceive that investment professionals add value via security selection and market timing.
2011-12-19 The Three Rs of Investing by Marc Seidner of PIMCO
The inability to achieve sustainable levels of economic growth raises the risk of recession in many developed world economies. Under financial repression, market interest rates are kept very low for a very long time period with the hope of stimulating investment, but repression also starves savers to the benefit of borrowers. Increasing risk with an uncertain distribution of possible outcomes should lead to caution regarding traditional models and asset allocation practices.
2011-12-16 De-stressing Balanced Fund Investing by John West of Research Affiliates
Balanced fund management has largely become a benchmark-hugging exercise, with asset allocations confined within a tight band. This month's Fundamentals examines what can be done to improve the added value investors can obtain from balanced fund investments.
2011-12-16 The Great Scarcity: Stockpicking by Bill Smead of Smead Capital Management
Correlations among the S&P 500 Index companies was the highest on October 10th of 2011 as it has been for 25 years. In the opinion of Smead Capital Management, this means that more investors are participating in market directional strategies, macro-economic strategies and tactical portfolio strategies than at any time in US history. As large-cap value managers and stock pickers, we are very excited about the next three to five years as all the chips have moved to the other side of the table and stock picking has become a scarce resource.
2011-12-13 GLWBs: Retiree Protection or Money Illusion? by Wade Pfau (Article)
One of the most popular variable annuity riders is the guaranteed lifetime withdrawal benefit (GLWB), which offers downside protection through lifetime income, upside potential with step-ups based on market performance, and minimal surrender penalties. But, examining historical data, I have found that those riders carry a cost that will not be readily apparent to retirees: their cash flows rapidly decrease on an inflation-adjusted basis.
2011-12-13 Can this be Serious? by Robert Huebscher (Article)
Of the hundreds of investment books that we are asked to review, a recent one stood out for its utter audacity: '401(k) Day Trading: The Art of Cashing in on a Shaky Market in Minutes a Day,' by Richard Schmitt. The premise of this book is as preposterous as its title. But it raised two important questions, meriting this review.
2011-12-13 The Third Dimension by Team of Beacon Pointe
The uncertainty generated by the ongoing sovereign debt crisis in Europe and policymakers' deadlock in the U.S. is likely to persist for a while, but it should not drive long-term investors out of the market. We believe it is prudent to stay focused on the third dimension -- time -- and to remain committed to one's long-term investment strategy with an emphasis on diversification, capital preservation, and careful manager research and selection.
2011-12-13 Asset Allocation and Risk Management in a Bimodal World by Vineer Bhansali of PIMCO
Fat tails and negative skewness in the distribution curve can arise from the mere possibility of multiple equilibriaeven if both individually appear normal. Once markets arrive at a resting place among different equilibria, they tend to become trapped due to a variety of restraining forces. For all these reasons, we believe that the core building blocks of asset allocation and option pricing in the current macroeconomic environment should allow for the possibility of multimodality. This significantly changes the conceptual approach towards portfolio construction and risk management.
2011-12-12 Rethinking Asset Allocation: PIMCOs Strategy for a Changing World by Mohamed A. El-Erian, Vineer Bhansali and Curtis Mewbourne of PIMCO
Alpha generation is a distinct component of the strategy because it is critical to actively seek opportunities in all global markets in this challenging environment. Explicit tail risk hedging is essential to prepare for more frequent significant downturns, both to mitigate their effects and to potentially benefit from them. The strategy is positioned to navigate a world of muted growth in the Western economies, significant market volatility, recurring balance sheet issues and continued income and wealth convergence of the emerging world with the developed world.
2011-12-09 2012: Politics Versus Fundamentals by Richard Bernstein of Richard Bernstein Advisors
Assessing the prospects for a coming twelve-month period is always a challenge. We rely on our broad arsenal of fundamental barometers for profits, sentiment, momentum, and our cyclical indicators to help us identify whether markets are correctly aligned relative to their economic and profits cycles.
2011-12-08 Global Economy and Market Summary Third Quarter 2011 by Stephen Hammers of Compass EMP Funds
The world economy has continued to slow during the last few months. The next several quarters are likely to be weak for three reasons. First, fiscal policy will continue to be restrictive as plans to trim excessive federal budget deficits continue to unfold. Second, private sector demand looks gloomy because households will continue to deleverage from high debt levels while unemployment remains a problem. Third, the uncertain future of the Euro-zone debt situation remains a major setback to future economic growth.
2011-12-06 Why Shiller and Soros May Be Wrong about Farmland Investing by Robert Huebscher (Article)
Earlier this year, Yale's Robert Shiller identified farmland as an asset class in the early stage of bubble formation. George Soros, Jim Grant and Jim Rogers have espoused similarly bullish views. But advisors - even those managing the assets of very wealthy clients - shouldn't bet the farm on these expert forecasts just yet.
2011-12-05 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Like a train wreck, the global markets have maintained a vicious shakeout whose collapse is frightening not only for the Europeans but for America and its trading partners. For the past several months we have been building a slow crescendo which, like a great symphony, has many codas yet to play. Clearly, a correction to overborrowing, overspending, and over-expecting is in place. Turbulence and volatility, both in the markets and political discourse, is the order of the day. The foundation of trust which underpins all capital exchange and political governance is nearly in default.
2011-12-05 The Facts They Dont Want You to Know by Niels C. Jensen of Absolute Return Partners
Our industry needs a good old fashioned kick up its backside. Far too much mediocrity is rewarded for nothing other than destroying value.
2011-12-03 Schwab Market Perspective: Short-term PainLong-term Gain? by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab
Markets have been under pressure as the crisis in Europe has recently intensified, providing the impetus for more aggressive action and an eventual resolution, including this week's coordinated central bank actions. Economic data in the United States continues to be largely better than expected. The supercommittee failed to come to a deficit reduction agreement. While markets expressed initial disappointment, their failure may end up being beneficial as it forces spending restraint. As the euro crisis has deepened, some steps have been taken but mostly address liquidity, not solvency.
2011-12-02 The Paradox of Active Fixed Income Management by Matt Tucker of iShares Blog
Amid this years volatile markets, many investors expected their fixed income holdings to be a source of stability in their portfolios. But some are finding the opposite has been true. In this blog, Matt Tucker explains how the Paradox of Active Management could be partly to blame.
2011-11-30 Flex 5, a Tactical, Practical Portfolio for Todays Volatile Markets. by Charles Gelineau of PGA Financial
Volatility has increased dramatically and is expected to continue. It is an extraordinary drag on returns due to the disproportionate impact of losses versus gains. Traditional asset allocations are flawed 5 ways. Style-pure funds are inflexible with extreme exposure to systematic risk and no escape hatch.Flexible funds, by design, can go defensive or opportunistic resulting in better odds for attractive capture ratios. Flexible funds is a practical, tactical replacement for traditional allocations. With flexible fund portfolios, advisors can potentially Improve investment returns.
2011-11-29 Jeremy Siegel on Why Stocks are 'Extremely Attractive' by Robert Huebscher (Article)
Jeremy Siegel is the Russell E. Palmer Professor of Finance at the Wharton School of the University of Pennsylvania. His book, Stocks for the Long Run, now in its fourth edition, is widely recognized as one of the best books on investing. We spoke to him last week about equity valuations and the prospects for the economy.
2011-11-28 The Global High Yield Opportunity by Matt Eagan, Kathleen Gaffney and Elaine Stokes of Loomis Sayles
The shifting characteristics of US, European, Asian and emerging markets high yield assets have contributed to an expanding opportunity set. This has prompted many institutional investors to broaden their high yield investment guidelines, often giving portfolio managers the ﬂexibility to include exposures to these markets within one portfolio. The days of silo investing, in which non-US investors sought exposure to US high yield and emerging market debt through separate mandates, may be giving way to an era of sector allocation driven by investors.
2011-11-22 Investment Trends in the Financial Advisory Profession by Robert Huebscher (Article)
Advisors are optimistic about the returns Treasury bonds will provide over the next decade, but they are less sanguine about the projected performance of US equities. Their inflation expectations are consistent with the historical data. These findings and many others arise from our study, Investment Trends in the Financial Advisory Space: Key Implications for the Investment Management Industry, a research report now available from Advisor Perspectives.
2011-11-21 Investment Outlook: November 2011 by Team of Aberdeen Asset Management
Financial crisis continues to dominate the political agenda: a credit crunch looms as Europes banks shrink balance sheets, growth momentum is diverging among different regions, investor focus on global fiscal policy will intensify in 2012 and abundant liquidity via central bank easing is likely to prevail for some time. Economic data has tended to surprise analysts over the last few weeks, encouraging the view that growth may not be as weak as some were predicting only a month ago. However the picture is very different among different regions around the world.
2011-11-16 As Alternative Investments Move into the Mainstream, Advisors and Investors Need to Choose Wisely by Team of Emerald Asset Advisors
We believe that having a piece of an overall portfolio that is committed to liquid alternatives is a critical component to long-term portfolio stability, capital preservation and growth. No one wants a repeat of 2008, or anything close to it. There are an abundance of liquid alternative choices available, some of which have proven themselves through various market cycles and environments. They have gone from Wall Street to Main Street for good reason. Embrace the opportunity, and you and your clients may just sleep a bit better at night during these volatile times.
2011-11-15 A Strategy with a 25-year Record of 25% Returns by Robert Huebscher (Article)
Indiana-based SBAuer Funds launched its inaugural mutual fund in December of 2007, after having established a successful track record with a separately managed account business. I spoke with Bob Auer, who has employed the same stock selection system used by the fund for the last 25 years, over which time returns have averaged 25% annually.
2011-11-10 Alternative Investments in Focus by Team of American Century Investments
We recently conducted a survey of financial professionals to better understand their view and use of alternative investments. Alternative investments are defined as those outside the traditional big three of cash, bonds, and stocks. These alternatives include commodities, real estate, and inflation-linked securities, among many others. Alternatives have surged in popularity in recent years, as investors and their advisors seek out new and potentially more effective ways to diversify and reduce risk in traditional balanced stock, bond, and cash portfolios.
2011-11-09 Is Now the Right Time to Hedge Tail Risk? by Vineer Bhansali, Tina Adatia and Jeroen van Bezooijen of PIMCO
Not all hedges have equally increased in value, giving investors the option to reduce the cost of their hedges by considering both direct and indirect hedges. Tail risk hedging may allow certain investors to maintain an allocation to risk assets where they might otherwise deem the position to be too risky and it can also help stabilize portfolios on a mark-to-market basis. Investors may decide to either start implementing hedges now, phase the tail risk strategy in over a period of time, or put the infrastructure in place now and defer implementation until market conditions change.
2011-11-08 An International Perspective on Safe Withdrawal Rates by Wade Pfau (Article)
Prospective retirees must consider whether they are comfortable basing retirement decisions on the impressive but perhaps anomalous numbers found in historical US data. What has been safe for US retirees in the past has been far less secure for their foreign counterparts.
2011-11-08 Is One Better than Three? by Dave Loeper, CIMA, CIMC (Article)
One way to 'juice' a portfolio is by increasing allocations to small- and mid-caps, as one recently published paper contends. But a careful analysis - properly adjusting for risk - shows how that seemingly appealing approach can destroy client wealth.
2011-11-08 Ignore Egan-Jones at Your Peril by Niels C. Jensen of Absolute Return Partners
The ink on the Greek rescue agreement has barely dried, and the feeling in financial markets is sombre yet again. However, investors have changed their focus away from Greece towards Italy - a change which could prove disastrous for the eurozone given the size of the Italian bond market. In this edition of The Absolute Return Letter we take a closer look at Italy's refinancing needs and suggest corporate bonds as an alternative to government bonds.
2011-11-07 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
A violent shakeout in global equity bourses is reverberating to U.S. shores, and exacerbating the fear that a second global credit/equity crisis is likely. In response, the domestic equity markets shook significantly last week, despite intraday bargain-hunting and attempts to forget altogether an unresponsive fundamental framework. In hindsight, my call towards a more conservative asset allocation model this past summer was fortuitous. The financial markets dont trust the underlying fundamental statistics, and the public doesnt trust the financial markets.
2011-10-27 Third Quarter Investment Commentary by Team of Litman Gregory
Since 2008, we have been in a period where macroeconomic forces are particularly influential and must inform our portfolio strategy. This quarter's developments in which we saw heightened concerns about a global economic slowdown, political gridlock, and serious concerns about shorter-term European and longer-term U.S. debt problems are consistent with the risk scenarios we've been discussing the past several years.
2011-10-27 Outlining the U.S. Economys Growth Dichotomy by Team of American Century Investments
David MacEwen describes the growth dichotomy that has developed during the recovery from the Great Recession, and how its restricted the recovery, softened consumer sentiment, influenced the fixed income teams macroeconomic outlook, and shaped some of the teams sector outlooks. One of the key characteristics of the subpar, slow-growth recovery we have experienced since the Great Recession has been the clear divide between the recovery rates of the business and consumer sectors. Businesses have bounced back faster and stronger than the U.S. consumer who buys their goods and services.
2011-10-26 The Long ViewBuilding The 3-D Shelter by Robert Arnott of Research Affiliates
The third quarter was harsh not only for stocks but for asset classes that provide valuable protection against inflation. Our view is that, in the long run, the combination of rising debts and deficits and aging demographics will create a 3-D hurricane affecting capital markets. In this issue of Fundamentals, we look at how investors can start erecting inflation shelters to protect themselves from the coming storm.
2011-10-25 On Market Timing and Whiskey by J.J. Abodeely (Article)
Noah S. 'Soggy' Sweat, Jr. a Mississippi legislator, gave a famous speech addressing the controversial subject of prohibition. The consummate politician, Soggy tried to appeal to advocates on both sides of the issue, illustrating a lesson that advisors today will surely appreciate: In order to get at the substance of a contentious issue, sometimes you have reframe the question.
2011-10-25 Got Jobs?! by Jeffrey Saut of Raymond James Equity Research
Whether this stampede turns out to be that strong will likely depend on the economy, our changing political environment, and Europe. However, I remain cautiously optimistic, believing there is a change afoot inside DC whereby business people are being elected, fostering the hope of simple, market-based solutions to our Nations ills. And, over the last three weeks the stock market appears to be sensing this as well with winning sectors continuing to be Energy, Financials, Consumer Discretionary, and Materials. Such sector rotation suggests the stock market believes things are getting better.
2011-10-21 Global Equity OutlookFourth Quarter 2011 by Team of American Century Investments
In this edition of Weekly Market Update, presents the teams outlook for global equity markets, based on the latest research and discussions with companies from industries and countries across the economy and the globe. The team focuses on individual security selection, building portfolios from the bottom up, rather than making top-down judgments about the economy. In their view, economic trends matter to the extent that they relate to corporate earnings power. As a result, the outlook focuses on corporate earnings and other areas they deem important to successful global equity investing.
2011-10-18 Wrong by Jeffrey Saut of Raymond James Equity Research
Near-term overbought is our short-term call, yet we think the lows are in for the year. Regrettably, we also believe there has been so much technical damage that the May 2nd intraday high of 1370.58 marks the high for the year. Nevertheless, we are buyers of favored stocks on weakness given our sense that there will be no recession and that earnings will continue to surprise on the upside.
2011-10-18 Volatility Rears its Ugly Head by Jeremy Blackman of Hester Capital Management
The major debate in the financial markets today revolves around whether or not the U.S. is going to experience a double-dip recession. We do not expect a recession, but if that does happen it should be a shallow one. We remain cautiously optimistic that the politicians in the US and Europe will eventually do the right thing as the consequences of not acting in a prudent and responsible manner are not pretty. We anticipate that markets will continue to be volatile until Europe finds resolution for its problems and until politicians across the globe learn to compromise across party lines.
2011-10-13 Prediction? Pain by James Moore of PIMCO
Recent Federal Reserve activity has pushed down the long end of the yield curve, spiking the present value of plan liabilities and widening the funding chasm. The pain of the pension community shows up most obviously in funded status estimates. High and increasing levels of implied equity risk premium in pension plans suggest sponsors expectations are increasingly optimistic about future contributions from risk assets.
2011-10-12 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
There is one certainty about todays markets: nothing is certain. Traversing the economic landscape is akin to walking across a room with a trap door looming unseen. It is not just equities which pose this risk. Austerity programs worldwide are forcing interest rates down, and bid prices to fall as well. In effect, waiting until maturity is ones greatest hope for financial recapture in a bond portfolio. As strongly as capital gains drove bond investing during a period of declining rates, strategic options dont exist anymore as long as interest rates remain pegged to these low levels.
2011-10-07 Rewriting the 4% Rule by Kevin Feldman of iShares Blog
Is there a safer and simpler way to plan retirement distributions? If youve saved more than you need for retirement and can live on 3% plus an inflation adjustment each year, you have the past century of data on your side suggesting that your nest egg will not outlast you. For most of us though, this is an unrealistic drawdown rate, so you will likely need some professional financial planning help to map out a withdrawal plan that meets your retirement goals. Like all rules that try to simplify complex questions, 4% is just thata number, which may or may not be your number.
2011-10-07 Point of Maximum Pessimism? by Niels C. Jensen of Absolute Return Partners
The current level of pessimism is quite overwhelming, in particular in Europe where the eurozone crisis has taken its toll on investor confidence. This has led to valuation levels we haven't seen since the dark days of 1981-82, just before we embarked on the 1982-2000 bull market - the biggest of all time. It is our view that investors will be amply rewarded if they begin to buy European equities at current levels, although it is a strategy that shall require both a solid stomach and some patience.
2011-10-06 Taxes, Income and Fairness by Team of American Century Investments
From a recent address by President Obama, it is clear that it wont just be the economy that will be a key issue in next years presidential election campaign. In addition, the question of fairness regarding taxationespecially among the wealthy and highest earning Americans who he believes ought to pay a greater amount of taxeswill be a major topic of debate. His speech has sparked a broad debate over who pays federal taxes in America and whether increasing tax rates on the highest earners is a wise move to both address our massive budget deficits and stimulate the economy.
2011-10-06 Global Investment Outlook: October 2011 by Team of Aberdeen Asset Management
Global growth momentum continues to decline but is worst in Europe. Solvency of national governments and now banks is creating fears of a crisis. Coordinated policy action is key to stemming adverse market reaction. Although economic data has continued to demonstrate slower business activity, this is most obvious within Europe which has suffered from fiscal contraction as well as diminishing export demand from the emerging world. Unemployment levels remain elevated, and the reluctance to create new jobs is proving the Achilles heel of policymakers efforts to kick start private sector demand.
2011-10-05 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
A fixation with tangible metals is both forward looking as well as reflective melancholy. Because the price of commodities had risen in the past, people might expect it to do so again. In the case of commodities trends lose their appeal when everyone already knows that the valuations have become inflated. In todays case we have been in a twelve year commodities price expansion. While some might try to eke out the last few cycles of profit within that trend, others wonder how much greedier can the trend enthusiasts be. There are no linear cycles that last forever and no free lunches.
2011-09-30 Extreme Divergence Between Coal Rocks and Stocks Unwarranted by Frank Holmes of U.S. Global Investors
Coal was relatively flat for the quarter, but whats interesting is that coal companies were severely discounted. Over the last two years, coal stocks and the commodity have closely tracked each other, until this summer, when worries about a global slowdown caused coal stocks to fall off a cliff, not once, but twice, in August and again in early September. This extreme divergence between coal companies and the commodity seems unwarranted when the long-term drivers of coal remain supportive.
2011-09-29 European Banks Under Pressure by Team of American Century Investments
On the surface, the European banking sectors status in the fixed-income markets should be on the upswing. The Basel III Accord strengthened capital requirements for banks and also set stricter guidelines for liquidity and debt. Helping reduce the risk profile of the banking sector, and this would normally be attractive to fixed-income investors. However, bond investors have had the opposite reaction, shunning the bonds of European banks in recent months. The gap between bank bonds and government bonds recently rose to levels not seen since the height of the 2008 Financial Crisis.
2011-09-27 Reexamining Bill Gross' Decision to Sell Treasury Bonds by Geoff Considine (Article)
Bill Gross made headlines in February by asserting that Treasury bonds were not providing enough yield to make them worth the risk and reducing his allocation to zero in the PIMCO Total Return Fund. The subsequent rally forced him to admit his mistake in August, but by then his fund was trailing 90% of its peers and having its worst year since 1995. I will examine Gross' decision in retrospect, to illustrate its tactical and strategic costs and benefits for his shareholders.
2011-09-27 A Buying Opportunity in Investment-Grade Corporate Bonds by Chris Shayne, CFA (Article)
Given that yields on Treasury and high-quality corporate bonds are near 50-year lows, investors looking for relative value in fixed income should consider purchasing lower-rated investment-grade corporate bonds. As Gluskin Sheff's David Rosenberg said last Wednesday, 'if you have money to put to work, and are looking for a reward that more than compensates for the incremental risk involved at this juncture, credit is a good place to be looking.'
2011-09-27 Yield Ahead by Daniel J. Manion of Sentinel Investments
So far this month the equity strategy teams of both Morgan Stanley and Bank of America Merrill Lynch have published pieces in which they extolled the current attractiveness of dividend paying stocks. At Sentinel, we couldn't agree more with the timeliness of this sentiment, although the notion of "yield support" might offer little comfort to equity investors experiencing a daily decline in stock prices equivalent to a year's worth of dividend income. Prospects for global growth have become decidedly less certain of late and corporate earnings growth expectations are being tempered.
2011-09-27 Estimating Future Stock Market Returns by Adam Butler and Mike Philbrick of Butler Philbrick & Associates
Investors would do well to heed the results of robust statistical analyses of actual market history, and play to the relative odds. This analysis suggests that markets are currently expensive, and asserts a very high probability of low returns to stocks (and possibly other asset classes) in the future. Remember, any returns earned above the average are necessarily earned at someone else's expense, so it will likely be necessary to do something radically different than everyone else to capture excess returns going forward.
2011-09-27 2011 First Half Review by Andrew Clinton of Clinton Investment Management
While yields on tax-exempt municipal bonds are lower than they have been in some time, there remains a strong argument for investing in tax-free investments that deliver actual cash flow. In addition, given the municipal bond markets historically stable credit history, illustrated most recently by states and local governments demonstrated willingness and ability to make difficult choices in order to protect debt holders, we would argue that investing in municipal bonds today is particularly compelling given the opportunity to achieve attractive relative return.
2011-09-26 Reflections and Outrage by Bob Rodriguez of First Pacific Advisors
Here is address given at the 2009 Morningstar conference which has just as much relevance now as it did then. Last years performance was a terrible one for the market averages as well as for mutual fund active portfolio managers. It did not matter the style, asset class or geographic region. We managers did not deliver the goods and we must explain why. In letters to shareholder will this failure be chalked up to bad luck, an inability to identify a changing governmental environment or to some other excuse? We owe them more than simple platitudes, if we expect to regain their confidence.
2011-09-22 More Focus on Fixed Income by Team of American Century Investments
G. David MacEwen, discusses how volatile market conditions, a population boom in the 65+ years category, and increasingly conservative investment behavior by those in that category as they approach retirement (including growing demand for more predictable outcomes) are shifting the focus of investment strategies toward fixed income. We strongly believe that the scheduled, mostly predictable payments of interest and principal from bonds are becoming progressively more attractive to a growing pool of investors and their advisors.
2011-09-16 China as an Asset Class by Henry Zhang and Robert Horrocks of Matthews Asia
China's economic expansion over the last 30 years has allowed many enterprises to prosper. For a number of investors, Chinese stocks have also grown in importance. As modern capital markets have taken root in China, stock markets have become one of the primary channels for companies to raise capital. While China's capital market is still early in its development and has its own risks and challenges, the country is expected to continue to grow and increasingly influence world economies. For a variety of reasons, we believe China is emerging as an investment asset class in its own right.
2011-09-16 Sell your Bonds and Gold and Buy Dividend Growth Stocks Before it is Too Late by Chuck Carnevale of F.A.S.T. Graphs
Although we generally believe in the soundness of the principle of diversification, we also believe that extraordinary times require extraordinary measures. Any historian of markets or economies would agree that financial markets are currently far from behaving ordinarily. We intend to point out several markets that are behaving both inefficiently and completely out-of-sync from sound and prudent economic principles. Therefore, we will argue that certain sacred cows that would and should apply during normal circumstances need to be questioned and challenged in these very uncertain times.
2011-09-15 Addressing Our Chronically High Unemployment Rate by Team of American Century Investments
Anyone who listened to President Obamas speech to Congress last Thursday should have come away with one overriding theme: His goal for the remainder of his first term in office is jobs creation. But the stubborn persistence of extremely high unemployment since the Great Recession officially ended over two years agoalong with the massive stimulus spending and record low interest rates that accompanied efforts to revive the economysuggest the challenge were facing in lowering unemployment is unlike any weve faced in past recessionary recoveries since World War II.
2011-09-15 Chinese Banks are Imitating Washington Mutual by Bill Smead of Smead Capital Management
Washington Mutual is only in existence in the world of litigation. For those of you out there who like to avoid these kinds of risks, we at Smead Capital Management recommend you avoid China, avoid the commodities which are used most heavily in construction, avoid the makers of construction and mining equipment, avoid the countries which have benefitted the most from Chinas uninterrupted growth, and avoid the vehicles used for financing all of this growth. The inevitable economic recession in China which we expect to follow will turn the asset allocation world upside down.
2011-09-14 Asian Bonds Fund Manager Interview: A Misunderstood Opportunity by Team of Aberdeen Asset Management
Global investors remain under-invested to Asian bonds. Exposure is often made through global debt benchmarks; however, these benchmarks typically have low allocations to Asia, may not be particularly active, have allocations to less creditworthy countries and possess limited local currency exposure. Many investment opportunities in the Asian region have been overlooked. Asia provides a diverse set of markets and a broad set of country issuers across the credit spectrum, offering what we believe are good opportunities for investors to enhance portfolio yields.
2011-09-13 Balance Grasshopper by Jeffrey Saut of Raymond James Equity Research
Over the weekend Greece did not default, although for over a year I have expressed the view that Greece has to default; a stance I continue to embrace. This morning, however, rumors are swirling again about a Greek default along with hints that Germany is not going to prevent it. That leaves the pre-opening futures down over 20 points, which would represent a retest of the selling-climax lows. While I am hopeful this will be a successful retest, consistent with the October 1978/1979 bottoming sequence, if 1100 is decisively broken it would imply the rally from the March 2009 lows is over.
2011-09-10 China Fears Much Ado About Nothing by Frank Holmes of U.S. Global Investors
There are many questions surrounding the global market but the Chinese economy remains headed toward the moon. The country, of course, remains vulnerable to external forces but we believe the economys strong momentum will be enough to carry the country through, should volatile times persist.
2011-09-08 Congressional Budget Office Updates Its Economic and Fiscal Forecast by Team of American Century Investments
Two weeks ago, the non-partisan Congressional Budget Office (CBO) released an update to their Budget and Economic Outlook that forecasts U.S. fiscal and macroeconomic trends over a ten year period (2012 to 2021). This update creates a baseline for negotiations by the Joint Select Committee on Deficit Reductionthat committee of six Democrats and six Republicans from Congress created by The Budget Control Act of August 2011 which resulted from the contentious debt ceiling negotiations in July. In this Weekly Market Update, well review what this baseline
2011-09-08 The Changing Landscape of Global Investing by Mohamed A. El-Erian of PIMCO
National and global realignments are fundamentally and durably changing the global investment landscape. Investors face the challenge of recalibrating some of the traditional parameters that are key to managing risk and delivering returns. There are also implications for investment management firms which are yet to be sufficiently reflected in the thinking and actions of the industry as a whole.
2011-09-06 Five Strategies for a Sideways Market by Kane Cotton, CFA and Jonathan Scheid, CFA (Article)
If this slow growth environment coupled with asset price volatility continues for (to steal a quote from Fed Chairman Bernanke) 'an extended period,' what additional portfolio strategies might aid the overall risk/return profile of investor portfolios? More specifically, how do you manage investments in a sideways market?
2011-09-02 If Carlsberg Did Mortgages by Niels C. Jensen of Absolute Return Partners
The old world is drowning in debt. Governments are responding with austerity programmes and near zero interest rates but neither will work. Economic growth will be required to get the escalating debt under control, but policy makers need to dig deep into the tool box for different ideas as to how to create this growth. In this month's Absolute Return Letter we focus on one particular idea which will greatly benefit economic growth at no cost to the tax payer - reform the mortgage finance system across the world, using the model developed by the Danes over the past 200 years.
2011-09-01 Updated Ideas for Fixed Income Positions by Team of American Century Investments
The current environment and related factorsincluding double-dip recession concerns, equity and high-yield corporate bond market volatility, moderate inflation expectations in the near term, and premium pricing for U.S. Treasury securitieshave raised questions for investors as they return from summer activities and re-examine fixed income investment positions. It is difficult to address all investor situations and scenarios. So for our hypothetical allocations in this piece, we will focus on fixed income positioning within employer-sponsored retirement plans, both qualified and non-qualified.
2011-09-01 Q&A with Litman Gregory Research by Team of Litman Gregory
We regularly use a Q&A format to address questions from readers about our investment views and current strategy. This format permits us to address a range of different topics and allows readers to focus on areas that are of interest to them. This Q&A piece was worked on jointly by members of our research team and tackles questions received during the past several weeks. We have grouped the questions into broad categories for convenience. The main topics include the Fairholme Fund, Investment-Grade Bonds, Floating Rate Loans, Municipal Bonds, International Bonds, China and Commodity Futures.
2011-08-30 Why High-Yield Bonds Make Sense Today by Geoff Considine, Ph.D. (Article)
None other than Gluskin Sheff's Dave Rosenberg, the widely followed analyst who was been consistently bearish in the current market cycle, said last week that high-yield bonds are 'a good place to be right now.' Recent price declines have made them attractive in the short term, and their risk-adjusted returns make them attractive to longer-term strategic investors.
2011-08-25 Perspective on the Fed, Inflation, and the Economy, as Well as Implications for Income Investors by Team of American Century Investments
The Fed recently took the unprecedented step of declaring their interest rate policy for the next two yearsthey will be holding their short-term rate target essentially at zero well into 2013. Well give our perspective on why the Fed has taken this unusual step, and what these policy decisions tell us about the state of the economy, inflation, and the bond market. Finally, well address potential solutions for income-oriented investors in todays environment of record-low bond yields.
2011-08-22 Libertarian-Style Investing Would Overweight Canada by David John Marotta of Marotta Wealth Management
Libertarians and economists both recognize that countries with more economic freedom experience higher GDP growth. That growth translates into higher stock returns for investors savvy enough to look for governmental fiscal restraint rather than government stimulus. The Heritage Foundation Index of Economic Freedom uses a systematic measurement of economic freedom to evaluate countries worldwide. Their conclusions clearly show that economic freedom and higher rates of long-term economic growth go together. Investors can use the study to select countries for their foreign stock allocation.
2011-08-18 Where the Debt Crisis Could Spread by Russ Koesterich of iShares Blog
Investors are facing an unprecedented situation. Virtually all the major advanced economies the US, Japan and Europe have simultaneously undergone a significant fiscal deterioration, thanks to the after-effects of the financial crisis and worsening demographics. In addition, investors are wrestling with the implications of the recent US downgrade by S&P, as well as a slowing economy. Markets are rattled and many are wondering: what is the new riskless asset? A new index called the BlackRock Sovereign Risk Index provides just such a framework.
2011-08-18 The GDP Growth Downgrade by Team of American Century Investments
While much of the nation focused on events leading up to the credit rating downgrade for the U.S. by Standard & Poors last week, this was preceded by another downgrade to the estimates of our recent, past gross domestic product (GDP) growth, which was announced by the U.S. Bureau of Economic Analysis (BEA) on Friday, July 27. While garnering much less attention, this revision has some serious implications for our economic outlook at least through the end of this year.
2011-08-16 Money Manager Pride Goeth Before Destruction by Bill Smead of Smead Capital Management
All great money managers reach a point in their career where adulation and self confidence detracts from their better judgment. This interruption in judgment usually coincides with the discipline in use becoming the most popular discipline in the marketplace or the investing style being overdue for a three to five-year correction. Studies of the equity managers with the best long term records show that the best underperform the S&P 500 Index 35% of the time. The pride associated with multi-decade success and an army of folks enjoying your work is probably the most dangerous thing.
2011-08-15 Panic Is Not a Strategy - Nor Is Greed by Liz Ann Sonders of Charles Schwab
Originally published in 2008, it's time for a refresher about the perils of panic. Asset allocation, diversification and rebalancing are as close to a "free lunch" as you can get as an investor. ThIn world where time horizons have shrunk precipitously, think longer-term.
2011-08-11 A Primer on Debt, Deficits, and Economic Growth by Team of American Century Investments
The recent kerfuffle in Washington over the extension of the debt ceiling presented investors with many competing arguments and seemingly contradictory information. On the one hand, we hear that debt is bad for growth. On the other hand, we are told that government spending is key to supporting the economy. And why is it that stocks tanked after an agreement was reached to avoid default and extend the debt limit? In this Weekly Market Update, we will try to provide some context for understanding these competing positions, as well as the recent market reaction to these events.
