Investors have had a lot to contend with thus far in 2023. Moderating economic growth, persistent inflation, volatile interest rates, falling profits, stress in the banking sector, war in Ukraine, and the debt ceiling debate all combined to weigh on sentiment.
The Federal Reserve’s higher interest rates, the work from home trend, ESG distractions, increases in crime, etc., are having far reaching effects on our economy and investors.
War, inflation, rising rates, banking chaos, and recession are among the challenges facing markets. Investors must balance these shorter-term risks with the long-term return prospects of equities.
Some previously steadfast bears are showing signs of giving in after a seven-month advance put the S&P 500 on the edge of a key chart line.
What generally follows that expression is a succinct synopsis. We’re always trying to be concise; however, distilling complex economic and investment matters usually requires several pages.
An in-depth analysis of hedge fund performance demonstrates that, over the past 15 years, lower-beta hedge fund styles have generally achieved higher alpha, aligning with investors' objectives of maximizing returns and diversification.
Despite economic uncertainty, we see compelling value in high-quality, liquid assets that we view as more resilient in the face of a potential recession.
New research shows that investors can profit by exploiting “momentum” – the notion that stocks or factors that experienced good performance will continue to do so, and vice versa.
For this edition of Bull vs. Bear, Karrie Gordon and Nick Peters-Golden debated the long-term investing case for gold ETFs. Have the yellow metal’s fundamentals fundamentally changed?
Along with identifying your goals and time horizon, assessing risk is a key part of building a holistic financial plan. And while affluent investors generally have higher risk tolerances, determining their individual risk profiles isn’t straightforward.
US subprime auto loans are highly stressed, with a new delinquency peak of 1.8%. Rising living costs, interest rates, lack of stimulus, negative equity, declining vehicle values, and rising rates are putting pressure on borrowers.
The sudden collapse of two US regional banks and the forced acquisition of Credit Suisse in Europe introduced a third dimension to the existing policy dilemma of balancing inflation and growth objectives: financial stability.
Consisting of 60% stocks/40% bonds, this classic investment portfolio has historically been a trusted way to generate returns and diversify investor portfolios. However, we believe the 60/40 allocation may now be working against investors.
My guest today, Harin de Silva, is one of the leaders of the quantitative investing community and the winner of several Graham Dodd Awards for institutional research. He is a member of the Q Group and a pioneer in factor investing.
Special purpose acquisition companies (SPACs) impose costs that are subtle, opaque and poorly understood. New research shows just how much SPAC investors stand to lose.
After the market selloff in 2022—a period that was particularly hard on growth stocks—we think our companies are attractively priced for the next five years, which is our baseline investment horizon.
Given market uncertainty and the risk of a US recession, is now the time for defensive stocks? Making a case for low-volatility, high-dividend equities with Franklin Templeton Investment Solutions’ Vaneet Chadha and Michael LaBella.
We think dividend-income strategies can be effective across multiple environments, provided that they’re designed to tap into a wider opportunity set beyond traditional dividend payers alone.
Early signs of economic unraveling are appearing. The federal corporation that insures bank deposits is woefully underfunded. The Fed is under pressure to pivot away from its inflation fight.
Income-seeking investors are accustomed to casting wide nets after years of low yields.
President Biden has proposed a $6.9 trillion budget that calls for reducing deficits and raising taxes on wealthy people and large corporations. There is a lot of spending in this budget that fuels inflation.
The surge in technology stocks that’s caused renewed losses for short sellers this year looks to be running out of steam, encouraging bears to maintain their bets against long-time targets such as Tesla Inc., Apple Inc. and Meta Platforms Inc.
Professional speculators are turning risk-on by gobbling up technology shares, after largely missing out on the new-year rally in the stock-market’s biggest winners.
Most think so.
The triumphant comeback of quant-investing strategies on Wall Street is suddenly on shaky ground as virtually all of 2022’s hottest market trends get derailed in the new year.
The recent embrace of so-called liquid alternatives by ordinary Americans seeking to fund their retirement is deeply troubling.
2022 was a year of disappointment and negative surprises as economies faced the consequences of geopolitical turmoil and central banks fighting inflation.
Reducing the U.S. deficit is praiseworthy. How was that accomplished in 2022?
It's easy to take the wrong signal from recent market strength.
The team at Infrastructure Capital Advisors provides key insights and advice on current market conditions and economic outlook for this month and the coming months.
