The AQR Style Premia Alternative Fund (QSPIX) was introduced a decade ago to provide pure exposure to four market factors that had historically delivered excess returns. Let’s look at how it performed over that period.
In November, Treasury rates dropped, and risk assets rallied. The market expects continuing drops in inflation and slower, but not disastrous, growth. The data support the market's sanguine assessment.
Inflation is a touchy subject, and given there are many ways to analyze it, investors should take note of the nuances that exist within the data.
Even with $2.4 trillion in ETF assets spread across more than 400 ETFs, there’s a pending offering from BlackRock that caught my eye.
Back in the Great Financial Crisis era, someone quipped that the federal government had become a giant hedge fund with an army attached. That wasn’t far off. Various agencies and entities were absorbing all kinds of risky assets to stabilize an overleveraged system.
The life story of Charlie Munger, who passed away on Tuesday at age 99, serves as a shining example of the enduring American Dream, especially now at a time when many people doubt whether the promise of a better life is still intact.
In a turnaround from last year, there is renewed interest in the fixed income asset class as yields have risen. Ed Perks, CIO of Franklin Income Investors, shares his analysis of recent macro developments and where he sees opportunities for income.
Tax-loss harvesting creates an opportunity every year for advisors to turn lemons into lemonade. Advisors can realize losses that their clients experienced during the year and use them to offset realized gains in other parts of their portfolio.
Our 2023 Manager ESG Survey shows that transparency around DEI data is increasing among investment managers. The results reveal that equity product managers in particular are more inclined to share DEI data compared to managers in other asset classes.
97% of corporate defined benefit (DB) plans can achieve full funding without a significant draw on corporate cash. This is an increase from the 86% noted in last year’s report.
Franklin Templeton recently hosted due diligence meetings with financial advisors where Tony Davidow, Senior Alternatives Investment Strategist, led discussions focused on alternative investments.
Dave Nadig, financial futurist and Jon Fee of VettaFi discuss how to introduce principals of financial planning to the next generation and the different aspects of financial education.
The likes of consumer resiliency based on the earliest readings on Black Friday sales and the degree to which the Artificial Intelligence theme continues support the idiosyncratic tendencies of the markets concentrated in the Magnificent 7.
The main point under contention this year will be the phase-out of fossil fuels and the limited progress achieved so far. As more businesses make net-zero commitments, there is mounting pressure for greater government support through policies and incentives.
Valid until the market close on December 31, 2023
The S&P 500 closed November with a monthly gain of 8.92%, after a loss of 2.20% in October. After close on the last day of the month, one of five Ivy portfolio ETFs — iShares 7-10 Year Treasury Bond ETF (IEF) — is signaling "cash", down from last month's final quadruple "cash" signal.
The National Association of Realtors® (NAR) released the latest monthly data for its pending home sales index. The index fell 1.5% in October to 71.4, the index's lowest reading since the NAR began tracking data in 2001, and is down 8.5% compared to one year ago. Pending home sales were expected to fall 2.0% last month.
With the release of October's report on personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.26% month-over-month change in disposable income comes to 0.21% when we adjust for inflation. The year-over-year metrics are 6.44% nominal and 3.33% real.
Personal income (excluding transfer receipts) rose 0.3% in October and is up 5.4% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) was up 0.3% month-over-month and 2.3% year-over-year.
The last time the municipal bond market rallied so much, it was Paul Volcker — and not Jerome Powell — who was winning a war on inflation.
There is broad agreement that economic damages will increase with warming, but there is substantial disagreement on the magnitude of these damages.
Maria Giraldo discusses the performance of the corporate credit sector this year and the rationale for our cautiously optimistic outlook for 2024.
The problem is not a deficit or a debt-issuance problem. It's an interest rate problem.
The US economy grew at an even faster pace in the third quarter than originally estimated, reflecting upward revisions to business investment and government spending.
The highest compliment I receive from clients is when they tell me they don’t feel like our relationship is transactional.
Content creation is a lot like building furniture; you need a plan and the right components.
As I start thinking about Christmas this year, I decided I want to be on the nice list again, so I put together some useful year-end actions and ideas for financial advisors.
Economic pain is likely in 2024, but that doesn’t mean stocks will struggle all year, especially if there is a continuation of the rolling recessions that have hit the economy.
