What to do in equity portfolios at the midyear point? Fundamental Equities CIO Tony DeSpirto assesses the backdrop and identifies three favored sectors.
If finance could be distilled into one idea, it likely would be that there should be a tradeoff between risk and reward: an investment with low risk should have a low expected return, while one that could make you rich should also be one that could lose you a lot of money. The Overnight Effect flies in the face of this core tenet.
I am not implying that brokerage firms that pay their advisors via a “payout” are lying, but there is no shortage of misleading when it comes to payouts.
Recent experience shows that a third mandate – preventing financial instability – trumps the Fed’s two congressional mandates of full employment and low inflation.
Persistent … or transitory? It’s the inflation question that has been weighing on financial markets over the last year. As each economic data point trickles out, it is analyzed and re-analyzed, with that focus in mind. But it may be the wrong question to ask.
As proxy season comes to a close, investors and advisors have grappled with company stewardship on a wide variety of issues. But what’s the best way to get a company to listen? Is divestment the way to go? Or must you engage with a company? And how do investors in ETFs and mutual funds make sure their voices are heard at the asset managers they invest with?
Engine No. 1 focuses on engaging with companies constructively to make sure they are taking the costs they impose on society and other stakeholders into account. It operates on the belief that climate and social concerns are economic issues and companies that fail to address them will underperform for the long term.
This article is relevant to financial professionals who are considering offering model portfolios to their clients.
Not all value strategies have benefited equally during value stocks’ recent outperformance versus growth stocks.
Will the plight of consumers drag GDP lower in the second quarter, resulting in a recession?
New research quantifies the implicit cost that investors incur when index funds, such as those tracking the S&P 500, are rebalanced. Those costs may be avoidable by adopting trading strategies that introduce the possibility of tracking error.
We strongly believe that the traditional benchmark-led approach to investing in emerging market debt can be far from optimal.
The tale of Bear Stearns’ rally and investors' myopic vision in the spring of 2008 is a valuable lesson for today.
For the year ending December 31, 2021, passive mutual funds and ETFs reported estimated net inflows totaling $958.43 billion, compared to estimated net inflows totaling $249.91 billion for actively managed funds.
Valid until the market close on June 30, 2022.
The S&P 500 closed May with a monthly gain of 0.01% after a loss of 8.8% in April. At this point, after close on the last day of the month, four of five S&P 500 strategies are signaling "cash" — Vanguard REIT Index ETF (VNQ), iShares Barclays 7-10 Year Treasury (IEF) and Vanguard All-World Index ex-US ETF (VEU), and Vanguard Total Stock Market ETF (VTI) — unchanged from last month's quadruple "cash" signal.
The bear has ended a long hibernation.
Low inventories drove natural gas prices to their highest level since 2008, while above normal temperatures are putting additional stress on natural gas supply.
Recent warnings from corporate executives and rapidly declining regional manufacturing surveys make me wonder if a recession has already started.
The terms "value" and "growth" have been blurred. What appears to be a value stock may be in its reputation only.
Natural gas prices traded higher to start the week after forecasts show hotter than average temperatures in the United States.
The U.S. debt cannot be paid, even in inflated dollars. Serious inflation is inevitable that will crash stock and bond markets, in addition to devaluing the dollar.
The geopolitical crisis in Ukraine creates a stagflationary shock for global economies. The plan to fight inflation just got far more complicated for global central banks.
Liquidity is fading due to the Fed, and therefore volatility is on the rise. Illiquid and volatile markets are not conducive to long-term wealth generation.
I don’t care how many PhDs are going to argue against me; direct indexing is Wall Street’s attempt at squeezing more fees out of the America public using advisors as the pawns.
We assess risks and potential opportunities for multi-asset portfolios amid late-cycle dynamics, higher inflation, rising interest rates, and geopolitical uncertainty.
In the first quarter of 2022, financial markets abruptly reversed course and volatility increased significantly.
The BOJ is trapped. It is conducting unlimited QE to keep rates low and weaken the yen, which promotes inflation.
Regular readers of WisdomTree blogs know that we are firm believers in both asset class and risk factor diversification when building our Model Portfolios.