2011-08-10 Global Investment Outlook: Aberdeen's monthly outlook for economies and markets. by Team of Aberdeen Asset Management
Eurozone crisis threatens financial stability Global industrial production momentum may be turning back up Fiscal policy and sovereign indebtedness is the major medium-term issue Monetary policy remains accommodative with emerging countries becoming less restrictive
2011-08-10 Should the US Credit Downgrade Concern You? by Kevin D. Mahn of Hennion & Walsh
While many validly fear that the downgrade may impact borrowing costs for our country, the larger potential risk, in my opinion, could be related to the types of assets that certain institutions (Ex. Banks) can hold on their respective balance sheets. Such a downgrade, or future downgrades, could force a large scale liquidation of these holdings due to changes in the underlying credit quality. With this said, no such panic selling of U.S. Treasuries has occurred. In fact, yields on 10-year U.S. Treasuries have fallen significantly.
2011-08-10 The Economic Recovery Has No Clothes by Kevin D. Mahn of Hennion & Walsh
What likely transpired yesterday was that investors finally siad, The economic recovery has no clothes, despite repeated claims by the Federal Government and certain economists to the contrary over the past 6-12 months. While historical research has shown that typical stock market recoveries generally precede economic recoveries by 6-9 months; perhaps it was too soon. While many encouraging signs pointing to a sustainable economic recovery have emerged over this timeframe in terms of corporate earnings GDP growth and M&A activity, many headwinds for the U.S. economy still exist.
2011-08-09 New Insights on the Role of Alternative Investments in High-Net-Worth Portfolios by Scott Welch, CIMA (Article)
Trends and developments over the past five years allow greater access to alternative strategies and dictate a different conversation with investors about the purpose and trade-offs of such strategies, as well as appropriate ways to incorporate them into well-diversified portfolios.
2011-08-05 Denominators Matter! What the Price of Gold Tells Us About the Value of Other Assets by JJ Abodeely of Sitka Pacific Capital Management
In an environment where holding either U.S. dollar cash or a broad market portfolio may be detrimental to real wealth preservation, more active asset allocation is required. Portfolio managers who have a broad toolbox of assets to choose from, nimbleness and flexibility, and an eye on the denominators that show us real value, will be in an enviable position to capitalize on the next great bull market in stocks.
2011-08-04 Insights from the 2010 Census by Team of American Century Investments
The good news is that while we are aging as a nation, we are also growing both in absolute size and the size of our young population. How quickly we grow is tied to a number of factors. But two of the most important are continued healthy economic growth (where a sense of growing affluence and economic possibility is a strong incentive for young adults to have children) and how liberal or restrictive our future immigration policy will be. Based on how these factors play out, we could easily be a nation of 450 million (or more) to 360 million (or less) just in the next four decades.
2011-08-02 Improving on the Ultimate Income Portfolio by Geoff Considine (Article)
The Ultimate Income Portfolio, which was published in this newsletter July 6 of last year, has delivered the risk-adjusted returns that I projected. Here's a detailed look at how last year's portfolio performed and several ways it can be improved in today's environment.
2011-08-02 Does Citigroup's Panic/Euphoria Model Work? by Georg Vrba, P.E. (Article)
Citigroup's Panic/Euphoria model fell into panic territory at the end of June 2011. According to the model's originator, strategist Tobias Levkovitch, this indicates a roughly 90% probability that equity prices will be higher in six months and a 97% chance of gains in 12 months. How reliable is this model?
2011-08-02 Hitting a Moving Target: Matching Portfolio Risk to Client Expectations by Scott Smith (Article)
Much of the angst faced by investors and advisors over the last several years was caused by mismatched perceptions regarding investors' appetite for portfolio risk. Advisors overestimated the amount of risk investors were comfortable being exposed to within portfolios.
2011-08-02 OH, WHAT A FEELING! as were dancing on the (debt) ceiling by Rob Isbitts of Carson Wealth Management Group
Most investors are risk-averse. They want to make a solid return, but they are far more emotionally influenced by losses, especially big losses. This is the emotion that rises to the surface during stressful times like this. After all, we are only about three years removed from the last major financial crisis, and Europe is putting up a good fight with the U.S. in the battle of who can implode first. If you are thinking enough already!, you have a lot of company. But are you doing anything about it? Here is what we have been doing all year, in anticipation of an eventual day of reckoning.
2011-08-02 Russ K.s Market Calls | Developed & Emerging Markets by Russ Koesterich of iShares Blog
I started the year with a bias for developed market equities over emerging market equities. Year-to-date, developed equity markets have outperformed emerging markets by roughly 4%. I had two main reasons for favoring developed market equities. Emerging market equities looked expensive relative to their developed market counterparts and I felt that emerging market inflation would be a more persistent problem than the market was discounting. Now, however, these major rationales for broadly favoring developed markets no longer hold.
2011-07-27 From Asset Allocation Nirvana to Asset Allocation Nightmare by Bill Smead of Smead Capital Management
We believe the next 10 years will be about money moving back into non-cyclical US large cap stocks and domestic companies which enjoy lower commodity prices and the repatriation of money from highly risky asset classes with poor odds. Being widely asset allocated today prepares folks for an under-performance nightmare In our opinion, bonds are expensive, commodities are outlandish, small caps trade at a huge premium and as Chinas economic contraction occurs, the crowd will flee emerging markets.
2011-07-26 Comfort is Rarely Rewarded; Maverick Risk and False Benchmarks by J.J. Abodeely, CFA, CAIA (Article)
Conventional investment strategies, while affording the investor at least a temporary degree of comfort, are destined to produce mediocre results. Only by distancing themselves from the ordinary approach – as Jeremy Grantham and Seth Klarman have – can asset managers achieve superior performance and truly fulfill their fiduciary duties by acting as proper stewards of their clients’ capital.
2011-07-23 Worried About the Future? by Kendall J. Anderson of Anderson Griggs
If you are worried about the current economic state of affairs you may be relieved by what research analysts are telling portfolio managers. First, they seem to be in agreement that businesses are doing fine, especially those that have a global market. Second, interest rates will be higher at some point in the future, and the majority of government debt is safe as far as the ability to pay interest on their borrowing. And most importantly, the earnings you should expect from your investments will be driven over time by the ability of companies to pay you with a little left over to reinvest.
2011-07-22 Why We Think the U.S. Wont Default on Its Debt by Team of American Century Investments
We believe its highly unlikely that the U.S. government will miss any of its scheduled debt payments in coming months, or that related market uncertainty and volatility will cause our money market funds to break the buck (be forced to transact share purchases and redemptions at prices less than the usual $1 per share). To help explain market behavior under unstable conditions, we often repeat the following adage: investment markets hate uncertainty. We tend to be leery of uncertainty because it can trigger investor skittishness, irrational behavior, and volatility.
2011-07-21 Is There Equity Beta in Oil? by Sebastien Page and Mark Taborsky of PIMCO
Oil exposure can increase equity beta in an investment portfolio. Historically, correlations between oil prices and equity prices have varied widely, depending on economic conditions. Determining whether oil price movements are driven by changes in supply or demand can help identify when the correlation between oil and stock prices is likely to be high or low. Investors can then know when exposure to oil is tilting their portfolios toward higher or lower equity beta.
2011-07-20 Secular Outlook: Implications for Investors by Bill Benz of PIMCO
As the economy undergoes important realignments, investors will need to rethink their traditional approaches to managing their portfolios. As the lines between interest rate and credit risk become blurred, finding sources of safe spread becomes even more critical. More, not less, discretion is warranted when navigating volatile global markets, avoid sectors affected by financial repression and hedge against inflation and/or adverse tail events. We believe investors need to look at risk factors rather than traditional asset classes when making asset allocation decisions.
2011-07-19 Retirement Planning and Worst-Case Scenarios by Wade Pfau (Article)
New research suggests that skepticism in a 4% safe withdrawal rate (SWR) is well justified. It is perhaps due to good luck that American retirees have not yet experienced a withdrawal rate below 4%. But a better approach than worrying about SWRs is to focus on the savings rate needed to meet your retirement spending goals, not on what the safe withdrawal rate is.
2011-07-15 We See This Slowdown as Temporary Too by Team of American Century Investments
We’re experiencing another mid-year economic slowdown, with renewed fears of a double-dip recession. Will the recovery regain momentum, like last year? The fixed income team, thinks so. Two years after the Great Recession ended, we’re still struggling to escape its lingering grip. Major facets of that struggle include the market and financial extremes the recession generated. U.S. economic growth and financial market benchmarks are striving to shift back to more normal/average levels. These cyclical shifts from historic extremes interest us as sources of potentially value-adding positioning.
2011-07-15 What a Multi-Speed World May Mean for Equities by Anne Gudefin and Masha Gordon of PIMCO
Equity investors may look in unfamiliar places as they navigate potential shifts in the global economy. An apparent rebound in risk tolerance since the financial crisis has supported higher equity valuations. Emerging market economies appear to be undergoing a mid-cycle rebalancing. We view this as a welcomed cyclical adjustment rather than the end of their growth cycle; long-term fundamentals remain intact. We believe advanced economies should continue to see headwinds to growth, and that potentially means investors may be generally willing to pay lower multiples to earnings.
2011-07-12 Harold Evensky on the New Rules for Wealth Management by Robert Huebscher (Article)
If you don't have a copy of The New Wealth Management on your bookshelf, you should. From gauging the risk tolerance of your clients to measuring the performance of their portfolios, this book provides comprehensive guidance for virtually every aspect of a financial advisory practice. Harold Evensky, the lead author, spoke with me last week and highlighted some key themes in the newly released second edition.
2011-07-12 Widespread Tail Risk Concerns Seem Bullish by Richard Bernstein of Richard Bernstein Advisors
Tail risk, as the name implies, is the risk of a highly unusual event occurring. A tail risk is often defined as an event occurring that provides a negative return at least three standard deviations below the average return. We doubt that the peak in the current stock market cycle is likely to occur when hedging tail risks is so common. After all, no one discussed tail risks at the market peaks in 2000 or 2007. Just like in previous cycles, the ultimate stock market peak will likely be accompanied by levered investments, rather than by hedged investments.
2011-07-07 Lessons from Investor Behavior Studies: Better to Have Patience and a Plan by Team of American Century Investments
Recent studies raise important questions about investor behavior and the likelihood that investors will successfully reach their financial targets. It seems that the best way to increase the odds of investing success is to take a balanced approach, providing exposure to the broad asset classes without leaving investors overexposed to any single area. Risk and financial reward exist in relation to one another. But diversification works on the principle that the relationship is not linear—you have the potential to get more return for each unit of risk you take by spreading out your investments.
2011-07-05 Momentum Investing Can Achieve Market-Beating Returns by Matthew Tuttle, CFP (Article)
In 2002 and 2008 the investment tide went out. And as Warren Buffett famously predicted, we learned who was swimming naked. Both times, it was the practitioners of Modern Portfolio Theory (MPT).
2011-06-30 Macroeconomics and Presidential Elections by Team of American Century Investments
It’s now just 16 months until our next presidential election. Republican candidates have already begun the long process of party debates and fund-raising efforts. President Obama wasted no time as well, launching his re-election campaign effort in March. This upcoming election will likely focus on the economy and involve major debates over taxation, spending, job creation and the fundamental role of the government in our economy. As a result, the election outcome could have significant consequences for the types of policies, incentives and legislation that will be pursued post-November 2012.
2011-06-30 The Biggest Bear Market Rally of All? by Bill Smead of Smead Capital Management
Most stock market participants screamed “bear market rally” in the summer of 2009 as the US market exploded to the upside from the March 2009 low. They were referring to the phenomena whereby a major rally follows a bear market, retraces some of the prior decline and attempts to suck most investors back into the market. These “sucker” rallies are debilitating because they heap agony those who end up getting caught twice in the same secular decline. We believe the rally in oil to $115 is possibly the biggest “bear market” rally ever and we advise folks to protect their capital.
2011-06-29 Covered Bonds: Strong Demand, New Regulations Create Global Momentum by Ben Emons and Kris T. Mierau of PIMCO
Basel III’s long-term funding and liquidity coverage requirements could boost demand, create technical support for valuations. The EC has proposed an exemption excluding covered bonds from private sector participation in post-insolvency burden sharing. The Covered Bond Act could alter the way regional banks in the U.S. rely on the Federal Home Loan Bank (FHLB) system for funding.
2011-06-28 An Important Challenge to ‘Stocks for the Long Run’ by Geoff Considine (Article)
Jeremy Siegel's dictum - to invest in stocks for the long run - faces a new challenge. A recent paper by Robert Stambaugh, a Wharton colleague, and Lubos Pastor of the University of Chicago says that once you take into account the uncertainty of estimating future returns, stocks are not nearly as attractive to retirement-oriented investors as Siegel has claimed.
2011-06-28 Reducing Risk through Value-Oriented Tactical Strategies by Mark E. Ricardo, JD, LLM, AAMS (Article)
Conventional wisdom was that the best way to reduce portfolio risk is to adopt a diversified long-term strategic asset allocation. That paradigm was challenged - deservedly so - following the 2008 financial crisis. Fortunately, an improved paradigm has emerged: Investors should combine long-term strategic allocations with a value-oriented tactical rebalancing strategy.
2011-06-28 The Diversified Portfolio Index by Charles Fahy, Sr. (Article)
Investment rates of return that are average but consistent are the products of exceptional performance. Over longer time horizons, these returns become increasingly difficult to outperform. One such example is the Diversified Portfolio Index - a buy-and-hold strategy deployed across all major asset classes.
2011-06-23 A New Era of Global Financial Repression by Scott A. Mather of PIMCO
Investors need to be especially alert to increasing financial repression. Any sovereign policy that interferes with free market activity and the pricing of debt or currency can be thought of as financial repression. Repressionary policy rates percolate through the global financial markets and affect asset prices across the risk spectrum. Many emerging market countries use repressionary tactics to capture a larger share of global growth.
2011-06-22 We’re Still Patiently Positioned for a Flatter Yield Curve by Team of American Century Investments
In this Weekly Market Update, we discuss the steep Treasury yield curve and our yield curve flattener trade. This economic cycle-based, duration-neutral, mean-reversion strategy—and how it fits with our other active positions—helps illustrate the investment process and outlook of the fixed income team. The gap between short- and long-maturity U.S. Treasury yields has been at or near historically wide levels since 2009. It’s an interesting facet of the latest economic cycle. One of our active positions is tied to an eventual narrowing of this spread to a more historically average level.
2011-06-21 Investing Based on Jeremy Grantham's Forecast for Diminishing Resources by Robert Huebscher (Article)
In his most recent commentary, Jeremy Grantham became one of the first mainstream investment professionals to publicly forecast a world economy threatened by diminishing natural resources. A survey of our readers showed that an overwhelming majority agree with Grantham's views. But constructing a portfolio positioned to capitalize on those themes is exceedingly difficult.
2011-06-21 Down the Rabbit Hole by Jeffrey Saut of Raymond James Equity Research
In last weeks comments I noted the SPX had been down for six consecutive weeks for only the 17th time since 1928. As Bespoke Investment Group wrote early last week, If there is any consolation for the bulls, it is that there have only been three weekly losing streaks of seven or more (weeks) for the index. (After six consecutive weeks down) in week seven, the SPX has risen an average of 1.03%. While last weeks gain of 0.52% fell short of that average, the SPX did manage to avoid its seventh weekly wilt. Not so for the NASDAQ, which recorded its seventh down week with a loss of 1.03%
2011-06-17 The Exodus by Bill Smead of Smead Capital Management
Prices of residential real estate in Vancouver have skyrocketed. Over 70% of these purchases were from Chinese Nationals driving prices high. Compared to average household income, Vancouver is nearly twice as expensive as New York. Gordon Chang of Forbes wrote an article titled “Chinese Entrepreneurs Are Leaving China”. Here is how Gordon began to explain the phenomena:“China’s rich, driven by a sense of insecurity, are taking money out of their country. Many are actually preparing to move elsewhere" There is an exodus of the best and brightest business people coming out of the country.
2011-06-16 U.S. Investors Overexposed to U.S. Dollar Risk? by Axel Merk of Merk Funds
The U.S. dollar has experienced significant weakness over recent years. And there is a risk the U.S. dollar will experience ongoing deterioration for an extended period of time. U.S. investors may want to take this possibility into consideration when assessing the U.S. dollar risk inherent in their investment portfolios. Our analysis into the aggregate financial asset holdings of the U.S. personal sector finds that the vast majority of investor’s financial assets are denominated in U.S. dollars and as a result, significant U.S. dollar risk exposure is evident.
2011-06-15 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Market trading is driven more and more by machines talking to each other triggering buy and sell orders that are algorithmically pre-programmed. Gone are the days of floor traders executing the specialist’s book, doing favors for each other and “working the bid.” Today’s syncopation is well orchestrated and devoid of human response or emotion. Machines aren’t the enemy, however. They are simply the new reality. As the burden of making trillion dollar bets shifts from to machine, greater efficiency and lack of peer pressure gives the markets a new benchmark of necessary change.
2011-06-15 The Economy Hits a Soft Patch—But How Soft and How Long? by Team of American Century Investments
Most economists concur that the economy recently has hit a “soft patch.” The revised estimate of first quarter GDP1 growth was only 1.8% on an annualized basis. Nonfarm payrolls grew only 54,000 in May, a substantial downward change from February to April when approximately 200,000 new jobs were added each month. And average housing prices have now declined for six consecutive months. The question investors are asking is whether this slowdown is temporary or a sign of a longer-term slowdown that is coming just as the Fed winds down its latest round of monetary stimulus at the end of June.
2011-06-13 Ouch by Jeffrey Saut of Raymond James Equity Research
While equity markets can certainly do anything, if the SPX declines to the lows registered in March of 2009, which is what Walter Zimmerman thinks, and if the current earnings estimates are anywhere near the mark, it would leave the S&P 500 trading at less than 6x earnings with a dividend yield (excluding any dividend increases) approaching 5%. I just dont believe this is in the cards, given my assumption the economy is NOT going to double dip. Amid such market machination I think investors should keep their heads screwed-on straight and begin compiling their buying lists.
2011-06-09 Taking Advantage of Cyclical Highs and Lows by Matt Lloyd of Advisors Asset Management
As we find ourselves in the throws of an economic soft patch, the anxiety to investors seems only to be a sniffle versus an outright sneeze or full-fledged cold. Many are wondering as to why the accumulation of the slowing economic news is having such a muted impact and cause many to extrapolate that a “coming to Jesus” meeting is around the corner. As we stated last week, the conundrum of negative outlook on Treasuries by three credit rating agencies is being trumped by slowing economic metrics. It is also influenced heavily by the majority of investors believing rates will rise.
2011-06-08 Gold at $1,500 an Ounce: Speculation or Fundamental Demand? by Team of American Century Investments
We believe gold’s performance in recent years and current price above $1,500 an ounce reflect solid fundamental demand, rather than speculative fervor. A key driver of gold demand in the current environment is buying by central banks around the world. In addition, it appears that investors looking for a hedge against both the falling dollar and broader economic uncertainty have been buying gold for its diversification benefits. Jewelry demand in India and China are other, underappreciated positives.
2011-06-07 New Challenges for the Endowment Model by Robert Huebscher (Article)
The multi-billion dollar endowments of elite institutions like Harvard, Yale, and Princeton are supposed to never be strapped for cash, but that's not how things played out during the financial crisis, when all those schools and many others were forced to raise liquidity under adverse market conditions. The endowment model, despite those failures, is still basically sound, according to Luis Viceira, but it needs several key improvements before institutions and individuals can rely on it.
2011-06-07 Improving on Buy and Hold: When is the Best Time to Sell by Georg Vrba, P.E. (Article)
My model, Improving on Buy and Hold: Asset Allocation using Economic Indicators, has been updated. A Sell-A type signal will be generated by the model in the second week of August and I advise reducing one's stock market investments then.
2011-06-07 Has the hour of the dividend stock arrived? by Team of Columbia Management
Surveying the present financial landscape-what are investors’ options? Bonds have been enjoying historic popularity. But they are at market highs and come with return and income potential inherently capped by their coupons. Turning to Treasuries, the price-to-yield is particularly unattractive. Then there’s the specter of interest rate risk. The steep rebound of equities off the crisis bottom ended with the arrival of 2010, and double-digit returns for many formerly cheap stocks went with it. Following a period of volatility, we appear to have settled into the slow-growth stage.
2011-06-07 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
“Which way is the market going?” That’s one unanswerable question. What we do know, empirically, is that the global credit markets are poor; pricing in most stocks is inefficient and governed by short term trading and speculation; sustainable economic growth is non-existent; and inflation is rampant in consumer goods and raw materials. Even if we’re correct with our asset allocation, we are playing defense and hoping to minimize any downside damage. If hindsight and backtesting are any indication, I would posit that the current equity market continuum is poised for more downside potential.
2011-06-07 Low Volatility Equity Solutions – Is Now The Time? by K.Sean Clark of Clark Capital Management Group
Correlations converging amid the market declines of 2008 called attention to the limits of relying on diversification between assets for portfolio protection. The desire for non-correlated returns among assets had led to a significant reduction in U.S. equity exposures and accelerated flows into non-U.S. equities and alternative strategies. But the correlations of these uncorrelated assets spiked under the extreme market stress of 2007 and 2008. This shows that for downside protection, buying assets with many different risk profiles is not a substitute for buying volatility to manage risk.
2011-06-07 The Tough Transition by Cole Smead of Smead Capital Management
Stock market participants seem to be having a great deal of difficulty handling temporary economic weakness. This weakness is highly likely to be a combination of higher gasoline prices and the disruptions that supply chains suffered at the hands of the Japanese Tsunami. We are not surprised by this temporary weakness and if it hadn’t been caused by this combination it would have come to pass anyway.
2011-06-07 Modern Portfolio Theory IS Harming Your Portfolio by JJ Abodeely of Sitka Pacific Capital Management
In a recent paper, Scott Vincent argues that the flawed foundation of MPT has allowed its advocates to control the language of the debate and set the stage for the obvious conclusion that passive index-based investing is inherently superior. And don’t think for a second that this debate is simply theoretical, academic, or unimportant– the basic tenets of MPT shape the decisions of nearly all investors in profound and often disturbing ways. YOUR money is almost certainly being managed with these ideas at the core. The traditional approach to asset allocation is built on false axioms.
2011-06-03 Five Misconceptions Squashed by Niels C. Jensen of Absolute Return Partners
DSK is not the only one in need of a bailout! As the sovereign crisis intensifies - and it will - bond yields in some countries will go higher. But they won’t go higher everywhere. Demographic as well as technical factors (e.g. Solvency II) will drive ever more money towards bonds, and that money will have to go somewhere. Germany, Switzerland and Scandinavia are probably the safest bets in terms of where sovereign bond yields could fall further. You should also expect high quality corporate bond yields to trade through sovereign yields in many countries. The trend has already begun.
2011-06-02 High Unemployment Remains a Substantial Challenge for the Economy by Team of American Century Investments
Continued high unemployment and weak residential housing prices are two hangovers from the Great Recession that continue to act as brakes on the economy and current recovery. Some analysts say the housing problem is a several-year process of allowing prices to fall to where demand recovers. But the housing market is closely related to the labor market and the unemployment problem. However, no one has a definitive analysis of what’s wrong or what is needed to bring unemployment down from 9%. And adopting the same laissez-faire approach as the housing market is clearly not a solution.
2011-06-02 Expert Roundtable on Risk by Mark W. Riepe, Liz Ann Sonders, Randy Frederick, Rob Williams, & Brad Sorensen of Charles Schwab
The word "risk" has a negative connotation-something to steer clear of whenever possible. However, in the investing world, risk and performance are intertwined. Market sentiment can shift quickly depending on economic or political news, geopolitical events and even natural disasters and these shifts can sometimes send investors fleeing for safety or taking on more risk as they seek higher returns. Mark Riepe, led a roundtable discussing the concept of risk in investing, strategies for reducing portfolio risk, and investment suggestions tailored to both risk-seeking and risk-averse investors.
2011-06-01 An Investment in Infrastructure by Team of Columbia Management
Neglecting infrastructure can have tragic consequences. Think about the I-35 bridge collapse in Minneapolis, levees breaking in Missouri or the San Bruno gas pipeline explosion. These and many other examples illustrate the type of destruction that can occur if the country’s aging infrastructure is not addressed. At the same time, demand for new infrastructure is growing exponentially in emerging markets. Data highlighting the scale of construction, transport, logistics and communications development are so large they render relevant context difficult to comprehend.
2011-05-31 Weekly Commentary & Outlook by Scotty George of du Pasquier Asset Management
So what is the state of the economy and the financial markets? Poor. Whether it’s drought, weather disasters, human disasters, or economic uncertainty, the markets seem to be going nowhere. The most potent markets are driven by cash, confidence, and confluence. But with two bear markets in the last decade, behavior and attitudes have changed. There has been a drastic decline in consumer confidence brought on by the dot.com bubble and by the horrific events of 9/11 and their reverberations. No matter how accessible cash became, it only seemed to lead to some kind of disaster.
2011-05-25 Bull Case Nobody Makes by Bill Smead of Smead Capital Management
We feel compelled to make a US stock market bullish case which feels as good to this writer as avoiding tech stocks did in late 1999. It is so lonely that it is divine. Andy Grove, former Intel CEO, college prof John Maynard Keynes said, “When everyone knows that something is so, it means that nobody knows nothin’.” We believe the majority has put their assets into investments that will provide defeat, insecurity and failure. Out of this comes a very optimistic bull case which is available to those who have courage to look foolish in the short run and avoid today’s popular asset allocation.
2011-05-25 Global Mergers and Acquisitions Activity Continues to Rise by Team of American Century Investments
Mergers and acquisitions activity is on the rise worldwide. In the U.S. this increase has been accompanied by the return of mega-deals ($10 billion+) driven primarily by large multi-national corporations flush with cash. These deals (and the anticipation of more to come) have helped drive markets up in the first quarter of this year. But the question on the minds of many investors is whether acquiring companies are at risk of overpaying for acquisitions that—while deemed “strategic”-may only end up transferring (not creating) value from shareholders of the acquiring to the acquired companies.
2011-05-24 Talking a Jumper off the Ledge by Doug Simmang (Article)
Our clients expect - and appreciate - the planning services we as advisors provide. But in those rare instances when emotion, fear and stress combine to cloud a client's judgment, we have the opportunity to truly make a difference in their lives. A recent story on NBC's Today Show illustrated the importance of the rational and reasoned logic an advisor can offer.
2011-05-24 Ownership in an Operating Business by David L. Blain (Article)
There was a time when the three legs of the retirement stool were Social Security, pensions, and personal savings, but those days are gone for good, and the stool needs new legs. Paper assets and real estate are classic asset classes that can help fill the void, but where else can investors turn for the stable income they need?
2011-05-20 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Last week, I wrote about a phenomenon in global markets “at the top” as being almost like perpetual motion inertia, constant movement, seemingly ending up static. Why does that exist, and what can we do to enhance its portfolio benefit and to reduce its incumbent risk? I believe that today’s risk derives from overvaluations created from “efficiencies” which magnify profitability, but don’t reflect declining top line revenue or demand. Indeed, as stock prices have migrated upwards, relative strength quotients within my proprietary measurements have disconnected, instead moving downwards.
2011-05-18 Floating rate: Hedging the interest rate risk in your fixed-income portfolio by Team of Columbia Management
Following the Great Recession of 2008, many investors aggressively moved to cash and fixed-income securities in a classic flight to safety. In early 2009, we could point to a historic opportunity to capture significant total return. Much of that correction has already occurred and valuations across the fixed-income market have largely recovered. At this juncture in the business cycle, credit risk has declined dramatically, as evidenced by defaults that are running below long-term averages, robust new issuance and demand for bonds, and healthy corporate balance sheets and earnings.
2011-05-17 Improving on Buy and Hold: An Initial Sell Signal by Georg Vrba, P.E. (Article)
I have updated the model described in my article, Improving on Buy and Hold: Asset Allocation using Economic Indicators. The ECRI U.S. Weekly Leading Index and its annualized growth rate published on May 13, 2011, together with the most recent values of the other indicators, have been incorporated in my model. A basic sell signal was generated last week.
2011-05-16 Secular Outlook: Navigating the Multi-Speed World by Mohamed A. El-Erian of PIMCO
It is a world that heals slowly and unevenly, and remains structurally impaired. Balance sheets, both across and within economies, are still out of equilibrium. We expect advanced economies will face sluggish growth and persistently high unemployment over the secular horizon. Emerging economies will achieve higher growth but face recurrent inflationary concerns. We do not expect policymakers to boldly address structural problems. By targeting negative real interest rates, they will pursue financial repression that undermines the “real return” contract that savers expect.
2011-05-12 The Value of Gold Company Stocks and Gold’s Role in a Diversified Portfolio by Team of American Century Investments
Two questions we’ve heard a lot lately are “Why haven’t the stocks kept pace with the metal?” and “What’s the right amount of gold for my portfolio?” The recent disparity in performance between gold bullion and gold mining stocks is largely down to concern about higher costs to extract and refine the metal. Compare those fears with conditions in 2009 and 2010, when gold mining stocks did very well as the price of gold bullion surged, while changes in production costs were comparatively tame. This meant better top-line revenue and margin figures, making for attractive stock performance.
2011-05-10 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Investors cheered the execution of world terrorist Osama Bin Laden last week, by parking money in defensive sectors such as Non-Cyclicals and withdrawing from tangible assets while they waited for what many believe might be an inevitable disruption and reprisal. Obviously, patriotism was running high but confidence was not. Can the markets persist in gaining new capital inflows, or will money recede in cyclical fashion into cash and defensive investing? It depends on whom you ask. Speculators see exogenous moments like this as reason to gamble short-term in currency exchange.
2011-05-10 What is the greatest investment risk? The risk that money won’t be there when you need it! by David Edwards of Heron Financial Group
Stocks rallied in April, closing at the high for the year and the highest level in three years. With stocks up 9.1% through April 30th versus our 2011 forecast of 8%, we see stocks as fully to slightly overvalued. In fact, given the lack of substantial “new” news to push stocks one way or the other, we expect a 10% trading range that could last through the summer and into the fall. On February 28th, David Edwards commented on Bloomberg Radio that “the S&P 500 could fall 10% in the next six months,” but that he wouldn’t change his strategy because he expected a 20% rally on the other side.
2011-05-09 The Menu by John P. Hussman of Hussman Funds
One of the ways investors can think about prospective return and risk is from the standpoint of the Capital Market Line, which lays out a menu of investment possibilities at various levels of return and risk. In theory, investors like to believe that this menu is always a nice, positively sloped line, where greater risk is associated with greater prospective return. And somehow, regardless of where market valuations are, investors often seem to believe that 10% is 'about right' for the prospective return on stocks. As it happens, valuations exert an enormous effect on the prospective returns
2011-05-05 Corn Price Increases Tell a Story About Why Commodity Prices Are Rising by Team of American Century Investments
In case you haven’t been watching, the price of corn for delivery in July (a futures price set on the Chicago Board of Trade) rose 35% just in the month of April from $216 to $293 per metric ton. As both a commodity and agricultural product, the demand and pricing of corn can provide interesting insights into whether inflation is rising, why and (if so) what factors are driving it. In this Weekly Market Update, we’ll take a look at the market dynamics for corn, what is driving recent price increases and how this is likely to unfold over the remainder of this year and beyond.
2011-05-05 Entropy and the Mechanics of Reflation by Team of Institutional Risk Analyst
All we can say with some degree of certainty is that the real economy seems to be slowing rapidly from our perspective. The problem is not so much a dearth of credit as a lack of demand for credit and goods of all descriptions. Have you noticed your retailers and service providers trying harder recently? Even the major airlines are treating passengers with a degree of deference that is almost unnerving -- but the planes are mostly full.
2011-05-03 Lucky People by Jeffrey Saut of Raymond James Equity Research
Since last June my unencumbered observation has been, You can get cautious from time to time, but dont get bearish. That mantra has served us well, especial since last September, because beginning on September 1, 2010 the senior index has not experienced anything more than a one- to three-session pause/pullback making today the 174th session in its upside skein. Such a stampede is unprecedented in my notes of over 40 years. Still, It looks like its going up to me.
2011-04-29 Comparing Korea and Taiwan by Michael Han of Matthews Asia
On a research trip to South Korea and Taiwan, I had the chance to compare the social, cultural and economic characteristics in both countries. Both enjoy educated workforces and a similar per capita GDP of about US$20,000 though South Korea’s population (50 million) is double Taiwan's. Both face challenges of low birth rates and a aging society. They also share similar economic development models, which focus on exports and specific industries. One key difference, however, is that Taiwan’s economy has been led by strong small and medium-sized enterprises while Korea’s large conglomerates.
2011-04-28 Weekly Market Update by Team of American Century Investments
Total returns began looking better for municipal bonds (munis) after mid-January this year as issuance eased and a wave of non-traditional (not tax-exempt income-seeking) buyers entered the market in pursuit of relative value and return opportunities provided by falling muni prices and rising yields compared with those of Treasuries. But the rewards from that influx of demand have not been uniform across the muni market, the non-traditional “crossover” buyers have targeted some segments much more than others, creating a divided market that has rewarded some investors at the expense of others.