What were the big ETF trends of 2023? David Mann, Global Head of ETF Product & Capital Markets, reviews some of his predictions for this year—and how they panned out.
Javier Milei was elected president of Argentina on the strength of a radical promise: that he would replace the highly inflationary Argentine peso with the stable US dollar.
A robust growth backdrop, a key input for cross-asset positioning, benefited from pent-up demand and an accommodative fiscal policy stance.
I'll share the impact healthcare costs have on financial plans, the critical healthcare information to include (such as medical tax deductions and IRMAA), how to budget for costs in a world of variables, and tangible strategies to implement during open enrollment and beyond to ensure clients are on the optimal coverage.
The growth of the federal deficit in the post-COVID era, coupled with the political unwillingness to increase taxes, foretells higher-than-historical inflation rates, according to new research.
Private equity firms that spent hundreds of billions of dollars on acquisitions at the top of the market risk a nasty hangover.
Food prices illustrate several challenges of containing inflation.
The 2023 holiday season is officially upon us. Happy Black Friday and Cyber Monday to those who observe!
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.
Now that we’re about to enter the Christmas shopping season, expect even more focus than usual on the consumer over the next several weeks.
Both supply and demand of workers will prevent a surge in unemployment rates.
While the fall in inflation is welcome, the impact of higher interest rates on mortgage borrowers still has some way to play out. The reduction in inflation will help DB members that are drawing on their pension. Pension trustees should consider their investment strategy and support members with their retirement planning.
CIO designate Sean Taylor gives his take on what Asia has to offer global and emerging markets investors, from growth, to diversification, to innovation.
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.
Doug Drabik discusses fixed income market conditions and offers insight for bond investors.
Taxes can have a significant and ongoing impact on an investment portfolio. Advisors can help their clients minimize that impact with a tax-smart approach. Advisors can prepare for capital gains season now, and potentially maximize their clients’ after-tax returns.
The potency of monetary policy will weigh more heavily on activity in 2024.
The latest inflation report, showing that price increases slowed in October, suggests that the US just might get the “immaculate disinflation” that everyone is hoping for: Inflation will fall to its pre-pandemic levels and remain there, and the US will avoid a recession. Allow me to make the pessimist’s case that we are not out of the woods yet.
I show how the best way to utilize bonds in retirement is not to rebalance between stocks and bonds in retirement, but rather to draw down on the bond side of the portfolio first and let the portfolio drift towards a greater equity allocation.
The primary holder of U.S. Federal debt is, surprising to many, the U.S. federal government itself, accounting for approximately 40% of the total outstanding debt.
Dina Ting, Franklin Templeton’s Head of Global Index Portfolio Management, sheds light on the benefits of single-country ETF allocations against what has been a rocky macro backdrop and discusses ways to re-evaluate potential opportunities in terms of tax-loss decision-making.
Today's uncertain economic climate is putting particular pressure on four market segments. Here's what to watch out for in the months ahead.
In this issue of Fixed-Income Sector Views, our Sector Teams identify positive technical trends that have helped to support spreads, but remain vigilant for signs of credit deterioration as the slowing economy and the bite of higher rates start to be felt by issuers.
Investors should embrace a genuine long-term perspective, extending their time horizons to at least 20 to 30 years. The traditional notion of long-term investing (five to 10 years) may fall short of realizing the full benefits of long-term strategies.
Let’s examine what the bond market is telling us about inflation and a solution that will pay you and your clients to insure for the possibility of continued high, long-term inflation.
The Treasury market’s nascent rally is facing its next big test: a bond auction that will help gauge whether investors are confident 2023’s selloff is over once and for all.
It’s touted as crypto’s big breakthrough on Wall Street: The imminent arrival of Bitcoin exchange-traded funds that will kick open digital-currency investing to the institutional and retail masses.
Is the Federal Reserve nearing the end of its rate-hiking cycle? The U.S. central bank is giving investors mixed messages. The Fed has recently paused its rate hikes and said it would keep interest rates between 5.25% and 5.5%.
Advisors who set up recurring withdrawals at TD need to beware. With the transition to Schwab, those scheduled January withdrawals will take effect in December instead.
Recent legislative changes will impact the student financial aid process and could create stress and confusion. Dr. Peter Mazareas, author, college financing expert and Co-Founder of Invite Education, shares some need-to-know information for parents, students, and financial advisors.