Forward-thinking advisors have been searching for and employing analytics very carefully. This series will explore some of these metrics, along with their benefits and pitfalls. Today’s topic is capital markets assumptions.
This post explains why we believe GARP Investing may be another powerful way to protect and grow capital amid a speculative frenzy that appears to be on its way out.
In propping up Japan's economy and financial markets, its central bank indirectly provided liquidity to the world's financial markets. But the BOJ could unleash a liquidity vacuum felt around the world.
In the span of just over two years, the world economy has been stricken by a pandemic and challenged by a military conflict in the heart of Europe. Major historical turning points are nearly always accompanied by fundamental shifts in the economy. The pace of history is accelerating with the global energy transition, urgency to secure reliable supplies of traditional energy, and locking in renewable alternatives. This shift will be driven by technology and innovation.
U.S. stocks fell Friday, extending a run of weekly losses into its third straight week, as investors reacted to a handful of disappointing earnings reports and the Federal Reserve’s increasingly aggressive language about future interest rate increases.
Does a risk-free bond with 7% yield interest you? If so, read about the red-headed stepchild of the bond world that is finally attracting investors.
When reviewing the current state of the global economy and investment markets, we recommend focusing on market signals and weeding out market noise.
Does the scenario below sound likely? If so, you are among the thousands of RIAs who are likely to lose significant assets over the next decade.
The Nasdaq Fund Network (NFN) recently announced the launch of model portfolios, separately managed accounts (SMAs) and unified managed accounts (UMAs) on the platform. The registration of model portfolios and managed accounts on NFN make them searchable on market data platforms, financial web portals and other similar media. Eversheds Sutherland published a whitepaper describing NFN's offerings, regulations in the space, and how the work is in accordance with applicable provisions of the New Marketing Rule and relevant SEC guidance.
The more the Fed decides to dance with inflation and ignore the bond market and economy, the more we should expect stock prices to fall.
Antti Ilmanen’s Investing Amid Low Expected Returns updates his 2011 Expected Returns, a volume considered by many the definitive work on the subject.
This article explores the problem vexing Russia and its trade partners. I explore how the threat and use of sanctions may force some countries to contemplate weaning off the world's reserve currency.
The value of bonds directly owned by households fell by $18 billion in the fourth quarter of 2021, dropping to the lowest level since 2008, according to Federal Reserve data. Instead, those buyers are moving toward mutual funds and exchange traded funds, which have roughly doubled their muni holdings over the last decade.
The poor performance of factor-driven value strategies over the past decade has raised the question of whether intangible assets, such as patents and proprietary software, are properly treated. New research confirms that intangibles indeed distort valuation metrices, but there is no consensus on how to address the problem.
Seeking resilience. 2022 started with rising interest rates, high inflation and unthinkable violence and human tragedy in Europe.
With QE finished and QT on the horizon, I answer a few questions to help you better appreciate what QT is, how it will operate, and discuss how draining liquidity will affect markets.
I’ll take an order of flat fees (otherwise known as retainers) with a side of financial planning. Customers are lining up out the door for this.
Preferred securities prices have fallen sharply, presenting an attractive entry point for income-oriented investors who can ride out the volatility.
Here at Absolute Return Partners, our portfolio construction is driven by the six structural megatrends that we have identified.
“Cash Is Trash” is a common theme as of late as inflation rages from the massive monetary interventions of 2020 and 2021.
On August 24, 2021, I presented two attractively valued dividend growth stock portfolios. One portfolio emphasized growth over income, and the other emphasized income over growth.
Filling out your March Madness bracket provides insight into how investors select assets, structure portfolios, and react during volatile market periods.
The Windfall Profits Tax Bill doesn’t penalize energy companies. It punishes consumers with more inflation. Further, it uses a faulty assumption to help gain support from the public.
Quick – where were you 25 years ago?
While the Russia-Ukraine conflict will likely remain uncertain for some time, we believe situations like this require cool heads from an investment perspective.
While higher gas prices may be welcome news to the oil industry, the rest of us should be concerned. It is a glaring recession warning. Over the last 40 years, higher gas prices have been linked to economic stagnation and recessions.
In this interview, Peter Essele, vice president, investment management and research, at Commonwealth Financial Network, explains why investors should view the volatility created by the pandemic and geopolitical events as an opportunity to add risk to their portfolios.