This article explores how the addition of specific liquid alternative strategies produces an “All-Terrain” portfolio with the potential for improved long-term performance across a wider range of market environments.
After enduring one of the worst years on record across asset classes, investors should find more cause for optimism in 2023, even as the global economy faces challenges.
At KCR, we believe in the Quantamental Investment approach–a strategy that leverages the most useful aspects of both quantitative investing and fundamental investing.
One of the biggest breakdowns has been in the relationship between stocks and bonds. Stock prices and bond prices are usually not correlated, meaning bonds can serve as the cornerstone of a hedge when stock prices waver and drop.
A handful of giant firms are gaining dominance over the hottest corners of the hedge fund industry. This year showed why.
“I have never seen so much bearishness in the market,” Jeremy Siegel said, “which is a great sign for stock investors.”
Democratization has become a buzz word within the fintech industry as technology and innovation have emerged to battle the headwinds that previously blocked accessibility to a subset of investment vehicles such as structured products.
Global Investment Report's 3Q Update of the 2022 hedge fund survey.
Professional speculators with billions in bearish trades on the line endured a rough ride after Tuesday’s report on US consumer prices brought the latest sign that the Federal Reserve is making progress in its battle against inflation.
As one year ends and another begins, we’ll look at how the Outcome-Based ETF industry evolved in 2022, how defined outcome ETFs distinguished themselves during the downturn, and what lies ahead for Outcome-Based ETFs in 2023 and why they’re more relevant today than ever before.
A multi-real-asset strategy may help plan participants preserve and grow purchasing power, enhance portfolio diversification, and mitigate inflation risks.
Subscribers have requested that I cover 5 dividend stocks with yields ranging from 2.5% to 9.5%.
Markets may continue to see volatility in 2023 as they navigate between global economic growth and inflation fears, with central banks' decreasing rate hikes and China's reopening.
Value equities are still priced for significant outperformance, globally.
In one of the most challenging years for markets, 2022 brought persistently high inflation, aggressive central bank tightening and heightened geopolitical risks, leaving investors with few places to hide.
Yes, inflation is peaking.
And up and down.
For years leading up to the pandemic, low inflation and stable growth created a favorable environment for investors that supported sustained periods of robust stock and bond returns. With inflation virtually non-existent, economic downturns were met with monetary and fiscal stimulus that provided a backstop for financial markets.
Fast-money quants were effectively forced to buy an estimated $225 billion of stocks and bonds over just two trading sessions, as one of Wall Street’s hottest strategies in the great 2022 bear market shows signs of cracking.
This morning I had to laugh when I saw an email that read, “Winter Is Coming – Owning Puts Is Not Enough.”
I look back to other periods when bonds outperformed stocks. This analysis allows us to assess specific stock traits and specific industries that over- and underperformed in those eras.
The top 50 broad strategy funds – determined by highest historical performance through 2021--outperformed the market by 21 percentage points through the first six months of 2022.
Today I want to talk about why the labor market is so out of balance. Some of this is new and some has been brewing for many years. We will end with some commentary on yesterday’s unemployment report.
Many investors are searching for assets that can help protect portfolios from inflation.
On August 16th, President Joe Biden signed the Inflation Reduction Act into law, ending months of uncertainty over whether congressional Democrats would ever reach agreement on a compromise budget reconciliation bill.
One investment with the ability to provide current income, inflation protection, and even the potential for capital appreciation has been largely overlooked – rising dividend stocks.
A number of key technical, sentiment and flow based indicators are suggesting we could see a relief in selling pressure over the coming weeks, and perhaps a countertrend rally in risk assets.
Bill Bengen’s 4% safe withdrawal rule is the standard by which retirement strategies are measured. But it fails as a practical guide to retirement planning. Here is how to fix it.
While 2022 has been a challenging year for nearly every segment of the capital markets, it comes with a silver lining for income investors: higher yields.
Generating investment income is challenging, especially in the low-yield environment we have been living with for the past decade.
Direct indexing is the fastest growing segment of the asset management industry. In this interview, Brandon Thomas of Envestnet explains how direct indexing helps clients gain low-cost, tax-efficient exposure to asset classes, ESG and quantitative strategies.
Dividends and dividend-paying stocks are getting renewed attention in recent months.