Individuals are increasingly looking for more tailored investment solutions, so it makes sense for plan fiduciaries to consider a more personalized approach, according to John Kutz, National Retirement Plan Strategist. He says personalization may be the ticket to better retirement outcomes.
Portfolios with large allocations to alternatives can have many benefits. However, alternative allocations can deviate meaningfully from policy, particularly during periods of equity-market turbulence.
I find for many the same is true with ETFs and capital gains. However, the ETF pie continues to expand with newer investors each year. The persistent lack of a capital tax gain burden simply for holding onto an investment is worthy of celebration.
Fossil fuels, particularly oil, are difficult to replace due to their availability, affordability and energy density. Low-carbon alternatives, like solar energy, need large amounts of space to produce comparable amounts of energy to oil.
The federal government starts a new fiscal year every October 1. In a rational world, Congress would fulfill its responsibilities by passing bills before that date to authorize spending in the various agencies and programs.
The run-off election looks tight in Argentina, where I’m attending a Young Presidents’ Organization (YPO) event in Buenos Aires.
I've updated this series to include the October release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $49,185, down 8.1% from over 50 years ago. After adjusting for inflation, hourly earnings are below their all-time high from April 2020.
We believe that an OCIO provider should have the capability to handle any type of investment assignment. However, most OCIO providers do not have the ability to do this.
In October, nominal home values increased for a 7th straight months while "real" home values fell for a 2nd straight month. Last month's ZHVI came in at $346,653, up 0.26% from the previous month and up 1.75% from one year ago. However, after adjusting for inflation, the real figures are -0.14% month-over-month and -4.77% year-over-year.
In the context of fighting inflation, the “‘final mile”’ represents the successful and sustainable achievement of a central bank’s inflation target. Stephen Dover, Head of Franklin Templeton Institute, opines on the Fed’s ability to reach it.
Investors starved for yield since the great financial crisis can now have it merely by holding cash reserves. At least for now (as of November 8), the U.S. three-month Treasury Bill was yielding 5.4%, up from 0.50% at the end of 2021 and 4.4% at the end of last year.
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
In the latest episode of the Alternative Allocations podcast series, Franklin Templeton’s Tony Davidow has an insightful conversation with the firm’s CEO, Jenny Johnson, regarding the burgeoning opportunities in alternative investments, especially in the current financial climate.
In our 2024 outlook, bonds emerge as a standout asset class, offering strong prospects, resilience, diversification, and attractive valuations compared with equities.
Can a single self-published paper really refute decades of work by three famous economists? If the paper is the modestly titled “Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends,” then the answer — with qualifications — is yes.
With its $33.7 trillion debt and trillion-dollar budget deficit, the US’s deteriorating fiscal situation is impossible to ignore. To simply balance the budget, a 29% across-the-board cut in spending would be necessary, even if the tax cuts enacted by the Trump administration are allowed to expire at the end of 2025.
We speak with ClearBridge Investments’ Jeff Schulze about a topic on many investors’ minds: the 10-year US Treasury yield and the path of monetary policy. He also shares his views on the latest US retail sales data and whether consumer resilience will last into 2024.
The price of gold just had its best October in nearly half a century, defying tough resistance from surging Treasury yields and a strong U.S. dollar. The yellow metal rallied an incredible 7.3% last month to close at $1,983 an ounce, its strongest October since 1978, when it jumped 11.7%.
Every year, millions of Americans send their hard-earned money to life insurance companies, in return for a promise that it will grow and provide them with regular income in old age.
Treasury yields have dropped as weak economic data suggests the Federal Reserve may begin cutting the federal funds rate target earlier than previously expected.
With the end of the year rapidly approaching, it’s time again to consider tax-loss harvesting opportunities. So, it may be an opportune time for investors to consider where they can best capture potential tax benefits.
In an economic environment characterized by rising interest rates and a forecasted slowdown, the fixed income asset class has emerged as a beacon of opportunity.
Join VettaFi and some of the pioneers of options-based ETFs from NEOS Investments, for a webcast digging into the next generation of options-based income strategies that pursue income as the outcome with an emphasis on tax efficiency.