Fiscal spending is normalizing quickly, and the Fed is warning investors it is ready to remove the stimulus. Such a reversal of monetary and fiscal liquidity does not guarantee a reversal of asset prices, but the odds of a bear market are increasing.
Preferred securities are a type of investment that generally offers higher yields than traditional fixed income securities, such as U.S. Treasury securities or investment-grade corporate bonds.
The 2022 investment year is now well underway and financial advisors and investors would be well advised to not, as the old saying goes, “fight the tape” of what is shaping up to be a difficult year for the stock market.
I propose a strategy that can produce larger price gains or losses than bonds and higher yields than traditional bond funds or ETFs. If yields decline soon, investors can expect double-digit returns in a relatively short period.
The term “value” is being grossly misapplied.
The Federal Reserve signaling a shift in monetary policy is causing a shift in the markets that have run hot on many years of stimulus and low rates.
As we examine the municipal bond “board” at the start this new year, it looks to us to be a more challenging one than a year ago. More like chess than checkers. Winning will likely require a more complex, multi-faceted strategy than in 2021.
Market volatility is a given, but that doesn’t make its inevitable appearance any less stressful.
The strike price on the Fed put has moved significantly. The Fed may sit idly by if markets voice displeasure with abrupt changes in monetary policy.
I examine two biases that often handcuff investors and push them to make the wrong decisions at the wrong time.
The term direct indexing is somewhat of a misnomer.
This is the 7th in a series of 11 videos where I will cover each of the 11 sectors looking for value.
The Fed is walking a tightrope between instability and inflation. Can it successfully tame inflation without causing severe market dislocations?
What insights can we glean beyond last year’s impressive 28% return? How did it compare it to global equities? I will show you some of the winners and losers, and finish with a few observations on the VIX.
Stocks are priced for perfection. Bonds trade at historically low yields despite 7% inflation. What could go wrong?
Uncertainty has become an ongoing theme in markets, economies, and communities everywhere, and in this environment, PIMCO investment professionals gathered – virtually, once again – for our recent Cyclical Forum.
Long before supply chain issues and soaring consumer prices made the headlines, I warned readers that massive monetary expansion made persistent inflation inevitable.
While no one knows what 2022 holds in store for investors, my concern is that it should not foster the same optimism as 2021.
Rising inflation is troubling bond investors worldwide, but European bond markets will likely experience comparatively weaker inflation pressures and stronger central bank support.
Here is how I nudge clients (sometimes not so gently) to where they should be on their portfolio.
To obtain the best long-term risk-adjusted performance, investors should combine multiple trend-following factor strategies into a single portfolio.
In high yield specifically, investors tend to think about it as a risky way to play fixed income. But we like to turn that thinking on its head, actually: that you should think about it as a way to de-risk your overall portfolio rather than to re-risk your fixed-income side.
BlackRock Portfolio Manager, Russ Koesterich, CFA, JD discusses his preference for the US dollar over a long Treasury hedge in the current markets.
It was another tough week in a brutal year for bears. Despite being right about many aspects of inflation, monetary policy and the persistence of the coronavirus, equity bears who were expecting anything to put a meaningful brake on the stock market were again denied.
It’s not uncommon for stakeholders in large organizations to have different views on the meaning of ESG and the importance of its pillars in defining organizational success. That’s understandable, and in fact, diverse perspectives can be a source of strength when making investment decisions.
As investors and financial advisors approach the end of 2021 and consider their annual recalibration of portfolio mix for the coming year, they would be prudent to factor in some difficult economic realities that can no longer be ignored–that will alter stock and bond performance into and well past 2022.
This article is relevant to financial professionals who are considering offering Model Portfolios to their clients.
This year marks our seventh annual ESG manager survey. Our survey of active managers assesses the integration of ESG considerations in investment processes among equity, fixed income and private market managers and spotlights firmwide policies, use of data, engagement and integration.
When rates are rising, investors need portfolio protection. But it’s no time to sit idly in cash and wait things out. Every day spent on the sidelines means income and opportunities lost. A passive, set-it-and-forget-it investing approach isn’t ideal either. Buy-and-hold laddered portfolios tend to lock in low yields that disappoint if the market begins to offer more.