A new wave of lawsuits alleges that Blackrock’s target date funds (TDFs) have underperformed. These lawsuits open the door to a related and scandalous breach of fiduciary duty – excessive risk.
The global economy and financial markets have suffered a dreadful first half of the year, ravaged by a severe commodity shock, strict COVID-19 lockdowns in the world’s second largest economy, and one of the most aggressive Fed tightening cycles in recent history. The second half looks equally tough.
Given that backdrop, now is a critical time for multi-asset investors to revisit their investment approach. There is a sharp divergence in the investment opportunities across equities, fixed income, and real assets.
My guest today, Todd Jablonski, will share how he’s thinking about investing across the multi-asset universe. Todd is the chief investment officer and head of multi-asset investment strategies and solutions for Principal Global Investors. He is responsible for the business, research, and investment management of Principal Global Asset Allocation.
This year has been a tough one for retirement savings. Inflation is high, markets are volatile and it’s hard to know where we’ll be in a few weeks, months or even a year.
Sales of bonds backed by debt associated with single-family rental housing has soared over the last two years, as rents climbed across the country.
After spending much of 2022 playing defense, professional speculators are reasserting themselves with aggressive equity bets on both the short and long side.
We normally start our letters on a positive note.
Our own government cannot afford a short end of the curve much higher than it is now, and our own fiscal and monetary decisions have held down the long end of the curve in what I believe is a multi-decade period ahead that is best referred to as “Japanification”
If Wall Street is right, the big revival in value investing in the post-lockdown era is in danger of falling apart all thanks to the resurgent bond market.
The market contraction presents better opportunities than we’ve seen in years to generate income, which we balance against the need for resilience in the face of a potential recession.
A few billion dollars cannot move a multi-trillion inflation needle. Two types of inflation are in play: one is transitory, but the other is not. The Fed cannot control inflation, but we want to believe it can.
When it comes to a comfortable retirement, women in the US have the cards stacked against them.
We meet the official definition of a market correction and the unofficial definition of a recession, and we’re close to the definition of high inflation. Market corrections can and have caused recessions. Be prepared for all three problems coexisting for many years.
There was a major development in 2006 that transformed how Americans invest for retirement. It solved one problem, but created another that will be causing extra pain to people who retire in this economy.
Among the many factors cited in academic research, only a handful have been sufficiently reliable for use in asset pricing models. One of those is momentum. New research shows that it works globally – even in China, a country whose markets have not historically exhibited momentum.
Last month I advised abandoning stocks and bonds in favor of inflation-protected alternatives. That hasn’t worked out. I have not changed my mind. Interest rates will increase and cause losses in stock and bond markets.
None of us can control markets, but it’s critical that our clients know how they have performed relative to appropriate benchmarks.
Depending on risk and diversification, 401(k) plans have lost between 4% and 20% so far this year. Unlike most other periods when stocks lost money, bonds have not defended well this time.
We think we could see a bullish back half of the year for equity markets. Our analysis follows in our Quarterly Strategy Report.
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.
Two forecasting methods predict a 54% stock market loss in 2022. Someday the stock market bubble will burst. But the data says we have not seen the worst of equity market declines.
Why would I work to increase the profile of an active fund manager? My reasons reflect the increasing pressure on advisors to differentiate themselves and demonstrate value.
Lifetime income solutions are high on the wish lists of defined contribution (DC) plan participants, with the certainty of a guaranteed lifetime income stream ranking as the top feature in our surveys over the past decade.
In 2003, at age 19, Elizabeth Holmes founded Theranos, and it became a $10 billion company by 2014. But it was a fraud. Aspects of target date funds mirror the Holmes story.
Applying volatility benchmarks correctly is the key to effective portfolio management.
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.
Those who are familiar with my articles know that I see market crashes in stocks and bonds occurring in this decade, combined with serious inflation. Readers ask how I recommend protecting. This is it.
It started with bonds. Now even collateralized debt obligations (CDOs) come in green.
Specialty Investments
Mid-Year Market Outlook
Investors have had a lot to contend with thus far in 2023. Moderating economic growth, persistent inflation, volatile interest rates, falling profits, stress in the banking sector, war in Ukraine, and the debt ceiling debate all combined to weigh on sentiment.
The Far-Reaching Effects of Commercial Real Estate’s Downward Spiral
The Federal Reserve’s higher interest rates, the work from home trend, ESG distractions, increases in crime, etc., are having far reaching effects on our economy and investors.