Investing for growth and investing for income shouldn’t be mutually exclusive. Learn how to build a personalized income strategy that balances immediate versus longer-term cash flow needs based on the investor’s unique situation.
Higher interest rates and inflation are likely to usher in a decade of policy restraint, limited liquidity and macro volatility, pressuring equities and motivating investors to reconsider tactical asset allocation and embrace real assets.
Interest on our federal debt is 2% and heading towards 5%, which will crowd out other expenditures and escalate deficit spending.
Research on tax-efficient retirement distribution strategies aims to sequence withdrawals from taxable, tax-deferred, and tax-exempt accounts to maximize after-tax spending. That can be either in terms of meeting an after-tax spending goal for as long as possible or preserving the most after-tax legacy after meeting spending needs over a specified timeframe.
Private equity (PE) has become a staple of institutional portfolios, but its performance has often been disappointing. New research shows that the levels of specialization and portfolio diversification should be important considerations when selecting a manager to implement a PE strategy.
Where is the line between selling a financial product and providing investment advice? That question is at the heart of a debate over a new proposal that aims to protect Americans’ retirement savings.
Starting in 2024, IBM will replace its 401(k) plan matching contributions with a new benefit earned within its overfunded DB plan, which has been frozen since 2008. This move essentially un-freezes the tech giant's DB plan.
Wall Street’s so-called Magnificent Seven has been living up to its name again, but none more so than Microsoft Corp.
The third quarter was a more favorable environment for active managers in U.S. Large and Small Caps, Japan, Australia, and Canada equities, while being more challenging for Global, Global ex-U.S., Emerging Markets, Europe, UK and Long/Short managers.
The doves lined up last week guiding the S&P500 up 5.85%, marking the best week of performance for the year. A busy week of data began with the quarterly refunding announcement from the Treasury.
Tax Loss Harvesting
Examining the Performance of AQR’s Style Premia Alternative Fund
The AQR Style Premia Alternative Fund (QSPIX) was introduced a decade ago to provide pure exposure to four market factors that had historically delivered excess returns. Let’s look at how it performed over that period.
The Impending Economic Slowdown Should Be Good for Markets
In November, Treasury rates dropped, and risk assets rallied. The market expects continuing drops in inflation and slower, but not disastrous, growth. The data support the market's sanguine assessment.
Lose Yourself in the Inflation Data
Inflation is a touchy subject, and given there are many ways to analyze it, investors should take note of the nuances that exist within the data.
A Pending BlackRock ETF to Watch
Even with $2.4 trillion in ETF assets spread across more than 400 ETFs, there’s a pending offering from BlackRock that caught my eye.
Healthcare, a Minor Major Problem
Back in the Great Financial Crisis era, someone quipped that the federal government had become a giant hedge fund with an army attached. That wasn’t far off. Various agencies and entities were absorbing all kinds of risky assets to stabilize an overleveraged system.
A Tribute to Charlie Munger and the Promise of the American Dream
The life story of Charlie Munger, who passed away on Tuesday at age 99, serves as a shining example of the enduring American Dream, especially now at a time when many people doubt whether the promise of a better life is still intact.
Attractive Income Opportunities for Uncertain Markets
In a turnaround from last year, there is renewed interest in the fixed income asset class as yields have risen. Ed Perks, CIO of Franklin Income Investors, shares his analysis of recent macro developments and where he sees opportunities for income.
Turning Lemons Into Lemonade: The Power of Tax-Loss Harvesting
Tax-loss harvesting creates an opportunity every year for advisors to turn lemons into lemonade. Advisors can realize losses that their clients experienced during the year and use them to offset realized gains in other parts of their portfolio.
Diversity in Investment Management: What Are the Latest Trends and Insights?
Our 2023 Manager ESG Survey shows that transparency around DEI data is increasing among investment managers. The results reveal that equity product managers in particular are more inclined to share DEI data compared to managers in other asset classes.
2023 Prudent Pension Funding Report: A Story of Positive Trends and Persistent Outliers
97% of corporate defined benefit (DB) plans can achieve full funding without a significant draw on corporate cash. This is an increase from the 86% noted in last year’s report.
Alternative Allocations: Alternatives by Franklin Templeton—Access Granted
Franklin Templeton recently hosted due diligence meetings with financial advisors where Tony Davidow, Senior Alternatives Investment Strategist, led discussions focused on alternative investments.