In this interview, Kevin Knowles and Nick Zylkowski discuss Russell Investments’ Personalized Managed Accounts (PMA) program, a suite of advisor-sold customized SMAs that support tax-loss harvesting and ESG mandates.
We believe the traditional 60/40 portfolio will face significant headwinds in meeting investor objectives as we move through this decade and the next. Against this backdrop, Scott Welch discusses how WisdomTree seeks to challenge the traditional 60/40 approach.
Rising inflation globally raises the question of whether inflation is persistent versus transitory, driving debate among our investment managers. Our Stephen Dover, Head of the Franklin Templeton Investment Institute, recently discussed economic growth, interest rates, and inflation during a roundtable,
Reducing exposure to equities and bonds to accommodate non-correlated assets or alternative strategies may reduce risk, but at the expense of lower potential returns and painful tracking error. We introduce a novel investment concept, accessible to all investors, which is designed to seek higher returns with less risk and low tracking error by using new products which, in combination, can provide more than $1 of exposure for every dollar invested. The proposed solution harnesses the full potential of traditional portfolios plus the opportunity for higher returns and risk reduction from non-correlated investments. We show how to maximize “Return Stacking™” opportunities by choosing alternative fund managers already engaging in capital-efficient strategies.
Three transformative trends will lead the world into a radically different macro environment over the secular horizon. Read our long-term outlook and implications to consider when investing.
Data from Vanguard shows that advisors have increased allocations to passive, low-cost investment products. But they also increased allocations to commodities and timed markets poorly, particularly after the March 2020 crash.
Separately Managed Accounts
Taking Stock: Q3 2022 Equity Market Outlook
What to do in equity portfolios at the midyear point? Fundamental Equities CIO Tony DeSpirto assesses the backdrop and identifies three favored sectors.
Night Moves: Is the Overnight Drift the Grandmother of All Market Anomalies?
If finance could be distilled into one idea, it likely would be that there should be a tradeoff between risk and reward: an investment with low risk should have a low expected return, while one that could make you rich should also be one that could lose you a lot of money. The Overnight Effect flies in the face of this core tenet.
Lies, Damned Lies, and Advisor Payouts
I am not implying that brokerage firms that pay their advisors via a “payout” are lying, but there is no shortage of misleading when it comes to payouts.
Will the Fed’s Third Mandate Derail Markets?
Recent experience shows that a third mandate – preventing financial instability – trumps the Fed’s two congressional mandates of full employment and low inflation.
Inflation Risk: Persistent or Transitory is the Wrong Question
Persistent … or transitory? It’s the inflation question that has been weighing on financial markets over the last year. As each economic data point trickles out, it is analyzed and re-analyzed, with that focus in mind. But it may be the wrong question to ask.
Engine No. 1 and Its Compelling Approach to ESG Investing
As proxy season comes to a close, investors and advisors have grappled with company stewardship on a wide variety of issues. But what’s the best way to get a company to listen? Is divestment the way to go? Or must you engage with a company? And how do investors in ETFs and mutual funds make sure their voices are heard at the asset managers they invest with?
Engine No. 1 focuses on engaging with companies constructively to make sure they are taking the costs they impose on society and other stakeholders into account. It operates on the belief that climate and social concerns are economic issues and companies that fail to address them will underperform for the long term.
The Current and Future State of Model Portfolios
This article is relevant to financial professionals who are considering offering model portfolios to their clients.
Why Some Value Strategies Struggle When Value Stocks Surge
Not all value strategies have benefited equally during value stocks’ recent outperformance versus growth stocks.
Consumer Weakness Signals a Recession
Will the plight of consumers drag GDP lower in the second quarter, resulting in a recession?
The Problems with Market-Cap Weighted Index Funds
New research quantifies the implicit cost that investors incur when index funds, such as those tracking the S&P 500, are rebalanced. Those costs may be avoidable by adopting trading strategies that introduce the possibility of tracking error.
No Stone Unturned
We strongly believe that the traditional benchmark-led approach to investing in emerging market debt can be far from optimal.
Bear Stearns: A Lesson in Bear Market Bounces
The tale of Bear Stearns’ rally and investors' myopic vision in the spring of 2008 is a valuable lesson for today.