2011-04-26 Why Mid-Cap? by RidgeWorth Investments (Article)
RidgeWorth Investments has published research detailing six distinct reasons why investors should consider a specific allocation to mid-caps. Specifically, it explores historical performance, evaluates current conditions that favor mid-caps as well as examines how mid-caps have performed during different points in market and economic cycles. Finally, the research looks at the incremental benefit of adding an allocation of up to 40% of mid-cap stocks to a portfolio of solely large and small cap stocks. We thank RidgeWorth Investments for their sponsorship.
2011-04-26 Cerulli Survey Results: Advisor Use of Tactical Allocation by Tyler Cloherty (Article)
Advisors have increasingly turned to tactical allocation to manage client risk. While there has been abundant discussion on how this approach should be executed in theory, our survey results show what advisors are doing today in their practices.
2011-04-26 Rude Crude by Jeffrey Saut of Raymond James Equity Research
Oil that is, black gold, Texas Tea; yet, rude crude still feels a bit stretched in the short-term given that West Texas Intermediate (WTI) is ~30% above its 200-day moving average (DMA). Indeed, over the past few weeks oil has become almost as extended above its 200-DMA as it was in July 2008, and we all know how that ended. Not that I am predicting a similar collapse in the price of Texas Tea, but rather that a consolidation/pullback period is likely, which could provide the backdrop for another leg up in stocks (even the energy stocks).
2011-04-21 Retail Sales Continue to Grow—and Raise Questions About the Consumer by Team of American Century Investments
Last week, the U.S. Commerce Department released its monthly report on retail sales for March. With gasoline prices up almost a dollar over the past six months and consumer demand already challenged by sagging home prices plus high unemployment, investors and analysts were eager to see if the streak of eight months of positive growth in retail sales through February could be sustained in March. And the answer was “Yes, but barely.”
2011-04-19 Rear View Mirrors by Richard Michaud of New Frontier Advisors
It was another positive quarter for U.S. equity investors. The market’s resilience in the face of the Fukushima earthquake, Middle East rebellions, and euro uncertainties was remarkable. The U.S. economy continued to demonstrate significant signs of recovery with new jobs in March and a 1% drop in the unemployment rate since November. While European markets were up 6.5% in dollar terms, Asian indices were down 2%. Bond market was mixed, with treasuries down and diversified indices flat. Oil prices were up over 16% while the dollar fell 6.4% relative to the euro but up 1.3% to the yen.
2011-04-18 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Acknowledging that all market activity is cyclical, not linear, I am often amused at the reaction by investors to each day’s trading results and the media commentary that follows. I am often asked by the media to characterize a market’s daily events, as if one might create a justification for volatility out of context. I view this day-after commentary as specious, at best. It takes days/weeks/years for real trends to evolve. In my methodology and study of the market it is most often these secular, or generational, themes that most resonate upon asset allocation and equity selection.
2011-04-15 Not all Bonds are Created Equal by Dan Fuss, Kathleen Gaffney, Matthew Eagan & Elaine Stokes of Loomis Sayles
It has become the question of the day: If interest rates are heading higher, shouldn’t I bail out of bonds altogether? While we anticipate rates will rise, we don’t believe abandoning bonds would be prudent for most investors. Bonds can play an important role in investor portfolios by providing income potential plus diversification. In this piece, we describe why we think rates may be biased higher in coming years and how our portfolio strategies may adjust to the new environment.
2011-04-14 Expectations Are High for Continued and Impressive Earnings Growth by Team of American Century Investments
This week marks a quarterly ritual on Wall Street where companies report their actual financial results for the most recent quarter, and analysts use these results to update their forecasts for companies, including their target share price and sell or buy recommendations. Most expect to see a continuation of the growth that began in 2009 as the economy was struggling to exit the Great Recession. This recovery of U.S. corporations has been the one bright spot for our economy, which continues to struggle with high unemployment, record government budget deficits and a weak housing market.
2011-04-12 Ten Trends that will Reshape the Fund Industry by Robert Huebscher (Article)
For advisors scouring among thousands of mutual funds, bargains and inefficiencies will be harder to find in coming years. Intense competition among funds for shelf space will not translate to lower fees, and the new class of broad asset allocation funds is unlikely to live up to its marketing promises. Those were among the surprising forecasts from Geoff Bobroff, with whom I met last week.
2011-04-11 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Every Year, every new calendar quarter in fact, brings a heightened sense of anticipation about market performance. In its proper perspective, we have a unique demarcation that allows us both to look back and to look forward. Whether we are “licking our wounds” from a beating we took previously, or rebalancing our assets and expectations for future success, investing is by its nature a regenerative endeavor, always filled with hope. That is why I find it almost comical that day-traders, hedge fund managers and strategists calibrate their successes, or failures, by the minute, day, or month.
2011-04-09 Risk 3.0 Investment Solutions for the New Market Realities by Mitchell Eichen and John Longo of The MDE Group
In spite of the stock market rebound from its March 2009 lows, the 2007-2009 bear market still looms large. Investors have lost faith in the conventional methods of portfolio management. Investor confidence was not merely shaken, but shattered. Risk was either improperly measured, or considered a distant second to return. In this paper, we introduce a new approach to portfolio management that builds upon prior work. The main contribution is that specific kinds of risk are explicitly considered. The portfolio is then optimized, using human judgment, for the current market outlook.
2011-04-07 Weekly Market Update by Team of American Century Investments
“Dodd-Frank” is shorthand for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The main focus of the legislation is on increasing regulation/supervision of banks and other major players in derivatives, lending, and securitization businesses. Few of the law’s provisions are aimed directly at the registered fund industry, likely reflecting the industry’s distance from the 2008 financial crisis and general effectiveness of the framework already in place. Nevertheless, a number of provisions could affect mutual funds and their investment advisers in meaningful ways.
2011-04-05 Two Critical Lessons from Japan An End-of-Quarter Letter to Clients by Dan Richards (Article)
Given recent events in Japan and North Africa, many clients are looking to their advisors for direction on what they should do. This template for an end-of-quarter letter is intended to be a starting point for your letter to clients.
2011-04-05 The Future of Investment Manager Due Diligence (and a Look Back at Q1 Performance) by Ron Surz (Article)
Despite the continuing global financial crisis, the uprisings in the Middle East and the Japanese disaster, global stock markets delivered positive results in the first quarter of 2011, as described in this capital market review. In the second part of the article, you'll discover what due diligence procedures need to change and why.
2011-04-04 Confessions of an Investor by Niels C. Jensen of Absolute Return Partners
Woody Brock is advocating a regime change. Throw away the generally accepted approach of two generations of investment ‘experts’ and start again, is Woody’s recommendation. As a practitioner, I certainly recognise the limitations of MPT and I agree that, in the wrong hands, it can be a dangerous tool, but there is also a discipline embedded in MPT which carries a great deal of value. And, in fairness to Woody, he does in fact agree that you can take the best from MPT and mix it with a good dose of ‘common sense’ and actually end up with a pretty robust investment methodology.
2011-03-31 Weekly Market Update by Team of American Century Investments
Last week brought more bad news regarding the residential housing market. There were declines in sales volume of both new and previously occupied homes for the month of February. Additionally, one major and closely followed home price index exhibited a 3.1% decline in January, marking the fourth consecutive month of price declines for this index. In most regional markets, the situation remains deflationary as prices continue to slip and (as is characteristic of deflationary markets) demand declines as buyers await further price declines before jumping in.
2011-03-30 “Agri”-vation by Scotty George of du Pasquier Asset Management
Recent events in the Middle East, combined with weather, have put tremendous pressure upon raw materials prices. The fear is that cyclical pricing pressure might become secular (generational) trends, accelerating inflation in energy prices, foodstuffs, and industrial components, thus undermining a tenuous uptick in consumer spending, global trade, and consumer confidence. While Wall Street rejoices that something, anything, has stimulated trading activity and profit margins, the world watches as surpluses contract and statistics become human convoys of disaster.
2011-03-29 GMO's Market Outlook: 'Disappointingly Overvalued' by Robert Huebscher (Article)
Opportunities across US and foreign assets classes are unattractive, according to Ben Inker, the head of asset allocation at the Boston-based global money manager Grantham, Mayo, van Otterloo & Co. (GMO). Neither the equity nor fixed income markets hold the potential for investors to earn acceptable inflation-adjusted returns, Inker said.
2011-03-26 How Capture Ratios can Help you Prepare for the Next Downturn by Isbitts of Rob Isbitts
Alpha and Beta tell us a lot, but they also lead us to an even more useful measure of performance and manager acumen, which allows you and your client to better understand the range of possibilities they are bound to experience in different types of market environments. That is what we call “Capture Ratio,” and that special topic is what we’ll focus on here.
2011-03-24 Mixed Fed Messages Reflect Murky Outlook by Team of American Century Investments
Mixed. Unsettled. Not altogether reassuring. Sounding a lot like the current state of the U.S. economy, that was the tone of the policy statement issued March 15 by the open-market operations committee of the U.S. Federal Reserve. It certainly didn’t provide comfort to those fearing that the Fed is in the process of fueling future inflation flames, nor did it offer any encouragement to savers hoping for higher short-term interest rates in the near future. What the statement did accomplish was help support the economic, inflation, and Fed policy outlooks of the fixed income team at ACI.
2011-03-23 In Search of Value by David A. Rosenberg of Gluskin Sheff
Within the space we do favour large-caps, strong balance sheets, high-quality, low P/E stocks, and commodities, especially energy. But among all the worries, we still see this as an overvalued market and we believe in buying low and selling high. We know that many pundits like to use short-term market measures of valuation using year-ahead or trailing earnings or cash flow, which at times seems a little disingenuous for an asset class that is inherently long-term in duration. Be that as it may, perhaps we can shed some light on why patience may still be virtuous here.
2011-03-22 What Investors Should Fear in the Permanent Portfolio by Geoff Considine, Ph.D. (Article)
Over the last decade, the assets of the fund PRPFX have swelled from $50 million to more than $10 billion. The concept underlying that fund, Harry Browne's Permanent Portfolio (PP), has rewarded PRPFX investors with attractive risk-adjusted returns. Those investors, however, may want to rethink their exposure - especially if PRPFX is the core of a retirement-oriented strategy.
2011-03-21 World Near Tipping Point? by Mohamed A. El-Erian of PIMCO
Much of the potency of policy responses has been used up in the successful efforts since 2008 to avoid global depression. The longer the persistence of supply disruptions, the greater the risk of core inflation increasing. Questions about the end of quantitative easing in the U.S. pose a challenge for policymakers.
2011-03-17 Could Gasoline Price Increases Affect the Economic Recovery? by Team of American Century Investments
The recent political uprisings in N. Africa have had a major impact on oil and gas pricing here in the U.S. Increases in energy prices have a negative impact on consumer disposable income and confidence, not just in the U.S but globally. When gasoline prices spiked in July 2008, consumer spending posted its biggest one month decline since September 2001. Higher energy prices also contribute to increases in the overall rate of inflation. These are risk factors in terms of sustaining our current economic recovery, bringing down unemployment, and continuing to drive growth in corporate earnings.
2011-03-14 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Despite last week’s contraction in global equity prices, the activity seemed mainly focused upon energy stocks and the turmoil in Libya and the Middle East. Of course, the world is also shocked by the earthquake tragedy in Japan. More significantly, there seems to be no cohesion of thought about whether these disruptions are ultimately (1) good for shareholders (2) bad for economic recovery. Instead, the debate rages on as to the sustainability of any short market rallies or the viability of real economic recovery in the face of pricing pressure upon commodities, particularly energy.
2011-03-11 The Seven Immutable Laws of Investing by James Montier of GMO
This dearth of assets offering a margin of safety raises a conundrum for the asset allocation professional: what does one do when nothing is cheap? Personally, I’d seek to raise cash. This is obvious not for its uninspiring near-zero yield, but because it acts as dry powder – a store of value to deploy when the opportunity set offered by Mr. Market becomes more appealing. And this is likely, as long as the emotional pendulum of investors oscillates between the depths of despair and irrational exuberance as it always has done. Of course, the timing of these swings remains as nebulous as ever.
2011-03-10 Turmoil in the Middle East: Should It Have Been Predicted? by Team of American Century Investments
The turmoil began, when a young Tunisian college graduate immolated himself on December 17 after being harassed by police as he attempted to sell fruit on the street. Some claim the vendor, Mohamed Bouazizi, did not have the money needed to bribe police officials to continue peddling and earn a living. He died on January 4, sparking deadly demonstrations and riots throughout Tunisia (now called the Jasmine Revolution) in protest of social and political issues in the country. And just 10 days later, on January 14, President Zine El Abidine Ben Ali was forced to step down after 23 years.
2011-03-07 Toryism, Socialism and Housing Reform: Real and Imagined by Christopher Whalen of Institutional Risk Analyst
This commentary is background for the presentation entitled "GSEs: The Future Role of Government Sponsored Enterprises in the US," at the Global Association of Risk Professionals event on Tuesday, March 8, 2011, in New York. The Obama Administration recently advanced some proposals to reform several government agencies that control the market for housing. Treasury/HUD plan is really a menu of possible options, eliminating what would not work and making it clear that change will happen slowly, if at all.
2011-03-07 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
The case for gold and energy-related price spikes is rooted, in part, by good intentions hedging against dollar fluctuations, inflation risk, and political discord. But unlike a level of rational speculation one might expect to see, one has to wonder whether the market’s players are overdoing their hand just a bit. Simply, the world of commodities gambling has been turned into a shootout. While oil production and distribution (as with gold) has been spiking over the last 3 years, real demand has only turned up modestly.
2011-03-03 The Debate Over Spending and Taxes Kicks into High Gear by Team of American Century Investments
What impact might President Obama’s recently submitted 2012 federal budget have on future federal budgets? Using historical data as our guide, we’ve forecast how it could play out through 2021.
2011-03-01 The Absolute Return Letter by Niels C. Jensen of Absolute Return Partners
Two remarkable events unfolded during the month of February. One cleared the front pages all over the world. The other one barely got a mention - outside of its home country that is. Both have the ability to derail the economic recovery currently unfolding. The first one is not surprisingly the uprising in the Middle East and North Africa. The other one is perhaps less obvious; we are referring to the Irish elections. We take a closer look at both of those events and what the implications may be for financial markets.
2011-03-01 The 10% Problem by Nathan Rowader of Forward Management
Many investors continue to expect 10% returns — but these days, are doing well if they earn 5%. They need to understand why major shifts in the global investment climate are challenging them to reset return expectations and reboot their plans. After six decades of double-digit average U.S. stock market returns, many American investors may have come to expect that they will earn similar returns going forward. And why wouldn’t they? From 1948 to 1978, for example, the U.S. stock market generated an average annualized total return of 10.7%.
2011-02-24 January’s Employment Situation Report Generates More Questions than Answers by Team of American Century Investments
The conflicting trends in the January Employment Situation report has forced all labor market observers to wait for February’s report in hopes of discerning some clearer trends. Generally speaking, the underlying trends are positive, as we’ve shown using the JOLTS data. On the other hand, things are not nearly as strong as the .8 percentage point drop in the official unemployment rate over the past two months would suggest. And that rate will likely rise again in the short term before it begins a long-term trend back to levels consistent with full employment and a healthy economy.
2011-02-23 Asian Emerging Markets Will Grow on You by Peter Nielsen and Bryce Fegley of Saturna Capital
A year has passed since Saturna put staff on the ground in the heart of Kuala Lumpur, Malaysia, at the offices of our subsidiary, Saturna Sdn. Bhd. As expected, we have gained valuable insight into the emerging markets of Asia. We find the key to unlocking the opportunities these markets have to offer is an understanding of the intersection of market structure, demographics, economic growth, and asset allocation. Our analysis of trends in these four areas reveals an economic environment with favorable prospects for long-term growth.
2011-02-22 Toward an Understanding of Risk - Part 2 by Robert Huebscher (Article)
How should clients think about risk in their portfolios? Advisor Perspectives put that question to a cross-section of prominent advisors and academics. Their answers encompassed diverse opinions and underscored how crucial that question is to the investment process. In part one of this series, which appeared last week, we heard from seven practitioners in the financial planning community. This week, we hear from seven well-known academics, including two Nobel Prize winners.
2011-02-22 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
I believe the markets are extended and at risk of consolidation. If one is compelled to invest, I would urge caution, patience, and dollar-cost-averaging rather than an “all-in” philosophy at this time. The big picture for financial securities is long-term positive but short-term precarious.
2011-02-17 Responding to the Stubbornly Steep U.S. Treasury Yield Curve by Team of American Century Investments
Disciplined, active investment managers are constantly on the lookout for capital market extremes, which can provide value-adding opportunities for investors. One such market extreme has been developing in the U.S. Treasury market for the past three years, reaching historic levels in 2010 and earlier this year. We’re talking about the very wide, stubbornly persistent gap between short- and longer-maturity U.S. Treasury yields.
2011-02-15 Toward an Understanding of Risk by Robert Huebscher (Article)
How should clients think about risk in their portfolios? Advisor Perspectives put that question to a cross-section of prominent advisors and academics. Their answers encompassed diverse opinions and underscored how crucial that question is to the investment process.
2011-02-15 Assessing New Tools to Protect Against Tail-Risk Events by Jerry Miccolis (Article)
Protecting against sudden, severe market drops is as crucial as it is difficult. A plethora of approaches to this problem have been brought to market in last few years, and to evaluate them my firm developed a set of rigorous criteria. These criteria led us to a solution that works for us and for our clients.
2011-02-15 David Laibson on the Hidden Challenges of Aging Clients by Dan Richards (Article)
In this interview, Harvard economist David Laibson discusses his research into the challenges of helping elderly clients with their financial planning. He also discusses how to overcome the procrastination and laziness that often result in inferior investment decisions. This is a transcript of the interview.
2011-02-11 Yelling Fire in a Crowded ‘Muni’ Theatre by Andrew Clinton of Clinton Investment Management
Municipalities have the unique power to raise taxes and service fees, while cutting non-essential services, in order to create revenues sufficient to pay debt holders. There are over 50,000 individual municipalities across the country. Over the course of decades, there have been very few instances of default. The economy's improvement should bolster state and local finances now and in the future. I firmly believe investors seeking safety of principle and attractive tax-free cash flow should look to capitalize on the current market uncertainty as they are being well compensated to do so.
2011-02-10 The Housing Market Remains a Weak Link in the Current Recovery by Team of American Century Investments
Recent data on single family home selling prices for the 20 largest metropolitan areas in the U.S. indicate that prices in most markets continue to decline. The monthly decline for the Case-Shiller Home Price Index was -0.5% in November, which marks the 5th consecutive monthly decline. So while other measures of our economy such as GDP growth (3.2% annualized increase for the fourth quarter of last year) or corporate profit growth continue to show solid progress, home prices—which are important in affecting consumer confidence and spending—continue to exhibit vestiges of deflation.
2011-02-08 Optimizing Your Fixed Income Allocation by Geoff Considine, Ph.D. (Article)
Here's a little-known fact: The traditional 60/40 portfolio, when using the aggregate-bond index for its fixed-income allocation, has a 99% correlation to the returns of the S&P 500. One way to overcome the limited diversification value offered by the aggregate index is to use a risk-parity approach. In this article, I explore the concept of risk parity in asset allocation and how it provides value for portfolio management.
2011-02-04 Portfolio Commentary : Fourth Quarter, 2010 by Jay Compson of Absolute Investment Advisors
For our 4Q commentary we have decided to alter our approach and provide direct insight into our managers’ thoughts by providing portions of their commentaries in a series of independent “short stories.” Collectively they represent many of the thoughts that we have utilized for writing our quarterly commentaries, but we feel the current environment offers a unique time to hear things “directly from the horse’s mouth.”
2011-02-03 Deconstructing the Current Inflation Conundrum by Team of American Century Investments
As the old saying goes: “The best time to buy flood insurance is when the river is still running low.” We suggest not waiting until inflation pressures increase further before making sure you have some inflation insurance in your portfolio.
2011-02-01 Fourth Quarter Letter by Team of Grey Owl Capital Management
In spite of Bernanke’s objective to put a floor on asset prices, including equities, we remain conservatively positioned. Equity and credit markets appear overvalued. In addition, with the U.S. and most developed-market economies significantly more leveraged than in the last 50 years, economic growth will likely be more volatile. Further, many potential exogenous forces could negatively influence public markets: over-leveraged municipalities, the PIIGS, and continued issues in the US housing market to name a few. Finally, there is no evidence that monetary policy can create real growth.
2011-01-26 World Bank Says Developing Countries Driving Global Growth by Team of American Century Investments
During the recent Great Recession, developing countries such as China and India played a key role in sustaining global economic growth, while developed economies struggled to cope with issues such as the subprime market meltdown, sovereign debt issues, and soaring unemployment numbers. In the coming years, developing nations will continue to play an increasingly important role in driving the global economy.
2011-01-26 Pavlov’s Bulls by Jeremy Grantham of GMO
About 100 years ago, the Russian physiologist Ivan Pavlov noticed that when the feeding bell was rung, his dogs would salivate before they saw the actual food. They had been “conditioned.” And so it was with “The Great Stimulus” of 2008-09.
2011-01-25 Should Advisors Care about Short-Term Volatility? by James Colon, John Gambla and Rob Guttschow (Article)
How can advisors construct portfolios that meet their clients' risk preferences across economic environments? You may be surprised to learn that tactical asset allocation has an important role to play.
2011-01-25 Fourth Quarter 2010 Market Review & Outlook by Steven Roge of R.W. Roge
Our outlook for 2011 remains cautious, as we were last year. We will continue with most of our 2010 strategies for 2011, with the exception of bonds and municipal bonds which may present some difficulty going forward. We have already lowered our allocation to bonds in the third quarter, lowered our bond duration, and are currently lowering these variables even further, especially in the municipal bond area.
2011-01-24 Weapons of Mass Poverty by Mark Elliott of Elliott Asset Management
Modern financial management dogmas may be fundamentally, terminally, and irreparably flawed – and may be key ingredients in modern asset bubbles. I believe what could be the most serious catastrophe to face retirees and other investors since The Great Depression may be currently underway and, as in past recent financial catastrophes, most investors and financial “professionals” will fail to act – despite what appears to be clear writing on the wall.
2011-01-18 Letters to the Editor by Various (Article)
A number of readers respond to Nancy Opiela's article, Tactical Asset Allocation and Market Timing: What's the Difference?, and one reader responds to Michael Lewitt's article, The Wages of Growth. Both articles appeared last week.
2011-01-18 Bubble-Liscious by Cliff W. Draughn of Excelsia Investment Advisors
In the world of investing there is no substitute for taking action. Therefore, as your advisor, I seek to understand our bias and attempt to make rational and prudent decisions. Savvy investors understand the risks inherent in their assumptions and adopt a more businesslike approach to investing by reducing and hedging risk. Investors are typically surprised when facing a loss, and the psychological power of losses far outweighs the power of gains. Therefore remember the critical rule of compounding: Don’t lose money
2011-01-11 Tactical Asset Allocation and Market Timing: What's the Difference? by Nancy Opiela (Article)
Why is it that the industry dismisses significant changes to portfolio allocations as "market timing" transactions but embraces the subtler "tactical shifts" many advisors are making in the current, transitional market? As advisors debate the nuances of that question, the more relevant question may be: How would you respond if a client asked you to explain the difference between market timing and tactical asset allocation?
2011-01-11 Inflation a Growing Concern for Emerging Market Countries by Team of American Century Investments
As a group, emerging market countries have rebounded from the Great Recession in much better shape than developed economies. And driven by higher commodity prices, robust domestic consumption, and a growing middle class with buying power, the emerging market asset class appears poised for more growth heading into 2011. While investors have been focusing on the European debt crisis, however, many emerging market economies have been getting a little overheated from the rapid pace of growth, and inflationary fears are quietly becoming a daily reality.
2011-01-09 2011 Outlook: U.S. Equities Cyclical and Seasonal Trends (Part 2) by Martin J. Pring of Pring Turner Capital Group
Part II addresses the cyclical and seasonal factors that will be in force during 2011. An analysis of the seasonal aspects will give us a better feel for the expected pattern of price behavior as the year unfolds. Since we do not know when the peak will actually materialize well discuss some indicators that should be monitored from the point of view of confirming when they have taken place. First though, lets take a closer look at some of the seasonal/cyclical patterns and how they might affect 2011.
2011-01-04 Your First Resolution for 2011: A Better Alternative to Face-to-Face Meetings by Dan Richards (Article)
In 2011 you need to rethink your approach to client meetings. For larger clients who you meet with regularly, you should consider replacing some of those face-to-face meetings with structured phone meetings.
2011-01-04 Improving on Buy and Hold: Update December 31, 2010 by George Vrba, P.E. (Article)
I have updated the model described in my article Improving on Buy and Hold: Asset Allocation using Economic Indicators. The ECRI U.S. Weekly Leading Index and its annualized growth rate, published on December 31, 2010, together with the most recent values of the other indicators used, have been incorporated in the model.
2011-01-04 2011 Outlook: U.S. Equities Secular Trend (Part 1) by Martin J. Pring of Pring Turner Capital Group
In December 2009 we published an article entitled Are You Prepared for Another Lost Decade that argued the U.S. stock market has been in a secular bear market since 2000. Our objective now is to bring you up- to-date on our current views. Lets begin by outlining the characteristics of secular trends and recapping the case for a secular bear. In Part II we will examine the cyclical and seasonal outlook for 2011 and how this might dovetail into the secular picture.
2011-01-02 Hangovers by Isbitts of Emerald Asset Advisors
The overhang of US unemployment, long-term inflation, and risks of temporary overheating in the Commodity and Emerging markets is a wicked one, so the best posture for 2011, and most years for that matter, is to be invested, but with a net to catch you when you fall. However, the longer out one looks, and the wider the breadth of investment themes one is permitted to consider, the more the truly dynamic secular investment opportunities become visible. The ability and willingness to see the "forest" over the ever-present "trees" is the best advice I can give you.
2010-12-31 Heads you lose, tails you lose. by Scotty George of du Pasquier Asset Management
Despite 2 year gains in financial valuations, most major global bourses remain in a downtrend as we enter 2011. Year-end improvements in market performance have not erased the erosive cycle trend decline begun in late 2006. Some argue that the past two years represented the regeneration of a new bull cycle in financial markets. However, empirical macro data, as well as a longer term perspective about the duration of bull markets, indicates that last year’s bull was simply a second intermediate upleg within a much longer bear market. No turnaround in the secular trend just yet.
2010-12-28 The Ten Most-Read Articles in 2010 by Robert Huebscher (Article)
As is our custom, we conclude the year by reflecting on the 10 most-read articles over the past 12 months. In decreasing order, based on the number of unique readers, those are...
2010-12-28 The Ten Best Articles You Probably Missed by Robert Huebscher (Article)
Great articles don't always get the readership they deserve. Here are 10 articles that you might have missed, but we believe merit reading.
2010-12-27 Lessons by Jeffrey Saut of Raymond James Equity Research
Lessons, I’ve learned a few over my 40 years in this business: A fool and his money are soon parted. There is no free lunch. Don’t put all your eggs in one basket. Spend interest, never principal. You cannot eat relative performance. Don’t be afraid to take a loss. Watch out for fads. Act. Take the long view. Remember the value of common sense.
2010-12-23 A Smoother Ride for Target-date Funds by Rob Arnott of Research Affiliates
Asset allocation is a critical step in the asset management process. No matter how diversified the portfolio, risk and reward aren’t linear. But target-date funds tacitly assume they are! Just because you are willing to take more risk doesn’t preordain higher returns, even over decades-long stretches. Rather, managing risk should be done either explicitly with active asset allocation of the glide path or implicitly through the natural contra-trading embedded in the Fundamental Index approach.
2010-12-22 Understanding Risk Parity by Brian Hurst, Bryan W. Johnson, and Yao Hua Ooi of AQR Capital Management
The outperformance of Risk Parity strategies during the recent credit crisis has confirmed the benefits of a truly diversified portfolio. Traditional diversification focuses on dollar allocation; but because equities have disproportionate risk, a traditional portfolio’s overall risk is often dominated by its equity portion. Risk Parity diversification focuses on risk allocation. We find that by making significant investments in non-equity asset classes, investors can achieve true diversification – and expect more consistent performance across the spectrum of potential economic environments.
2010-12-21 Debunking Ken Fisher by Robert Huebscher (Article)
In his latest book, Debunkery, Ken Fisher achieves his goal of dispelling many common investment myths and, in doing so, offers his philosophy on how individuals should manage their money. While most of the advice he offers is unequivocally correct, he also makes egregious errors on some serious matters.
2010-12-21 Demographics and Sovereign Debt by Team of American Century Investments
Events surrounding what the press calls the European Sovereign Debt Crisis have been in the news for much of the past year. Unfortunately, this label masks an underlying major contributing factor: demographics. The combination of long life expectancies, relatively early retirement ages, generous retirement benefits and a shrinking base of workers to support the growing proportion of retirees in the population will put tremendous burdens on the budgets of these countries.
2010-12-21 How Much Smid-Cap Exposure is Best? by Jon Quigley, CFA and John Bright, CFA (Article)
Small- to mid-cap stocks have outperformed since 1999 and have attracted considerable attention. We offer a few things to consider in determining how much exposure to smid-cap stocks you should maintain.
2010-12-17 Staying the Course No Longer Works! by Harold Evensky of Evensky & Katz
'Staying The Course No Longer Works,' and 'Modern Portfolio Theory is Dead,' have been popular headlines with the financial media. It sure sounds good; after all, why would any investor willingly subject their portfolio to the massive losses of 2008 and early 2009? So does that mean that long term strategic investing is out the window? One of our core beliefs is that to earn market returns an investor needs to be in the market.
2010-12-14 Five 2010 Tax Tips for a Time of Uncertainty by Glenn Frank (Article)
While the posturing and political grandstanding continues in Washington over the fate of the Bush tax cuts, tax season is fast approaching. With the time for long-term planning long gone, here are five questions to ask clients that could prompt some smart tax moves in the closing weeks of 2010.
2010-12-14 Encouraging Signs of Life from the U.S. Consumer by Team of American Century Investments
Early data from the start of the 2010 holiday shopping season indicate this could shape up to be the best year for consumer spending (and retailers) since 2005. Some have attributed this simply to consumer psychology based on pent-up demand and frustration after nearly three years of relative austerity. However, there are other indicators suggesting that consumer finances are at least on the mend.
2010-12-10 Why The Market Multiple Will Be Higher In 2011 by Jeff Miller of New Arc Investments
We are currently at the unusual tipping point. The emerging consensus about improving economic prospects is having two effects: higher long-term bond yields and more confidence in earnings. The implication is that stocks will get a higher multiple in 2011 as confidence improves. This is not merely speculation, but a conclusion based upon the data cited.
2010-12-07 Splitting Hairs by Scotty George of du Pasquier Asset Management
Federal debt, personal debt, political gridlock and global currency imbalances are systemic problems. It was difficult and time-consuming getting into these predicaments, and will be equally as difficult getting out. I am seeing indications in my quantitative database that we are in the early stages of cyclic deterioration, a period during which the rate of capital gains probabilities declines and market valuations perform indiscriminately in a non-correlated way. We should be prepared for the opposite of what we expect or want.
2010-12-07 'Shadow' NAVs for Money Funds Available by Team of American Century Investments
In January 2011, so-called "shadow" net asset values (NAVs) for money market funds (MMFs) will become available publicly for the first time. They will be posted by the SEC on their Web site 60 days after they are filed monthly with the commission by fund management companies, including American Century Investments(R). As one of the investment industry's MMF pioneers, American Century Investments supports the new regulations and manages five MMFs.
2010-12-06 The Dangers of Rebalancing by Michael Edesess (Article)
Every portfolio should be rebalanced to its targeted asset allocation, we are taught. Indeed, there may be no other precept as routinely and studiously practiced among financial advisors. But does rebalancing either increase expected return or reduce risk? If so, why? The answers to those questions reveal that it may be prudent to rebalance, but not for the reasons you think.
2010-12-04 Reframing A Case For High Yield Bonds by Tom Fahey of Loomis Sayles
Our contention is that high yield bonds are likely to continue to be a respectable store of value. We base this on their valuation profile and fixed income characteristics, which tend to stand out in the midst of a protracted economic recovery and ongoing deleveraging process that could have significant implications for economic growth and yield potential.
2010-12-03 The Dirty Dozen by Niels C. Jensen of Absolute Return Partners
In the following I list a number of risk factors which I believe investors should give serious consideration, but I do not for one second pretend for that list to be exhaustive. Neither should you read anything into the order of which those risk factors are listed. If you want my assessment of how to rank the various factors, you need to take a look at the risk scatter chart at the end of the letter.
2010-11-30 Black Gold, Texas Tea by Robert Huebscher (Article)
The flow of money into gold-related funds is, at least in part, driven by good intentions - hedging against dollar debasement, inflation, and systemic risk. As investors drive the price of gold to record levels, though, they are overlooking an equally compelling commodity hedge, one that the Beverly Hillbillies once dubbed 'black gold, Texas tea' - oil, that is.
2010-11-29 A Time to Invest in Africa by Nile Capital Management of Nile Capital Management
In this report, I will summarize my answer to the often-asked question: “Why is this a good time for investors to focus on Africa?” I also will explain why the best way to participate in African markets and manage their risks is through an actively managed fund that offers “feet-on-the-ground” expertise in Africa.