How To Think About Your Money Story
Dave Nadig, financial futurist and Jon Fee of VettaFi discuss how to introduce principals of financial planning to the next generation and the different aspects of financial education.
Black Friday Expectations & AI Hype
The likes of consumer resiliency based on the earliest readings on Black Friday sales and the degree to which the Artificial Intelligence theme continues support the idiosyncratic tendencies of the markets concentrated in the Magnificent 7.
COP28 – A Look Ahead
The main point under contention this year will be the phase-out of fossil fuels and the limited progress achieved so far. As more businesses make net-zero commitments, there is mounting pressure for greater government support through policies and incentives.
Moving Averages: S&P Finishes November Up 8.9%
Valid until the market close on December 31, 2023
The S&P 500 closed November with a monthly gain of 8.92%, after a loss of 2.20% in October. After close on the last day of the month, one of five Ivy portfolio ETFs — iShares 7-10 Year Treasury Bond ETF (IEF) — is signaling "cash", down from last month's final quadruple "cash" signal.
Pending Home Sales Fall to Record Low
The National Association of Realtors® (NAR) released the latest monthly data for its pending home sales index. The index fell 1.5% in October to 71.4, the index's lowest reading since the NAR began tracking data in 2001, and is down 8.5% compared to one year ago. Pending home sales were expected to fall 2.0% last month.
Real Disposable Income Per Capita Up 0.2% in October
With the release of October's report on personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.26% month-over-month change in disposable income comes to 0.21% when we adjust for inflation. The year-over-year metrics are 6.44% nominal and 3.33% real.
The Big Four Recession Indicators: Real Personal Income Increases in October
Personal income (excluding transfer receipts) rose 0.3% in October and is up 5.4% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) was up 0.3% month-over-month and 2.3% year-over-year.
Munis Haven’t Rallied So Much in a Month Since Paul Volcker Ran the Fed
The last time the municipal bond market rallied so much, it was Paul Volcker — and not Jerome Powell — who was winning a war on inflation.
The Energy Transition, Part 3: Implications for Economies and Markets
There is broad agreement that economic damages will increase with warming, but there is substantial disagreement on the magnitude of these damages.
Macro Markets Podcast Episode 44: Corporate Credit Review and Preview
Maria Giraldo discusses the performance of the corporate credit sector this year and the rationale for our cautiously optimistic outlook for 2024.
Large Fiscal Deficits Are Not the Real Problem
The problem is not a deficit or a debt-issuance problem. It's an interest rate problem.
US Economy Grew 5.2% in Third Quarter, More Than First Estimated
The US economy grew at an even faster pace in the third quarter than originally estimated, reflecting upward revisions to business investment and government spending.
Create a Non-Transactional Relationship
The highest compliment I receive from clients is when they tell me they don’t feel like our relationship is transactional.
How to Create Content with Purpose
Content creation is a lot like building furniture; you need a plan and the right components.
Year-End Strategies for Advisors. Will You Make Santa’s “Nice” List?
As I start thinking about Christmas this year, I decided I want to be on the nice list again, so I put together some useful year-end actions and ideas for financial advisors.
U.S. Outlook: One Thing Leads to Another
Economic pain is likely in 2024, but that doesn’t mean stocks will struggle all year, especially if there is a continuation of the rolling recessions that have hit the economy.
Year in Review: 2023 ETF Predictions Report Card
What were the big ETF trends of 2023? David Mann, Global Head of ETF Product & Capital Markets, reviews some of his predictions for this year—and how they panned out.
How Argentina Could Still Convert to the Dollar
Javier Milei was elected president of Argentina on the strength of a radical promise: that he would replace the highly inflationary Argentine peso with the stable US dollar.
Multi-Asset Investing: Tracing the Growth Impact of US Fiscal Policies
A robust growth backdrop, a key input for cross-asset positioning, benefited from pent-up demand and an accommodative fiscal policy stance.
The Missing Piece to Advisors’ End-Of-Year Planning Strategies
I'll share the impact healthcare costs have on financial plans, the critical healthcare information to include (such as medical tax deductions and IRMAA), how to budget for costs in a world of variables, and tangible strategies to implement during open enrollment and beyond to ensure clients are on the optimal coverage.
