Every time interest rates go up there is a flurry of demand for a product that has been around at least since the Roman Empire — annuities. The insurance industry has already seen rapid growth in annuity sales since 2021 and if rates remain at or move above current levels, demand seems poised to explode.
Former Bridgewater Associates LP executive Bob Elliott’s plan for exchange-traded funds that employ hedge fund strategies has sharpened the debate about whether retail investors should have access to such approaches.
News that a Washington DC Court of Appeals ruled in favor of Grayscale Investments LLC over the Securities and Exchange Commission has ignited hope that a Bitcoin exchange-traded fund will soon be available. Bitcoin prices jumped.
Moody’s Investors Service recently released a report bluntly entitled, “Private equity exposure increases credit risk for universities with limited wealth.”
The yield on 10-year Treasuries went above 5% last week for the first time since July 2007, when the first Transformers movie was topping the box office and the Dow Jones Industrial Average surpassed 14,000 for the first time in history.
The Securities and Exchange Commission recently announced new rules for hedge funds to report on equity short positions. There’s nothing terrible in the rules, but they will impose pointless costs on investors, mainly because they were written by lawyers rather than accountants.
“Very strict enforcement” is a euphemism used by the American Automobile Association to warn motorists of places where even minor traffic violations will likely be caught and punished with heavy fines.
A group of high-frequency traders, market makers and service providers calling themselves the Shortwave Modernization Coalition has asked the Federal Communications Commission for access to the shortwave band of the radio spectrum, seeking to shave crucial milliseconds off the transmission of data between major financial sectors.
Playing Shakespeare’s King Lear is the crowning ambition for some actors, but in 2023 we’re seeing superstar hedge fund managers Daniel Och and Ray Dalio trying out for the role in real life.
Watching the new Tom Wolfe documentary, Radical Wolfe, I was reminded of the key role the author and journalist played in the development of quantitative finance.
A recent paper analyzing the correlation between stock and bond returns going back to 1875 suggests the relationship of the past quarter century is shifting in an uncertain inflationary environment. The results might stimulate some investors to rethink their portfolio allocations.
A staff report from the Federal Reserve Bank of New York titled “Capital Management and Wealth Inequality” comes to some remarkable Marxist conclusions.
When future economic historians write of our times, the thrust will be that it was a time of transition.
You hear a lot these days how unaffordable housing has become in the US. One way to think about affordability is to look at home prices relative to household incomes.
The fraction of enterprise value of large US companies represented by tangible assets — things like real estate and inventory — has fallen from 50% to 20% over the past 15 years.
Some of the most widely read financial news stories involve projections by Wall Street strategists such as Morgan Stanley’s Michael Wilson, who recently conceded he’d misjudged the direction of US stocks this year.
I sense a growing middle-of-the-road regulatory consensus on cryptocurrencies. It splits the difference between “crypto is a Ponzi scheme to defraud investors and enable criminals,” on the one hand, and “crypto solves ancient financial problems and will usher in an era of prosperity and freedom,” on the other.
One of the discouraging things about working in cryptocurrencies is that almost all the outside focus is on price changes and the resulting fortunes won and lost. Since the most insubstantial assets have the greatest price volatility, this can lead casual observers to think crypto is all froth and nonsense.
The collapse of crypto exchange FTX in November 2022, capping a “horribilis annus” for big-name, regulated digital currencies, combined with the demo release of ChatGPT the same month, sent venture capital money fleeing from crypto and into AI.
The explosive growth of the gig economy is one of the most important labor-market trends to emerge since the 2008 financial crisis. Companies offering ride-sharing, do-it-yourself property rentals and a host of other services have upended traditional sectors.
The benchmark S&P 500 Index has been on quite a rally, having risen 24% since October. At a level of about 4,433, it's already above the median year-end target of 4,100 in a Bloomberg News survey of 23 Wall Street strategists.
ChatGPT is the fastest growing app of all time, gaining more than 100 million users just two months after its launch in November. It allows users to have human-like conversations that include reasonable-sounding and often correct answers to all sorts of questions. Like humans, it can ask for more information and explain reasoning.
Making optimistic predictions either makes you look foolish if bad things happen or be forgotten if nothing bad happens.
BlackRock Inc., the world’s largest asset manager, suggests investors should abandon portfolios made up of 60% stocks and 40% bonds, a mix that has been a standard for six decades.