The Death of Active Management Has Been Greatly Exaggerated
For the year ending December 31, 2021, passive mutual funds and ETFs reported estimated net inflows totaling $958.43 billion, compared to estimated net inflows totaling $249.91 billion for actively managed funds.
Moving Averages: S&P Inched Up in May
Valid until the market close on June 30, 2022.
The S&P 500 closed May with a monthly gain of 0.01% after a loss of 8.8% in April. At this point, after close on the last day of the month, four of five S&P 500 strategies are signaling "cash" — Vanguard REIT Index ETF (VNQ), iShares Barclays 7-10 Year Treasury (IEF) and Vanguard All-World Index ex-US ETF (VEU), and Vanguard Total Stock Market ETF (VTI) — unchanged from last month's quadruple "cash" signal.
The Mother Of All Bear Markets
The bear has ended a long hibernation.
Looking to the Futures: Natural Gas at New Highs
Low inventories drove natural gas prices to their highest level since 2008, while above normal temperatures are putting additional stress on natural gas supply.
Snap Goes the Economy
Recent warnings from corporate executives and rapidly declining regional manufacturing surveys make me wonder if a recession has already started.
The Hazy Line Between Value and Growth
The terms "value" and "growth" have been blurred. What appears to be a value stock may be in its reputation only.
Looking to the Futures: Natural Gas Spikes on Hot Temps
Natural gas prices traded higher to start the week after forecasts show hotter than average temperatures in the United States.
Our Debt Cannot Be Inflated Away
The U.S. debt cannot be paid, even in inflated dollars. Serious inflation is inevitable that will crash stock and bond markets, in addition to devaluing the dollar.
A Stagflationary Shock
The geopolitical crisis in Ukraine creates a stagflationary shock for global economies. The plan to fight inflation just got far more complicated for global central banks.
Watch Out: The Fed is Removing Liquidity from the Markets
Liquidity is fading due to the Fed, and therefore volatility is on the rise. Illiquid and volatile markets are not conducive to long-term wealth generation.
19 Reasons to Run Like the Wind from Direct Indexing!
I don’t care how many PhDs are going to argue against me; direct indexing is Wall Street’s attempt at squeezing more fees out of the America public using advisors as the pawns.
Late‑Cycle Strategies
We assess risks and potential opportunities for multi-asset portfolios amid late-cycle dynamics, higher inflation, rising interest rates, and geopolitical uncertainty.
Grey Owl Capital's Q1 Letter
In the first quarter of 2022, financial markets abruptly reversed course and volatility increased significantly.
Japanese Inflation – Liquidity Crisis in the Making (Part 2)
The BOJ is trapped. It is conducting unlimited QE to keep rates low and weaken the yen, which promotes inflation.
The WisdomTree Q2 2022 Asset Class and Risk Factor Review and Outlook
Regular readers of WisdomTree blogs know that we are firm believers in both asset class and risk factor diversification when building our Model Portfolios.
Using Analytics in Wealth Management: The Good and Bad (Part 2)
Forward-thinking advisors have been searching for and employing analytics very carefully. This series will explore some of these metrics, along with their benefits and pitfalls. Today’s topic is capital markets assumptions.
GARP Stocks: Common Sense in an Age of False Narratives
This post explains why we believe GARP Investing may be another powerful way to protect and grow capital amid a speculative frenzy that appears to be on its way out.
Liquidity Crisis in the Making – Japan's Role in Financial Instability
In propping up Japan's economy and financial markets, its central bank indirectly provided liquidity to the world's financial markets. But the BOJ could unleash a liquidity vacuum felt around the world.
Which Sectors Will Outperform Under Inflation
In the span of just over two years, the world economy has been stricken by a pandemic and challenged by a military conflict in the heart of Europe. Major historical turning points are nearly always accompanied by fundamental shifts in the economy. The pace of history is accelerating with the global energy transition, urgency to secure reliable supplies of traditional energy, and locking in renewable alternatives. This shift will be driven by technology and innovation.
Stock Market Volatility: Schwab’s Quick Take
U.S. stocks fell Friday, extending a run of weekly losses into its third straight week, as investors reacted to a handful of disappointing earnings reports and the Federal Reserve’s increasingly aggressive language about future interest rate increases.