2010-11-23 Conflicted Agents: Credit Ratings, Risk Management and Dodd-Frank by Christopher Whalen of Institutional Risk Analyst
Implementing Dodd-Frank levels the playing field for all of the producers of ratings. Banks and funds should start to create, aggregate and share two metrics - probability of default and loss given default - for all of the exposures which they touch. In creating these metrics, these institutions must both do their own work and will be able to reference any one of hundreds of external ratings and valuation sources.
2010-11-23 The Glad Game by Rob Arnott of Research Affiliates
In a world of low-single digit yields, a conventional 60/40 asset mix will get pension funds just over halfway toward an expected 8% return. But investors should not wring their hands: there are ways of achieving their return expectations.
2010-11-09 New Strategies in Alternative Investments by Robert Huebscher (Article)
Alternative investments, broadly speaking, and hedge funds, more specifically, have performed as intended over the last 20 years, modestly increasing returns and significantly reducing risk when added to a traditional stock-bond portfolio. Selecting the appropriate vehicle is the challenge, and that task has been made easier by the introduction of new exchange-traded strategies.
2010-11-09 How Modern Is Your Portfolio Theory? by Direxion Funds (Article)
After 58 Years, is there Another Way to Conquer the Efficient Frontier? In the past, active or "tactical" investment management referred to jumping in and out of stocks and bonds - market timing. With the introduction of sophisticated funds that help the masses harness the power of institutional managers and alternative asset classes and strategies, today, tactical management may help to renovate your portfolios - and help you retain and attract assets.
2010-11-09 Gridlock, Inertia, or Hope? by Scotty George of du Pasquier Asset Management
'How will the election results impact upon the markets and my portfolio during the next year?' Scotty George evaluates the data.
2010-11-09 Latest GDP Growth Report Points to Continued Economic Weakness by Team of American Century Investments
After one quarter of robust gross domestic product (GDP) growth late last year - characteristic of an economy snapping out of a recession - the trend that has followed has been very uncharacteristic, with a substantial downward shift in GDP growth. American Century Investments investigates quarterly shifts in consumer spending and investing and other factors that effect GDP.
2010-11-09 RCM's Global Strategic Outlook: Fourth Quarter 2010 by Andreas Utermann of RCM
Analyzing various leading indicators, there is hardly any hint of a recession. This is not to say that there is no risk of a recession happening. A continued weak labor market is weighing on household consumption in industrialized economies. The housing market in the U.S. is showing signs of weakness. There is a risk of a policy failure in emerging markets, especially of China overdoing policy tightening. Fiscal policy tightening in the West may actually turn out to be too strong. In sum, we think that structural headwinds and tailwinds could balance each other out.
2010-11-08 The Hail Mary Pass by David Baccile of Sextant Investment Advisors
With the announcement of $600 bn in new QE this week, Fed quarterback Bernanke has dropped back deep into the pocket and launched a last ditch Hail Mary pass with the hopes of stimulating growth to bring down persistently high unemployment. There is one major problem this view. The magnitude of the debt overhang is far greater now than at any other time in history, making the relatively trivial QE1, QE2, QE3, etc. ultimately doomed to failure. For those with a long-term approach to asset allocation, chasing a hot asset class or reacting to a 'clueless' Fed policy is not an option.
2010-11-03 Four Rather Sick Patients by Niels C. Jensen of Absolute Return Partners
The world is in an unprecedented situation in which all four major trading currencies (EUR, GBP, JPY and USD) face serious challenges. Not all four major currencies, however, can fall at the same time. Currencies are unique in the sense that they are relative as opposed to absolute trading objects. You don't just buy dollars. You buy dollars against some other currency. The scaremongers may have their day in the sun, but ultimately common sense will prevail and currency traders will have to go back to focus on housing starts again.
2010-11-02 'Bubble' Bashing Does Not Imply a Risk-Free Bond Outlook by Team of American Century Investments
The present bond environment still doesn't fit previous 'bubble' profiles. We are, however, in a period of historically low interest rates and Treasury bond yields, with more room to rise than fall. Future bond price declines are a realistic expectation, but these declines are unlikely to rival other post-bubble, extended price plunges. Bonds continue to provide a cushion for equity exposure in diversified portfolios and a source of steady income for those who need it.
2010-10-30 Schwab Market Perspective: So Now What? by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab
The Federal Reserve and upcoming elections are in sharp focus and results and actions in these two areas could determine whether the momentum seen since September can continue. Earnings season was better than expected and the market reacted as such. But confidence remains a major issue, with brewing mortgage-related problems and continued uncertainty around tax policy causing consternation. Debt remains a major issue that's just now being addressed and protectionism still threatens economic expansion. China remains a bright spot for global growth.
2010-10-29 Asset Allocation in an Uncertain Economy by Robert Huebscher (Article)
Advisors should not bet on whether the recession will be L-, V-, or W-shaped. Instead, Ron Albahary said they should use strategic asset allocation and overweight or underweight those asset classes that have historically done well at certain points in the economic cycle. Albahary is the CIO of Convergent Wealth Advisors, a Washington, DC-based wealth manager.
2010-10-29 Asset Allocation: Fall 2010 by Tony and Rob Boeckh of Boeckh Investment Letter
Excess liquidity will continue to act as a tailwind for equities, commodities and non-dollar currencies well into 2011. Deflation will dominate in the short term; the inflationary threat is probably further away than most investors expect. Gold is expensive relative to the inflationary outlook. Fixed income markets are heavily influenced by government intervention. While it is likely that continued intervention will succeed in depressing bond yields below market levels, even a modest increase in inflationary expectations would undermine these actions. We recommend shortening duration.
2010-10-26 An Exceptional Resource for Asset Allocation by Michael Edesess (Article)
Roger C. Gibson's fine and exemplary book, Asset Allocation: Balancing Financial Risk, Fourth Edition, shows that character and conscience-based counseling still exist, even in the financial profession. It is still possible for advisors to look out for their clients' long-term interests.
2010-10-26 Improving on Buy and Hold: Buy by Georg Vrba, P.E. (Article)
Georg Vrba updated the model described in his article, Improving on Buy and Hold: Asset Allocation using Economic Indicators. The ECRI U.S. Weekly Leading Index and its annualized growth rate published on October 22, 2010, together with the most recent values of the other indicators used, have been incorporated and generated a buy signal.
2010-10-26 Emerging Market Uprising: What it Means for Investors by George Magnus of Boeckh Investment Letter
This special report by George Magnus, a senior economic advisor at UBS Investment Bank, takes a look at some key economic and investment issues regarding emerging markets and China. Magnus, who has just completed a book on emerging markets, argues that while EMs have boomed in recent years, there are a number of unresolved problems which suggest the past may not repeat, and investors must be careful.
2010-10-26 Hope is Not a Strategy by John West of Research Affiliates
Most pension funds and 401(k) calculators assume total returns in the 7-8 percent range. Is this assumption realistic, however, with a mature economy saddled with unprecedented debt levels and an aging workforce? This commentary examines retirement plan assumptions and calculates that we can reach this return level only if we assume top quartile results for stocks, bonds, and alternatives over the next 10 years. That's like expecting a decade of sunshine in the markets.
2010-10-26 Have the Financial Markets and the Real Economy Become Disconnected? by Team of American Century Investments
There are solid and logical reasons why equity markets have been up substantially since the start of the third quarter. The U.S. economy remains in a fragile situation and the global financial system is far from healthy. Nonetheless, progress is being made and, barring any new crises or setbacks, the case for the market's recent rise can be justified. What's different this time is that two sectors that have traditionally led economic recoveries in the U.S. - consumer spending and real estate - will remain on the sidelines for the foreseeable future.
2010-10-19 The World According to TARP by Team of American Century Investments
Taken together, initiatives enacted under the Troubled Asset Relief Program will provide up to $45.6 billion in home mortgage foreclosure relief. Proponents of these programs argue that if they finally stabilize the housing market and pricing, all homeowners will benefit. Opponents believe they create a huge problem of moral hazard in the residential housing market. They also point out that stabilizing home values above what may be a lower floor based on market supply may preclude other individuals from being able to enter the market and purchase a home they can afford.
2010-10-19 Letters to the Editor by Various (Article)
In our letters to the Editor, two readers respond to our recent article, The Misguided Promise of 529 Plans, citing the advantages of those plans.
2010-10-12 The Great Depression, the Great Recession and Lessons from 1937-1938 by Team of American Century Investments
While much shorter and less severe than the Great Depression, the recession of 1937-1938 added approximately three years to the recovery period. It is extremely unlikely that we will see a repeat of this type of recession. However, depending on the outcome of elections in November, there could be substantial shift in the fiscal and taxation policies of the federal government away from Keynesianism and toward fiscal discipline and supply side economics.
2010-10-05 The Misguided Promise of 529 Plans by Robert Huebscher (Article)
Along with the overall market, 529 plans suffered disastrous returns in 2008, leaving many families with insufficient funds to pay their tuition costs. The real problem, though, is not with the past performance of 529s. A misguided promise underlies the vast majority of 529 plans - that their heavy allocation to equities will provide acceptable risk-adjusted returns for the time horizons over which most parents invest.
2010-10-05 Improving on Buy and Hold: Don’t Buy Yet by Georg Vrba, P.E. (Article)
According to Georg Vrba, all conditions for a type A buy signal have not as yet been satisfied. Exactly the same conditions exist now as those of 5/6/08. The past is not an indicator of the future, but it would not have been a good decision to enter the market in May 2008.
2010-10-05 Challenges and Solutions for Income-Seeking Investors by Team of American Century Investments
The Fed's prediction that it will keep its short-term interest rate target at 0-0.25 percent for 'an extended period' continues to affect the near-term game plan for risk-averse investors and savers. A period of potentially heightened uncertainty and low absolute returns means that maximizing risk-adjusted returns is crucial to investment success over time. An optimized mix of fixed income holdings with a variety of different risk levels can add value to investor portfolios in this low-yield and low interest rate environment.
2010-10-05 Commentary & Market Outlook by Jeff Spitzmiller, Jim Worden and Alan Chauhan of Iron Point Capital Management
While recent economic numbers have been low, they continue to point to growth - albeit slow growth - over the next few quarters. With the Fed poised to continue engaging in quantitative easing and more stimulus programs being promoted in Congress to help small businesses and improve payrolls, it is clear that all monetary and fiscal tools will be used to keep the economy moving on an upward trajectory.
2010-10-01 Insolvency Too by Niels C. Jensen, Nick Rees and Patricia Ward of Absolute Return Partners
On 1st January 2013, Solvency II, a new directive governing capital adequacy rules in the European insurance and life insurance industry, will come into effect. Going forward, European insurers will have to be able to pass a 1-in-200 years' event stress test, which has been designed to give the industry enough of a cushion to withstand even the most severe of bear markets without being forced to sell. Risky asset classes such as equities, commodities and other alternative investments will be assigned much higher reserve requirements than less risky asset classes such as bonds.
2010-09-28 A Better Alternative - Natural Resource Equities by RS Investments (Article)
Investors look to the commodity market to provide three primary benefits: portfolio diversification, inflation protection, and equity-like returns. However, empirical data shows that over the last decade, shifts in underlying fundamentals have undermined the role which commodities are expected to play in a diversified portfolio, particularly relative to natural resource equities. RS Investments reviews the return streams generated by both commodities and natural resource equities in the context of the benefits expected from each investment option. We thank them for their sponsorship.
2010-09-28 Unraveling the 12b-1 Debate by Robert Huebscher (Article)
The SEC has proposed sweeping changes to the way commission-based advisors will be compensated for the services they provide. Those changes will rename and modify the 12b-1 fees that many mutual funds now charge. To understand their impact, we spoke with Avi Nachmany of NY-based Strategic Insight, whose clients include the largest mutual funds.
2010-09-28 Improving on Buy and Hold: The Updated Signals by Georg Vrba, P.E. (Article)
At the request of many readers, Georg Vrba updated the model described in his article Improving on Buy and Hold: Asset Allocation using Economic Indicators. The Economic Cycle Research Institute's (ECRI) U.S. Weekly Leading Index (WLI) and the index's annualized growth rate published on September 24, 2010, together with the most recent values of the other indicators he used, have been incorporated in the model.
2010-09-27 Are 401(K) Investors Fighting Yesterday's War? by Rob Arnott of Research Affiliates
It is time for investors and their advisors to look forward, not backward, in their 401(k) investment planning. Inflation is the biggest single enemy to long-term investors. A portfolio of real return assets balanced with a stock- and bond-heavy 401(k) fund menu is the best way to build a portfolio for an uncertain future. To do this, one needs to include inflation hedges before inflation strikes and when they are least costly.
2010-09-27 Is Deflation Still a Risk? by Team of American Century Investments
Last Friday's Consumer Price Index report found that prices rose 1.1 percent on an annual unadjusted basis in August. Because the U.S. Federal Reserve Open Market Committee noted in last week's statement that inflation is currently at levels somewhat below what it judges to be consistent with long-run price stability, some have suggested that the central bank is still concerned about deflationary pressures in the economy. Whatever happens, one thing is clear: As long as the residential housing crisis drags on without resolution, the risk of deflation should remain a concern for investors.
2010-09-23 Was it really a Lost Decade? by Kevin D. Mahn of Hennion & Walsh
Many have claimed that the decade of the 2000s was a lost decade for stock investors. When you look at the returns of the S&P 500 index over the decade, it is hard to challenge the validity of this claim. For the period of December 31, 1999 through December 31, 2009, the S&P 500 index had an annualized simple price return of -2.72 percent. A look at returns in categories beyond U.S. large-caps, however, including emerging markets, bonds, and U.S. mid-caps and small-caps, reveals that other types of investments actually had positive returns.
2010-09-21 American Century Investments by Team of American Century Investments
Among the first items the U.S. Congress is likely to deal with after the midterm election are the federal budget deficit and taxes. The accepted wisdom is that markets prefer the more incremental change based on political compromise brought by divided governments. However, median returns data looking back 60 years do not provide any strong support for this. Indeed, if a divided government leads to intransigence and gridlock, then it will take another two years and the next general election before key issues can be addressed.
2010-09-21 The Recession is Over! But No Recovery in Housing by David A. Rosenberg of Gluskin Sheff
Well, the National Bureau of Economic Research made it official yesterday: The recession ended in mid-2009. The equity market rejoiced, which itself is amusing since the stock market is supposedly a discounting mechanism, but it goes to show that old news sells well. Meanwhile, the National Association of Home Builders housing market index disappointed in September, coming in flat, at 13, instead of inching up a point to 14, as was widely expected. This well below the stimulus-led yearly high of 22 set in May.
2010-09-16 Reality Bites and Models Broke Down by David A. Rosenberg of Gluskin Sheff
Week after week, and month after month, all the data show that households are embarking on a deliberate move to redress their underweight allocations in bonds and overweight allocations in equities. Yet again, the investment company institute numbers showed that last week, bond funds took in a net $5.73 billion inflow while equity funds posed a net redemption of $1.1 billion (on top of a $9.7 billion outflow the week before). Equities have not recorded a positive inflow for one week since early May!
2010-09-16 The Woody Hayes Economy by Team of Applied Finance Group
By preventing additional redistribution policies, the split government that will likely emerge from the November U.S. midterm elections will probably loosen some purse strings to invest, hire and grow. However, we probably will not see any policies that will meaningfully change the overall economic condition or the outlook for equities as an investment. The next two years will thus most likely bring a Woody Hayes economy - 'Three yards and cloud of dust'- meaning we will have some renewed economic activity, but not the sustained, robust growth to be expected coming out of such a long slump.
2010-09-14 A Better Way to Invest in Gold by Geoff Considine, Ph.D. (Article)
In the year since Geoff Considine last wrote about gold, underlying prices have risen 24%, leading to several important questions - including whether his advice of a year ago still holds today. We look closely at how a direct investment in GLD performed as compared to a bond-plus-call-option strategy, and which conditions favor each strategy.
2010-09-14 Latest Bond 'Bubble' Fears are Overblown by Team of American Century Investments
Despite considerable discussion in the financial media about the existence of a bond market bubble, the fixed-income team at American Century Investments finds little evidence to support this claim. Bond bubble proponents base their argument largely on record flows into fixed-income investments, bonds' extended outperformance over stocks, and record low interest rates. However, a confluence of economic headwinds argues for a prolonged period of low interest rates and inflation, while investor demographic and behavioral finance trends also appear to favor further bond inflows.
2010-09-13 And a Partridge in a 'Pair' Tree by Jeffrey Saut of Raymond James Equity Research
We've gone from double-dip to double-drip. While the economy is slowing, a slide back into recession is unlikely. Chances of deflation have also deflated. Meanwhile, last week the Labor Day Indicator sounded the 'all clear' signal when the S&P 500 closed higher over the four days following the holiday. Unless the S&P violates its 50-day moving average of 1085, followed by a break of 1060, the path of least resistance for stocks remains up. Still, investors continue to shun stocks, leaving the equity risk premium exceptionally large.
2010-09-10 Municipal Bond Market August 2010 Q&A by Andrew Clinton of Clinton Investment Management
In their quarterly commentary, Clinton Investment Management answers questions regarding municipal bond market conditions. As the U.S. economy stabilizes, they argue, higher interest rates will likely follow. That is not to say, however, that investors should avoid fixed income, let alone municipal bonds. As an asset class, fixed income, and tax-exempt bonds in particular, have proven to be a stabilizing force in asset allocations during what has arguably been one of the most challenging three-year periods in financial market history.
2010-09-07 Jeffrey Gundlach on Bonds, Stocks and Gold by Robert Huebscher (Article)
DoubeLine's Jeffrey Gundlach recently reduced his position from "overweight" to "small underweight" in Treasury bonds, and cited "divergent behavior across the yield curve." In this interview, he discusses that behavior and the rationale behind his move, as well as his thoughts on other asset classes, including equities and gold.
2010-09-07 The Free Lunch Illustrated by Michael Nairne (Article)
One of the most remarkable discoveries in modern finance is the ability to improve the expected return of a portfolio while simultaneously reducing its risk. In this guest contribution, which advisors can share with clients, Michael Nairne explains that the proverbial "free lunch" does exist, its exploitation requires a focus not only on the returns and volatility of the assets in the portfolio but on the degree of covariance between those assets.
2010-09-02 Beggar Thy Neighbor by Niels C. Jensen, Nick Rees and Patricia Ward of Absolute Return Partners
Austerity hurts domestic economic growth, and all those countries facing harsh austerity programs over the next several years will thus realize that the only way out of the current predicament is through higher exports and/or lower imports. We cannot all export our way out of our problems, however. Somebody will have to do the imports. Lower economic activity will again lead to lower tax revenues for the public sector; it is a very unfortunate and rather vicious spiral which is also very deflationary.
2010-08-31 The Riskiest Pension Assets (and the Implications for Muni Bonds) by Robert Huebscher (Article)
State finances are in trouble, in large part due to unfunded pension liabilities. To assess the depth of those problems, one can look at what is likely the riskiest component of states' pension assets - their exposure to alternative investments and, in particular, to private equity. We assess those risks and look at the larger question of whether unfunded liabilities can trigger municipal defaults.
2010-08-31 Why Mid-Cap? by RidgeWorth Investments (Article)
RidgeWorth Investments has published research detailing six distinct reasons why investors should consider a specific allocation to mid-caps. Specifically, it explores historical performance, evaluates current conditions that favor mid-caps as well as examines how mid-caps have performed during different points in market and economic cycles. Finally, the research looks at the incremental benefit of adding an allocation of up to 40% of mid-cap stocks to a portfolio of solely large and small cap stocks. We thank RidgeWorth Investments for their sponsorship.
2010-08-31 Evaluating Unconstrained Managers by Various (Article)
How can advisors evaluate an unconstrained asset manager, such as John Hussman of the Hussman Fund? In a follow-up to a recent article on research by Roger Ibbotson, we present views from several advisors on the role of returns-based style analysis and whether it can help identify whether managers such as Hussman deliver alpha.
2010-08-31 Merger and Acquisition Activity Rises by Team of American Century Investments
Merger and acquisition activity has jumped dramatically in the past few months. The good news for investors is that increased M&A activity can help sustain the market during a period of economic softness or a slowdown that we may face in the next several quarters. The risk for investors is whether the money spent on M&A activity will be done wisely and with a clear eye on creating shareholder value. If not, that money is probably better spent buying back shares or increasing dividend payouts.
2010-08-24 What Investors Really Want by Robert Huebscher (Article)
Using a mean-variance optimizer to construct a retirement portfolio that sits on the efficient frontier is tantamount to dining on a well-prepared meal that was pureed in a blender, believes Meir Statman, a professor of finance at Santa Clara University. Statman's research focuses on behavioral finance, and how advisors can help investors make smarter decisions.
2010-08-24 Improving on Buy and Hold: Asset Allocation using Economic Indicators by Georg Vrba, P.E. (Article)
Most long-term stock market investors follow a buy-and-hold strategy, one that makes big losses unavoidable when major downturns strike the stock market. This strategy assumes that an investor cannot know when to switch from one asset to another and that if one avoids the bad days of the market, one is also likely to miss the best days. In this guest contribution, Georg Vrba presents a way to resolve this dilemma, based on various economic indicators that provide timely buy and sell signals for the S&P 500 index.
2010-08-19 The Bond Bubble Debate: 'One Rosie' Takes on 'Two Jeremies' by David A. Rosenberg of Gluskin Sheff
What we have on our hands is a powerful demographic appetite for yield at a time when income is under-represented on boomer balance sheets. The two most significant determinants of the trend in long-term bond yields - Fed policy and inflation - continue to flash 'green' at a time when the yield curve is still historically steep and destined to flatten. Finally, the central bank has already assured us that short-term rates will remain at rock-bottom levels for as long as the eye can see. David Rosenberg also comments on growing acceptance of frugality by retailers.
2010-08-18 Ten Ways to Improve The Returns on Your Portfolios by Kendall J. Anderson of Anderson Griggs
On May 25, 2010, Dr. Paul Woolley, former head of the International Monetary Fund's investment and borrowing activities and founder of the UK arm of Grantham, Mayo, van Otterloo, laid out 10 policies that if adopted, could increase annual returns after inflation by 25 percent and long-term returns by at least 50 percent. He addressed his comments to the world's biggest public pension and charitable funds. His 10-point manifesto, however, will work just as well for individuals, offering the same, if not greater, potential return benefits to their portfolios.
2010-08-17 Misconceptions about Risk and Return Uncovered by Geoff Considine, Ph.D. (Article)
Our beliefs about risk and return determine how we construct portfolios and manage risk. Research over the last decade suggests that a number of the ideas on which many investors and advisors rely lead to portfolios that are too highly exposed to market risk. In this article, we review a number of ideas that determine how we select assets and how we determine what to expect from those assets.
2010-08-17 A New Framework for Retirement Income Planning by Manish Malhotra (Article)
In this guest contribution, Manish Malhorta proposes a new framework to solve many problems associated with retirement income planning, one that answers questions investors often ask, such as: "How much retirement income can I have with only a 10% chance of failure?" and "How much do I need to have now to draw $50,000 for 30 years with full certainty?"
2010-08-17 Cerulli Survey Results: New Themes in Advisors’ Portfolio Strategies by Bing Waldert (Article)
New ideas, such as tactical asset allocation and the use of alternatives, have seen some uptake even before the market crisis, particularly within large institutions, but they are receiving increased attention as solutions for risk-averse clients. This article examines some of the evolutions, using data from a Cerulli Associates survey of Advisor Perspectives readers conducted in June and July of 2010.
2010-08-17 Refining Core-Satellite Investing by Ron Surz (Article)
Thanks in large part to the current crisis, investors are showing renewed interest in portfolio construction, and core-satellite investing is regaining popularity. So why the interest in core? It could be for either of two reasons - hedging or completeness - as Ron Surz explains.
2010-08-17 Letters to the Editor: Harold Evensky, et. al. by Various (Article)
Our letters to the Editor include three responses to articles in last week's issue from Harold Evensky of Florida-based Evensky & Katz.
2010-08-17 Economic, Investment and Asset Allocation Overview – July 2010 by Jeff Spitzmiller, Jim Worden and Alan Chauhan of Iron Point Capital Management
A buy-and-hold U.S. stock portfolio alone can't be expected to provide attractive returns over the coming years. Alternative asset classes and certain segments of the stock and bond markets are current areas of focus for Iron Point Capital Management. The firm currently favors high-yield bonds, floating rate securities, alternative investments and emerging market debt and equity, amongst other investments that can provide excess return, risk reduction or the ability to capitalize on long-term trends.
2010-08-16 Consumers, Credit Cards and Deleveraging by Team of American Century Investments
The August 6 report from the Federal Reserve on consumer credit and indebtedness depicts consumers and households that are still in the throes of a difficult deleveraging process. In the longer term, this is exactly what is needed to help put the U.S. economy back on a solid foundation for recovery and renewed growth. Because deleveraging involves two steps, however - first, avoiding spending based on new borrowing, and, second, directing current discretionary income toward debt repayment rather than consumption - it limits how much consumers can contribute to the recovery.
2010-08-12 Asset Allocation: Volatility, Correlations and Returns in the New Environment by Tom and Rob Boeckh of Boeckh Investment Letter
Slow growth, high unemployment and weak inflation will keep interest rates very low in the short term. Rising government debt levels and heavy reliance on monetary ease from the Federal Reserve, however, suggest rising risks of price inflation later on, possibly much later. The current period of low long-term interest rates should thus be thought of as an extended base-building period for higher rates down the line. Investors should maintain a diversified portfolio, shifting equity exposure to defensive, non-cyclical sectors, and build positions in cash and safe sovereign debt.
2010-08-10 When Active Management Matters by Kenneth R. Solow, CFP and Michael E. Kitces, MSFS, MTAX, CFP (Article)
Financial planners have eagerly awaited any research that could finally, definitively prove - or disprove - the pesky notion that active management is effective. Though no one has yet risen to that challenge, past academic studies have been improperly interpreted to show that portfolio policy, or asset allocation affects portfolio returns far more than active management. As Ken Solow and Michael Kitces write in this guest contribution, the most recent study to tackle the active management debate, by Yale professor Roger Ibbotson, shares two weaknesses with previous research.
2010-08-06 Comparing Our Path to Recovery with Past Recessions and Recoveries by Team of American Century Investments
What appears to be a preliminary trend in declining rates of GDP growth has led many to speculate that the current economic recovery is weakening, or that we are slipping into another recession. The latter scenario seems very unlikely given the number of simulative factors at work in our economy, such as record-low interest rates and record-high deficit spending by the federal government. But the fact that we are less than three months away from an important midterm election in the U.S. Congress means that the state of our economy will be hotly debated and in the headlines.
2010-08-03 Insights from the U.S. International Balance of Trade by Team of American Century Investments
The U.S. trade deficit increased to -$42.3 billion in May. Large and increasing trade deficits are sustainable as long as the rest of the world is willing to lend money to finance them. Growing trade deficits, however, are unhealthy in the long term. Trade imbalances also cause imbalances in capital flows. There was a time when it was argued that, as the U.S. entered a post-industrial society and economy, its growing trade deficit in goods would be offset by a growing trade surplus in services. Nearly three decades of experience, however, have demonstrated that this isn't the case.
2010-07-30 Inflation in 2010 and Beyond? Practical Considerations for Institutional Asset Allocation by Michael Katz and Christopher Palazzolo of AQR Capital Management
Traditional institutional portfolios with risk characteristics similar to a 60/40 stocks/bonds allocation are not well-positioned for unexpected inflation. Stocks are not effective inflation hedges, particularly in the short and medium term. Meanwhile, traditional institutional allocations resemble a 'bet' on low inflation. A risk-based approach to strategic asset allocation, however, may generate more balanced performance across both inflationary and deflationary periods.
2010-07-28 Market Thoughts and the Long-Term Outlook for Inflation by David A. Rosenberg of Gluskin Sheff
The bull market in bonds will end reasonably close to the point in time that inflation (or deflation) bottoms. This is because the major economic factor that correlates consistently with the direction of market-determined interest rates, at least for long term Treasury Bonds, is CPI Inflation. Core inflation should recede from around 1 percent now to near 0 percent in the next 12-to-24 months, which would imply an ultimate bottom in the long bond yield of 2.5 percent and 2 percent for the 10-year T-note.
2010-07-27 Why Immediate Annuities Make Sense by Geoff Considine, Ph.D. (Article)
As they approach retirement, baby boomers are increasingly concerned about how best to manage their portfolios during the decumulation phase of their lives. One of the challenges for advisors and investors is understanding what role annuities should play, if any. Geoff Considine shows that immediate annuities should be an important part of a decumulation strategy.
2010-07-27 Sizing Up the Jobs Growth Challenge by Team of American Century Investments
While labor market data indicates the economy is still adding jobs, the pace of additions is far slower than what is needed to meaningfully reduce our 9.5 percent unemployment rate. Much of the half-a-percentage-point rise in employment during the second quarter of this year came from the hiring of up to 700,000 temporary workers for the decennial Census survey. Now that this effort is winding down, some economists are forecasting that short-term unemployment will rise again.
2010-07-24 The Artificial Economic Recovery by Tony and Rob Boeckh of Boeckh Investment Letter
Economic recovery in the U.S. and elsewhere has slowed rapidly and forecasts are being downgraded accordingly. The massive stimulus packages stopped a self-feeding downward spiral, but they have given us only an artificial recovery. Government tax revenues will be disappointing and expenditures will remain elevated. A fragile economy, however, should not push investors away entirely from risk assets. High levels of risk and uncertainty argue for continued focus on wealth preservation and sound diversification.
2010-07-21 Caribbean Blue by Doug MacKay and Bill Hoover of Broadleaf Partners
There is no doubt that economic growth is slowing after a significant reacceleration off the Great Recession lows that occurred 16 months ago. The only question at this point is how much it slows. After peaking in the four percent vicinity, most economists now expect GDP growth to slow to something in the 2 percent range. It is nearly always the case that when deceleration occurs during a recovery, folks in our industry begin to wonder if growth will merely slow to a 'soft landing' outcome or if we will crash land in a 'double dip' recession.
2010-07-13 Fake Diversification Exposed: Does Asset Allocation Work? by David B. Loeper, CIMA, CIMC (Article)
Domestic equities are down roughly 14.5% from their April 23rd high. Many advisors tout sophisticated (and very expensive) asset diversification strategies, supposedly to protect their clients against precisely these circumstances. So, with this recent decline, Dave Loeper asks whether all of those supposed diversifiers protected portfolios?
2010-07-12 In Search of Your Sleeping Point by Cliff W. Draughn of Excelsia Investment Advisors
Asset allocation is an art involving quantitative analysis of financial markets combined with common sense. A buy-and-hold strategy is a dead decision during markets such as these. We have had the worst May in stocks since 1940. No credit still equals no jobs, China is destined for turmoil as its real estate market unwinds, and the Consumer Confidence Index is down to 52.9 in June from 62.7 in May. Fair value on the S&P is 950, which would indicate another 7 percent decline in stock prices from here.
2010-07-09 July 2010 Newsletter by Harold Evensky of Evensky & Katz
Evensky & Katz president Harold Evensky doesn't know about you, but he's getting tired of living in interesting times. Unfortunately the market gods don't much care for his opinion. So, given the reality that the markets have been a tad exciting lately, in addition to his regular meandering tidbits, he's included a number of items that he thought might provide a little perspective on the ranting of the financial talking heads.
2010-07-06 Liquid Assets Are at a 37-Year High on Corporate Balance Sheets: Is This a Bullish or Bearish Sign? by Team of American Century Investments
Whether bullish or bearish, the rapid growth in corporate liquid assets does reflect one undisputable fact: The corporate sector of the economy generally responded quickly and effectively to the Great Recession, cutting costs, shedding excess inventory and curtailing unnecessary investments. As a result, corporations are poised to perform well based on the overall strength of the current economic recovery. Earnings growth over the past five quarters has been impressive. However, whether this trend and rate of earnings growth can continue will increasingly depend on what happens to revenues.
2010-07-06 Stock Markets and a Sea of Change by Ron Surz (Article)
Ron Surz provides his award-winning market commentary, analyzing performance across global markets during the first half of this year. He also addresses several other topics, including the fiduciary standard, developments in target date funds, and distortions in style assignments created as a byproduct of the financial crisis.
2010-07-02 The Art of Outperformance by Niels C. Jensen of Absolute Return Partners
This month's letter is different. Our usual ramblings about the dire outlook for the global economy have been put aside for a while. Instead we focus on a couple of ideas for equity investors who have grown frustrated trying to beat the market - which is very difficult indeed. We do make some rather unflattering comments about active managers, but please note that these are specific to the equity space. In other, less efficient, asset classes, active managers often do much better than is the case in the equity world.
2010-07-01 Summer Forecast (and Beyond) by The Emerald Team of Emerald Asset Advisors
With Spain and its PIIG friends continuing to cause anxiety in global investment circles, it's a good time to focus on the potential risks and rewards facing investors right now. In reviewing our commentary released on February 1st of this year, we find that little has changed in the reward/risk tradeoffs we see. Themes identified earlier this year are now starting to play out and come into focus, as often happens simply with the passage of time. So, here is a brief update on those themes and more importantly, how they are influencing the management of the portfolios we run.