Fiscal Deficits Drive Higher Inflation
The growth of the federal deficit in the post-COVID era, coupled with the political unwillingness to increase taxes, foretells higher-than-historical inflation rates, according to new research.
Private Equity's Bubble Vintage May Fizzle
Private equity firms that spent hundreds of billions of dollars on acquisitions at the top of the market risk a nasty hangover.
Food, For Thought
Food prices illustrate several challenges of containing inflation.
The Rise in Gold, Silver and Bitcoin Prices Captures the Mood of the 2023 Holiday Season
The 2023 holiday season is officially upon us. Happy Black Friday and Cyber Monday to those who observe!
Annuities Are Back in Fashion, But Are They Safe?
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.
Consumer Spending Set for Slower Growth
Now that we’re about to enter the Christmas shopping season, expect even more focus than usual on the consumer over the next several weeks.
Loosening Labor
Both supply and demand of workers will prevent a surge in unemployment rates.
Falling UK Inflation: What Are the Implications for Pension Savings?
While the fall in inflation is welcome, the impact of higher interest rates on mortgage borrowers still has some way to play out. The reduction in inflation will help DB members that are drawing on their pension. Pension trustees should consider their investment strategy and support members with their retirement planning.
Why Asia Matters
CIO designate Sean Taylor gives his take on what Asia has to offer global and emerging markets investors, from growth, to diversification, to innovation.
Is a Hedge Fund-Style Investment Right for You?
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.
Recurring Fiscal Deficits and the Consequences
Doug Drabik discusses fixed income market conditions and offers insight for bond investors.
The 4 A’s of Preparing for Capital Gains Season
Taxes can have a significant and ongoing impact on an investment portfolio. Advisors can help their clients minimize that impact with a tax-smart approach. Advisors can prepare for capital gains season now, and potentially maximize their clients’ after-tax returns.
The Weight Of High Interest Rates
The potency of monetary policy will weigh more heavily on activity in 2024.
Inflation Could Come Back When You Least Expect It
The latest inflation report, showing that price increases slowed in October, suggests that the US just might get the “immaculate disinflation” that everyone is hoping for: Inflation will fall to its pre-pandemic levels and remain there, and the US will avoid a recession. Allow me to make the pessimist’s case that we are not out of the woods yet.
How Rebalancing Thwarts Achieving Retirement Goals
I show how the best way to utilize bonds in retirement is not to rebalance between stocks and bonds in retirement, but rather to draw down on the bond side of the portfolio first and let the portfolio drift towards a greater equity allocation.
Who Owns the Federal Debt?
The primary holder of U.S. Federal debt is, surprising to many, the U.S. federal government itself, accounting for approximately 40% of the total outstanding debt.
Using Single-Country ETFS as Part of a Tax-Loss Harvesting Strategy
Dina Ting, Franklin Templeton’s Head of Global Index Portfolio Management, sheds light on the benefits of single-country ETF allocations against what has been a rocky macro backdrop and discusses ways to re-evaluate potential opportunities in terms of tax-loss decision-making.
4 Weak Spots in the Current Market
Today's uncertain economic climate is putting particular pressure on four market segments. Here's what to watch out for in the months ahead.
Fourth Quarter 2023 Fixed-Income Sector Views
In this issue of Fixed-Income Sector Views, our Sector Teams identify positive technical trends that have helped to support spreads, but remain vigilant for signs of credit deterioration as the slowing economy and the bite of higher rates start to be felt by issuers.
Breaking the Chains of Time
Investors should embrace a genuine long-term perspective, extending their time horizons to at least 20 to 30 years. The traditional notion of long-term investing (five to 10 years) may fall short of realizing the full benefits of long-term strategies.
Is the Bond Market Wrong About Inflation?
Let’s examine what the bond market is telling us about inflation and a solution that will pay you and your clients to insure for the possibility of continued high, long-term inflation.
Bonds’ Best Month Since March Faces ‘Sanity Check’ in Auction
The Treasury market’s nascent rally is facing its next big test: a bond auction that will help gauge whether investors are confident 2023’s selloff is over once and for all.
Bitcoin ETF Hype Has Wall Street Eyeing $100 Billion Crypto Potential
It’s touted as crypto’s big breakthrough on Wall Street: The imminent arrival of Bitcoin exchange-traded funds that will kick open digital-currency investing to the institutional and retail masses.