The Quality Spectrum: Stability in an Unstable World
War, inflation, rising rates, banking chaos, and recession are among the challenges facing markets. Investors must balance these shorter-term risks with the long-term return prospects of equities.
Hedge Funds Rush to Buy Stocks on S&P 500’s Momentum
Some previously steadfast bears are showing signs of giving in after a seven-month advance put the S&P 500 on the edge of a key chart line.
The Long and Short of It
What generally follows that expression is a succinct synopsis. We’re always trying to be concise;
however, distilling complex economic and investment matters usually requires several pages.
When High Alpha Met Low Beta
An in-depth analysis of hedge fund performance demonstrates that, over the past 15 years, lower-beta hedge fund styles have generally achieved higher alpha, aligning with investors' objectives of maximizing returns and diversification.
Income Fund Update: Building Resilience and Harnessing Yield in High Quality Assets
Despite economic uncertainty, we see compelling value in high-quality, liquid assets that we view as more resilient in the face of a potential recession.
Momentum Versus Factor Momentum: Which Dominates?
New research shows that investors can profit by exploiting “momentum” – the notion that stocks or factors that experienced good performance will continue to do so, and vice versa.
Bull vs. Bear: When Investing in Gold ETFs, Find What Glitters
For this edition of Bull vs. Bear, Karrie Gordon and Nick Peters-Golden debated the long-term investing case for gold ETFs. Have the yellow metal’s fundamentals fundamentally changed?
Risk Mitigation's Crucial, Complex Role for Wealthy Families
Along with identifying your goals and time horizon, assessing risk is a key part of building a holistic financial plan. And while affluent investors generally have higher risk tolerances, determining their individual risk profiles isn’t straightforward.
A Closer Look at Auto ABS and Investment Opportunities
US subprime auto loans are highly stressed, with a new delinquency peak of 1.8%. Rising living costs, interest rates, lack of stimulus, negative equity, declining vehicle values, and rising rates are putting pressure on borrowers.
Navigating a Trilemma
The sudden collapse of two US regional banks and the forced acquisition of Credit Suisse in Europe introduced a third dimension to the existing policy dilemma of balancing inflation and growth objectives: financial stability.
Move Over 60/40
Consisting of 60% stocks/40% bonds, this classic investment portfolio has historically been a trusted way to generate returns and diversify investor portfolios. However, we believe the 60/40 allocation may now be working against investors.
Minimize Risk and Participate in the Market Upside
My guest today, Harin de Silva, is one of the leaders of the quantitative investing community and the winner of several Graham Dodd Awards for institutional research. He is a member of the Q Group and a pioneer in factor investing.
The Death Knell Sounds for SPACs
Special purpose acquisition companies (SPACs) impose costs that are subtle, opaque and poorly understood. New research shows just how much SPAC investors stand to lose.
Although Stocks Were Volatile During the First Quarter, High Quality Has Come Back Into Favor
After the market selloff in 2022—a period that was particularly hard on growth stocks—we think our companies are attractively priced for the next five years, which is our baseline investment horizon.
The Case for Low-Volatility, High-Dividend Equities
Given market uncertainty and the risk of a US recession, is now the time for defensive stocks? Making a case for low-volatility, high-dividend equities with Franklin Templeton Investment Solutions’ Vaneet Chadha and Michael LaBella.
Dividend Investing: Broader Is Better for Multi-Asset Strategies
We think dividend-income strategies can be effective across multiple environments, provided that they’re designed to tap into a wider opportunity set beyond traditional dividend payers alone.
The Impact of Bank Failures and Disintermediation
Early signs of economic unraveling are appearing. The federal corporation that insures bank deposits is woefully underfunded. The Fed is under pressure to pivot away from its inflation fight.
Taming Biases in High-Dividend Equity Strategies
Income-seeking investors are accustomed to casting wide nets after years of low yields.
Biden’s $6.9 Trillion Deficit Gamble
President Biden has proposed a $6.9 trillion budget that calls for reducing deficits and raising taxes on wealthy people and large corporations. There is a lot of spending in this budget that fuels inflation.
Tesla Punishes Short-Sellers With Losses
The surge in technology stocks that’s caused renewed losses for short sellers this year looks to be running out of steam, encouraging bears to maintain their bets against long-time targets such as Tesla Inc., Apple Inc. and Meta Platforms Inc.