2010-06-30 Asset Allocation Thoughts by Tony and Rob Boeckh of Boeckh Investment Letter
This commentary provides an asset allocation framework for investor’s portfolios that reflects our macro view, concerns about the general riskiness of the financial world and a variety of issues that go into the asset allocation process. In general, we continue to be positive on risks assets in the context of our continuing focus on wealth preservation and diversification. Probabilities favor a recovery in stock and commodity prices rather than an extended bear market.
2010-06-29 General Motors and Lessons of Externalities by Team of American Century Investments
The decline and collapse of GM was a long-term phenomenon and not that uncommon a story for corporations in the history of U.S. business, except for its sheer size and (perhaps) the length of time over which it unfolded. One after another attempts to salvage the company fell short of expectations. Why GM failed—and why other companies in similar situations have managed to execute successful turnarounds or avoid collapse is an important question.
2010-06-22 Inexpensive Protection Against Rising Rates by Geoff Considine, Ph.D. (Article)
As is too often the case, the biggest risks are those that we discount. The possibility of a surge in interest rates appears to be today's ignored risk, despite the warnings of many experts, including David Einhorn, Bill Gross, and Seth Klarman. We discuss an inexpensive strategy to protect your portfolios from the tail risk of rising rates.
2010-06-21 Talking the Economy: Alex Pollock, Bruce Bartlett and Josh Rosner by Christopher Whalen of Institutional Risk Analyst
This commentary features snippets from interviews by IRA co-founder Chris Whalen for his upcoming book, Inflated: How Money and Debt Built the American Dream, which is scheduled for release in November. Alex Pollock of the American Enterprise Institute, Bruce Bartlett, a domestic policy adviser to President Ronald Reagan and Treasury official under President George H.W. Bush, and Josh Rosner, principal of Graham-Fisher, all discuss the economic outlook.
2010-06-18 Life in the Fast Lane: Volatility and Uncertainty Abound! by Liz Ann Sonders of Charles Schwab
A 'square root' recovery is the most likely scenario: a V-shaped initial recovery followed by a flat-line period of growth. With the peaking in the US leading indicators in April, a likely double-dip in the euro area, slowing growth in China and rising US taxes, the beginning of a soft patch for the economy is likely upon us. This next phase has been accompanied by heightened volatility, a characteristic that is unlikely to go away. However, the current rally off the recent lows has legs.
2010-06-15 'May Momentum Killers' Supported Economic, Rate Outlooks by Team of American Century Investments
Now that stocks are suffering a bona fide correction this quarter and Treasury yields are again pricing in low inflation expectations in the near term, the case for a long, slow, grinding economic recovery with continued low interest rates for months to come is a lot easier to make than it was seven weeks ago. Money market and FDIC-insured accounts should provide the most predictable path with the least price fluctuation. Investors who want more yield and return should consider high-quality short-maturity bonds and bond funds.
2010-06-15 Asset Allocation Matters, But Not as Much as You Think by Robert Huebscher (Article)
The market downturn has caused a rethinking of many core principles underpinning investment advice, chief among them the role of asset allocation. We talk with Yale's Roger Ibbotson about the impact of market returns and active management in explaining return variance and the role of asset allocation going forward.
2010-06-08 What’s Driving Investment Management Outsourcing? by Northern Trust Investments (Article)
Advisors who fully outsource their investment management want to free time for clients and grow their practice. But, as Northern Trust Investments' research explores, not all advisors are comfortable with full outsourcing. We thank Northern Trust for their sponsorship.
2010-06-08 Ten Ways to Improve Manager Selection by Nancy Opiela (Article)
Today's emphases on fiduciary responsibility, risk management and increased transparency require better due diligence when selecting managers. Especially in today's turbulent markets, advisors who spend more time and resources to do due diligence well can find themselves at a distinct competitive advantage. While these ten tips won't necessarily help you identify the next active management superstar, they can bolster your manager selection and due diligence program.
2010-06-08 Insight on the Current Status of the Housing Market by Team of American Century Investments
Both existing and new residential homes sales have seen impressive increases in volume over the past several months ending in April. Two factors will likely weigh on residential home sales for the remainder of this year, however. The first factor is the expiration of the homebuyer tax credit. The second is the rate of economic recovery and growth in employment for the remainder of this year. Over the next one to three years, little can contribute more to recovery in the residential housing market than reduced unemployment accompanied by rising incomes and increased consumer confidence.
2010-06-07 The European Disease by Niels C. Jensen of Absolute Return Partners
It should be blatantly clear that Greece is by no means the only country at risk of falling into the much dreaded debt trap. The United Kingdom, the United States, New Zealand, Spain, France, Portugal and Australia are all in dangerous territory and Ireland is in very deep trouble on this account. This cross-European contagion risk threatens the very existence of our banking system, and it is this risk that French and German leaders are thinking about when they say that Greece will not be allowed to go down.
2010-06-02 Whither the Regulatory Winds? by Nouriel Roubini of RGE Monitor
While reforms like eliminating the 'too-big-to-fail' card and adopting Glass-Steagall-like regulations to unbundle different types of financial activity are necessary to ward off asset bubbles and combat systemic risks, they might not be feasible for political reasons. In the event of a Glass-Steagall type separation, we would expect a divergence in credit spreads between banks with and without insured deposits, but expect the cost of credit for depository institutions to be very close to sovereign risk. On the flip side, dilution risk would be concentrated in depository institutions.
2010-06-01 Three Ways to Improve Safe Withdrawal Rates by Geoff Considine, Ph.D. (Article)
Using Monte Carlo analysis, Geoff Considine examines three ways safe withdrawal rates can be increased beyond the baseline 4% guideline. He compares and quantifies the benefits of increasing diversification beyond equities and bonds, increasing allocations to fixed income, and employing tactical asset allocation.
2010-05-25 Three Reasons Why the Economy is Mending, Despite the Rise in Unemployment by Team of American Century Investments
Despite the rise in the unemployment rate to 9.9 percent in April, there are at least three reasons why the economy appears to be on the mend after the recent recession. First, growth in labor productivity foreshadows new hiring. Second, the economy is adding jobs. And third, the civilian labor force is growing again. These three trends mean we could continue to see official unemployment figures inch higher despite an improving economy overall.
2010-05-24 Don't Mess With Aunt Minnie by John P. Hussman of Hussman Funds
In medicine, an Aunt Minnie is a particular set of symptoms that is distinctly characteristic of a specific disease, even if each of the individual symptoms might be fairly common. Last week, we observed an Aunt Minnie featuring a collapse in market internals that has historically been associated with sharply negative market implications. Historically, we can identify 19 instances in the past 50 years where the weekly data featured broadly negative internals, coupled with at least 3-to-1 negative breadth, and a leadership reversal.
2010-05-18 Search Engine Marketing for Financial Advisors by Dan Sommer (Article)
How do you take advantage of search engine marketing as a financial advisor? The goal of search engine marketing is to ensure that your website appears on as many results pages as possible for queries that relate to your business, and in this guest contribution Dan Somer explains the details of Search Engine Optimization (SEO) and Pay-Per-Click (PPC) advertising.
2010-05-11 Inspire Client Trust by Delivering Clear, Insightful Investment Communications by Ani Yessaillian (Article)
One of the best ways to build trust with your clients is to consistently deliver clear, insightful investment communications. In this guest contribution, consultant Ani Yessaillian tells you how to make the most of your quarterly performance report and your off-cycle investment communications.
2010-05-11 Two 'Takes' on the Latest GDP Growth Figure by Team of American Century Investments
Overall, the preliminary report of first quarter GDP growth was good news for consumers, businesses and investors seeking to finally put the Great Recession in the past. Consumer spending and business investment are both showing healthy signs of growth, which is to be expected during the early phases of a recovery. Concerns are now focused not on whether we are in a recovery phase, but whether the recovery will be strong enough to pull us out of the large hole the recession created.
2010-05-11 A Coming Wave of M&A? by Seth P. Hieken, CFA (Article)
In this guest contribution, Seth Hieken of The Colony Group says to expect M&A transactions to accelerate over the course of the year. If correct, there are several important guidelines investors may wish to follow.
2010-05-11 Across the Pond - Still a Sea of Red by David A. Rosenberg of Gluskin Sheff
It remains to be seen how Greece and the other problem countries in the euro area will manage to cut their deficits without at the same time controlling their monetary policy and their currency. While coincident economic indicators such as employment have improved in recent months, many of the leading indicators are pointing towards a discernible slowing in economic and earnings growth in the second half of the year and into 2011 as countries worldwide shift from stimulus to fiscal restraint.
2010-05-07 The Right Page of the Right Book by Team of Beacon Pointe
The beginning of 2010 saw a continuation of the 2009 rally. Most stock exchanges around the world, with the notable exception of China, posted positive returns for the quarter and added to their gains off the March 9, 2009 trough. The major indices, however, remain well below their previous highs. The post-bear rally has been fast and furious and at this time, a pause seems justified. The exact timing and nature of this pause, however, are highly uncertain.
2010-05-06 Chipan? by Team of Emerald Asset Advisors
In this commentary, Emerald responds to a reader question about China and Japan. Emerald says that equities in both countries are overvalued, but that this is less important than the fact that buying pressure is still outweighing selling pressure. The long-term ascension of the Chinese economy is one of the most prominent secular themes in today's markets. Japan, on the other hand, like the U.S., faces an obvious mess. The ultimate ruler is price, however, and Japanese stock prices have stubbornly risen for many months without a long-overdue correction.
2010-05-05 The Commodities Con by Niels C. Jensen of Absolute Return Partners
Investor allocation to commodities has grown dramatically in recent years - to the point where commodities have become a mainstream asset class. Commodity prices have thus at least partly been driven not by fundamental demand but by demand from financial investors eager to diversify their equity risk and attracted to the seemingly high probability of generating uncorrelated returns. What these investors do not seem to understand, however, is that now that traders themselves determine market prices, the promised land of uncorrelated returns is little more than wishful thinking.
2010-05-04 Consumer Sentiment and the Economic Outlook by Team of American Century Investments
The animal spirits John Maynard Keynes described in 1936 as a substantial force in determining the direction of the economy are still with us today. At the moment we are in a prolonged period of below-average consumer sentiment that began in mid-2007. Ultimately, consumer sentiment will rebound. When this occurs, the change in sentiment as measured by the Consumer Sentiment Index is likely to be quick and large. However, there will likely have to be some change in the environment or course of events to convince the population that our difficult times are behind us.
2010-04-27 Gary Shilling: America’s Lost Decade by Robert Huebscher (Article)
The US faces 10 years of slow growth and deflation that could rival Japan's "lost decade" - two words which Gary Shilling did not utter but which unmistakably characterize his forecast. Shilling is founder and President of the New Jersey-based economic consulting firm A. Gary Shilling & Co.
2010-04-27 The Four Horsemen of Growth: David Kelly’s Guide to Markets by Katie Southwick (Article)
With unprecedented volatility now largely behind us, J.P. Morgan's Chief Investment Strategist David Kelly believes that the economy is entering a period of recovery. To move forward, we must abandon our negative mindsets and focus on opportunities for expansion.
2010-04-27 Writing in Plain Speak by Wendy J. Cook (Article)
Wendy Cook specializes in helping advisors write newsletters and create presentations, and in this guest contribution she shares a number of tips to improve your writing skills. Cook is passionate about writing, and her article covers topics such as the importance of brevity and how to tailor content to your audience.
2010-04-27 The Hidden Risk in Target Date Funds by Ron Surz (Article)
Choosing the appropriate target date fund (TDF) for an investor is not easy, given the large number of products in the marketplace and the lack of tools to easily compare those offerings. That choice, however, is made a lot easier if one focuses on the component of TDFs where investors are exposed to the greatest risk - what guest contributor Ron Surz calls the "risk zone."
2010-04-21 The Bernanke Put: Creating Tetrodotoxin Investors by Cliff W. Draughn of Excelsia Investment Advisors
The 'Bernanke Put' of low interest rates over an extended period of time has effectively lured investors to pursue greater and greater levels of risk without critically thinking about the ramifications of upcoming mortgage resets, consumer spending versus income, credit contraction, valuations, and unemployment. Our country has never experienced leverage of this magnitude. In this environment, we must remember the lesson from Benjamin Graham: 'The margin of safety takes priority over all other investment considerations.'
2010-04-20 It's Census Time: Where in the World Are We Growing? by Team of American Century Investments
International population forecasts provided by the U.S. Census Bureau provide directional insights that can be useful to investors. The U.S. will continue to be a dynamic, growing and expanding country from a population perspective well into the 21st century. One implication is that we can deal with concerns over our rapidly growing government debt by growing out of the problem. In addition, despite the recent gloom caused by the housing bubble bursting, real estate values are likely to recover and continue growing long-term as a result of population growth.
2010-04-20 Lessons from Yale’s Endowment Model and the Financial Crisis by Geoff Considine, Ph.D. (Article)
The Yale endowment's performance during the financial crisis was worse than what would be mathematically expected, but not significantly enough to question the endowment model's tenets. Moreover, Yale's performance and philosophy suggest two very important lessons for advisors and investors- to diversify beyond equities and fixed income, and that some illiquid asset classes can be an important source of alpha.
2010-04-20 Investment Implications for Government Policy and Intervention by BlackRock, CFA Institute Reprint w/ Curtis Arledge (Article)
Government intervention has stabilized the economy, but policymakers must be careful to draw down their interventions before inflation occurs. Although residential real estate has seen its worst days, a wave of high-yield bonds and loans will soon mature, and the banking system must rebound enough to absorb that bubble. Despite these uncertainties, the range of yields and total annual returns among fixed-income sectors provide investors with multiple opportunities. We thank BlackRock for their sponsorship.
2010-04-07 When the Facts Change by Niels C. Jensen of Absolute Return Partners
An echo bubble is upon us. Echo bubbles are the children of primary asset bubbles, and emerge when monetary authorities respond to the bursting of a primary asset bubble by slashing policy rates. Extraordinarily low interest rates are currently encouraging another bout of excessive risk taking. If policymakers raised rates now, however, they would almost certainly kill the fledgling recovery. The pressure is therefore on monetary authorities to keep rates low and feed the new bubble. Investors should steer toward assets that benefit from high volatility.
2010-04-06 Don't Discount Dividends by Team of American Century Investments
During long and sustained bull markets, investors tend to overlook the importance of dividends in long-term wealth creation for equity investors. Benjamin Graham and David Dodd emphasized the importance of dividends in the overall valuation process for equities in a classic 1934 text. Because of their consistency in both good times and bad, dividends and dividend reinvestment can help cushion the downsides as well as enhance ultimate wealth. Investors, therefore, should not 'discount dividends.'
2010-04-06 Liz Ann Sonders on the US Economic Recovery by Robert Huebscher (Article)
Liz Ann Sonders is Senior Vice President and Chief Investment Strategist at Charles Schwab & Co. In this interview, she discusses her positive outlook for the US economy, which she believes has been recovering since last summer.
2010-04-01 Market Insight by Duncan W. Richardson of Eaton Vance Investment Managers
A year ago today, changes in the financial markets were nearly overwhelming for investors. At the close of last year's first quarter even the most sanguine of observers couldn't help but worry that the worst might not be over yet. Investor fear was reflected in the March 2009 asset allocation survey by the American Association of Individual Investors showing record low 41 percent allocations to equities and record high 45 percent allocations to cash.
2010-03-31 The Price of Emotion by Michael Nairne of Tacita Capital
Emotionally driven investment decisions often lead investors to buy high and sell low, and can exact a huge price on a portfolio over time. The antidote to emotional investing is threefold. First, investors must clarify their ability to tolerate risk in financial and psychological terms, and use this profile as the primary determinant of portfolio design. Second, investors should back-test the asset class performance of recommended portfolios. Finally, investors must document their investment strategies in writing.
2010-03-30 Seven Tips for a Successful Family Foundation by Nancy Opiela (Article)
Managing a foundation's assetswins you the cachet of being seen as helping your clients fulfill their philanthropic goals, and it is extremely lucrative work that can create a practice-building bridge to the next generation.The administrative aspects, as Nancy Opiela writes, can be daunting and she offers seven tips for a successful family foundation.
2010-03-29 Possible Outcomes: A Typical Post-War Recovery, or a Perfect Storm by John P. Hussman of Hussman Funds
Credit data suggests two distinct possibilities for the future direction of the economy. The most likely outcome is that we will see serious credit strains in the months ahead, adding to overextended market conditions, and creating a 'perfect storm' with a great deal of potential risk. Alternatively, if we do not encounter fresh credit strains in the coming months, a typical 'post-war' recovery may be on the horizon. Regardless of what lies ahead, current conditions recommend a defensive stance.
2010-03-29 Market Thoughts by David A. Rosenberg of Gluskin Sheff
The market is overvalued by more than 25 percent, but is also extremely overbought after going 24 sessions without a decline of 1 percent or more. Eighty-nine percent of the stocks on the S&P 500 are now trading above their 50-day moving averages, and the Dow has advanced in 17 of the last 24 days. This suggests that the prop desks at the five large banks are all selling securities, with leverage, to each other. There is no sign of any other major buyer, including the Fed. This provides reason for caution, because the banks could decide to switch direction at any time.
2010-03-29 Weekly Commentary and Outlook by Tom McIntyre of McIntyre, Freedman & Flynn
The stock market shrugged off the passage of Obamacare and moved higher last week based on the resolution of the debt crises in Dubai and Greece, as well as definite signs that corporate profits remain strong. Both the Dow Jones Industrial Average and the NASDAQ Composite gained around 1 percent, even as Treasury yields started to move higher. This week's employment report should see gains of 200,000 jobs or more. While the impact will be overstated, job creation this large could change perceptions.
2010-03-29 I'm Entitled by Charles Lieberman (Article)
Greece's budget problems reflect the willingness of the government to pay workers wages and benefits that exceed the willingness of citizens to pay taxes. The simple lesson is that governments cannot promise benefits without considering their cost. It is therefore disappointing that the U.S. government chose to create a new healthcare entitlement program at a time when it is already running high budget deficits. Markets are not ready to stop financing U.S. budget deficits right now, but this may become a problem down the road.
2010-03-29 Central Banks in 2010 - The Cacophonous Sound of Exit Music by Asha Bangalore of Northern Trust
Recent developments suggest that the uncertainty of the past three years has left central banks skittish. Otherwise strong economies have been slow to normalize rates and central banks that are following inflation targets have been more willing to risk breaches than growth. The remainder of the year will be characterized by differing exit strategies and their intended and unintended consequences. As central banks around the world begin tightening before the Fed and the ECB, there will be further implications for global capital flows and exchange rates.
2010-03-23 The Best Books on Passive Investing by Indudeep Chhachhi & Edward R. Wolfe (Article)
Two finance professors, Edward Wolfe and Indu Chhachhi, survey the literature on passive investing and offer their recommendations for authors and books. Whichever side of the active-passive debate you take, these books should be required reading. The evolution through which the literature on passive investing has gone is striking. Early writers started out with a point to prove: that passive investing is the only way to invest that makes sense. Today, the writing in this area has moved beyond "proving a point" to expanding on what is a settled issue.
2010-03-16 The Trifecta - Okun's Law and Unemployment - Is the Law of Supply & Demand Obsolete? by Kendall J. Anderson of Anderson Griggs
Okun's law explains the relationship between unemployment and real output, and calculates the gap between real GDP and potential GDP. Based on current GDP growth forecasts, the law predicts a one-half percentage point decline in unemployment this year and a full-point decline in 2011. Despite very positive returns, however, investors continue to allocate to bonds instead of stocks. The laws of supply and demand tell us that this is unwise.
2010-03-16 Latest Unemployment Report Reveals the Growing Problem of the Long-Term Unemployed by Team of American Century Investments
Four out of 10 unemployed workers are designated as long-term unemployed, meaning that they have been seeking a job for at least six months. This rate exceeds any other since the 1940s. As we have evolved towards a service- and knowledge-based economy, people with at least an undergraduate degree have fared better both in terms of lower unemployment rates and higher wages. This trend has become even more pronounced during the recession that began in December 2007 relative to the past two periods of peak unemployment in June 1992 and 2003.
2010-03-16 The New Investment Paradigm: Graham Meets Markowitz by Bob Veres (Article)
Broadly speaking, the financial services industry has been divided into two competing paradigms since roughly 1950. One, articulated by Harry Markowitz, suggests advisors add value through diversified portfolios optimized along the efficient frontier. The other, advocated by Benjamin Graham, says advisors add value by purchasing assets at prices less than their fair value. Bob Veres reconciles those views and describes the New Paradigm that has emerged.
2010-03-16 No Shell Game? Then What Is It? by Dave Loeper (Article)
Wealthcare's Dave Loeper responds to Roger Schreiner's recent article, It's No Shell Game. Loeper contends that the rules of Schreiner's challenge ensure that Schreiner will win and, from a larger perspective, active management advocates sacrifice their clients' wealth by exposing them to risks those advocates cannot control.
2010-03-09 What's Next for the High Yield Market by Team of Pioneer Investment Management
The economy can achieve 3 to 4 percent growth in 2010. This growth rate, along with low interest rates, should provide a favorable environment for riskier fixed income asset classes such as high yield. Corporate profit margins, cash flows and productivity are all near record levels relative to prior cycles, and balance sheets are relatively healthy. This puts companies in a good position to capitalize on the recovery. A strategy that balances high yield, equity, convertible and bank loan securities is prudent, given the anticipated investment environment.
2010-03-09 Underwater in the Housing Market by Team of American Century Investments
The number of negative equity mortgages, situations where the borrower owes more on their mortgage than the current market value of the home they bought, increased substantially since the housing bubble burst in 2007. While these homeowners continue to make payments, there is a weak correlation between how badly their mortgages are underwater and foreclosure rates. This is also a problem because many middle and lower income people use their homes as their most important source of retirement savings. In addition, negative equity may diminish labor mobility at a time of high unemployment.
2010-03-08 Turning Cautious by Scotty George of du Pasquier Asset Management
The current global rallies in stocks seem to be short-cycle upswings within the existing secular bear trend. Low interest rates are leaving no other suitable alternative for investors, and high grade fixed-income opportunities are few and far between. Interest rates may rise, however, before year end as global debt continues to mount. Investors should therefore look for an above-average exposure to cash in the short term while waiting for downward movement in stocks in the long term.
2010-03-04 An Open Letter to the President of the United States by Dennis Gibb of Sweetwater Investments
Dennis R. Gibb asks President Obama in an open letter to set up a mortgage refinance workout facility administered by existing banks. Between 5 and 7 percent of homeowners are in foreclosure, while another 9 percent are in default. Many homes are now worth less than the principal of their mortgage. Gibbs also offers suggestions for job creation, financial reform and other policy issues.
2010-03-04 The Anatomy of a Recovery by Michael Golub of The Golub Group
Blue-chip multinationals now face some of the best opportunities we have seen in decades, supported by high corporate cash levels, strong free cash flow generation, expanding profit margins, manageable debt levels, relatively little need to access capital markets to fund growth, attractive valuations, sound management teams and the ability to capitalize on global growth, particularly in emerging markets. Disciplined focus on business fundamentals will be crucial to investor success.
2010-03-04 The Retirement Lottery by Niels C. Jensen of Absolute Return Partners
Aggressive advertising feeds us the fallacy that as long as we invest for the long term, equities will always provide us with solid returns. This may be true if your investment horizon is 30 or 40 years, but most people do not start saving for retirement until they are in their 40s. Hundreds of millions of baby boomers are now chasing whatever returns they can to ensure that they can retire in relative comfort. Jensen also examines the relationship between net private savings, foreign capital inflows and government debt.
2010-03-03 February/March 2010 News and Events by Harold Evensky of Evensky & Katz
Congress is currently debating whether to apply the fiduciary standard to anyone providing investment advice. Evensky and Katz argue this would help protect client interests. Some brokerage and insurance representatives claim, however, that this would chill the ability of brokers or advisors to provide advice. Evensky and Katz also examine health care costs, social statistics and other varied topics.
2010-03-02 Asset Allocation for Grantham’s Seven Lean Years by Geoff Considine, Ph.D. (Article)
Followers of Jeremy Grantham know his consistently accurate long-term forecasts well, as well as his ability to identify and avoid asset bubbles and steer clients into high-performing asset classes. Grantham's prescience is remarkable but not irreplicable. Geoff Considine shows that his Monte Carlo simulations nearly match Grantham's forecasts, and he reviews the implications for asset allocations.
2010-03-01 New Order by Scotty George of du Pasquier Asset Management
The American financial system is losing political and economic power. U.S. output is burdened by expectations and obligations that are increasingly hard to meet, and the country's GDP suggests a national economy that has lost control of its destiny to forces beyond its control. Energy dependence, rising fiscal deficits and an aging population and infrastructure will present problems in the next half decade, but will provide opportunities for capital gains, and will seem more manageable as markets recover.
2010-03-01 Lessons from the 'Naughties' by Rob Arnott of Research Affiliates
Sizeable real returns will be difficult in this decade, as they were in the last. Almost all asset classes are priced richly relative to historical norms. We can tilt the odds back in our favor, however, by tactically altering our portfolio risk based on measures as simple as yields and yield spreads. The surest path to success marries tactical asset allocation with a more efficient beta, such as the Fundamental Index methodology, and a full toolkit of alternative markets.
2010-03-01 Greece on the Verge of Collapse Due to Credit Default Swaps? by Chris Maxey of Fortigent
While some in the financial press blame credit default swaps for Greece's fiscal woes, the impact of CDS on the country's finances is actually quite small. Greece racked up massive amounts of debt long before CDS even existed, and net CDS have hardly moved as the Greek financial crisis has spiraled out of control. Maxey also comments on rising equity prices, improving GDP growth, new restrictions on short selling, declining housing figures and this week's upcoming data releases.
2010-02-26 Focus on the Forest, Not the Trees by David A. Rosenberg of Gluskin Sheff
Despite the reflexive rebound in global equity markets, deflation is still the primary trend for consumer prices and asset values as households rebuild balance sheets and as governments face sovereign default risks. Investors should focus on bonds, hybrids, and dividends with consistent yields as they search for safety and income at a reasonable price.
2010-02-26 Was It All Just A Bad Dream? Or, Ten Lessons Not Learnt by James Montier of GMO
Montier reflects on ten lessons the investment industry did not learn during the market declines of 2008 and 2009. He says that it is time to abandon the efficient market hypothesis and acknowledge the role the housing bubble played in the financial crisis. In addition, he notes that the principles of value investing still hold true: Buy when assets are cheap, and sell when they are expensive.
2010-02-25 How to Whip Inflation Now (or Whenever It Arrives) by Isbitts of Emerald Asset Advisors
Inflation is coming, but it is hard to predict just when. When it does come, the inflationary era will be several years in length. A flexible investment toolbox that includes the ability to use the short side of the market and employ alternative styles will be essential.
2010-02-24 Leading Indicators Reflect Positive Trends by Ken Taubes of Pioneer Investment Management
GDP growth forecasts of 3 percent to 4 percent could mean gains in credit and equity markets. Higher growth could lead to quicker tightening by the Fed, however, which could depress bond prices, as well as increase discount rates for equity markets. Corporate credit and equity markets should provide strong opportunities in 2010. While inflation is not a threat in the near term, investors should consider incorporating inflation hedges such as bank loans or multi-sector inflation products as tensions grow between fiscal deficits and monetary policy.
2010-02-24 Fine Tuning Your Asset Allocation - 2010 Update by Paul Merriman of Merriman
Never ignore your emotions or better judgment in order to chase higher returns. Investors should settle for lower returns in order to reduce their risks. It is better to work longer or save more each year than to retire with too little money. It is also better to have less money to spend in retirement than to suffer losses that put you in danger of running out of money.
2010-02-23 Stock Market Performance and Inflation by Team of American Century Investments
The world is awash in liquidity as a result of the recent financial crisis and subsequent risk of deflation. Many investors are concerned that this \"cheap money\" will result in rising inflation. Historical S&P 500 data suggests, however, that the highest price to earnings ratios occur when inflation is between 1 percent and 6 percent.
2010-02-23 An Analysis of the Risk and Return of Small/Mid-Cap Growth by David Vincent (Article)
In this guest contribution, David Vincent of Fred Alger says investors interested in gaining exposure to the small-capitalization growth equity style should consider the small/mid ("SMid") capitalization style as a way to capture the benefits of small-cap growth.
2010-02-23 Interest Rates, Inflation and the PIMCO Total Return Fund by Robert Huebscher (Article)
The current generation of financial advisors has never experienced rising interest rates, but that will change, based on the forecasts we collected in our survey last week. We review our survey results and look at the implications for the largest bond portfolio, the PIMCO Total Return fund.
2010-02-22 Markets Gain on Improving Sentiment by Chris Maxey of Fortigent
Equity markets settled down tremendously this past week after a week of volatile trading, posting a 3 percent gain for the S&P 500 index. Subsiding fears about the impact of Greece on global markets support market gains. The CBOE Volatility Index fell in February to 20 from a high of 27. Maxey also comments on mortgages, inflation, and upcoming data releases.
2010-02-22 Value? by Scotty George of du Pasquier Asset Management
It is important not to get carried away with short-term bursts in the market. These bursts have not eradicated the causes of the ubiquitous bear trend. We must not measure our self-worth by the value of our portfolio at the end of the given day. The most aggressive gains emanate from prudent portfolio methodology and a long-term orientation toward economic dynamics.
2010-02-18 Just When We Thought They Were Out... by Chris Maxey of Fortigent
Equity markets were still oversold based on a number of momentum and sentiment measures last week as buyers pushed the both the S&P 500 and the Dow Jones Industrial Average indexes to volatile 0.9 percent gains. Headlines this week should center on Greece\'s bid for explicit financial support from other Eurozone members, as well as a slew of new economic data.
2010-02-18 The Ultimate Buy-and-Hold Strategy: 2010 update by Paul Merriman of Merriman
An investor's choice of assets if far more important than the times he decides to buy or sell those assets. In a nutshell, the ultimate buy-and-hold strategy is this: Use no-load funds to create a sophisticated asset allocation model with worldwide equity di-versification by adding value stocks, small company stocks and real estate funds to a traditional large-cap growth stock portfolio.
2010-02-17 Grecian Formula by Isbitts of Emerald Asset Advisors
The market rally in the last 10 months of 2009 should have taken two or three years to unfold. The pace of advance thus has to slow, and this slowdown may manifest itself with temporarily lower stock prices. Furthermore, slowly increasing interest rates may suggest fears of inflation.
2010-02-17 The Return of the Primary Trend by David A. Rosenberg of Gluskin Sheff
If credit, equity prices and the economy are on a downward primary trend this year and 2009 was indeed a counter-trend bounce, then the appropriate course of action is to capitalize off the rally in assets last March and figure out how to still make money on a risk-adjusted basis. Rosenberg also examines February's recovery in the National Association of Home Builders housing market index and fiscal woes at the state level.
2010-02-16 Two Sides of the Cuve by Scotty George of du Pasquier Asset Management
Scotty George of du Pasquier says in the Arlington Econometrics weekly market commentary that the disinflationary curve is at an inflection point, and that we are likely to see an upswing in the cost of money, savings rates and prices. All of this could usher in a new cycle of economic phenomena.
2010-02-14 Growing Problems in the Residential Real Estate Market (Part 2) by Team of American Century Investments
The problem of growing housing delinquencies has spread to states not originally affected in the sub-prime crisis and to higher-quality prime mortgages as the nation’s unemployment rate has reached double-digit levels. This commentary looks at the failure to-date of policy initiatives intended to stem defaults, and at the range of possible future policies.
2010-02-09 Growing Problems in the Residential Housing Market by Team of American Century Investments
American Century Investments says in its weekly market update that rapidly rising delinquencies and foreclosures on residential housing could soon eclipse unemployment as an object of focus for economists, policymakers and the public. Delinquencies on loans secured by one- to four-unit properties, including home equity lines of credit, have soared since the end of 2007 to approximately 10 percent of the total value of mortgages.
2010-02-08 Arlington Econometrics Weekly Commentary for the week of February 8, 2010 by Scotty George of du Pasquier Asset Management
Financial markets need to stop picking at old wounds before they can heal, says du Pasquier advisor Scotty George. Slow earnings acceleration, poor industrial and consumer demand, job cuts, stagnant wages, currency imbalances, expanding worldwide debt and skeptical consumer sentiment are all keeping market numbers in negative territory.
2010-02-04 Market Review & Outlook by Ronald W. Roge of R.W. Roge
R.W.Roge is a NY-based advisor and fund manager. They call for a "slow and bumpy" recovery, and expect interest rates to rise. They are investing in the shorter end of the yield curve, TIPS, and high-quality dividend paying stocks.
2010-02-03 Investment Commentary by Bruce A. Weininger of Kovitz Investment Group
Kovitz is a $1 billion Chicago-based asset manager. This commentary reviews their investment philosophy (value-driven without attempting to “time” the market), and includes a discussion of certain types of leverage that can be beneficial to the investor (e.g., operating leverage) and others that can be harmful (e.g., revaluation and multiple expansion risk). In this context, they comment that “the bond market might be a bit frothy and perhaps in some form of a bubble.”
2010-02-02 Change – The Only Constant by Christina Ho (Article)
The Institute for Private Investors serves families with over $50 million in assets. Their data show wealthy investors have increased their use of tactical asset allocation and are positioning their portfolios to defend against liquidity, concentration and inflation risk.