I-Bonds: At 7%, It's Hard to Go Wrong
Does a risk-free bond with 7% yield interest you? If so, read about the red-headed stepchild of the bond world that is finally attracting investors.
The WisdomTree Q2 2022 Economic and Market Outlook in 10 Charts or Less
When reviewing the current state of the global economy and investment markets, we recommend focusing on market signals and weeding out market noise.
Why RIAs Are Going to Lose in Retirement-Income Planning
Does the scenario below sound likely? If so, you are among the thousands of RIAs who are likely to lose significant assets over the next decade.
Memorandum regarding SMAs/UMAs/Model Portfolios and the Nasdaq Fund Network
The Nasdaq Fund Network (NFN) recently announced the launch of model portfolios, separately managed accounts (SMAs) and unified managed accounts (UMAs) on the platform. The registration of model portfolios and managed accounts on NFN make them searchable on market data platforms, financial web portals and other similar media. Eversheds Sutherland published a whitepaper describing NFN's offerings, regulations in the space, and how the work is in accordance with applicable provisions of the New Marketing Rule and relevant SEC guidance.
Will the Fed Ignore the Economy to Fight Inflation?
The more the Fed decides to dance with inflation and ignore the bond market and economy, the more we should expect stock prices to fall.
Antti Ilmanen: Investing Amid Low Expected Returns
Antti Ilmanen’s Investing Amid Low Expected Returns updates his 2011 Expected Returns, a volume considered by many the definitive work on the subject.
Will War in the Ukraine Undo the Dollar as the Reserve Currency?
This article explores the problem vexing Russia and its trade partners. I explore how the threat and use of sanctions may force some countries to contemplate weaning off the world's reserve currency.
Mom and Pop Buying Fewer Muni Bonds Directly as ETFs Heat Up
The value of bonds directly owned by households fell by $18 billion in the fourth quarter of 2021, dropping to the lowest level since 2008, according to Federal Reserve data. Instead, those buyers are moving toward mutual funds and exchange traded funds, which have roughly doubled their muni holdings over the last decade.
Do Intangibles Explain the Failure of the Value Factor?
The poor performance of factor-driven value strategies over the past decade has raised the question of whether intangible assets, such as patents and proprietary software, are properly treated. New research confirms that intangibles indeed distort valuation metrices, but there is no consensus on how to address the problem.
Taking Stock: Q2 2022 Equity Market Outlook
Seeking resilience. 2022 started with rising interest rates, high inflation and unthinkable violence and human tragedy in Europe.
Will Quantitative Tightening Overwhelm the Markets?
With QE finished and QT on the horizon, I answer a few questions to help you better appreciate what QT is, how it will operate, and discuss how draining liquidity will affect markets.
The Price Advisors Will Pay for Ignoring Flat Fees
I’ll take an order of flat fees (otherwise known as retainers) with a side of financial planning. Customers are lining up out the door for this.
Why to Consider Preferred Securities Now
Preferred securities prices have fallen sharply, presenting an attractive entry point for income-oriented investors who can ride out the volatility.
A New Era Of Globalisation
Here at Absolute Return Partners, our portfolio construction is driven by the six structural megatrends that we have identified.
Is Cash Trash As Inflation Rages?
“Cash Is Trash” is a common theme as of late as inflation rages from the massive monetary interventions of 2020 and 2021.
2 Dividend Growth Portfolios Built August 2021: One Focused On Income The Other Growth
On August 24, 2021, I presented two attractively valued dividend growth stock portfolios. One portfolio emphasized growth over income, and the other emphasized income over growth.
What if Investing Were Run Like March Madness?
Filling out your March Madness bracket provides insight into how investors select assets, structure portfolios, and react during volatile market periods.
The Senseless War on Big Oil
The Windfall Profits Tax Bill doesn’t penalize energy companies. It punishes consumers with more inflation. Further, it uses a faulty assumption to help gain support from the public.
25 Years in Risk Management
Quick – where were you 25 years ago?
Ukraine Investment Considerations: Time in the Market Beats Timing the Market
While the Russia-Ukraine conflict will likely remain uncertain for some time, we believe situations like this require cool heads from an investment perspective.
