Do not be distracted by conventional presumptions about the Fed’s tightening cycle and interest rates. The ultimate bogeyman of this investment cycle will be credit quality and the warning sign will be when banks tighten lending standards.
With the Federal Reserve today moving away from zero with a 25 basis point move, has anything changed my view that bond yields will stay lower for longer? I don't think it has. 2016 should be a very interesting market environment
One of the biggest economic surprises of 2015 is that the stunning drop in global oil prices did not deliver a bigger boost to global growth. The good news is that the welcome but modest effect on growth probably will not die out in 2016.
The addition of the Chinese renminbi to the IMF's basket of reserve currencies is likely to accelerate foreign access to China's debt markets, one of the most significant milestones in integrating China into the international financial system.
As the Fed normalises its monetary policy and the ECB doubles down on extraordinary measures, we certainly should hope for the best. But we should also be planning for a substantial rise in financial and economic uncertainty.
Disciples of factor-based investing need to respond to a new challenge - while factor analysis is valuable for two reasons, investors are better served by a strategy based solely on allocating to asset classes, a new study claims.
There's a widely held belief that in order to create alpha, a fund manager needs to make meaningful bets away from the market. But is this the reality? Does greater non-market risk actually produce higher alpha?
Today's slowdown is truly global, with economies everywhere contributing to it. We witness "disappointing" growth, quarter by quarter, year after year. The consensus pays too much attention to China as the cause. So what really is behind all this?
The case for and against illiquid assets is hotly debated. Indeed, other than fees, the battle between industry funds and retail super funds has been heavily fought around significantly differing levels of exposures to the main illiquid asset classes.
Risk tolerance is a key constraint in designing a portfolio, but it should also be considered a key constraint in establishing their goals for investing in the first place.
The Paris terror attacks have severe political, strategic and economic implications. After only one week, the Union moved away from its ideal of free movement of people, and fiscal rules.
I am not at all sure that an eventual interest rate increase from the Federal Reserve should be dismissed as an event with little impact in the real world.
If Paris is not an anomaly, and the frequency or magnitude of terrorist attacks against soft targets in G7 cities increases, what will be the geopolitical, economic and investment consequences?
In October, I joined Dr Woody Brock and PIMCO's Fed watcher, Tony Crescenzi, and 18 senior practitioners for a workshop organised by PortfolioConstruction Forum on where global monetary policy was headed. Three key views emerged.
We examine four situations where individuals make poor choices and review the research to show where the brain makes those decisions. In each case, we present some ideas about how to overcome the potentially suboptimal choice when it comes to investing.
Financial pundits routinely claim that US inflation is much higher than the reported statistics. Viewed over the longer term, however, US inflation is far lower than reflected in the published data, according to economist, Dr Woody Brock.
The US Fed is near-certain to start its tightening cycle on 16 December. Apart from praising Yellen for consistency and foresight (instead of castigating her for confusion and indecisiveness), how should investors react?
Since Angela Merkel singlehandedly opened Germany's borders to refugees, asylum seekers, migrants and any other nomads, the continent has been plunged into chaos. It threatens to wreck the European Union - or, at least turn it into an entirely different organisation.
To harness the full potential of India's growth story, investors should seek exposure to India's mid and small cap companies, rather than just the large, liquid companies with significant global revenue bases which dominate benchmark allocations.
In Putin's third presidential term, dissidents are routinely dubbed deviants, fifth columnists, and traitors, as the regime leads a drive for national unity based on religion, tradition, and paranoid rhetoric. For the moment, Putinism is the only game in town.
Between 15 and 30 years ago, there were several studies into the importance of asset allocation. Is asset allocation still important today, and in the Australian fund context? How successful is active management?
Arguably, the future of designing portfolios for accumulators in particular is that the asset class and sector exposures of the portfolio should be adjusted around the risk/return characteristics of the worker's job.
According to a Harvard Business School study, the percentage of US GDP attributable to the financial industry tripled from 1950 to the 2000s. Has any of this increase improved the services rendered by the financial services industry to the real economy?
The idea that financial markets are too focused on the short term is gaining ground in the media, academics and now, politicians. Upon closer inspection, the supposed negative consequences of investor short-termism appear not to be happening at all.
According to Dr David Lazenby, finology provides a framework for re-envisioning advice from the customer experience perspective - because the traditional advice process can be extremely daunting for clients, and may leave them feeling quite vulnerable.
The efficient frontier for retirement income generally consists of combinations of stocks and income annuities - perhaps surprisingly, bond funds do not serve a useful role in the optimal retirement income portfolio.
The influx of refugees and economic migrants from Africa, Asia, and the Middle East appears as broad-based as the ancient migrations that defined Europe throughout history. Europe needs migrants from a purely economic perspective.
With the US on its way to energy independence, there's a risk it and its Western allies will consider the Middle East less important. That's wishful thinking - a burning Middle East can destabilise the world economically and socially.
With interest rates at record lows, it is a really good time to revisit how we build debt portfolios. A three box approach can really help in making and communicating investment decisions for the secure part of their portfolio in the new, low interest rate environment.
An Oxford Uni paper in 2013¹ severely criticised consultants for failing to pick winners via their fund manager research. The New York Times picked it up. But the fact that consultants couldn't identify gold medal winners in advance doesn't matter.