Are Rate Hikes in the Past? The Fed’s Giving Mixed Messages
Is the Federal Reserve nearing the end of its rate-hiking cycle? The U.S. central bank is giving investors mixed messages. The Fed has recently paused its rate hikes and said it would keep interest rates between 5.25% and 5.5%.
TD-to-Schwab Tax “Gotcha” Coming in January
Advisors who set up recurring withdrawals at TD need to beware. With the transition to Schwab, those scheduled January withdrawals will take effect in December instead.
The New FAFSA: What Every Advisor, Parent and Student Should Know
Recent legislative changes will impact the student financial aid process and could create stress and confusion. Dr. Peter Mazareas, author, college financing expert and Co-Founder of Invite Education, shares some need-to-know information for parents, students, and financial advisors.
Personalization in Retirement Plans Is Paramount
Individuals are increasingly looking for more tailored investment solutions, so it makes sense for plan fiduciaries to consider a more personalized approach, according to John Kutz, National Retirement Plan Strategist. He says personalization may be the ticket to better retirement outcomes.
Portfolio Rebalancing, Part 2: The Private Markets Puzzle
Portfolios with large allocations to alternatives can have many benefits. However, alternative allocations can deviate meaningfully from policy, particularly during periods of equity-market turbulence.
Loyal ETF Investors Rewarded With No Tax Bills
I find for many the same is true with ETFs and capital gains. However, the ETF pie continues to expand with newer investors each year. The persistent lack of a capital tax gain burden simply for holding onto an investment is worthy of celebration.
The Energy Transition, Part 2: The Transition Challenge
Fossil fuels, particularly oil, are difficult to replace due to their availability, affordability and energy density. Low-carbon alternatives, like solar energy, need large amounts of space to produce comparable amounts of energy to oil.
Socially Insecure
The federal government starts a new fiscal year every October 1. In a rational world, Congress would fulfill its responsibilities by passing bills before that date to authorize spending in the various agencies and programs.
A Time of Gratitude and Opportunity
The run-off election looks tight in Argentina, where I’m attending a Young Presidents’ Organization (YPO) event in Buenos Aires.
Middle-Class Hourly Wages as of October 2023
I've updated this series to include the October release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $49,185, down 8.1% from over 50 years ago. After adjusting for inflation, hourly earnings are below their all-time high from April 2020.
The Value of Working With an OCIO Provider That Can Do It All
We believe that an OCIO provider should have the capability to handle any type of investment assignment. However, most OCIO providers do not have the ability to do this.
Zillow Home Value Index: "Real" Home Value Falls in October
In October, nominal home values increased for a 7th straight months while "real" home values fell for a 2nd straight month. Last month's ZHVI came in at $346,653, up 0.26% from the previous month and up 1.75% from one year ago. However, after adjusting for inflation, the real figures are -0.14% month-over-month and -4.77% year-over-year.
Inflation—the Final Mile
In the context of fighting inflation, the “‘final mile”’ represents the successful and sustainable achievement of a central bank’s inflation target. Stephen Dover, Head of Franklin Templeton Institute, opines on the Fed’s ability to reach it.
Is Cash Trash? DoubleLine Has Some Thoughts
Investors starved for yield since the great financial crisis can now have it merely by holding cash reserves. At least for now (as of November 8), the U.S. three-month Treasury Bill was yielding 5.4%, up from 0.50% at the end of 2021 and 4.4% at the end of last year.
U.S. Economic Outlook, November 2023
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
Democratizing Alternative Investments
In the latest episode of the Alternative Allocations podcast series, Franklin Templeton’s Tony Davidow has an insightful conversation with the firm’s CEO, Jenny Johnson, regarding the burgeoning opportunities in alternative investments, especially in the current financial climate.
Prime Time for Bonds
In our 2024 outlook, bonds emerge as a standout asset class, offering strong prospects, resilience, diversification, and attractive valuations compared with equities.
America’s Top 1% Don’t Make as Much as You Might Think
Can a single self-published paper really refute decades of work by three famous economists? If the paper is the modestly titled “Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends,” then the answer — with qualifications — is yes.