Higher Gas Prices Predict a Recession
While higher gas prices may be welcome news to the oil industry, the rest of us should be concerned. It is a glaring recession warning. Over the last 40 years, higher gas prices have been linked to economic stagnation and recessions.
Lessons from Turmoil: Taking Advantage of Volatility
In this interview, Peter Essele, vice president, investment management and research, at Commonwealth Financial Network, explains why investors should view the volatility created by the pandemic and geopolitical events as an opportunity to add risk to their portfolios.
Bear Market Strategies – Are You Ready?
Fiscal spending is normalizing quickly, and the Fed is warning investors it is ready to remove the stimulus. Such a reversal of monetary and fiscal liquidity does not guarantee a reversal of asset prices, but the odds of a bear market are increasing.
Preferred Securities: Balancing Yield with Risk
Preferred securities are a type of investment that generally offers higher yields than traditional fixed income securities, such as U.S. Treasury securities or investment-grade corporate bonds.
Don’t Fight The Tape In 2022 – Hedge The Tape Before It’s Too Late
The 2022 investment year is now well underway and financial advisors and investors would be well advised to not, as the old saying goes, “fight the tape” of what is shaping up to be a difficult year for the stock market.
The Strategy for a Bull Market in Bonds
I propose a strategy that can produce larger price gains or losses than bonds and higher yields than traditional bond funds or ETFs. If yields decline soon, investors can expect double-digit returns in a relatively short period.
Value Stock Funds Are Lacking Value
The term “value” is being grossly misapplied.
Implications of the Fed’s Policy Shift for Investors
The Federal Reserve signaling a shift in monetary policy is causing a shift in the markets that have run hot on many years of stimulus and low rates.
2022 Municipal Market Outlook: Checkers vs. Chess
As we examine the municipal bond “board” at the start this new year, it looks to us to be a more challenging one than a year ago. More like chess than checkers. Winning will likely require a more complex, multi-faceted strategy than in 2021.
Insight And Action Items For Volatile Stock Markets
Market volatility is a given, but that doesn’t make its inevitable appearance any less stressful.
Did Powell Let the Fed Put Expire?
The strike price on the Fed put has moved significantly. The Fed may sit idly by if markets voice displeasure with abrupt changes in monetary policy.
Fear and Greed: An Investor’s Worst Enemies
I examine two biases that often handcuff investors and push them to make the wrong decisions at the wrong time.
Direct Indexing: What Exactly Is It And Why Are So Many Talking About It?
The term direct indexing is somewhat of a misnomer.
12 Stocks in the Industrials Sector
This is the 7th in a series of 11 videos where I will cover each of the 11 sectors looking for value.
Will the Fed Choose Financial Instability or Inflation?
The Fed is walking a tightrope between instability and inflation. Can it successfully tame inflation without causing severe market dislocations?
The WisdomTree Q1 2022 Economic and Market Outlook in 10 Charts or Less
When reviewing the current state of the global economy and investment markets, we recommend focusing on market signals and weeding out market noise.
Deep Analytic Market Insights for 2021
What insights can we glean beyond last year’s impressive 28% return? How did it compare it to global equities? I will show you some of the winners and losers, and finish with a few observations on the VIX.
2022 Investment Outlook (Part 2) – Stocks and Bonds
Stocks are priced for perfection. Bonds trade at historically low yields despite 7% inflation. What could go wrong?
Investing in a Fast‑Moving Cycle
Uncertainty has become an ongoing theme in markets, economies, and communities everywhere, and in this environment, PIMCO investment professionals gathered – virtually, once again – for our recent Cyclical Forum.
US Growth Has Peaked Inflation Will Persist
Long before supply chain issues and soaring consumer prices made the headlines, I warned readers that massive monetary expansion made persistent inflation inevitable.
The 2022 Outlook Part 1 - Tailwinds Shift to Headwinds
While no one knows what 2022 holds in store for investors, my concern is that it should not foster the same optimism as 2021.
European Fixed-Income Outlook: Euro Markets Will Stand Out in 2022
Rising inflation is troubling bond investors worldwide, but European bond markets will likely experience comparatively weaker inflation pressures and stronger central bank support.
