The current speculative environment seems to increasingly resemble the Technology Bubble of 1999/2000. All bubbles eventually burst and the burst of the Tech Bubble led to the so-called lost decade in equities.
The basic tenets of building wealth, like having a well-diversified portfolio with long time horizons, are not difficult concepts that are relatively easy to implement. So, why don’t people follow them? In our latest insight, we analyze several risk/return charts across multiple time horizons and reveal the results that investors tend to find surprising.
2023 will likely go down in history as a year of extreme speculation. However, we believe there are once-in-a-generation investment opportunities for 2024 resulting from that overly speculative myopia.
Whether famous or infamous, the Magnificent 7 stocks have been 2023’s stock market story. However, the fundamentals of the Magnificent 7 aren't uniquely superior, and the breadth and depth of other growth opportunities seems historically large and attractive. In our latest insight, we complete an analysis of US companies with expected earnings growth greater than 25% and compare it against the Magnificent 7 stocks.
Read our latest insight to learn why we believe the economy isn't landing but that we see profits taking off suggesting a once-in-a-generation investment opportunity.
We started RBA in 2009 primarily because we thought the US stock market was entering one of the biggest bull markets of our careers. However, most investors did not agree with our bullishness. Now, risk aversion seems a thing of the past.
It’s time for our annual August report, “Charts for the Beach.” Each year we highlight five of our favorite charts we think consensus is currently overlooking. So, head for the beach, but be safe and heed the warning about the critical lifeguard shortages. Yet another sign the labor markets are historically tight!
Building wealth isn't difficult, so why don't people do it? As younger generations reach the point where they have finally saved enough to begin investing it may seem overwhelming to know where to start.
Many stock market observers have commented regarding the market’s narrow leadership. However, few observers agree why this narrow leadership is occurring. Some, like us, believe it's purely speculation and others believe there's fundamental justification for it.
We've described the past several years' stock market as a seesaw in which the "market" was the fulcrum of the seesaw. On one side of the seesaw sit the highly speculative growth sectors and on the other side, sit virtually everything else in the global equity markets.
Every news item these days seem to swing between extremes. When in reality, these bank failures are not atypical. Read our latest insight to learn what similarities these recent bank failures have with previous failures and what the warning signals are.
Read our latest insight to learn why we believe this year's market rally is just speculation and how we are positioning our portfolios for a change in leadership.
Read Michael Contopoulos' latest report highlighting opportunities outside of Investment Grade corporate bonds and why one does not need to own credit to generate income at the moment.
2023 may be another difficult year for investors who hope to relive the speculative markets of 2020 and 2021.
One of the reasons we formed RBA in 2009 was we thought the US was entering perhaps the biggest bull market of our careers.
It has always been important to separate one’s political views from one’s investment portfolio.
Investors see a myriad of unknowns right now, and popular discussion continues to focus on a dichotomy between growth and cyclicals. We think there is a third choice that's being ignored.
It’s time for our annual August report, “Charts for the Beach.” Each year we highlight five of our favorite charts we think consensus is currently overlooking. Load up the cooler, get your towel and chair, and enjoy the charts! And, watch out for those sharks!!
The investing world seems highly uncertain these days. Investors are understandably having trouble balancing earnings, the Fed, fiscal policy, inflation, economic growth, disease control, and geo- and US politics. Read our latest report to learn about the two certain events that are central to our current portfolio positioning.
Bear markets always signal a leadership change within the overall equity market. The leadership going into a bear market is rarely, if ever, the leadership coming out. Because of this rule of thumb, we view bear markets as periods of extreme opportunity.
In our latest insight, we analyze the recent DALBAR study to determine how well (or not well) active fixed-income investors performed during the bull market and explain what we believe will be the best approach for fixed-income investing given the start of a pro-inflation paradigm shift.
To start, let’s discuss what diversification is and what it is not.
The global economy seems to be significantly changing, yet investors remain very hesitant to alter their basic portfolio strategies. As they did around 2010, investors are using the old leadership as their portfolios’ core. We think this could be a mistake.
Concerns around high equity valuations and rising asset prices are finally manifesting. In this webinar, Richard Bernstein will examine the critical shift in the markets - focusing on the anti-tech trade, cyclicals, consumer staples and other areas where RBA is finding opportunities and isolating risks.
Investors have been spoiled by the trend in falling long-term interest rates over the past 40 years, but the economic backdrop is changing. Read our new report where we explain the concept of equity duration and analyze how interest rates, earnings, and the relationship between the two can impact equities.