2010-02-01 Up, Then Down by Scotty George of du Pasquier Asset Management
“The aftermath of a bull leg is sometimes unpleasant. We are experiencing a normal capitulation in stock prices that follows the remarkable success of last year’s bull cycle. ‘Unleveraging the euphoria’ is far from crisis levels, yet, but unsatisfying, nonetheless, while it’s happening.”
2010-01-26 Diversification Really Does Pay Off by Geoff Considine, Ph.D. (Article)
The last decade severely tested investors' belief in the value of diversification and strategic asset allocation, leading some in the financial media to assert that diversification and asset allocation failed and were worthless during the crash of 2007-2008. Now is an ideal moment to look back and assess the carnage.
2010-01-26 Using Alternative Investments to Build a Stronger Portfolio by Robert M. Hussey (Article)
Traditional asset classes may no longer provide sufficient portfolio diversification, but there's a new wave of mutual funds that offer alternatives strategies previously available only to large institutions. Robert Hussey of Natixis Global Associates describes how alternative strategies can be used in a mutual fund package. We thank them for their sponsorship.
2010-01-25 Arlington Econometrics Weekly Market Commentary by Scotty George of du Pasquier Asset Management
“Today, the climate in the financial markets is tenuous. Despite the public’s low levels of trust and confidence in their institutions, particularly their financial institutions, they continue to inv
2010-01-19 Arlington Econometrics Weekly Market Commentary by Scotty George of du Pasquier Asset Management
My work is leading me towards smaller cap and emerging markets as untapped sources of capital gains. Additionally, since earnings acceleration patterns are quite narrow, the universe of possible cand
2010-01-19 Steve Leuthold: The Market will Rally This Year by Robert Huebscher (Article)
Steve Leuthold is chairman of the $4.5 billion Leuthold Group and one of the most widely-followed market analysts. In his keynote presentation at last week's Fortigent conference, he offered an upbeat forecast for the first half of 2010.
2010-01-19 Shiller PE's and Modeling Stock Market Returns by Joseph A. Tomlinson, FSA, CFP (Article)
One of the most popular assumptions used in investment modeling is that stock prices follow a random walk. However, a growing body of evidence shows that this is a bad assumption, and that stock prices go through periods of over-pricing and under-pricing that affect future returns. Joe Tomlinson, a Maine-based advisor, offers a model based on Shiller PE ratios to disprove the random walk hypothesis.
2010-01-11 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
2010-01-08 2009 Is History ... Here\'s What We Learned by Isbitts of Emerald Asset Advisors
2010-01-08 4th Quarter Commentary - Investing Proactively Without Predictions by Team of Partnervest Advisory Services
\"\'If you’re going to predict,\' an anonymous economist famously quipped, \'predict often.\' 2009 by all accounts was a good year. The S&P500 gained 23.4%. Emerging ma
2010-01-05 Paul Krugman on Deficits, Taxes, Inflation, and Recovery by Dan Richards (Article)
Dan Richards' interview with Paul Krugman, the 2008 Nobel prize winner in Economics, covers his views on the size of the next stimulus package, how high marginal tax rates should go, and lessons from the Japanese experience. Whether or not you agree with him, Krugman is highly influential and his views may presage future policy decisions.
2010-01-05 Risk Management through Costless Collars by Geoff Considine (Article)
Nassim Taleb and Zvi Bodie are among those who advocate a wealth management strategy that includes options. Despite their evangelism, though, options are rarely a part of retirement portfolios. The costless collar, a straightforward options strategy, gives investors the upside of an asset class (such as equities) while absolutely limiting the downside risk.
2010-01-05 Perspectives on 2009 and Beyond by Ron Surz (Article)
We are again privileged to provide Ron Surz' award-winning market commentary. Surz examines global performance in Q4, 2009 and the prior decade.
2010-01-04 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-12-31 The Last Apocalypse? by Scotty George of du Pasquier Asset Management
2009-12-29 Diversification is Not Enough by Roger J. Schreiner (Article)
The mainstream financial services industry, the media and academia - virtually everyone - has overestimated the value of diversification in risk management. The recent crisis has shown that investors need more than simple diversification to protect them from both the known and the unknown risk that they will eventually encounter. In this guest contribution, Roger Schreiner, says that when it comes to risk management, diversification simply is not enough.
2009-12-21 The Bumpy Road to Recovery by Paul Merriman of Merriman
2009-12-18 Arlington Econometrics Weekly Market Commentary by Scotty George of du Pasquier Asset Management
2009-12-16 Deja Vu: Will the U.S. Undergo a Reprise of 1937? by Nouriel Roubini of RGE Monitor
2009-12-15 Demand Disappears, but Builders Say 2009 Marks Housing's Bottom by John Burns of John Burns Real Estate Consulting
2009-12-15 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-12-15 The Next Black Swan? Underfunded Public Pensions by Robert Huebscher (Article)
The plights of California and other states reveal an ominous threat our economy faces: underfunded public pension liabilities. We examine the size and scope of this problem, focusing on whether the underlying assumptions used to calculate liabilities are realistic.
2009-12-14 Fixing Bank Securitization: Interview with Michael Krimminger by Christopher Whalen of Institutional Risk Analyst
2009-12-14 Arlington Econometrics Weekly Market Commentary by Scotty George of du Pasquier Asset Management
2009-12-14 Gathering Momentum by Charles Lieberman (Article)
2009-12-14 Overhearing Bernanke by Goddard of Capital Advisors
2009-12-14 Ratings Agencies Seek to One up Each Other by Chris Maxey of Fortigent
2009-12-12 Thoughts on the Statistical Recovery by John Mauldin of Millennium Wave Advisors
2009-12-11 Higher Hire, Fire Low by Anderson of Anderson Griggs
2009-12-11 Healthcare, Nationalism, and OODA by Gibb of Sweetwater Investments
2009-12-11 And That's the Week that Was... by Ron Brounes of Brounes & Associates
2009-12-10 Did Bernanke Get Grilled for the Sins of Others by Paul Kasriel of Northern Trust
2009-12-10 December Economic Newsletter by Anderson of Cambridge Advisors
2009-12-09 The Economics of Copenhagen by Nouriel Roubini of RGE Monitor
2009-12-09 Consolidation Phase for Equities by Matthew Hunt of Prospect Wealth Management
2009-12-08 Doing Things Differently by Tom Brakke of TJB Advisors
2009-12-08 The 529 Dilemma by Mary Ann Lambert (Article)
The recent market decline coupled with, tax, custodial, management fees and estate planning issues make the decision to use a 529 plan less than straightforward. In this guest contribution, advisor Mary Ann Lambert briefly reviews the history of college savings plans and shows how the current landscape favors 529s for some clients but not for others.
2009-12-07 And That's the Week that Was... by Ron Brounes of Brounes & Associates
2009-12-07 President's Newsletter by Harold Evensky of Evensky & Katz
2009-12-07 Three Strikes on Ben Bernanke: AIG, Goldman Sachs & BAC/TARP by Christopher Whalen of Institutional Risk Analyst
2009-12-07 Arlington Econometrics Weekly Market Commentary by Scotty George of du Pasquier Asset Management
2009-12-07 Capital Gain Management by Champeau of Vogel Consulting
2009-12-07 Recovery on Track: Buy Equities, Sell Bonds by Charles Lieberman (Article)
2009-12-07 Improved Labor Markets are a Double Edged Sword by Chris Maxey of Fortigent
2009-12-05 A Conversation with John by John Mauldin of Millennium Wave Advisors
2009-12-04 The Global Distribution of Carbon Emissions by Barro and Redlick of VoxEU
2009-12-03 Is the Fed Engaged in Quantitative or Qualitative Easing by Paul Kasriel of Northern Trust
2009-12-02 Alert the Fed! Ben Bernanke: Beneath the Bankers by Christopher Whalen of Institutional Risk Analyst
2009-12-02 After Dubai by Nouriel Roubini of RGE Monitor
2009-12-02 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-12-02 2010 Land Acquisition and New Home Sales Strategy by John Burns of John Burns Real Estate Consulting
2009-12-01 Busted! Another Investment Myth is Disproved by Isbitts of Emerald Asset Advisors
2009-12-01 The Gannon Report - Keep Active! by Gannon of The Royce Funds
2009-12-01 To Roth or not to Roth, That is the Question by David B. Loeper, CIMA, CIMC (Article)
With the new Roth conversion rules about to be lifted next year and a "one-time special offer" available to allow investors to spread the tax bite of conversion over two years, more and more Roth conversion calculators are showing up every day. Be wary, says Dave Loeper of Wealthcare Capital. If you use one of these calculators, don't say he didn't warn you about how misleading the results can be.
2009-11-30 While Pundits Play Gotcha, the Unemployment Situation Improves by Paul Kasriel of Northern Trust
2009-11-30 And That's the Week that Was... by Ron Brounes of Brounes & Associates
2009-11-30 Routinely 'Under Water' by Michael Nairne of Tacita Capital
2009-11-30 Underachievers Please Try Harder - The Role of Inertia in Asset Allocation Prescient Advisors by Jeff Joseph of Prescient Advisors
2009-11-30 Liquidity vs. Solvency: Interview with Bob Eisenbeis and David Kotok by Christopher Whalen of Institutional Risk Analyst
2009-11-30 It's a Weak Recovery, Or Is It? by Charles Lieberman (Article)
2009-11-30 Concern About Dubai Overblown by Chris Maxey of Fortigent
2009-11-28 Why I am an Optimist by John Mauldin of Millennium Wave Advisors
2009-11-25 Roubini Global Economics - Holiday Season Kick-off by Nouriel Roubini of RGE Monitor
2009-11-25 The Temptations Brought on by Low Yields by Tom Brakke of TJB Advisors
2009-11-25 Dividend Paying Stocks by Michael Golub of The Golub Group
2009-11-24 Interview: Brian McMahon of Thornburg Investments by Robert Huebscher (Article)
We speak with Brian McMahon, CEO and CIO of Thornburg Investment Management about the Thornburg Income Builder Fund (TIBAX) and the challenges of finding income-producing securities in today's markets.
2009-11-23 Arlington Econometrics Weekly Commentary by Scotty George of du Pasquier Asset Management
2009-11-23 Is that a Bubble in your Natural Gas? - Interview with Jim Lucier by Christopher Whalen of Institutional Risk Analyst
2009-11-23 We Were Dead Before the Ship Even Sank by Jeff Joseph of Prescient Advisors
2009-11-23 Too Big to Fail vs. Too Political to Regulate by Charles Lieberman (Article)
2009-11-23 The State of Inflation by Chris Maxey of Fortigent
2009-11-21 Where the Wild Things Are by John Mauldin of Millennium Wave Advisors
2009-11-20 U.S. Building Market Intelligence by John Burns of John Burns Real Estate Consulting
2009-11-20 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-11-18 Obama Tours Asia with a Full Agenda by Nouriel Roubini of RGE Monitor
2009-11-18 Playing the Angel - Investment Advisors as Venture Capitalists by Jeff Joseph of Prescient Advisors
2009-11-17 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-11-17 Goldfinger by Michael Dana of Dana Investment Advisors
2009-11-17 Year End Planning for 2009: Tax Strategies by David R. Stafseth of Vogel Consulting
2009-11-17 Can the Recovery Continue? by Matthew Hunt of Prospect Wealth Management
2009-11-17 Housing Cools In October, Survey Shows by John Burns of John Burns Real Estate Consulting
2009-11-16 Economic Calendar Picks Up Following Reprieve by Chris Maxey of Fortigent
2009-11-16 The Inquisition – A Business Primer – Unemployment by Anderson of Anderson Griggs
2009-11-16 A Top by Scotty George of du Pasquier Asset Management
2009-11-16 Loan Growth at Public Expense; Jack Sustman on the Vortex as Market Descriptor by Christopher Whalen of Institutional Risk Analyst
2009-11-16 Debunking Policy and Economic Myths by Charles Lieberman (Article)
2009-11-16 Accumulated Musings by Paul Kasriel of Northern Trust
2009-11-15 Balance and Options - Exit and Liquidity Considerations in Private Investment by Jeff Joseph of Prescient Advisors
2009-11-15 November 2009 Economic Update by Anderson of Cambridge Advisors
2009-11-14 If This Is Recovery... by John Mauldin of Millennium Wave Advisors
2009-11-13 Get the Most Out Of This New Window of Stimulus by John Burns of John Burns Real Estate Consulting
2009-11-13 Investment-Grade Bonds Asset Class Review by Team of LItman Gregory
2009-11-13 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-11-12 The Recession Is Over ! ? ! by Jason R. Graybill and Neil D. Klein of Carret Asset Management
2009-11-12 Painting the House by MacKay of Broadleaf Partners
2009-11-11 Monetary Policy Outlook by Nouriel Roubini of RGE Monitor
2009-11-11 Third Quarter 2009 Review by Gary M. Wozny and John M. Nowicki of LCM Capital Management
2009-11-10 Preliminary Q3 2009 Bank Stress Test Results; Looking for OTC Derivatives Reform by Christopher Whalen of Institutional Risk Analyst
2009-11-10 Unemployment-The Trend behind the Numbers by Fried of Fried Asset Management
2009-11-09 Buffett's Message by Charles Lieberman (Article)
2009-11-09 Fairness by Scotty George of du Pasquier Asset Management
2009-11-09 Will There Be Gold At The End Of This Rainbow? by Chris Maxey of Fortigent
2009-11-09 This Recession is Over! by Ronald W. Roge of R.W. Roge
2009-11-07 The Glide Path Option by John Mauldin of Millennium Wave Advisors
2009-11-07 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-11-07 The Amazing Race by Team of Beacon Pointe
2009-11-07 Third Quarter 2009 Portfolio Commentary by Jay Compson of Absolute Investment Advisors
2009-11-07 Design and Effectiveness of Fiscal-stimulus Programmes by Barro and Redlick of VoxEU
2009-11-07 Recovering from by Fried of Fried Asset Management
2009-11-04 Too-Big-To-Fail: Regulatory Reforms of Systemically Important Institutions by Nouriel Roubini of RGE Monitor
2009-11-03 Survey Confirms that Traffic is Slowing as The Tax Credit Nears Expiration by John Burns of John Burns Real Estate Consulting
2009-11-03 Getting in Position by James A. Skinner of The Royce Funds
2009-11-02 Systemic Risk is All About Innovation and Incentives: Ed Kane by Christopher Whalen of Institutional Risk Analyst
2009-11-02 Arlington Econometrics Weekly Market Commentary by Scotty George of du Pasquier Asset Management
2009-11-02 Equity Correction May Be Short Lived by Chris Maxey of Fortigent
2009-11-02 I'll Get Back In When The Market Corrects by John Petrides (Article)
2009-10-31 Catching Argentinian Disease by John Mauldin of Millennium Wave Advisors
2009-10-30 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-10-30 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-10-29 Getting Even From 2008 by Isbitts of Emerald Asset Advisors
2009-10-28 Are Capital Controls in Fashion Again? by Nouriel Roubini of RGE Monitor
2009-10-28 Zombie Love: Barack Obama, GMAC and Ally Bank by Christopher Whalen of Institutional Risk Analyst
2009-10-27 Policy Needs and Timing Concerns by Charles Lieberman (Article)
2009-10-27 Stay the Course or Plot Another? by Ted A. Ponko, CFA (Article)
Is it reasonable for investors' objectives to change along with major fluctuations in their wealth? In these instances, sticking with the current portfolio may not be the best option - even for long-term investors. In this guest contribution, Ted Ponko of Klein Decisions argues advisors need a reliable way to determine when to stay the course and when to plot another.
2009-10-27 The “V” Points Downward by Robert Huebscher (Article)
Long-term equity investors face a critical juncture. They can believe a V-shaped economic recovery is imminent, if not underway, and valuations for broad-based equity indexes properly reflect an end to the "decrepit decade" of return-less risk in US markets. Or they can believe true economic recovery - growth, not just stability - is still a long way off and US equity valuations are in bubble territory, not reflective of the rough terrain ahead. We provide our thoughts.
2009-10-26 A Frightful Time to Live in Europe by Chris Maxey of Fortigent
2009-10-26 A Tsar Too Far by Jeffrey Bronchick of Reed, Conner & Birdwell
2009-10-25 Insights About the Past, Present, and Future by Investment Research Team of Litman Gregory
2009-10-25 So What About the Real Economy? Interview with Credit Risk Monitor by Christopher Whalen of Institutional Risk Analyst
2009-10-24 The Best of Times by John Mauldin of Millennium Wave Advisors
2009-10-23 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-10-23 In Your Head by Scotty George of du Pasquier Asset Management
2009-10-23 The Retirement Lottery by Michael Nairne of Tacita Capital
2009-10-21 Eastern Europe: Out of the Danger Zone? by Nouriel Roubini of RGE Monitor
2009-10-21 Advance 3Q 2009 Delinquency Rate Estimates - October 21, 2009 by Anderson of Foresight Analytics
2009-10-20 Are the Fed, the Congress and the Primary Dealers an Alliance of Convenience? by Christopher Whalen of Institutional Risk Analyst
2009-10-20 A Comment Regarding Inflation by David Ogburn and Cynthia Duncan of The Golub Group
2009-10-19 Is Headline Inflation Deceiving Investors? by Chris Maxey of Fortigent
2009-10-19 Dow 10,000 again, and again by Scotty George of du Pasquier Asset Management
2009-10-19 59% Of Home Buyers Rely on Low Down-Payment Government Mortgages, Survey Shows by John Burns of John Burns Real Estate Consulting
2009-10-19 Yet another Quarter of Better-Than-Expected Earnings Growth by Charles Lieberman (Article)
2009-10-19 4th Quarter Newsletter by Bradley Turner of Chess Financial
2009-10-17 Muddle Through, R.I.P? by John Mauldin of Millennium Wave Advisors
2009-10-17 Inflation and Deficits – What Might Milton Friedman Have to Say? by Paul Kasriel of Northern Trust
2009-10-16 Signaling the End of the Recession by Daniel J. Traub of Tempo Financial Advisors, LLC
2009-10-16 The Miracle of Rule 3a-7, Riskless Arbitrage and Other Artifacts of the Crisis: Fred Feldkamp by Christopher Whalen of Institutional Risk Analyst
2009-10-16 Commercial RE Distress Will Have A Big Impact on Housing by John Burns of John Burns Real Estate Consulting
2009-10-16 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-10-16 Y2.01K by Isbitts of Emerald Asset Advisors
2009-10-16 Big Ben by Hamamjian of Global Equity Advisors
2009-10-15 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-10-15 Fall Quarterly Commentary by John G. Prichard of Knightsbridge Asset Management
2009-10-15 Quarterly Newsletter by Matthew Hunt of Prospect Wealth Management
2009-10-14 Latin America Economic Outlook by Nouriel Roubini of RGE Monitor
2009-10-13 Bank Profile: Wells Fargo & Co; More on Securitization by Christopher Whalen of Institutional Risk Analyst
2009-10-13 Increase Employment the Same Way You Increase Home Sales by Paul Kasriel of Northern Trust
2009-10-12 Let's Get Real by Scotty George of du Pasquier Asset Management
2009-10-12 Alchemy lasted 2500 Years - Will Modern Portfolio Theory Last as Long? by Anderson of Anderson Griggs
2009-10-12 Markets Resume the March Higher by Chris Maxey of Fortigent
2009-10-12 Is There A by Charles Lieberman (Article)
2009-10-10 Killing the Goose by John Mauldin of Millennium Wave Advisors
2009-10-09 How much better could it get? by William H. McAfee of WHM Capital Advisors
2009-10-09 Financial Exigency: Capitalism to Fascism by Cliff W. Draughn of Excelsia Investment Advisors
2009-10-09 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-10-09 Chasing by Isbitts of Emerald Asset Advisors
2009-10-09 Bond Funds vs. Individual Bonds by Team of Litman Gregory
2009-10-07 Does Asia's Economic Rebound Signal the Return to Stellar Growth? by Nouriel Roubini of RGE Monitor
2009-10-07 U.S. Building Market Intelligence, October 2009 by John Burns of John Burns Real Estate Consulting
2009-10-06 And That's the Quarter That Was... by Ron Brounes of Brounes & Associates
2009-10-05 Green Shoots Withering in the Fall Season by Chris Maxey of Fortigent
2009-10-05 Sour Grapes by Michael Dana of Dana Investment Advisors
2009-10-05 The Recovery Process by Charles Lieberman (Article)
2009-10-04 Bank of America: How Much Should Bond Holders be Haircut to Restore Solvency? by Christopher Whalen of Institutional Risk Analyst
2009-10-03 Chuck Royce on Third Quarter 2009 by Chuck Royce of The Royce Funds
2009-10-03 Another Finger of Instability by John Mauldin of Millennium Wave Advisors
2009-10-02 Short Sales Are About to Increase by John Burns of John Burns Real Estate Consulting
2009-10-02 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-09-30 For Obama's Diplomacy, the Going Gets Tough by Nouriel Roubini of RGE Monitor
2009-09-30 Manic Edge by Scotty George of du Pasquier Asset Management
2009-09-30 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-09-29 Strategic and Tactical Perspectives on Gold by Geoff Considine, Ph.D. (Article)
There are good reasons for investors to maintain a long-term strategic allocation to gold, which has clear, positive portfolio benefits (due to low correlation to other asset classes). That said, gold is in an historic run-up in value and has been generating unsustainably high returns. Because of its high price and rising volatility, Geoff Considine argues there is significant tactical risk in gold.
2009-09-29 Taste Testing Investment Style Sausages by Ron Surz (Article)
Equity indexes, like those offered by Russell and S&P are the investment-world equivalent of sausages - chopped up pieces of meat in tightly wrapped packages. Most shoppers buy sausages based on brand name, as do investors when they choose their benchmarks. In this guest contribution, Ron Surz dissects these index sausages and explains the real differences in their ingredients.
2009-09-29 A Tale of Two Investors by Brian Murphy (Article)
Just as Dickens contrasted the fortunes and misfortunes in England and France in his classic novel, A Tale of Two Cities, today the divergence is painfully apparent in those who plan to accumulate wealth for their retirement and those who seek excess returns in their portfolios. In this guest contribution, advisor Brian Murphy tells the tale of two clients - one who aggressively sought alpha and the other who passively built retirement wealth.
2009-09-29 Interview: Jeff Mortimer, CIO of Charles Schwab Investment Management by Robert Huebscher (Article)
Jeff Mortimer is Senior Vice President and Chief Investment Officer-Charles Schwab Investment Management, Inc. (CSIM). Mortimer has overall responsibility for approximately $240 billion in Schwab Funds and managed accounts. We spoke with Mortimer two weeks ago about the economy and why he believes the market has already priced in the bad news trumpeted by the media.
2009-09-28 Will Japan drive our interest rates higher? by Vitaliy Katsenelson of Investment Management Associates
2009-09-28 The Global Carry Trade and the Crimes of Patriots by Christopher Whalen of Institutional Risk Analyst
2009-09-28 Unappreciated Risk by Charles Lieberman (Article)
2009-09-28 Investors Take a Breath by Team of Fortigent
2009-09-26 Welcome to the New Normal by John Mauldin of Millennium Wave Advisors
2009-09-25 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-09-23 The G20’s Crowded Agenda by Nouriel Roubini of RGE Monitor
2009-09-22 Lower Than You Think by Michael Nairne of Tacita Capital
2009-09-21 The Recession Is Likely Over! by Team of Fortigent
2009-09-21 Is it Models or the Economists?: Statement by David Colander by Christopher Whalen of Institutional Risk Analyst
2009-09-21 Art and Science by Scotty George of du Pasquier Asset Management
2009-09-21 From Boring to #1 in 20 Weeks by Isbitts of Emerald Asset Advisors
2009-09-21 Stocks Have Moved From Being by John Petrides (Article)
2009-09-19 The Hole in FDIC by John Mauldin of Millennium Wave Advisors
2009-09-18 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-09-18 “The Stimulus Didn’t Work” – An Overlooked Fact that Needs Mention by Asha Bangalore of Northern Trust
2009-09-16 New Home Price Stability Emerges in California by John Burns of John Burns Real Estate Consulting
2009-09-16 Exposure at Default: As Banks Shrink, So Does the Economy by Christopher Whalen of Institutional Risk Analyst
2009-09-15 Lehman Anniversary - What's Different? What's the Same? by Nouriel Roubini of RGE Monitor
2009-09-15 Equities Continue to Rally by Matthew Hunt of Prospect Wealth Management
2009-09-15 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-09-15 Local Building Market Intelligence by John Burns of John Burns Real Estate Consulting
2009-09-15 Mohammed El-Erian: We Have Not Reached Escape Velocity by Robert Huebscher (Article)
Kicking off this year's Schwab Impact conference in San Diego, Mohammed El-Erian told an audience of nearly 1,000 advisors on Sunday night that the US financial system has not fully emerged from the financial crisis. El-Erian and his co-presenter, Larry Fink of Blackrock, addressed a range of topics, including the safety of the financial system, the future of regulation, and the outlook for inflation.
2009-09-15 Investing Lessons from Golf and Blackjack Players by Robert Huebscher (Article)
At key moments investors refuse to take those chances that will make them money. Behavioral finance has a term for this - risk intolerance. Research supporting these claims comes from two divergent pastimes - the games of golf and blackjack.
2009-09-15 Theoretical Support for the Moving Average Crossover by Keith C. Goddard, CFA (Article)
In this guest contribution, Keith Goddard matches an appropriate descriptive theory about how asset markets work with recently published normative theory using Ted Wong's moving average crossover as an indicator for timing portfolio changes in active portfolio management strategies. He proposes that the theory of "Rational Belief Equilibrium" in asset markets, developed by Stanford professor, Mordecai Kurz, helps to explain why moving average crossovers have demonstrated predictive value in the stock market, and why they might continue to offer predictive value in the future.
2009-09-14 Now What? by Scotty George of du Pasquier Asset Management
2009-09-14 Has Charles Ponzi Visited Rock Hill, South Carolina? by Anderson of Anderson Griggs
2009-09-14 Stocks Advance with Little Data to Digest by Team of Fortigent
2009-09-14 One Year After Lehman by Charles Lieberman (Article)
2009-09-12 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-09-12 Elements of Deflation, Part 2 by John Mauldin of Millennium Wave Advisors
2009-09-11 VW by Michael Dana of Dana Investment Advisors
2009-09-11 Moving in the right direction (but aware of the crosscurrents) by Fried of Fried Asset Management
2009-09-10 The Trouble With Models Starts With Subjectivity by Christopher Whalen of Institutional Risk Analyst
2009-09-10 U.S. Building Market Intelligence, September 2009 by John Burns of John Burns Real Estate Consulting
2009-09-10 Animal Spirits (Interview with Robert Shiller) by Romesh Vaitilingam of VoxEU
2009-09-09 Is Resource Nationalism Back? by Nouriel Roubini of RGE Monitor
2009-09-08 Slow Turn by Charles Lieberman (Article)
2009-09-08 JPMorganChase: How Much Capital Does a Bank Need? by Christopher Whalen of Institutional Risk Analyst
2009-09-08 Employment Creating Headwinds by Team of Fortigent
2009-09-08 Are REITs Now Undervalued? by Geoff Considine, Ph.D. (Article)
The last couple of years have been rough for real estate, but there was a time not too long ago when it seemed that this was a 'special' asset class, with REITs providing valuable diversification benefits and consistently high returns. Do today's low valuations represent an opportunity to buy? Can investors expect a return to low correlations for REITs with the major equity market indexes?
2009-09-08 Shiller P/Es and Predicting Returns Some Additional Thoughts by Joseph A. Tomlinson, FSA, CFP (Article)
In a follow-up to his article last week, Shiller P/Es and Predicting Returns, Joe Tomlinson explores the issue of how best to use the Shiller P/Es in setting asset allocation strategies. He extends his earlier work to show results for a selection of alternative strategies.
2009-09-08 Infrastructure Investing by Michael D. Underhill (Article)
With global markets improving, liquidity returning to the credit markets, and valuations improving, the infrastructure market looks promising. In this guest contribution, Michael Underhill argues that infrastructure assets,when chosen correctly, can diversify an investor's portfolio because of their low correlation with other asset groups, their consistent returns coupled with lowered levels of risk, and their potential for inflation-linked returns.
2009-09-05 The Elements of Deflation by John Mauldin of Millennium Wave Advisors
2009-09-04 Sitting on My Porch by MacKay of Broadleaf Partners
2009-09-04 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-09-04 In Case You Missed It by Isbitts of Emerald Asset Advisors
2009-09-02 Q2 Performance in Western Europe by Nouriel Roubini of RGE Monitor
2009-09-01 Arlington Econometrics Weekly Commentary by Scotty George of du Pasquier Asset Management
2009-09-01 Q2 2009 Bank Stress Test Results: The Zombie Dance Party Rocks On by Christopher Whalen of Institutional Risk Analyst
2009-09-01 2Q 2009 Construction Trends by Anderson of Foresight Analytics
2009-09-01 Another Confirmation of Chinese Not-so-miracle Growth; September - the Worst Month of the Year by Vitaliy Katsenelson of Investment Management Associates
2009-09-01 Politics and Fund Managers by Robert Huebscher (Article)
Those readers who would like to know whether to invest with Democrat or Republican fund managers finally have some guidance, thanks to a new academic study. We report the results, along with a host of reasons why you shouldn't read too much into this data. We also provide the names of the top fund manager donors to each party over the period from 1992 to 2006.
2009-09-01 Shiller P/E's and Predicting Returns by Joseph A. Tomlinson, FSA, CFP (Article)
It becomes clearer every day that the stock market does not follow a random walk and that there may be some predictability in long-term returns. But there's little agreement on how best to make such predictions. In this guest contribution, advisor Joe Tomlinson takes a look at using price/earnings ratios to predict future stock market performance.
2009-09-01 Additional Thoughts on the “New Normal” by Geoff Considine, Ph.D. (Article)
A number of readers responded to Geoff Considine's article three weeks ago, What the New Normal Means for Asset Allocation, including Larry Katz, Director of Research at Merriman, whose response we published last week. Katz criticized Considine along a number of dimensions, and in this guest contribution Considine defends his New Normal asset allocation.
2009-09-01 Dougal Williams Responds: The Failure of Asset Allocation Funds by Dougal Williams, CFA (Article)
Dougal Williams' article two weeks, A Crash Course in Investing: Six Lessons from the Market Meltdown, also drew comments from a reader, who challenged the methodology Williams used when he argued that asset allocation funds have failed to deliver out-performance. Williams responds to those criticisms and offers new evidence of the failure in that fund category.
2009-09-01 The Levers to Financial Freedom by Russ Thornton (Article)
Virtually the entire financial services industry is built upon spending vast amounts of time, money and other resources on things over which we have absolutely no control - like attempting to manage investment returns. In this guest contribution, advisor Russ Thornton shows that, by focusing on those things you can control, you as a financial planner can build better, more resilient plans for your clients.
2009-08-31 So Long Sweet Summer by Team of Fortigent
2009-08-31 The Myth of Decoupling by Sébastien Wälti of VoxEU
2009-08-31 Cash is a Clunker by Charles Lieberman (Article)
2009-08-31 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-08-29 An Uncomfortable Choice by John Mauldin of Millennium Wave Advisors
2009-08-29 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-08-28 Something to Think About by Michael Golub of The Golub Group
2009-08-26 The China Effect by Nouriel Roubini of RGE Monitor
2009-08-25 Inertia by Scotty George of du Pasquier Asset Management
2009-08-25 The New Normal and Asset Allocation Merriman’s Response by Larry Katz, CFA (Article)
Larry Katz, Director of Research at Merriman, Inc., responds to Geoff Considine's article two weeks ago, What the New Normal Means for Asset Allocation. He has multiple objections concerning much of Considine's logic, and would not recommend his alternative portfolio to their clients.
2009-08-25 Should Investors Hold More Equities Near Retirement? by Ron Surz (Article)
A just-published paper argues that investors should hold more equities as they near retirement, contrary to conventional wisdom and to the glide paths employed by the target date fund industry. Ron Surz examines this research, and argues that the authors of the paper failed to properly consider the risks inherent in such a strategy.
2009-08-24 There's A Strong Recovery Ahead in Housing by Charles Lieberman (Article)
2009-08-24 If Inflation Is a Monetary Phenomenon, Is U.S. Hyperinflation a Clear and Present Danger? by Paul Kasriel of Northern Trust
2009-08-24 Economy Hems and Haws by Team of Fortigent
2009-08-24 The Discomfort of Diversification by Michael Nairne of Tacita Capital
2009-08-22 The Statistical Recovery, Part Three by John Mauldin of Millennium Wave Advisors
2009-08-21 I'll Save the World - And Melt With You by Isbitts of Emerald Asset Advisors
2009-08-21 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-08-20 2nd Quarter Review 2009 by Gary M. Wozny and John M. Nowicki of LCM Capital Management
2009-08-19 U.S. Economic Outlook Update: Stop Asking When the Recession Will End by Nouriel Roubini of RGE Monitor
2009-08-18 Healthcare Game by Vitaliy Katsenelson of Investment Management Associates
2009-08-18 Systemic Risk: Is it Black Swans or Market Innovations? by Christopher Whalen of Institutional Risk Analyst
2009-08-18 U.S. Building Market Intelligence, August 2009 by John Burns of John Burns Real Estate Consulting
2009-08-18 A Crash Course in Investing Six Lessons from the Market Meltdown by Dougal Williams, CFA (Article)
The market decline from October 2007 to early March 2009 was the worst since the late 1930's. Stocks dropped 60%, investor uncertainty skyrocketed, and trust and confidence were shattered. The age-old rules for personal investing are now being questioned: Is Buy-and-Hold dead? Has Asset Allocation outlived its usefulness? Does Diversification still work? In this guest contribution, Dougal Williams provides answers to these questions that can serve as a guide for long-term investment success.