Hedge Funds Go Risk-On, Buying Tech Stocks for 12 Straight Days
Professional speculators are turning risk-on by gobbling up technology shares, after largely missing out on the new-year rally in the stock-market’s biggest winners.
Are We Having a Recession or Not?
Most think so.
Quant Funds Shed Billions as Wall Street's Hottest Trends Falter
The triumphant comeback of quant-investing strategies on Wall Street is suddenly on shaky ground as virtually all of 2022’s hottest market trends get derailed in the new year.
Alternatives for the Masses?
The recent embrace of so-called liquid alternatives by ordinary Americans seeking to fund their retirement is deeply troubling.
Fed Up: Can the Fed Accommodate the Market?
2022 was a year of disappointment and negative surprises as economies faced the consequences of geopolitical turmoil and central banks fighting inflation.
The Deficit is Not the Debt
Reducing the U.S. deficit is praiseworthy. How was that accomplished in 2022?
Areté Market Review Q422: Cash is King-ish
It's easy to take the wrong signal from recent market strength.
October 2022 Market & Economic Outlook Report
The team at Infrastructure Capital Advisors provides key insights and advice on current market conditions and economic outlook for this month and the coming months.
From All-Weather to All-Terrain Investing for the Stormy Decade Ahead
This article explores how the addition of specific liquid alternative strategies produces an “All-Terrain” portfolio with the potential for improved long-term performance across a wider range of market environments.
Cyclical Outlook Key Takeaways: Strained Markets, Strong Bonds
After enduring one of the worst years on record across asset classes, investors should find more cause for optimism in 2023, even as the global economy faces challenges.
Quantamental Investing: A Brief Primer on KCR’s Toolkits
At KCR, we believe in the Quantamental Investment approach–a strategy that leverages the most useful aspects of both quantitative investing and fundamental investing.
When Old Rules Break Down, Consider a New Investing Approach
One of the biggest breakdowns has been in the relationship between stocks and bonds. Stock prices and bond prices are usually not correlated, meaning bonds can serve as the cornerstone of a hedge when stock prices waver and drop.
Bigger Was Better in 2022: Global Hedge-Fund Industry Sees Split
A handful of giant firms are gaining dominance over the hottest corners of the hedge fund industry. This year showed why.
Jeremy Siegel: The Excessive Bearishness is Great for Equity Investors
“I have never seen so much bearishness in the market,” Jeremy Siegel said, “which is a great sign for stock investors.”
Democratization: More Than Just a Buzz Word
Democratization has become a buzz word within the fintech industry as technology and innovation have emerged to battle the headwinds that previously blocked accessibility to a subset of investment vehicles such as structured products.
Top 50 Hedge Funds Outperform the Market by 28 percentage points through the first nine months of the year
Global Investment Report's 3Q Update of the 2022 hedge fund survey.
Wrong-Way Bets on Inflation Exposed Ahead of Fed Rate Decision
Professional speculators with billions in bearish trades on the line endured a rough ride after Tuesday’s report on US consumer prices brought the latest sign that the Federal Reserve is making progress in its battle against inflation.
Defined Outcome ETFs™: More relevant today than ever before
As one year ends and another begins, we’ll look at how the Outcome-Based ETF industry evolved in 2022, how defined outcome ETFs distinguished themselves during the downturn, and what lies ahead for Outcome-Based ETFs in 2023 and why they’re more relevant today than ever before.
Plan Design in an Inflation‑Sensitive World
A multi-real-asset strategy may help plan participants preserve and grow purchasing power, enhance portfolio diversification, and mitigate inflation risks.
5 Dividend Stocks with Yields Of 2.25% To 9.5%
Subscribers have requested that I cover 5 dividend stocks with yields ranging from 2.5% to 9.5%.
Recovery and Risk
Markets may continue to see volatility in 2023 as they navigate between global economic growth and inflation fears, with central banks' decreasing rate hikes and China's reopening.
Quarterly Letter 3Q 2022
Value equities are still priced for significant outperformance, globally.
Three Income Themes for Multi-Asset Investors in 2023
In one of the most challenging years for markets, 2022 brought persistently high inflation, aggressive central bank tightening and heightened geopolitical risks, leaving investors with few places to hide.
Inflation Is Peaking, But How Low Will It Go?