While the Fed has now dropped "transitory" from their communications, the US and global economies might indeed be in a transitory state, and the important investment question is transitioning to what? It seems highly unlikely the economy will return to its pre-pandemic state. In our year ahead outlook report, we highlight our views on the best investment opportunities for 2022, given our analysis of an economic transition during the coming year.
Investors become myopic during bubbles. As we’ve repeatedly highlighted, it is exactly that narrow-mindedness that presents opportunities because investors ignore the broad range of potential investments outside the bubble. In this report, we outline the opportunities available outside of today's bubbles and analyze the fundamentals that support our views.
The global economy is changing, yet many investors seem to have static portfolios. RBA explains why we believe the current shift in market leadership will last longer than investors are expecting.
With very low inflation expectations for this year, Rich analyzes the shifts in the global and US economies that could impact inflation and explains how to position your portfolio for this change.
Read our year-ahead report to learn how this shift could lead to investment opportunities in 2021 and to understand RBA's positioning.
In RBA’s latest report, Rich revisits the "Earnings Expectations Life Cycle" from the perspective of growth versus value investors and outlines why growth investors need to be contrarians in 2021.
This year our annual summertime report, “Charts for the Beach”, visually highlights newsworthy issues that aren’t yet in the news.
Black swans are swimming in flocks. We highlight today’s biggest black -and white- swans that can hurt -or help- your portfolio.
Coronavirus is a global pandemic that few if any could have predicted, but it’s deteriorating fundamentals throughout 2019 into 2020 that set the table for the recent extreme market volatility. Now that volatility has clearly arrived, what‘s the strategy when black swans swim?
Every instance of financial speculation today is termed a “bubble”, but true financial bubbles are rarer than most investors believe and they go beyond the financial markets and pervade society.
Throughout this 10-year bull market, investors have been overly cautious toward equity markets and ignored “new highs”. Now in this late-cycle market environment, investors are piling into cyclicality, private equity and venture capital. It’s time to stop saying everyone is so bearish.
Smoke detectors and fire extinguishers are critical safety devices. But investors in every cycle ignore the markets’ warning signals regarding risk. Rather than ignore the warnings, we are dusting off and priming the traditional portfolio “fire extinguishers”.
Today’s markets are experiencing decreasing liquidity amid increasing volatility. To stay ahead, investors must adapt their strategies to the ever changing market environment and learn to invest like a chameleon.
Unprecedented market uncertainty is leading many investors to focus on the markets more than ever, but are they focusing on the right things? For our annual August report, Charts for the Beach, we highlight 5 charts that consensus is currently overlooking.
All too frequently investors use the rear-view mirror to determine an investment’s attractiveness. An upward sloping price chart often automatically makes a stock more attractive. Recent performance helps determine a “good” manager. Past interest rate movements can cause changes to bond portfolio duration.
One wayward tweet can send the markets spiraling in the short term, but RBA knows that in the long term, profits determine the direction of the markets, not politics.
Investors remain fixated on longer-duration bonds even as their risk increases. Duration is a measure of risk and myopically focusing on the long end of the curve while it appears to be significantly overvalued may prove fruitless.
Investors have remained on the sidelines for most of this 10+ year bull market, yet FOMO is leading many to join the party late. In this late cycle environment, one should consider sobering up before the punch bowl is taken away.
Investors’ current enthusiasm for piling money into next great tech unicorn is ominously reminiscent of March 2000. Might we be doomed to repeat the Tech Bubble?
The Fed’s constant balancing act between easing and tightening monetary policy is intended to influence banks’ lending habits, but as the old axiom goes; you can lead a horse to water, but you can’t make it lend.
We think it’s better to position our portfolios based on 2019 fundamentals than structuring them by looking backward at December 2018’s volatility.
Public policy can be corporate-friendly or corporate-unfriendly. But what if it’s corporate-uncertain? Then investors are faced with volatility. Part I of our Year Ahead investigates the current corporate-uncertain environment.
The US government’s debt problem isn’t new. It has been steadily growing for nearly 40 years, and growing interest expense has secularly weighed down domestic economic growth. Why has this happened and how do we fix it?
Most investors purchase insurance for their homes, vehicles and health, but rarely expand the practice to their investment portfolios. At RBA, we diversify our portfolios using negatively correlated asset classes, but just like insurance, it comes with a premium.
Investors seem overly concerned about equity market volatility, but ignore the growing risks in fixed-income and seem oblivious to the bonds’ already multi-year underperformance. One might say they are looking for risk in all the wrong places.