2009-08-17 Disappointing Economic Data Weighs on Markets by Team of Fortigent
2009-08-17 It Is Different This Time by Scotty George of du Pasquier Asset Management
2009-08-17 You Kiddin' Me? by Vitaliy Katsenelson of Investment Management Associates
2009-08-17 New Home Prices, Starts and Sales Rates are Nearing a Bottom by John Burns of John Burns Real Estate Consulting
2009-08-17 Will Commercial Real Estate Defer Recovery? by Charles Lieberman (Article)
2009-08-15 The Statistical Recovery, Part 2 by John Mauldin of Millennium Wave Advisors
2009-08-14 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-08-14 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-08-13 Are You Ready for the Next Bank Stress Tests?; More on OTC Derivatives Reform by Christopher Whalen of Institutional Risk Analyst
2009-08-12 Credit Markets Update: Fundamentals Driven or Too Much Liquidity? by Nouriel Roubini of RGE Monitor
2009-08-12 Dog Daze by Michael Dana of Dana Investment Advisors
2009-08-12 Rushing to Foolishness by Gibb of Sweetwater Investments
2009-08-11 Economic Improvement Going Global by Team of Fortigent
2009-08-11 It Is Looking More Like A V-Shaped Recovery by Charles Lieberman (Article)
2009-08-11 August 2009 Economic Update by Anderson of Cambridge Advisors
2009-08-11 Now Comes the Hard Part by Jeffrey Bronchick of Reed, Conner & Birdwell
2009-08-11 What the New Normal Means for Asset Allocation by Geoff Considine, Ph.D. (Article)
Bill Gross of PIMCO forecasts a New Normal - slow economic growth, higher inflation, and increasing correlations among asset classes. If this view is correct, what should investors do? Geoff Considine examines the implications for asset allocation and financial planning by stress-testing some well-known asset allocations to see how well they will serve investors in the forecast environment.
2009-08-10 Is It That Good? by Scotty George of du Pasquier Asset Management
2009-08-08 Six Impossible Things Before Breakfast by John Mauldin of Millennium Wave Advisors
2009-08-08 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-08-06 Look Forward and Smile by MacKay of Broadleaf Partners
2009-08-06 China's Growth an Accounting Miracle by Vitaliy Katsenelson of Investment Management Associates
2009-08-05 All About Picking Losers as Winners: Interview With Bob Feinberg by Christopher Whalen of Institutional Risk Analyst
2009-08-05 Are There Bright Spots Amid the Global Recession? by Nouriel Roubini of RGE Monitor
2009-08-05 2nd Quarter 2009 Market Review & Outlook by Ronald W. Roge of R.W. Roge
2009-08-04 Summer Quarterly Commentary by John G. Prichard of Knightsbridge Asset Management
2009-08-04 A Wakeup Call for Advisors: Turmoil at the Top of the Market by Dan Richards (Article)
Recent articles in Business Week, the New York Times and the Wall Street Journal describe turmoil among high-net worth investors and have profound implications for financial advisors. Dan Richards offers a five-point response for advisors to counteract investor disillusionment with their current relationship.
2009-08-03 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-08-03 Still Missing the Last Piece: Jobs by Charles Lieberman (Article)
2009-08-03 Another Record Month Officially Behind Us by Team of Fortigent
2009-08-02 And That\'s the Week That Was... by Ron Brounes of Brounes & Associates
2009-08-02 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-08-02 The Great Reflation Experiment by John Mauldin of Millennium Wave Advisors
2009-07-29 Europe Economic Outlook by Nouriel Roubini of RGE Monitor
2009-07-28 "Moderately Constructive" ... What the Heck Does That Mean? by Isbitts of Emerald Asset Advisors
2009-07-28 The Simple Math of China's Staggering Growth by Vitaliy Katsenelson of Investment Management Associates
2009-07-27 The Big Picture by Scotty George of du Pasquier Asset Management
2009-07-27 White Swans and Credit Default Swaps; Martin Mayer at AIER by Christopher Whalen of Institutional Risk Analyst
2009-07-27 Revenues Down, Profits Up, Is This a Problem? by Charles Lieberman (Article)
2009-07-27 Equity Markets on a Tear by Team of Fortigent
2009-07-27 Save, Pay Down Debt, Save Some More… What a Novel Concept ! by Jason R. Graybill of Carret Asset Management
2009-07-25 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-07-25 The Statistical Recovery by John Mauldin of Millennium Wave Advisors
2009-07-23 Beating the Market by Michael Nairne of Tacita Capital
2009-07-22 Can Japan Avoid Another Lost Decade? by Nouriel Roubini of RGE Monitor
2009-07-22 Restructuring, Resolution and Rebirth at Citigroup? by Christopher Whalen of Institutional Risk Analyst
2009-07-22 Double-Trouble, Triple Threat by Isbitts of Emerald Asset Advisors
2009-07-22 Advance 2Q 2009 Delinquency Rate Estimates by Anderson of Foresight Analytics
2009-07-21 Investors Throw Caution to the Wind by Team of Fortigent
2009-07-20 Lethargy? by Scotty George of du Pasquier Asset Management
2009-07-20 From Green Shoots to Flowering Buds by Charles Lieberman (Article)
2009-07-20 Has Housing Construction Really Bottomed? by John Burns of John Burns Real Estate Consulting
2009-07-20 Einstein on Investing by Goodson of RDL Financial
2009-07-18 Europe on the Brink by John Mauldin of Millennium Wave Advisors
2009-07-17 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-07-17 Jobs by Michael Dana of Dana Investment Advisors
2009-07-16 Why Safe Isn't Always by Charles Bennett Sachs of Evensky & Katz
2009-07-16 Survey Results: New Home Market Remains Weak by John Burns of John Burns Real Estate Consulting
2009-07-16 Simple Rules for Complex Times by Cliff W. Draughn of Excelsia Investment Advisors
2009-07-16 Statement on U.S. Economic Outlook by Dr. Nouriel Roubini by Nouriel Roubini of RGE Monitor
2009-07-16 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-07-15 Our Five Year Forecast by Anderson of Anderson Griggs
2009-07-15 What Do AIG and CIT Have in Common? Asset Deflation by Christopher Whalen of Institutional Risk Analyst
2009-07-15 Tempo Financial Advisors by Daniel J. Traub of Tempo Financial Advisors, LLC
2009-07-15 China Economic Outlook by Nouriel Roubini of RGE Monitor
2009-07-15 The Last Word - Post Madoff by Harold Evensky of Evensky & Katz
2009-07-14 All Aboard! by MacKay of Broadleaf Partners
2009-07-14 Quarterly Market Commentary by Ashburn of Creekside Partners
2009-07-13 Failed Models, Positive Asymmetrical Outcomes, Managed Futures and Market-Timers by Jeff Joseph of Prescient Advisors
2009-07-13 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-07-13 As Earnings Kick Off, Investors Remain Cautious by Team of Fortigent
2009-07-13 The Shin Bone Is Connected to the Knee Bone... by Charles Lieberman (Article)
2009-07-11 Buddy, Can You Spare $5 Trillion? by John Mauldin of Millennium Wave Advisors
2009-07-10 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-07-10 The Good, the Bad, the Unknown by William H. McAfee of WHM Capital Advisors
2009-07-10 Portfolio Strategy by Bradley Turner of Chess Financial
2009-07-10 The Passing of Billy Mays Will Boost My Personal Saving Rate by Paul Kasriel of Northern Trust
2009-07-08 U.S. Economic Outlook: Q2 2009 Update by Nouriel Roubini of RGE Monitor
2009-07-08 Does the Fed Really Manage Risk? by Christopher Whalen of Institutional Risk Analyst
2009-07-08 Does the Fed Really Manage Risk? by Christopher Whalen of Institutional Risk Analyst
2009-07-07 Economic Update by Mark Oelschlager of Oak Associates
2009-07-06 Out with a Wimper, In with a Bang by Team of Fortigent
2009-07-06 Disappointment, Not Tragedy by Charles Lieberman (Article)
2009-07-06 And That's the Quarter That Was... by Ron Brounes of Brounes & Associates
2009-07-06 Second Quarter Investment Perspective by Anderson of Cambridge Advisors
2009-07-02 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-07-02 Monitoring the Market News by Fried of Fried Asset Management
2009-07-02 Market Review and Outlook by MacKay of Broadleaf Partners
2009-07-01 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-07-01 Feudal Economy: 2009 by Scotty George of du Pasquier Asset Management
2009-07-01 Will the Global Warming Bill Cool the Global Economy? by Nouriel Roubini of RGE Monitor
2009-06-30 Seeking Superlative RAROC: Stress Test Profiles for US Bancorp and Cullen/Frost Bankers by Christopher Whalen of Institutional Risk Analyst
2009-06-30 Letters to the Editor: Moving Average: Holy Grail or Fairy Tale, Part I by Various (Article)
We have two sections of letters to the Editor. The first set features responses to Ted Wong's article, Moving Average: Holy Grail or Fairy Tale - Part 1.
2009-06-29 The Message of the Bond Market by Charles Lieberman (Article)
2009-06-29 Short, but Busy, Wekk Forthcoming by Team of Fortigent
2009-06-27 The End of the Recession? by John Mauldin of Millennium Wave Advisors
2009-06-26 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-06-25 The Bond Hedge by Michael Nairne of Tacita Capital
2009-06-24 Regulatory Reforms in G7 Financial Centers by Nouriel Roubini of RGE Monitor
2009-06-24 Tax Aware Investing by Isbitts of Emerald Asset Advisors
2009-06-23 Inflation, Politics, History and Investments by Metcalf of Merriman
2009-06-23 Compelling Evidence That Active Management Really Works by Ken Solow (Article)
The majority of academic studies conclude that active management does not add value for investors. However, a closer look at how many studies were conducted reveals several flaws in their methodology that are not as well-known as the accepted conclusion about active versus passive management. Guest contributor Ken Solow revisits work by two Yale researchers showing the value added through active management.
2009-06-23 Letters to the Editor – Moving Average: Holy Grail or Fairy Tale? by Various (Article)
Ted Wong's article last week, Moving Average: Holy Grail or Fairy Tale?, drew a large number of questions and comments from readers.
2009-06-22 Next Week/Next Year by Scotty George of du Pasquier Asset Management
2009-06-22 (The Economy) and Housing are Bottoming by Charles Lieberman (Article)
2009-06-22 Is the Economic Glass Half Full…or Half Empty? by Team of Fortigent
2009-06-22 Back to Basis for Securitization: Interview With Ann Rutledge by Christopher Whalen of Institutional Risk Analyst
2009-06-21 Statement by Christopher Whalen Committee on Banking, Housing and Urban Affairs by Christopher Whalen of Institutional Risk Analyst
2009-06-20 This Time its Different* by John Mauldin of Millennium Wave Advisors
2009-06-19 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-06-19 Metro Area Home Prices 1Q 2009 - Bottoming Out by Anderson of Foresight Analytics
2009-06-18 Five Reasons to Avoid the Gold Rush by Vitaliy Katsenelson of Investment Management Associates
2009-06-17 BRICs in the Monitor by Nouriel Roubini of RGE Monitor
2009-06-17 Larry Summers is Confident; Joe Mason on Skin in the Game for Securitization by Christopher Whalen of Institutional Risk Analyst
2009-06-16 9 Keys to Portfolio Risk Management by Isbitts of Emerald Asset Advisors
2009-06-16 Is It Time to Change the Way We Invest? by Team of Litman Gregory
2009-06-16 Technical, Practical, Theoretical; Observations on Bonds and Inflation by MacKay of Broadleaf Partners
2009-06-15 Global Leaders Provide Optimistic Outlook by Team of Fortigent
2009-06-15 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-06-15 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-06-15 Green Shoots – The Will to Believe – If You Sleep With Dogs, You’re Bound To Get Fleas by Anderson of Anderson Griggs
2009-06-15 One Step Back by Scotty George of du Pasquier Asset Management
2009-06-15 June Survey: New Home Indicators Show Slight Uptick by John Burns of John Burns Real Estate Consulting
2009-06-15 Markets Moving Back to Equilibrium by Matthew Hunt of Prospect Wealth Management
2009-06-15 What if the Chinese Sell Treasuries? by Charles Lieberman (Article)
2009-06-15 The FDIC vs. the Banksters: by Christopher Whalen of Institutional Risk Analyst
2009-06-12 The Quality Alternative by Nejmeh of HS Management Partners
2009-06-10 Fair Deals and Bad Dealers: CDS, Regulatory Reform and Other Tales from Washington by Christopher Whalen of Institutional Risk Analyst
2009-06-10 Is Eastern Europe on the Brink of an Asia-Style Crisis? by Nouriel Roubini of RGE Monitor
2009-06-10 Hybrid Portfolio Theory by Jeff Joseph of Prescient Advisors
2009-06-10 Taxation and the Flight of Capital by Gibb of Sweetwater Investments
2009-06-10 VAT by Michael Dana of Dana Investment Advisors
2009-06-09 Changes in Asset Allocation by Robert Huebscher and Mary Pitek (Article)
Each quarter we review changes in the Advisor Perspectives (AP) Universe, which represents $50 billion in high-net worth assets managed by RIAs. Our analysis looks at changes in asset allocation, the mutual funds and ETFs that gained or lost market share, and the performance of the most popular actively managed mutual funds. This analysis focuses on changes in asset allocation.
2009-06-08 Why are Interest Rates Rising on Treasuries? by Charles Lieberman (Article)
2009-06-08 Half-Way There by Scotty George of du Pasquier Asset Management
2009-06-08 Economy Moving in the Right Direction by Team of Fortigent
2009-06-06 The New, New Normal by John Mauldin of Millennium Wave Advisors
2009-06-06 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-06-06 Greater Risk over Next Five Years - Inflation or Deflation? by Paul Kasriel of Northern Trust
2009-06-05 U.S. Building Market Intelligence, June 2009 by John Burns of John Burns Real Estate Consulting
2009-06-05 Bear Market Bubbles by MacKay of Broadleaf Partners
2009-06-03 Assessing Obama’s ‘Smart Power’ Approach to Foreign Policy Making by Nouriel Roubini of RGE Monitor
2009-06-03 Credit Default Swaps and Too Big to Fail or Unwind: Interview With Ed Kane by Christopher Whalen of Institutional Risk Analyst
2009-06-03 Summer Forecast by Isbitts of Emerald Asset Advisors
2009-06-03 The by Dubee of Quest Financial Services, Inc.
2009-06-02 Market Commentary by Mark C. Scheffler of Appleton Group
2009-06-02 Jeremy Grantham's Warnings to Investors by Robert Huebscher (Article)
Of the thousands of investment letters penned in the industry, only one draws as much readership as Warren Buffet's annual letter to his shareholders: The quarterly commentary written by Jeremy Grantham. Grantham, the Chairman of the Boston-based investment firm Grantham Mayo Van Otterloo, was a featured speaker at Morningstar's Investor Conference last week, and he spoke at two breakout sessions. Those who, like me, attended both were richly rewarded, as he gave two distinctly different talks, addressing many subjects not covered in his commentaries.
2009-06-02 John Bogle and the Lantern on the Stern by Robert Huebscher (Article)
In his remarks at the Morningstar conference last week, Vanguard founder and index fund pioneer John Bogle criticized many aspects of the mutual fund industry. Bogle, who turned 80 this year, is primed to fight his next battle - reducing investor reliance on past returns - which he likens to a lantern on the stern of a ship.
2009-06-01 The Susan Boyle of Software by Vitaliy Katsenelson of Investment Management Associates
2009-06-01 Dog Days of Summer Nearly Here by Team of Fortigent
2009-06-01 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-06-01 Q1 2009 Bank Ratings Update and GM, GMAC Join the Zombie Dance Party by Christopher Whalen of Institutional Risk Analyst
2009-06-01 Where Are the Land Mines Hidden? by Charles Lieberman (Article)
2009-05-30 This Way be Dragons by John Mauldin of Millennium Wave Advisors
2009-05-29 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-05-29 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-05-27 Inflation: Will Your Investments Protect You? by Larry Katz of Merriman
2009-05-27 The State of Real Estate Around the World: No Signs of Stabilization? by Nouriel Roubini of RGE Monitor
2009-05-27 Germany's Subprime Crisis: Interview With Achim Dübel by Christopher Whalen of Institutional Risk Analyst
2009-05-27 The Black Swan Portfolio by Jeff Joseph of Prescient Advisors
2009-05-26 Long Weekend Ushers in Busy Week Ahead by Team of Fortigent
2009-05-26 Designer Clothes by Scotty George of du Pasquier Asset Management
2009-05-26 Is the Stock Market Rally for Real? by Charles Lieberman (Article)
2009-05-26 Buyback Strategy Version 1.2 - New and Improved! by Fried of Fried Asset Management
2009-05-26 What the “Missing Out” Argument Misses by Theodore Wang (Article)
Market timing is discredited by passive investment advisors as a voodoo ritual. Buy-and-hold proponents argue most compellingly by citing the "missing out" scenario - they show a dramatic drop in return, to Treasury Bill levels, if investors are out of the markets for only a few good days. In this guest contribution, Ted Wong debunks the missing out argument, using 137 years of market data.
2009-05-23 The Paradox of Deficits by John Mauldin of Millennium Wave Advisors
2009-05-22 Global Economy Now Stabilising by Matthew Hunt of Prospect Wealth Management
2009-05-22 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-05-21 Suze Orman - Should You Listen to Her Advice? by Curran of Merriman
2009-05-20 Are Commodity Prices Getting Ahead of Fundamentals? by Nouriel Roubini of RGE Monitor
2009-05-20 Answering Your Question by MacKay of Broadleaf Partners
2009-05-20 Are We in a Cyclical or Secular Bull Market? by Vitaliy Katsenelson of Investment Management Associates
2009-05-19 David Swensen's Ascent by Mebane Faber (Article)
Mebane Faber provides an excerpt from his new book, The Ivy Portfolio, on the ascent of David Swensen and the development of the tools employed to manage Yale's endowment. Faber shows the data Swensen used to determine Yale's aggressive allocation to alternative asset classes.
2009-05-18 Kabuki on the Potomac: Reforming Credit Default Swaps and OTC Derivatives by Christopher Whalen of Institutional Risk Analyst
2009-05-18 Calm Down by Scotty George of du Pasquier Asset Management
2009-05-18 New Home Indicators Maintain Improved Levels by John Burns of John Burns Real Estate Consulting
2009-05-18 Seeds of Recovery by Charles Lieberman (Article)
2009-05-18 Lackluster News Drags on the Markets by Team of Fortigent
2009-05-18 An Uncommon Value by Michael Golub of The Golub Group
2009-05-18 Market Overview: The Upside of Dividends by Team of Miller/Howard
2009-05-18 Sucker's Rally? by Isbitts of Emerald Asset Advisors
2009-05-18 Sucker's Rally? by Isbitts of Emerald Asset Advisors
2009-05-16 Faith-Based Economics by John Mauldin of Millennium Wave Advisors
2009-05-15 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-05-15 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-05-15 Planning for Recovery by Ronald W. Roge of R.W. Roge
2009-05-15 Chrysler, GM and the New Industrial Policy by Christopher Whalen of Institutional Risk Analyst
2009-05-13 Green Shoots or Yellow Weeds? by Nouriel Roubini of RGE Monitor
2009-05-13 Tactical? Yes Practical? Maybe by Isbitts of Emerald Asset Advisors
2009-05-12 "Private" Practice by Jeff Joseph of Prescient Advisors
2009-05-12 How Stealing Chrysler Threatens Our Markets by Vitaliy Katsenelson of Investment Management Associates
2009-05-12 First Quarter 2009 Review by Stephen G. Royce of LCM Capital Management
2009-05-11 Not Too Early by Scotty George of du Pasquier Asset Management
2009-05-11 Inflation Fears are Overblown by Charles Lieberman (Article)
2009-05-11 Investment Bedrock by Hoefer of The Golub Group
2009-05-11 Focus Shifts from Earnings to Economy by Team of Fortigent
2009-05-11 Spring Quarterly Commentary by John G. Prichard of Knightsbridge Asset Management
2009-05-09 Green Shoots or Dandelion Weeds? by John Mauldin of Millennium Wave Advisors
2009-05-08 Mortgage Duration Risk: The Banks Are No Longer the Problem by Christopher Whalen of Institutional Risk Analyst
2009-05-08 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-05-08 Why God Made Mom's; The View from the Second Grade by MacKay of Broadleaf Partners
2009-05-07 Silver Lining by Michael Dana of Dana Investment Advisors
2009-05-07 IRA Releases Preliminary Q1 2009 Bank Stress Index Results by Christopher Whalen of Institutional Risk Analyst
2009-05-07 Municipal Bonds - CIM 1Q 09 Quarterly Review and Outlook by Andrew Clinton of Clinton Investment Management
2009-05-07 Economic Update by Anderson of Cambridge Advisors
2009-05-06 The Impact of the Chrysler Bankruptcy by Nouriel Roubini of RGE Monitor
2009-05-04 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-05-04 The Upside Case for the Stock Market by Charles Lieberman (Article)
2009-05-04 Economic News Remains Fast & Furious by Team of Fortigent
2009-05-02 Back to the Future Recession by John Mauldin of Millennium Wave Advisors
2009-05-01 From Swine Flu to Bank Stress Tests, Washington is the Problem by Christopher Whalen of Institutional Risk Analyst
2009-05-01 From Swine Flu to Bank Stress Tests, Washington is the Problem by Christopher Whalen of Institutional Risk Analyst
2009-05-01 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-05-01 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-04-30 The Road to Recovery by MacKay of Broadleaf Partners
2009-04-30 U.S. Building Market Intelligence, April 2009 by John Burns of John Burns Real Estate Consulting
2009-04-29 Navigating Towards Bretton Woods 3? by Nouriel Roubini of RGE Monitor
2009-04-27 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-04-27 The Ship is Turning by Charles Lieberman (Article)
2009-04-27 Are the Bulls Ready to Take Out the Bears? by Team of Fortigent
2009-04-27 Crisis = Opportunity? by Jeff Joseph of Prescient Advisors
2009-04-25 Back to the Future Recession by John Mauldin of Millennium Wave Advisors
2009-04-24 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-04-24 Tired...and not Retired by Isbitts of Emerald Asset Advisors
2009-04-23 Should Washington & Wall Street Take a Lesson from Bill Ford? by Christopher Whalen of Institutional Risk Analyst
2009-04-22 2009 Global Economic Outlook (Q1 update) by Nouriel Roubini of RGE Monitor
2009-04-22 Risk Premiums Decline, Liquidity Returns… for Quality that is by Jason R. Graybill of Carret Asset Management
2009-04-20 Bottom Fishing by Scotty George of du Pasquier Asset Management
2009-04-20 Step by Step by Charles Lieberman (Article)
2009-04-20 Earnings Keep the Market Afloat by Team of Fortigent
2009-04-20 Certainty and Uncertainty by Crowther-Pal of Litman Gregory
2009-04-18 The Trend May Not Be Your Friend by John Mauldin of Millennium Wave Advisors
2009-04-17 Can You Kick It? ... And Other Irrelevant Questions by Isbitts of Emerald Asset Advisors
2009-04-17 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-04-17 Can Citigroup be Restructured Without an FDIC Resolution? by Christopher Whalen of Institutional Risk Analyst
2009-04-15 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-04-15 Cycles by Michael Dana of Dana Investment Advisors
2009-04-15 Diversification is not Dead by Daniel J. Traub of Tempo Financial Advisors, LLC
2009-04-15 Zombie Update; Pento on Bernanke's Permanently Expanded Balance Sheet by Christopher Whalen of Institutional Risk Analyst
2009-04-15 Banks in the Spotlight by Nouriel Roubini of RGE Monitor
2009-04-15 Housing Survey from The Frontlines by John Burns of John Burns Real Estate Consulting
2009-04-14 Prevaricators' Market by Cliff W. Draughn of Draughn Partners
2009-04-14 WHM Capital Advisor’s Quarterly Review: “Hope Springs Eternal” by William H. McAfee of WHM Capital Advisors
2009-04-14 All About Balance by Scotty George of du Pasquier Asset Management
2009-04-13 Investors Await Earnings by Team of Fortigent
2009-04-13 A Little Healthier, Psychologically by Charles Lieberman (Article)
2009-04-13 Portfolio Strategy by Bradley Turner of Chess Financial
2009-04-11 Is That Recovery We See? by John Mauldin of Millennium Wave Advisors
2009-04-10 "Renting" the Stock Market - The Ballad of Babe and Yogi by Isbitts of Emerald Asset Advisors
2009-04-10 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-04-08 China’s Economy in 2009 and Beyond by Nouriel Roubini of RGE Monitor
2009-04-07 Saved by the Bell by Anderson of Anderson Griggs
2009-04-06 Not Out of the Woods Quite Yet by Charles Lieberman (Article)
2009-04-06 World Leaders Winning Back Investor Confidence by Team of Fortigent
2009-04-06 Valleys, Foothills and New Mountains by MacKay of Broadleaf Partners
2009-04-06 Market Commentary by Mark C. Scheffler of Appleton Group
2009-04-06 Apples and Truffles: PPIP is FInancially Flawed, Intellectually Dishonest by Christopher Whalen of Institutional Risk Analyst
2009-04-05 Deep Inside the Dow by John Mauldin of Millennium Wave Advisors
2009-04-05 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-04-05 Good News on a Relative Basis by Beckman of Oxford Group
2009-04-02 AIG: Before Credit Default Swaps, There Was Reinsurance by Christopher Whalen of Institutional Risk Analyst
2009-04-02 AIG: Before Credit Default Swaps, There Was Reinsurance by Christopher Whalen of Institutional Risk Analyst
2009-04-01 Focus on the G20 by Nouriel Roubini of RGE Monitor
2009-04-01 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-03-31 Kaleidoscope by Scotty George of du Pasquier Asset Management
2009-03-30 March Rallies Bring April... by Team of Fortigent
2009-03-30 International Economic Games at the G20 by Charles Lieberman (Article)
2009-03-30 In Ohio the World's Not Ending: An Interview with Ken Joyce of Rurban Financial by Christopher Whalen of Institutional Risk Analyst
2009-03-28 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-03-28 Why Bother With Bonds? by John Mauldin of Millennium Wave Advisors
2009-03-25 The Public-Private Partnership Investment Program (PPIP) - Will It Work? by Nouriel Roubini of RGE Monitor
2009-03-24 Washington Fiddles as Global Deflation Rages by Christopher Whalen of Institutional Risk Analyst
2009-03-23 Policy Engaged by Charles Lieberman (Article)
2009-03-23 The Fed Decides to go 'All In' ... Again by Team of Fortigent
2009-03-23 Additional Thoughts from Michael Golub by Michael Golub of The Golub Group
2009-03-23 The Fed Decides to go 'All In' ... Again by Team of Fortigent
2009-03-21 Solving the Housing Crisis by John Mauldin of Millennium Wave Advisors
2009-03-20 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-03-20 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-03-19 The Big Truths in Life are Always Simple by Michael Golub of The Golub Group
2009-03-19 What to Expect When You're Expecting... a Financial Disaster by Isbitts of Emerald Asset Advisors
2009-03-18 Reversal of Capital Flows in the Emerging World by Nouriel Roubini of RGE Monitor
2009-03-18 Unraveling the Housing Market by Charles Lieberman (Article)
2009-03-18 Don't Fight the Fed by Charles Lieberman (Article)
2009-03-17 What is the Stated Intent of Fair Value Accounting? by Christopher Whalen of Institutional Risk Analyst
2009-03-17 In Like a Lion by Michael Dana of Dana Investment Advisors
2009-03-17 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-03-17 Not Suitable for All Ages? by Isbitts of Emerald Asset Advisors
2009-03-16 March Madness Comes a Week Early by Team of Fortigent
2009-03-16 Early Green Shots by Charles Lieberman (Article)
2009-03-14 The Swiss Start Their Engines by John Mauldin of Millennium Wave Advisors
2009-03-13 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2009-03-13 Stress Test Zombies: Not Too Big To Fail? Tough Tootsies Little Banks! by Christopher Whalen of Institutional Risk Analyst
2009-03-13 New Initiatives Fail to Re-assure by Matthew Hunt of Prospect Wealth Management
2009-03-12 Something for Nothing, Free Lunches and Fool's Gold by MacKay of Broadleaf Partners
2009-03-12 Are We All Keynesians Now? by Art Patten of Symmetry Capital Management
2009-03-12 Grantham's "Reinvesting When Terrified" 3/10/2009 by Kuntzman of Beacon Pointe
2009-03-12 Housing Affordability Reaches Its Best Levels in Several Generations! by John Burns of John Burns Real Estate Consulting
2009-03-11 2009 U.S. Economic Outlook: Q1 2009 Update by Nouriel Roubini of RGE Monitor
2009-03-11 Is There Any Good News? by Fried of Fried Asset Management
2009-03-09 A-Pathetic Situation by Isbitts of Emerald Asset Advisors
2009-03-09 The Clocks Changed: Now If Only We Could \'Spring Forward\' the Economy by Team of Fortigent
2009-03-09 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-03-09 Accounting Gone Wild by Charles Lieberman (Article)
2009-03-09 Stock Market To Go Much Lower by Nouriel Roubini of RGE Monitor
2009-03-08 What is the Plan? A Discussion with Bill Dunkelberg and David Kotok by Christopher Whalen of Institutional Risk Analyst
2009-03-07 The Law of Unintended Consequences by John Mauldin of Millennium Wave Advisors
2009-03-06 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2009-03-06 Even Amid Gloom, Stocks May End Year With Gains by Kuntzman of Beacon Pointe
2009-03-04 The Re-Emergence of Global Protectionism: A Newer Version of Smoot-Hawley? by Nouriel Roubini of RGE Monitor
2009-03-04 How to Resolve AIG & Citi; Walker Todd on Stress Testing the Banks by Christopher Whalen of Institutional Risk Analyst
2009-03-04 Guild Investment Management Commentary by Monty Guild of Guild Investment Management
2009-03-03 Things Have to Get Better, Right? Right?? by Team of Fortigent
2009-03-03 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-03-02 Stressed to the '09s by Isbitts of Emerald Asset Advisors
2009-03-02 A Good Strategic Move by Charles Lieberman (Article)
2009-03-02 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-03-02 Zombie Dance Party: Was the Banking Industry Really Profitable in 2008? by Christopher Whalen of Institutional Risk Analyst
2009-02-28 Buy and Hope Investing by John Mauldin of Millennium Wave Advisors
2009-02-27 The Value of Trust Preferred Shares by Charles Lieberman (Article)
2009-02-27 February Economic Update by Anderson of Cambridge Advisors
2009-02-27 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2009-02-26 It Is Scary by Harold Evensky of Evensky & Katz
2009-02-25 Eastern European Tinderbox: How Explosive Could It Get? by Nouriel Roubini of RGE Monitor
2009-02-25 Caressing and Stressing, Shopping and Rebalancing by MacKay of Broadleaf Partners
2009-02-25 What is To Be Done With Credit Default Swaps? by Christopher Whalen of Institutional Risk Analyst
2009-02-25 What is To Be Done With Credit Default Swaps? by Christopher Whalen of Institutional Risk Analyst
2009-02-23 Martin Mayer on CDS; Nouriel Roubini on the Banks by Christopher Whalen of Institutional Risk Analyst
2009-02-23 Markets Have Another Case of the Mondays by Team of Fortigent
2009-02-23 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-02-23 Economic News is Grim by Matthew Hunt of Prospect Wealth Management
2009-02-23 Nationalization Fears by Charles Lieberman (Article)
2009-02-21 When Rome Burns by John Mauldin of Millennium Wave Advisors
2009-02-20 Black Holes and Red Giants by MacKay of Broadleaf Partners
2009-02-20 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2009-02-19 Too Big to Bail: Lehman Brothers is the Model for Fixing the Zombie Banks by Christopher Whalen of Institutional Risk Analyst
2009-02-18 Meeting the U.S. Financing Needs by Nouriel Roubini of RGE Monitor
2009-02-18 Market Commentary by Mark C. Scheffler of Appleton Group
2009-02-17 A Keynesian Experiment Unlike Any We Have Seen by Team of Fortigent
2009-02-17 Stop Talking, Just Do It by Charles Lieberman (Article)
2009-02-17 What Happened? by Art Patten of Symmetry Capital Management
2009-02-14 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-02-14 Time for a Reality Check by John Mauldin of Millennium Wave Advisors
2009-02-13 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-02-13 Chopped Salad by Isbitts of Emerald Asset Advisors
2009-02-13 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2009-02-13 Preparing for a Worst Case Scenario by Dean of Dean & Associates
2009-02-12 Worries in the Middle East; Exxon Apostasy Continued. by Vitaliy Katsenelson of Investment Management Associates
2009-02-11 Treasury's Financial Stability Plan: Will It Work? by Nouriel Roubini of RGE Monitor
2009-02-10 Out of Bad Times Always Come the Good Times by Michael Golub of The Golub Group
2009-02-09 Even Cupid is Having Trouble Finding a Job by Team of Fortigent
2009-02-09 Even Bonds Offer Good Value Now by Charles Lieberman (Article)
2009-02-09 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-02-07 Thoughts on the Continuing Crisis by John Mauldin of Millennium Wave Advisors
2009-02-06 U.S. Building Market Intelligence February 2009 by John Burns of John Burns Real Estate Consulting
2009-02-06 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2009-02-06 Hair by Isbitts of Emerald Asset Advisors
2009-02-05 Dive When You See Only Rocks by Goodson of RDL Financial
2009-02-04 Vulnerabilities in the Emerging World by Nouriel Roubini of RGE Monitor
2009-02-03 Crisis and Evolution by Jack Brown of Laureola Asset Management Co.