Yes, inflation is peaking.
Up and Down
And up and down.
Strategies for Volatile Markets
For years leading up to the pandemic, low inflation and stable growth created a favorable environment for investors that supported sustained periods of robust stock and bond returns. With inflation virtually non-existent, economic downturns were met with monetary and fiscal stimulus that provided a backstop for financial markets.
Quants Forced to Shed $225 Billion of Short Bets in Big Squeeze
Fast-money quants were effectively forced to buy an estimated $225 billion of stocks and bonds over just two trading sessions, as one of Wall Street’s hottest strategies in the great 2022 bear market shows signs of cracking.
Do You Have A Systematic Process For Managing Inverse ETFs?
This morning I had to laugh when I saw an email that read, “Winter Is Coming – Owning Puts Is Not Enough.”
Stock Picking in a Bond-Friendly Environment
I look back to other periods when bonds outperformed stocks. This analysis allows us to assess specific stock traits and specific industries that over- and underperformed in those eras.
Global Investment Report’s 2022 Annual Hedge Fund Survey: Mid-Year Update
The top 50 broad strategy funds – determined by highest historical performance through 2021--outperformed the market by 21 percentage points through the first six months of 2022.
Where Are the Workers?
Today I want to talk about why the labor market is so out of balance. Some of this is new and some has been brewing for many years. We will end with some commentary on yesterday’s unemployment report.
Equity Income: The Dividend Defense Against Inflation
Many investors are searching for assets that can help protect portfolios from inflation.
US Retirement Legislation And Regulation Bulletin: Third Quarter 2022
On August 16th, President Joe Biden signed the Inflation Reduction Act into law, ending months of uncertainty over whether congressional Democrats would ever reach agreement on a compromise budget reconciliation bill.
A Case for Direct Indexing Using Rising Dividend Stocks
One investment with the ability to provide current income, inflation protection, and even the potential for capital appreciation has been largely overlooked – rising dividend stocks.
Stocks Sniffing a Bear Market Rally
A number of key technical, sentiment and flow based indicators are suggesting we could see a relief in selling pressure over the coming weeks, and perhaps a countertrend rally in risk assets.
What’s Wrong With the 4% Rule?
Bill Bengen’s 4% safe withdrawal rule is the standard by which retirement strategies are measured. But it fails as a practical guide to retirement planning. Here is how to fix it.
Tackling the Income Problem
While 2022 has been a challenging year for nearly every segment of the capital markets, it comes with a silver lining for income investors: higher yields.
Dividend Growth Stocks and High Yield Bonds: An Innovative Approach to Generating Investment Income
Generating investment income is challenging, especially in the low-yield environment we have been living with for the past decade.
Direct Indexing in a Changing Environment for Advisors
Direct indexing is the fastest growing segment of the asset management industry. In this interview, Brandon Thomas of Envestnet explains how direct indexing helps clients gain low-cost, tax-efficient exposure to asset classes, ESG and quantitative strategies.
Dividends – What’s All The Excitement?
Dividends and dividend-paying stocks are getting renewed attention in recent months.
New Lawsuits Threaten the Target-Date Fund Industry
A new wave of lawsuits alleges that Blackrock’s target date funds (TDFs) have underperformed. These lawsuits open the door to a related and scandalous breach of fiduciary duty – excessive risk.
The Global Outlook for Multi-Asset Management
The global economy and financial markets have suffered a dreadful first half of the year, ravaged by a severe commodity shock, strict COVID-19 lockdowns in the world’s second largest economy, and one of the most aggressive Fed tightening cycles in recent history. The second half looks equally tough.
Given that backdrop, now is a critical time for multi-asset investors to revisit their investment approach. There is a sharp divergence in the investment opportunities across equities, fixed income, and real assets.
My guest today, Todd Jablonski, will share how he’s thinking about investing across the multi-asset universe. Todd is the chief investment officer and head of multi-asset investment strategies and solutions for Principal Global Investors. He is responsible for the business, research, and investment management of Principal Global Asset Allocation.
A 1, 2, 3 on 401(k) Day: 3 Important Reminders Amidst Market Uncertainty
This year has been a tough one for retirement savings. Inflation is high, markets are volatile and it’s hard to know where we’ll be in a few weeks, months or even a year.