Perhaps the most famous trading experiment ever conducted was when commodities investor Richard Dennis bet his partner William Eckhardt in 1983 that he could train a group of amateurs – dubbed “the Turtles” -- to be successful futures traders.
As 2022 draws to a close, it’s natural to think about what to expect from 2023. I’m primarily interested in technology.
The dispiriting thing about the Securities and Exchange Commission’s 400-page proposal to re-engineer financial markets, and the response from outside the agency, is that lawyers and economists are arguing over questions that have easy technical solutions.
From the earliest days of artificial intelligence (AI) and machine learning (ML) in the 1950s, practitioners have spoken of using it for investment fund management.
A yield curve inversion, when rates for two-year US Treasury notes rise above those for 10-year notes, has preceded every recession since the 1960s. The first clear inversion in 15 years happened in July 2022, although there were brief and shallow inversions in August 2019 and April 2022.
Any time you neglect to maximize diversification, whether to chase active management, indulge personal intuition or save trouble, you need to think carefully about whether you are getting paid enough for the additional risk.
There’s a lot of focus on Elon Musk’s Twitter Inc. purchase and plans to turn around the troubled social network.
Securities and Exchange Commission Chair Gary Gensler recently gave a speech called “Competition and the Two SECs.”
The firestorm among UK pension funds is a wake-up call for their peers across the Atlantic. The end of an era of cheap money is exposing an industry that’s chronically underfunded and overexposed to market turbulence.
In times like these, when nothing seems to work in financial markets, risk parity strategies should act as a sort of shock absorber. It’s a simple concept, really. Unless you have reason to believe one investment is better than another, you should take equal risk in each.
One of the most popular and reliable touchstones of investment strategy is value.
The benchmark S&P 500 Index’s recent rebound has brought it more than halfway back from its 2022 low point in mid-June, which is an encouraging sign for many investors.
Everyone agrees that a recession is a contraction in real economic activity, but there’s no consensus on how deep, widespread and long-lasting the contraction has to be to deserve the “recession” label.
The US Securities and Exchange Commission is concerned that retail investors are being duped by “greenwashing.”
Investors have had an unpleasant 2022, to put it mildly. Both stocks and bonds have dropped by more than 10%. On top of that, inflation rates at around 8.5% are the highest in four decades, reducing the purchasing power of whatever remains investors’ portfolios and promising big increases in interest rates by the Federal Reserve that threaten future investment returns.
As if all that’s going on in the world wasn’t enough to worry about, Bloomberg News reports that young people are seeking mental health treatment to break all-consuming cycles of cryptocurrency trading. Those profiled complained that frantic trading in the hopes of scoring quick riches in a rapidly growing, $2 trillion asset class led them to neglect ordinary life and destroyed their peace of mind.
We know the Covid-19 pandemic has changed the U.S. workforce forever. What we don’t know for sure is how the changes will play out. Some are accelerations of trends that began around the time of the financial crisis in 2008 or earlier, while others were directly inspired by the pandemic. Still others were temporary dislocations that will revert. But it’s anyone’s guess which changes are which.
The Bloomberg Global Aggregate Index, a benchmark for the bond market worldwide, has tumbled 11% from its peak in January 2021, equating to a drop of $2.6 trillion in the index’s market value.
The most important news for long-term investors is rarely in the headlines. Great contrarian plays rarely come from things most people don’t believe, rather they are based on things most people ignore.
A new report from the U.K.’s Cambridge University Centre for the Future of Democracy offers investors a rare chance to think about the overall economy over the next decade. The authors compiled a large global dataset that suggests some not-often-heard claims, such as that the tide of populism, nationalism and inequality has turned, and is rapidly receding in favor of a more prosperous, peaceful, egalitarian and cohesive globe in the next decade.
Large asset managers provide model portfolios for many purposes — as options in 401(k) plans, as blueprints for institutional clients and affiliated financial advisors, and as suggestions for unaffiliated investment advisors. These have the “lather, rinse, repeat” conflict of interest.
I don’t know which of the three Fed Bears will show up in 2022, but all three are plausible enough that investors should diversify so none can cause fatal financial damage.
The total value of all cryptocurrency assets has just exceeded $3 trillion, according to Bloomberg News. It’s such a big number that it needs some context to be meaningful. Consider Microsoft Corp. and Apple Inc., which have market capitalizations that recently topped $2.5 trillion.
There has been an unusual burst of good news for State pension plans in the past week. New Jersey, one of the shakiest plans in the country, reported a 28.6% return for the fiscal year ended June 30, the highest in more than 20 years.