2009-02-02 Great Expectations by Kuntzman of Beacon Pointe
2009-02-02 Investment Football by Isbitts of Emerald Asset Advisors
2009-02-02 A January Dud, Bad Banks and Earnings Insights by MacKay of Broadleaf Partners
2009-02-02 It's Groundhog Day and the Economy Sees its Shadow by Team of Fortigent
2009-02-02 Dismal News Is Not Quite So Dismal by Charles Lieberman (Article)
2009-02-02 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-01-31 Trading with the Big Boys by John Mauldin of Millennium Wave Advisors
2009-01-30 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-01-30 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2009-01-29 The Reshaping of the Financial Markets and the Economy in 2009 and Beyond by Altfest of L.J. Altfest
2009-01-28 Davos Debate: Reshaping the Future of the Global Financial System by Nouriel Roubini of RGE Monitor
2009-01-27 Market Commentary by Anderson of Cambridge Advisors
2009-01-27 January 2009 Market Commentary by Chokshi of Kinnaras Capital Management
2009-01-27 Winter Quarterly Commentary by John G. Prichard of Knightsbridge Asset Management
2009-01-27 Quarterly Commentary by Matthew Hunt of Prospect Wealth Management
2009-01-26 Buckle Up for the Week Ahead by Team of Fortigent
2009-01-26 Two Steps Forward, One Step Back by Charles Lieberman (Article)
2009-01-26 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-01-26 The Next Bubble... It's Here by Isbitts of Emerald Asset Advisors
2009-01-24 Here Comes TARP 3 and 4 by John Mauldin of Millennium Wave Advisors
2009-01-23 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2009-01-21 Obama's Presidential Honeymoon Faces Daunting Economic and Geo-Political Tasks by Nouriel Roubini of RGE Monitor
2009-01-20 A Wild Week in the Economy by Team of Fortigent
2009-01-20 Economic & Market Commentary by Halliburton of Tradition Capital Management
2009-01-20 Portfolio Strategy by Bradley Turner of Chess Financial
2009-01-19 Geithner and the NY Fed Code of Conduct by Kotok of Cumberland Advisors
2009-01-17 The Endgame by John Mauldin of Millennium Wave Advisors
2009-01-17 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2009-01-17 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-01-17 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-01-17 Market Will Turn Before Economy by Daniel J. Traub of Tempo Financial Advisors, LLC
2009-01-14 Navigating the First Global Economic Recession by Nouriel Roubini of RGE Monitor
2009-01-14 Revisiting Lows by MacKay of Broadleaf Partners
2009-01-12 Happy New Year?? by Team of Fortigent
2009-01-12 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2009-01-12 Dismal Economy by Charles Lieberman (Article)
2009-01-10 Forecast 2009: Deflation and Recession by John Mauldin of Millennium Wave Advisors
2009-01-09 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2009-01-09 2009: Another Box of Chocolates? by Isbitts of Emerald Asset Advisors
2009-01-09 Why is This Market Rising? by Fried of Fried Asset Management
2009-01-08 Back to the Basics by William H. McAfee of WHM Capital Advisors
2009-01-07 And That's The Year That Was... by Ron Brounes of Brounes & Associates
2009-01-07 2009 U.S. Economic Outlook by Nouriel Roubini of RGE Monitor
2009-01-06 Confirming the Existence of the Pony by Jeffrey Bronchick of Reed, Conner & Birdwell
2009-01-05 The Outlook for 2009 by Charles Lieberman (Article)
2009-01-03 2008: Annus Horribilis, RIP by John Mauldin of Millennium Wave Advisors
2009-01-02 ProVise Bullets by Ray Ferrara of ProVise Management Group
2009-01-02 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2009-01-02 Market & Economic Commentary by Byrne of Aspetuck
2008-12-31 What are the Key Questions for 2009? by Nouriel Roubini of RGE Monitor
2008-12-31 ... Not a Drop to Drink by Scotty George of du Pasquier Asset Management
2008-12-26 Final Thoughts (for this year) by Isbitts of Emerald Asset Advisors
2008-12-25 Looking Back at 2008 by MacKay of Broadleaf Partners
2008-12-22 Winter Thaw? by Charles Lieberman (Article)
2008-12-22 Good Bye 2008! by Norton of Fortigent
2008-12-22 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-12-22 Market Commentary by Mark C. Scheffler of Appleton Group
2008-12-21 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-12-21 I Meant to Do That by John Mauldin of Millennium Wave Advisors
2008-12-17 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-12-17 Focus on Currencies by Nouriel Roubini of RGE Monitor
2008-12-16 Made off! by Fried of Fried Asset Management
2008-12-16 Harold Evensky on Madoff's Swindle by Harold Evensky of Evensky & Katz
2008-12-15 Letter to Clients re: Madoff Securities by Jim Vos of Aksia
2008-12-15 Week-End at Bernie's by Norton of Fortigent
2008-12-15 It's All about the Credit Markets by Charles Lieberman (Article)
2008-12-15 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-12-15 Monthly Investment Newsletter by Matthew Hunt of Prospect Wealth Management
2008-12-14 Things That Just Should Not Be by John Mauldin of Millennium Wave Advisors
2008-12-14 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-12-10 Will Aggressive Monetary and Fiscal Measures Prevent Stag-deflation in 2009? by Nouriel Roubini of RGE Monitor
2008-12-10 Another Possibility by Stuart Brown of Warren Capital Group
2008-12-09 Emerald Asset Advisors by Isbitts of Emerald Asset Advisors
2008-12-08 Rough Sledding Ahead by Norton of Fortigent
2008-12-08 Mr. Market's Manic Moods by John Petrides (Article)
2008-12-06 The State of the Domestic Auto Industry: Part II by Zandi of Moody's Economy.com
2008-12-06 The Velocity Factor by John Mauldin of Millennium Wave Advisors
2008-12-05 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-12-05 Mortgage Rates, A Treasury Bubble and Oil's Cumeuppance by MacKay of Broadleaf Partners
2008-12-05 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-12-04 Credit Now, Equities Later by Kiesel of PIMCO
2008-12-03 A Wakeup Call for the New Foreign Policy Team? by Nouriel Roubini of RGE Monitor
2008-12-03 A Reality Check by Andres of Envestnet
2008-12-02 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-12-01 The Final Stretch by Norton of Fortigent
2008-12-01 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-12-01 Still Working to Restore Confidence by Charles Lieberman (Article)
2008-11-30 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-11-30 The Financial Fire Trucks are Gathering by John Mauldin of Millennium Wave Advisors
2008-11-26 Focus on the US Economy by Nouriel Roubini of RGE Monitor
2008-11-24 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-11-24 Bank Bailout Part II - Another Turkey? by Norton of Fortigent
2008-11-24 Restoring Confidence by Charles Lieberman (Article)
2008-11-22 Whiplash! by Fried of Fried Asset Management
2008-11-22 Leverage Is an 8 Letter Word by John Mauldin of Millennium Wave Advisors
2008-11-21 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-11-20 Special ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-11-19 Commodity Headwinds by Nouriel Roubini of RGE Monitor
2008-11-19 The Half Empty, Half Full Glass by Kuntzman of Beacon Pointe
2008-11-18 Welcome to the by Isbitts of Emerald Asset Advisors
2008-11-18 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-11-18 The Lost Decade by McGrath of Evensky & Katz
2008-11-18 Managing the Stress of Today's Markets by Charles Bennett Sachs of Evensky & Katz
2008-11-17 The Power of Lower Oil Prices by Charles Lieberman (Article)
2008-11-17 Managing Director's Letter by Byrne of Aspetuck
2008-11-17 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-11-17 The Power of Lower Oil Prices by Charles Lieberman (Article)
2008-11-17 US Car Corp in the Works by Norton of Fortigent
2008-11-15 The Economy Gets a Margin Call by John Mauldin of Millennium Wave Advisors
2008-11-15 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-11-15 Welcome to the by Isbitts of Emerald Asset Advisors
2008-11-15 What now, that the election is over? by Fried of Fried Asset Management
2008-11-12 Unemployment, The Consumer and the Faith of Ancients by MacKay of Broadleaf Partners
2008-11-12 Roadmap for the G20 by Nouriel Roubini of RGE Monitor
2008-11-11 Expectations for a Long Recession by Charles Lieberman (Article)
2008-11-11 Welcome to the by Isbitts of Emerald Asset Advisors
2008-11-11 No Place to Hide & Market Commentary by Ronald W. Roge of R.W. Roge
2008-11-11 Monthly Investment Newsletter by Matthew Hunt of Prospect Wealth Management
2008-11-10 Stimulus (for everyone) on the Way by Norton of Fortigent
2008-11-08 The Problem With Deleveraging by John Mauldin of Millennium Wave Advisors
2008-11-08 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-11-08 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-11-05 Barack Obama, the 44th President of the United States by Nouriel Roubini of RGE Monitor
2008-11-03 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-11-03 Looking for Value; It's Everywhere by Charles Lieberman (Article)
2008-11-01 Electing the Janitor-in-Chief by John Mauldin of Millennium Wave Advisors
2008-10-31 October Economic Update by Anderson of Cambridge Advisors
2008-10-31 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-10-31 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-10-31 OCT - Over! by Isbitts of Emerald Asset Advisors
2008-10-31 Fall 2008 Commentary by John G. Prichard of Knightsbridge Asset Management
2008-10-29 Global Stag-Deflation in Sight by Nouriel Roubini of RGE Monitor
2008-10-28 How Shall We Then Invest? by John Mauldin of Millennium Wave Advisors
2008-10-28 Valuations and Extremes by MacKay of Broadleaf Partners
2008-10-27 Back to Basics: Investment Lessons from the Wizard of Oz by Goodson of RDL Financial
2008-10-27 Big Fundamental Week Ahead by Norton of Fortigent
2008-10-27 A Letter to Treasury Secretary Paulson by Charles Lieberman (Article)
2008-10-27 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-10-25 You Ain't Seen Nothing Yet... by Mark C. Scheffler of Appleton Group
2008-10-24 $10,331,139,000,845.22 by Isbitts of Emerald Asset Advisors
2008-10-24 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-10-24 Fried Asset Management by Fried of Fried Asset Management
2008-10-23 Finish the Race by MacKay of Broadleaf Partners
2008-10-22 Room for Optimism Amid the Gloom by Daniel J. Traub of Tempo Financial Advisors, LLC
2008-10-22 Emerging Markets: Who is at Risk? by Nouriel Roubini of RGE Monitor
2008-10-21 It's All About the U (Shaped Recovery) by Isbitts of Emerald Asset Advisors
2008-10-20 Coordinated Rescue Strategies by Charles Lieberman (Article)
2008-10-20 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-10-18 Resist the Urge to Sell by Fried of Fried Asset Management
2008-10-18 The Economic Blue Screen of Death by John Mauldin of Millennium Wave Advisors
2008-10-17 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-10-16 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-10-16 Is the Worst Behind Us? by Nouriel Roubini of RGE Monitor
2008-10-15 Portfolio Strategy by Bradley Turner of Chess Financial
2008-10-15 October 2008 Investment Prospects by Matthew Hunt of Prospect Wealth Management
2008-10-14 Appleton Group Market Commentary by Mark C. Scheffler of Appleton Group
2008-10-14 Bear Market Rallies and Tactical Asset Management by Coby of Coby-Lamson
2008-10-13 A Week of Rebound Ahead? by Norton of Fortigent
2008-10-13 Seriously, Frankly by Charles Lieberman (Article)
2008-10-13 Economic & Market Commentary, October 2008 by Halliburton of Tradition Capital Management
2008-10-13 Drilling for Bedrock by William H. McAfee of WHM Capital Advisors
2008-10-13 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-10-11 Investment Perspective Third Quarter, 2008 by Anderson of Cambridge Advisors
2008-10-11 Where Do We Go From Here? by John Mauldin of Millennium Wave Advisors
2008-10-10 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-10-10 True Value and the Great I Am by MacKay of Broadleaf Partners
2008-10-10 Crisis Management by Isbitts of Emerald Asset Advisors
2008-10-10 A Week to Remember? Or to Forget? by Kuntzman of Beacon Pointe
2008-10-10 The World is at Severe Risk of a Global Systemic Financial Meltdown by Nouriel Roubini of RGE Monitor
2008-10-09 Investment Perspective Third Quarter, 2008 by Anderson of Chess Financial
2008-10-09 Recessions and Recoveries by Kayes of Willingdon Wealth Management
2008-10-09 Weighing In by MacKay of Broadleaf Partners
2008-10-08 Exceptional Action for Extraordinary Times by Charles Lieberman (Article)
2008-10-07 ProVise Management Group by Ray Ferrara of ProVise Management Group
2008-10-07 Bailing Out by Kuntzman of Beacon Pointe
2008-10-06 The Voyage Begins by Norton of Fortigent
2008-10-06 A Stitch in Time Would Have Saved Nine by Charles Lieberman (Article)
2008-10-06 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-10-05 The Curve in the Road by John Mauldin of Millennium Wave Advisors
2008-10-05 Banking Crises Around the World by Dunne of The Liscio Report
2008-10-03 Third Quarter Review by MacKay of Broadleaf Partners
2008-10-03 And That's The Quarter That Was by Ron Brounes of Brounes & Associates
2008-10-03 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-10-01 Yesterday\'s Markets by Kuntzman of Beacon Pointe
2008-10-01 Passage of the Troubled Asset Relief Program (TARP) Bill by Byrne of Aspetuck
2008-10-01 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-09-29 Behind the Scenes at the Credit Crisis by Charles Lieberman (Article)
2008-09-29 Rumplestiltskin Economics by Scotty George of du Pasquier Asset Management
2008-09-29 A September to Misremember by Isbitts of Emerald Asset Advisors
2008-09-29 The Melodrama Continues by Charles Lieberman (Article)
2008-09-27 Who's Afraid of a Big, Bad Bailout? by John Mauldin of Millennium Wave Advisors
2008-09-26 Fast Forward (Part 2 of 2) by Isbitts of Emerald Asset Advisors
2008-09-26 Fast Forward (Part 1 of 2) by Isbitts of Emerald Asset Advisors
2008-09-26 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-09-26 A New Bailout Plan? by MacKay of Broadleaf Partners
2008-09-22 Gone with the Economy by Norton of Fortigent
2008-09-22 Sifting Through the Carnage by Charles Lieberman (Article)
2008-09-20 Betting on Financial Armageddon by John Mauldin of Millennium Wave Advisors
2008-09-19 An Ounce of Prevention is Worth a Pound of Cure by Mark C. Scheffler of Appleton Group
2008-09-19 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-09-19 Market Report by Ronald W. Roge of R.W. Roge
2008-09-18 Recap of Recent Market Events and Commentary by Byrne of Aspetuck
2008-09-18 Strength in Adversity by Kuntzman of Beacon Pointe
2008-09-17 And the Spiral Continues by Norton of Fortigent
2008-09-17 Financial Markets by Isbitts of Emerald Asset Advisors
2008-09-17 Market Turmoil by Eusey of Beacon Pointe
2008-09-17 ProVise Special Bulletin by Ray Ferrara of ProVise Management Group
2008-09-16 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-09-15 Where's the Safety Net? by Charles Lieberman (Article)
2008-09-15 Thoughts at the End of the Day by Charles Lieberman (Article)
2008-09-15 What Happened Today by MacKay of Broadleaf Partners
2008-09-14 Housing: Are We Near the Bottom? by John Mauldin of Millennium Wave Advisors
2008-09-12 Would You Rather Win the Battle or the War? by Isbitts of Emerald Asset Advisors
2008-09-12 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-09-12 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-09-10 They Were Indeed Too Big to Fail by Norton of Fortigent
2008-09-10 Buy the Bleeding: Time to Revisit Energy & Industrials? by MacKay of Broadleaf Partners
2008-09-10 Investment Update September by Matthew Hunt of Prospect Wealth Management
2008-09-08 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-09-08 Help for the GSEs and Housing by Charles Lieberman (Article)
2008-09-08 Thoughts on the Continuing Crisis by John Mauldin of Millennium Wave Advisors
2008-09-08 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-09-08 Uncertainty and the Birth of Black Swans by MacKay of Broadleaf Partners
2008-09-02 Hopeful Signs of Improvement by Charles Lieberman (Article)
2008-09-02 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-09-02 A Review of Recent Market Performance Trends by Isbitts of Emerald Asset Advisors
2008-08-26 Back to School! by Norton of Fortigent
2008-08-26 Academic Debate by Charles Lieberman (Article)
2008-08-23 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-08-23 Here and There by Isbitts of Emerald Asset Advisors
2008-08-23 It's more than Fannie and Freddie by John Mauldin of Millennium Wave Advisors
2008-08-21 There Must be 50 Ways to Invest Your Assets by Isbitts of Emerald Asset Advisors
2008-08-18 Whatever Happened to Decoupling? by John Mauldin of Millennium Wave Advisors
2008-08-18 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-08-18 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-08-18 Dollar Remains a Winner by Norton of Fortigent
2008-08-18 Problematic Credit Risks by Charles Lieberman (Article)
2008-08-18 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-08-13 Finding Michael Phelps by MacKay of Broadleaf Partners
2008-08-12 Oil & Gas Retreat, Dollar Advances by Norton of Fortigent
2008-08-11 Black Gold by Charles Lieberman (Article)
2008-08-11 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-08-11 Monthly Investment Update by Matthew Hunt of Prospect Wealth Management
2008-08-09 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-08-09 Two Wild and Crazy Guys by Isbitts of Emerald Asset Advisors
2008-08-09 Market Review and Outlook by Ronald W. Roge of R.W. Roge
2008-08-09 Happy Birthday GreenThought$ Part 3 of 3 by Isbitts of Emerald Asset Advisors
2008-08-09 A New Asset Class - Part Two by John Mauldin of Millennium Wave Advisors
2008-08-04 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-08-04 July Economic Update by Anderson of Cambridge Advisors
2008-08-04 Is Inflation a Problem? by Charles Lieberman (Article)
2008-08-04 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-08-04 The Rise of a New Asset Class by John Mauldin of Millennium Wave Advisors
2008-08-04 Quarterly Commentary by Dean of Dean & Associates
2008-08-04 Happy Birthday Greenthought$, Part 2 of 3 by Isbitts of Emerald Asset Advisors
2008-07-31 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-07-31 Oil, Earnings, and When To Sell by MacKay of Broadleaf Partners
2008-07-29 The Complicated World of Fannie and Freddie by Charles Lieberman (Article)
2008-07-29 Summer 2008 Commentary by John G. Prichard of Knightsbridge Asset Management
2008-07-28 Happy Birthday Greenthoughts by Isbitts of Emerald Asset Advisors
2008-07-28 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-07-28 Earnings and Mr. Bear by John Mauldin of Millennium Wave Advisors
2008-07-28 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-07-28 Easing off the Gas Pedal by Norton of Fortigent
2008-07-24 June Quarterly Newsletter by Anderson of Cambridge Advisors
2008-07-21 Fannie, Freddie, & Oil by Norton of Fortigent
2008-07-21 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-07-21 GMO versus GMI by Charles Lieberman (Article)
2008-07-21 Second Quarter Market Review by Bradley Turner of Chess Financial
2008-07-19 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-07-19 Quotable by Isbitts of Emerald Asset Advisors
2008-07-19 The World Will Not End by John Mauldin of Millennium Wave Advisors
2008-07-18 Quarterly Newsletter by Matthew Hunt of Prospect Wealth Management
2008-07-17 The Tempo Vantage by Daniel J. Traub of Tempo Financial Advisors, LLC
2008-07-16 Wall Street Rescue Again by Norton of Fortigent
2008-07-16 WHM Capital Advisor’s Quarterly Review: “It Just Gets Worse” by William H. McAfee of WHM Capital Advisors
2008-07-16 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-07-14 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-07-14 Hysteria, Stoked by Hedge Funds and Media by Charles Lieberman (Article)
2008-07-13 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-07-13 $1.6 Trillion in Losses and Counting by John Mauldin of Millennium Wave Advisors
2008-07-13 You Ain't Seen Nothing Yet by Mark C. Scheffler of Appleton Group
2008-07-13 Style Boxes: Out of Style? by Isbitts of Emerald Asset Advisors
2008-07-13 Ugly Days, Springboards, and Silver Linings by MacKay of Broadleaf Partners
2008-07-13 Special Market Update by Byrne of Aspetuck
2008-07-08 Jobs Pressure Again by Norton of Fortigent
2008-07-07 What is Needed for the Economy to Improve? by Charles Lieberman (Article)
2008-07-07 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-07-05 The Good News (About the Bad News) by Mike Ryan of Paragon Asset Management
2008-07-05 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-07-05 In T-Ball as in Life by Isbitts of Emerald Asset Advisors
2008-07-03 It's All About Oil...Again by Norton of Fortigent
2008-07-02 And That's The Quarter That Was by Ron Brounes of Brounes & Associates
2008-07-02 Special Market Update by Byrne of Aspetuck
2008-07-02 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-07-02 Market Review & Outlook by Jeff Travis of Broadleaf Partners
2008-07-01 Worries Over Incompetent Policies by Charles Lieberman (Article)
2008-06-30 What is Risk? by Yentile of Quest Financial Services, Inc.
2008-06-30 June Economic Update by Anderson of Cambridge Advisors
2008-06-29 The Slow Motion Recession Re-visited by John Mauldin of Millennium Wave Advisors
2008-06-29 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-06-25 June 2008 Newsletter by Harold Evensky of Evensky & Katz
2008-06-25 The Case Against Bonds by Isbitts of Emerald Asset Advisors
2008-06-25 Special Market Update by Byrne of Aspetuck
2008-06-23 Dow Cracks 12K, Energy Up & Fed Policy Shifts by Norton of Fortigent
2008-06-23 When Will It End? by Charles Lieberman (Article)
2008-06-23 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-06-23 Warren Makes a Bet by John Mauldin of Millennium Wave Advisors
2008-06-20 Fulcrums and Flashpoints by Jeff Travis of Broadleaf Partners
2008-06-20 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-06-16 Talk Softly and Carry a Big Stick by Charles Lieberman (Article)
2008-06-16 Kahnversations by Isbitts of Emerald Asset Advisors
2008-06-16 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-06-16 Whip Inflation Now by John Mauldin of Millennium Wave Advisors
2008-06-16 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-06-16 Big 4s Dominate by Norton of Fortigent
2008-06-16 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-06-16 Market Commentary by Mark C. Scheffler of Appleton Group
2008-06-11 Oil Rules the Roost Once Again by Norton of Fortigent
2008-06-11 No Oil Recession by Anderson of Cambridge Advisors
2008-06-11 Falling from Grace, Job Loss, and War by Jeff Travis of Broadleaf Partners
2008-06-11 Some Important Numbers for 2008 by Grande of R.W. Roge
2008-06-09 Moral Confusion by Charles Lieberman (Article)
2008-06-09 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-06-08 When Bubbles Collide by John Mauldin of Millennium Wave Advisors
2008-06-08 Roll 'Em if You Got 'Em by Isbitts of Emerald Asset Advisors
2008-06-08 Investment Prospects by Matthew Hunt of Prospect Wealth Management
2008-06-08 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-06-03 Treasury Rally at an End? by Norton of Fortigent
2008-06-03 Never Say Never by Forlines of Core Asset Management
2008-06-03 The Commodities Debate by MacKay of Broadleaf Partners
2008-06-03 May Economic Update by Anderson of Cambridge Advisors
2008-06-02 And Miles to go Before I Sleep by Charles Lieberman (Article)
2008-05-31 The Problem with the Euro by John Mauldin of Millennium Wave Advisors
2008-05-31 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-05-31 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-05-31 Long Term Thoughts for Today's Investor by Isbitts of Emerald Asset Advisors
2008-05-29 Weekly Economic Commentary by Tarlov of Tarlov Financial
2008-05-27 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-05-26 Whither the Price of Oil? by John Mauldin of Millennium Wave Advisors
2008-05-26 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-05-26 They Said It, and We Believe It by Isbitts of Emerald Asset Advisors
2008-05-20 A Few Rays of Sun Through the Clouds by Norton of Fortigent
2008-05-19 Bubbles, Barron's and Broadleaf by MacKay of Broadleaf Partners
2008-05-19 Turning the Long, Slow, Painful Corner by Charles Lieberman (Article)
2008-05-19 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-05-17 The Fed at the Crossroads by John Mauldin of Millennium Wave Advisors
2008-05-16 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-05-16 Introducing Greeenthought$ by Isbitts of Emerald Asset Advisors
2008-05-16 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-05-16 Unsettling Developments by Kaplan of Legacy Asset
2008-05-14 April Economic Update by Anderson of Cambridge Advisors
2008-05-13 Buys, Sells, and Thought$ by Isbitts of Emerald Asset Advisors
2008-05-13 Investment Prospects by Matthew Hunt of Prospect Wealth Management
2008-05-12 The Conspiracy Raising Oil Prices by Charles Lieberman (Article)
2008-05-12 Oil Gushing Again by Norton of Fortigent
2008-05-12 Capturing Investment Success by Isbitts of Emerald Asset Advisors
2008-05-12 Capturing Investment Success (Part 2) by Isbitts of Emerald Asset Advisors
2008-05-12 Don't Let the Market be Your Evil Twin by Isbitts of Emerald Asset Advisors
2008-05-12 Wedgewood View 1st Quarter 2008: 100-Year Flood by Rolfe of Wedgewood Partners
2008-05-10 Why Investors Fail by John Mauldin of Millennium Wave Advisors
2008-05-09 And That's The Week That Was... by Ron Brounes of Brounes & Associates
2008-05-06 Quarterly Commentary by Dean of Dean & Associates
2008-05-05 Fasten Your Seatbelts! by Kuntzman of Beacon Pointe
2008-05-05 Looking Ahead to a Gradual Recovery by Charles Lieberman (Article)
2008-05-05 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-05-04 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2008-05-04 Lies and Other Statistics by John Mauldin of Millennium Wave Advisors
2008-05-01 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-04-30 Investors Guide to Handling Sharp Objects by Jeffrey Bronchick of Reed, Conner & Birdwell
2008-04-30 Market Review & Outlook by Ronald W. Roge of R.W. Roge
2008-04-29 Hard or Soft Landing by Norton of Fortigent
2008-04-29 Arlington Econometrics Market Commentary by Scotty George of du Pasquier Asset Management
2008-04-28 More Policy Action is Still Needed by Charles Lieberman (Article)
2008-04-28 The Velocity of Money by John Mauldin of Millennium Wave Advisors
2008-04-25 Storms, Steroids, and Sunnier Skies by MacKay of Broadleaf Partners
2008-04-25 And That's the Week That Was... by Ron Brounes of Brounes & Associates
2008-04-24 Quarterly Investment Letter by Ed Symons and Colin Symons of Symons Capital Management
2008-04-24 Is it a Bull, Bear or Cowardly Lion Market? by Vitaliy Katsenelson of Investment Management Associates
2008-04-23 Inflation Time! by Norton of Fortigent
2008-04-22 The Turn is Underway by Charles Lieberman (Article)
2008-04-22 Economic and Market Commentary by Halliburton of Tradition Capital Management
2008-04-21 And That's the Week that Was... by Ron Brounes of Brounes & Associates
2008-04-21 Five Delectable Examples of “Stein’s Law” by Horace W. Brock of Strategic Economic Decisions
2008-04-16 Collateral Damage by Steve Taddie of Stellar
2008-04-16 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-04-15 Tax Time by Norton of Fortigent
2008-04-14 First Quarter Market Review by Bradley Turner of Chess Financial
2008-04-13 Weekly Market Commentary by Mark C. Scheffler of Appleton Group
2008-04-13 Sub-prime versus Savings & Loan Crisis by Davis of Haas
2008-04-08 Gloom from the Fed by Norton of Fortigent
2008-04-07 Market Commentary by Anderson of Cambridge Advisors
2008-04-03 Opportunity in High Quality Mega-Cap Stocks by Scott P. Noyes of Noyes Capital
2008-04-02 First Quarter Review by MacKay of Broadleaf Partners
2008-04-01 Mixed Signals by Norton of Fortigent
2008-03-31 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-03-27 Gloomy Focus on Financials will Eventually Fade to Opportunity by James G. Tillar of Tillar-Wenstrup Advisors
2008-03-26 Weekly Market Commentary by Mark C. Scheffler of Appleton Group
2008-03-24 March Economic Commentary by Justin S. Anderson of Cambridge Advisors
2008-03-21 Fine Tuning Your Asset Allocation by Paul Merriman of Merriman
2008-03-20 An Introduction to Alternative Investments by Kabarec of Kabarec
2008-03-20 Market Commentary by Jonathan M. Satovsky of Satovsky Asset Management
2008-03-20 Reassurance, you did not tell me you needed the money tomorrow by Mehlich of Mehlich Roegiers Goldin
2008-03-20 The Sector Tug of War by Kayes of Willingdon Wealth Management
2008-03-20 Weekly Market Commentary by Mark C. Scheffler of Appleton Group
2008-03-17 Market Gets Bear-Ish; Fed Jumps the Gun by Norton of Fortigent
2008-03-17 What's an Investor to do? by MacKay of Broadleaf Partners
2008-03-17 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-03-11 Market Volatility Remains In Place by Norton of Fortigent
2008-03-11 Are we there yet? by Steve Taddie of Stellar
2008-03-07 Uncertainty! by Ronald W. Roge of R.W. Roge
2008-03-05 Katsenelson Predicts by Vitaliy Katsenelson of Investment Management Associates
2008-03-04 For What It's Worth, An Important Turning Point? by MacKay of Broadleaf Partners
2008-03-04 Market Decline Continues; Municipals in a Confused State by Norton of Fortigent
2008-03-01 Symons Capital Management Q4 2007 Summary by Ed Symons and Colin Symons of Symons Capital Management
2008-02-29 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-02-21 Quarterly Market Commentary by John G. Prichard of Knightsbridge Asset Management
2008-02-21 Commodities, Oil and the Reflation Trade by MacKay of Broadleaf Partners
2008-02-15 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-02-07 Wow, Bear Markets and the Craziness of Datapoint Trading by MacKay of Broadleaf Partners
2008-02-01 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-01-31 2007 Q4 Market Commentary by Brian M. Barish of Cambiar Investors
2008-01-31 January Letter by Craig Newkirk, CFA and Berthann Jones, CFA of Financial Freedom
2008-01-31 Client Letter by Crossett of Girard Partners
2008-01-30 Don’t Fall for Financial Pornography and Wall Street Noise by Harold Evensky of Evensky & Katz
2008-01-28 Fourth Quarter Market Review by Bradley Turner of Chess Financial
2008-01-28 Outlook 2008 by Ronald W. Roge of R.W. Roge
2008-01-24 Market Commentary by Ferri of Portfolio Solutions
2008-01-23 Market Update by Kuntzman of Beacon Pointe
2008-01-23 Quarterly Commentary by Beckman of Oxford Group
2008-01-23 Market Volatility by Eckel of Pinnacle
2008-01-23 The Consequences of a Falling Dollar by John P. Swift of Swift Wealth
2008-01-22 The Appleton Group Composites by Mark C. Scheffler of Appleton Group
2008-01-22 Pricing a Recession by Norton of Fortigent
2008-01-22 2008 Outlook: Uncertainty vs. Opportunity by Aschwald of Quantum Capital
2008-01-18 Economic and Market Commentary by Halliburton of Tradition Capital Management
2008-01-17 The Bipolar Markets of 2008 by Altfest of L.J. Altfest
2008-01-16 ProVise Bullets by Ray Ferrara of ProVise Management Group
2008-01-10 Fourth Quarter 2007 - Market Review by Frankola of Vista Inv. Mgmt
2008-01-06 Where will the Investment Opportunities be in 2008? by Scott P. Noyes of Noyes Capital
2008-01-04 Quarterly Commentary by Higgins of The Golub Group
2008-01-03 What's Ahead for Investors in 2008 by Paul Merriman of Merriman
2007-12-31 ProVise Bullets by Ray Ferrara of ProVise Management Group
2007-12-17 Interesting Times by Harold Evensky of Evensky & Katz
2007-09-14 Looking Past the Fed and Towards 2008 by MacKay of Broadleaf Partners
0000-00-00 Woody Brock on Why to Own Stocks Now - Video by Robert Huebscher (Article)
Dr. Horace 'Woody' Brock is the founder Strategic Economic Decisions and the author of American Gridlock. In a recent talk, he explained why investors should own stocks – particularly those with stable dividends – and why bonds are very risky in today's environment. This is the video; a transcript of this talk is also available.