How America Can Get Its Debt Back Under Control
With its $33.7 trillion debt and trillion-dollar budget deficit, the US’s deteriorating fiscal situation is impossible to ignore. To simply balance the budget, a 29% across-the-board cut in spending would be necessary, even if the tax cuts enacted by the Trump administration are allowed to expire at the end of 2025.
How Long Will Consumers Keep Spending?
We speak with ClearBridge Investments’ Jeff Schulze about a topic on many investors’ minds: the 10-year US Treasury yield and the path of monetary policy. He also shares his views on the latest US retail sales data and whether consumer resilience will last into 2024.
Japan’s New Gold Era: The Yen’s Decline Sparks Unprecedented Demand For Safe Havens
The price of gold just had its best October in nearly half a century, defying tough resistance from surging Treasury yields and a strong U.S. dollar. The yellow metal rallied an incredible 7.3% last month to close at $1,983 an ounce, its strongest October since 1978, when it jumped 11.7%.
Annuities Should Be Boring, Not a Systemic Threat
Every year, millions of Americans send their hard-earned money to life insurance companies, in return for a promise that it will grow and provide them with regular income in old age.
Bond Market: What Happened to "Higher for Longer"?
Treasury yields have dropped as weak economic data suggests the Federal Reserve may begin cutting the federal funds rate target earlier than previously expected.
Use U.S. Treasury ETFs for Tax-Loss Harvesting Opportunities
With the end of the year rapidly approaching, it’s time again to consider tax-loss harvesting opportunities. So, it may be an opportune time for investors to consider where they can best capture potential tax benefits.
Discovering Sources of Alpha and Diversification in Fixed Income
In an economic environment characterized by rising interest rates and a forecasted slowdown, the fixed income asset class has emerged as a beacon of opportunity.
Seeking reliable income in today’s markets and beyond
Join VettaFi and some of the pioneers of options-based ETFs from NEOS Investments, for a webcast digging into the next generation of options-based income strategies that pursue income as the outcome with an emphasis on tax efficiency.
Investing for Income: A Personalized Approach
Investing for growth and investing for income shouldn’t be mutually exclusive. Learn how to build a personalized income strategy that balances immediate versus longer-term cash flow needs based on the investor’s unique situation.
From Abundance to Austerity: Why the Next Decade Won’t Be Like the Last
Higher interest rates and inflation are likely to usher in a decade of policy restraint, limited liquidity and macro volatility, pressuring equities and motivating investors to reconsider tactical asset allocation and embrace real assets.
“Guns or Butter” Has Become “Guns and Butter”
Interest on our federal debt is 2% and heading towards 5%, which will crowd out other expenditures and escalate deficit spending.
Managing Taxes in Retirement using the Effective Marginal Tax Rate
Research on tax-efficient retirement distribution strategies aims to sequence withdrawals from taxable, tax-deferred, and tax-exempt accounts to maximize after-tax spending. That can be either in terms of meeting an after-tax spending goal for as long as possible or preserving the most after-tax legacy after meeting spending needs over a specified timeframe.
How to Select PE Investments
Private equity (PE) has become a staple of institutional portfolios, but its performance has often been disappointing. New research shows that the levels of specialization and portfolio diversification should be important considerations when selecting a manager to implement a PE strategy.
Retirement Savers Are Getting Ripped Off
Where is the line between selling a financial product and providing investment advice? That question is at the heart of a debate over a new proposal that aims to protect Americans’ retirement savings.
How IBM Reopened Its DB Plan To Replace 401(K) Contributions
Starting in 2024, IBM will replace its 401(k) plan matching contributions with a new benefit earned within its overfunded DB plan, which has been frozen since 2008. This move essentially un-freezes the tech giant's DB plan.
Microsoft Record Leads $1.5 Trillion Nasdaq Surge
Wall Street’s so-called Magnificent Seven has been living up to its name again, but none more so than Microsoft Corp.
Q3 Active Management Review: Value Dominates
The third quarter was a more favorable environment for active managers in U.S. Large and Small Caps, Japan, Australia, and Canada equities, while being more challenging for Global, Global ex-U.S., Emerging Markets, Europe, UK and Long/Short managers.
Lining Up The Doves
The doves lined up last week guiding the S&P500 up 5.85%, marking the best week of performance for the year. A busy week of data began with the quarterly refunding announcement from the Treasury.