Housing Slowdown Puts Damper on Rent-Backed Bonds
Sales of bonds backed by debt associated with single-family rental housing has soared over the last two years, as rents climbed across the country.
Hedge Funds Swarm Back to Upended Markets With Short, Long Bets
After spending much of 2022 playing defense, professional speculators are reasserting themselves with aggressive equity bets on both the short and long side.
Depressing the Optimists
We normally start our letters on a positive note.
Muddling Through Stagflation
Our own government cannot afford a short end of the curve much higher than it is now, and our own fiscal and monetary decisions have held down the long end of the curve in what I believe is a multi-decade period ahead that is best referred to as “Japanification”
Value Trade Crumbles on Wall Street, Putting Quant Funds at Risk
If Wall Street is right, the big revival in value investing in the post-lockdown era is in danger of falling apart all thanks to the resurgent bond market.
Income Fund Update: Higher Yields, Wider Spreads, Greater Opportunities
The market contraction presents better opportunities than we’ve seen in years to generate income, which we balance against the need for resilience in the face of a potential recession.
The Inflation Reduction Act is an Orwellian Ruse
A few billion dollars cannot move a multi-trillion inflation needle. Two types of inflation are in play: one is transitory, but the other is not. The Fed cannot control inflation, but we want to believe it can.
Wall Street Is Failing Women in Retirement
When it comes to a comfortable retirement, women in the US have the cards stacked against them.
Economic Recessions, Stock Market Corrections and High Inflation
We meet the official definition of a market correction and the unofficial definition of a recession, and we’re close to the definition of high inflation. Market corrections can and have caused recessions. Be prepared for all three problems coexisting for many years.
The Fatal Flaw in Your Retirement Plan’s Target Date Funds
There was a major development in 2006 that transformed how Americans invest for retirement. It solved one problem, but created another that will be causing extra pain to people who retire in this economy.
Factor Momentum is Everywhere, Including China
Among the many factors cited in academic research, only a handful have been sufficiently reliable for use in asset pricing models. One of those is momentum. New research shows that it works globally – even in China, a country whose markets have not historically exhibited momentum.
Why I Was Wrong About Interest Rates, so Far
Last month I advised abandoning stocks and bonds in favor of inflation-protected alternatives. That hasn’t worked out. I have not changed my mind. Interest rates will increase and cause losses in stock and bond markets.
The Art and Science of Performance Benchmarking
None of us can control markets, but it’s critical that our clients know how they have performed relative to appropriate benchmarks.
How Much Have 401(k) Plans Lost This Year?
Depending on risk and diversification, 401(k) plans have lost between 4% and 20% so far this year. Unlike most other periods when stocks lost money, bonds have not defended well this time.
Bullish Back Half
We think we could see a bullish back half of the year for equity markets. Our analysis follows in our Quarterly Strategy Report.
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.
Stocks Sniffing A Bear Market Rally
A number of key technical, sentiment and flow based indicators are suggesting we could see a relief in selling pressure over the coming weeks, and perhaps a countertrend rally in risk assets.
This is Not the Market Bottom
Two forecasting methods predict a 54% stock market loss in 2022. Someday the stock market bubble will burst. But the data says we have not seen the worst of equity market declines.
Why I Consulted with an Active Fund Manager
Why would I work to increase the profile of an active fund manager? My reasons reflect the increasing pressure on advisors to differentiate themselves and demonstrate value.
Lifetime Income Fees vs. Costs: Look Beneath the Tip of the Iceberg
Lifetime income solutions are high on the wish lists of defined contribution (DC) plan participants, with the certainty of a guaranteed lifetime income stream ranking as the top feature in our surveys over the past decade.
Elizabeth Holmes’ Lesson for Target-Date Funds
In 2003, at age 19, Elizabeth Holmes founded Theranos, and it became a $10 billion company by 2014. But it was a fraud. Aspects of target date funds mirror the Holmes story.
Utilizing Volatility Benchmarks In Building Long-short Stock Pairs
Applying volatility benchmarks correctly is the key to effective portfolio management.
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.
How I Protect Against the Coming Market Crash
Those who are familiar with my articles know that I see market crashes in stocks and bonds occurring in this decade, combined with serious inflation. Readers ask how I recommend protecting. This is it.
Does This CDO Come in Green? With ESG Everywhere, Buyers Beware
It started with bonds. Now even collateralized debt obligations (CDOs) come in green.