The 10 Toughest Client Objections to Overcome
Here is how I nudge clients (sometimes not so gently) to where they should be on their portfolio.
Enhancing Investment Performance by Combining Factor-Based Stock Selection with Multi-Indicator Trend Following
To obtain the best long-term risk-adjusted performance, investors should combine multiple trend-following factor strategies into a single portfolio.
Rethinking High Yield
In high yield specifically, investors tend to think about it as a risky way to play fixed income. But we like to turn that thinking on its head, actually: that you should think about it as a way to de-risk your overall portfolio rather than to re-risk your fixed-income side.
The Dollar: Still the Better Hedge
BlackRock Portfolio Manager, Russ Koesterich, CFA, JD discusses his preference for the US dollar over a long Treasury hedge in the current markets.
Wall Street Pros Were Bullish for 2021, Just Not Bullish Enough
It was another tough week in a brutal year for bears. Despite being right about many aspects of inflation, monetary policy and the persistence of the coronavirus, equity bears who were expecting anything to put a meaningful brake on the stock market were again denied.
Making ESG Second Nature in Asset Allocation
It’s not uncommon for stakeholders in large organizations to have different views on the meaning of ESG and the importance of its pillars in defining organizational success. That’s understandable, and in fact, diverse perspectives can be a source of strength when making investment decisions.
Investors and Advisors Are Compelled to Consider the Hard Economic Realities Facing the Financial Markets
As investors and financial advisors approach the end of 2021 and consider their annual recalibration of portfolio mix for the coming year, they would be prudent to factor in some difficult economic realities that can no longer be ignored–that will alter stock and bond performance into and well past 2022.
Checking In on Risk Factor Diversification
This article is relevant to financial professionals who are considering offering Model Portfolios to their clients.
2021 Annual ESG Manager Survey: The Red Flag Is Raised on Climate Risk
This year marks our seventh annual ESG manager survey. Our survey of active managers assesses the integration of ESG considerations in investment processes among equity, fixed income and private market managers and spotlights firmwide policies, use of data, engagement and integration.
Stay Flexible as Rates Rise
When rates are rising, investors need portfolio protection. But it’s no time to sit idly in cash and wait things out. Every day spent on the sidelines means income and opportunities lost. A passive, set-it-and-forget-it investing approach isn’t ideal either. Buy-and-hold laddered portfolios tend to lock in low yields that disappoint if the market begins to offer more.
Personalized Managed Accounts: Putting Investors in the Driver’s Seat
In this interview, Kevin Knowles and Nick Zylkowski discuss Russell Investments’ Personalized Managed Accounts (PMA) program, a suite of advisor-sold customized SMAs that support tax-loss harvesting and ESG mandates.
The Markets Continue to Rethink the 60/40 Portfolio
We believe the traditional 60/40 portfolio will face significant headwinds in meeting investor objectives as we move through this decade and the next. Against this backdrop, Scott Welch discusses how WisdomTree seeks to challenge the traditional 60/40 approach.
Debating the Next Moves for Inflation, Growth, and Rates
Rising inflation globally raises the question of whether inflation is persistent versus transitory, driving debate among our investment managers. Our Stephen Dover, Head of the Franklin Templeton Investment Institute, recently discussed economic growth, interest rates, and inflation during a roundtable,
Return Stacking: Strategies for Overcoming A Low Return Environment
Reducing exposure to equities and bonds to accommodate non-correlated assets or alternative strategies may reduce risk, but at the expense of lower potential returns and painful tracking error. We introduce a novel investment concept, accessible to all investors, which is designed to seek higher returns with less risk and low tracking error by using new products which, in combination, can provide more than $1 of exposure for every dollar invested. The proposed solution harnesses the full potential of traditional portfolios plus the opportunity for higher returns and risk reduction from non-correlated investments. We show how to maximize “Return Stacking™” opportunities by choosing alternative fund managers already engaging in capital-efficient strategies.
Age of Transformation
Three transformative trends will lead the world into a radically different macro environment over the secular horizon. Read our long-term outlook and implications to consider when investing.
Vanguard Data Shows Investment Trends by Advisors
Data from Vanguard shows that advisors have increased allocations to passive, low-cost investment products. But they also increased allocations to commodities and timed markets poorly, particularly after the March 2020 crash.