The typical approach to portfolio construction in the world of financial planning is a two-step process encompassing asset allocation and investment selection. It is the second step where a major flaw exists.
Markets have a habit of coming along and kicking you in the teeth when you least expect it - and often when you are most confident you know what you are doing. The bull market in central bank omnipotence is probably over.
Focusing on a client's investment portfolio alone ignores their greatest asset - their ability to continue earning income through the fruits of their labor, also known as their "human capital". Deciding how much risk to take with financial capital given a client's human capital risks is crucial.
Yellen has confirmed what should have been obvious all along - the Fed is not indifferent to international financial stress and its risk-management approach remains strongly biased in favour of "lower for longer". But four things about US monetary policy are frequently misunderstood.
In all of '87, '98, '05 and '15, the US economy was close to full employment, inflation was tame, commodity prices low, EMs were under financial strain, volatility roiled financial markets, the US dollar was strong, and US monetary policy excessively generous. What followed?
Europe in 2015 stands at the crossroads. The euro crisis and the refugee crisis are testing the foundations of the European project. Even if the EU survives this challenge, it will be a much changed and probably much weaker.
The Australian residential property market is stretched. But about to crash, triggering a recession? It's nuts and you can clearly see it's nuts.
The progress we have seen in European markets in 2015 is sustainable over the next 12 months. But, investors should temper return expectations and anticipate continued market volatility.
The outlook for developed credit markets, and in particular the US credit market, remains constructive. Here are Three reasons support the case for credit now.
Real return investing isn't too real at all, with big targets like CPI+5%. It is an objective that is not strongly linked to the reality of investment markets - so prepare for another investment approach aligned with disappointment.
To be clear, Europe is still one of the most developed, most prosperous, and most liveable places on earth. However, the cracks in Europe are clearly visible. It is a world region that made the past but will not make the future.
Oil prices have headed south again. The current decline also has an important demand dimension. A sustained price recovery will not occur quickly...
PortfolioConstruction Forum Strategies Conference 2015 featured a carefully selected faculty of more than 35 international and local portfolio construction experts offering their best high conviction ideas about critical portfolio "crossroads". Here are the highlights.
Conference 2015 featured a carefully selected faculty of more than 35 international and local portfolio construction experts offering their best high conviction ideas about critical portfolio "crossroads". This Resources Kit is a deluge of videos, podcasts, and papers for all sessions of the jam-packed program so you can "attend" and earn CPD.
Fears that China's economy is teetering on the edge of collapse are exaggerated. But it is slowing. And the slowdown will inevitably highlight problems that until now have remained largely hidden, triggering fresh bouts of market volatility.
If you want to understand falling oil prices, forget Chinese consumption and focus on Middle East production. And, if you want to understand the world economy, forget about stock markets - focus on the fact that cheap oil always boosts global growth.
This week's market correction is long overdue. It is also not over because the true underlying problems are much more serious than the commonly cited causes. And, at last, markets are teaching Xi and Li who in fact is the boss.
I don't believe this week's market corrections portend the ultimate downturn in this investment cycle. The endgame will take a few more years. Here are some market, currency and China milestones to watch for to check this view is correct.
Many have taken an alarmist approach to the recent sell-off in China's A sharemarket, declaring the bubble has definitely burst. The question was well put by one of our key clients who in late June asked, "Is China Done?".
It's a paradox in financial planning that the so-called "hard" skills are actually the easiest to master, while the so-called "soft" skills are often the hardest.
Changing client behaviour was an essential part of a financial planner's skills, yet that part of the job had not been approached with the same level of scientific rigour as a planner's technical skills.
A QMTV (quality, momentum, transition and value) framework can help investors manage buy, hold and sell decisions through various cycles and provide a crossroad signal.
The longer interest rates stay negative, the more distortions will appear in financial markets. Certain trends are already in place which could ultimately lead to severe distortions.
Investors should not buy stocks merely based on their volatility (or other risk) characteristics, but also take into account factors that are known to have a large impact on returns, such as valuation and momentum.
Infrastructure has gained greater focus in recent years, with investors drawn to its defensive characteristics. But infrastructure investing requires a tight definition to deliver the defensive attributes that investors are targeting.
Investors can substantially improve the risk/return characteristics of their strategic asset allocation by considering not only the classic equity premium, but also other premiums present in the equity market.
The increasing concentration of the Australian stock market indices is mirrored by the concentration of the Australian funds management industry. What does this mean for alpha generation?
Six years into a bull market, Australian equity values are beginning to look stretched. But large divergences in valuations across sectors are creating great opportunities for truly active managers.
Consumers and the energy industry are both at a crossroads - hence the exclusion of some parts of the electricity supply chain from the investible universe of low-risk global listed infrastructure securities.
Although it is widely appreciated that past performance is not a guide to future returns, it is less appreciated that past diversification is not a guide to future risk.
There are three escapes the Fed had to make in order to declare its mission a success - escape from a liquidity trap, escape from quantitative easing, and, escape from the zero bound. Only the last remains. Will it achieve its great escape? Probably.
High active share is often profiled as "better" but such portfolios can exhibit risk concentrations which may lead to volatile return streams. Low active share funds should not be excluded from asset allocators’ tool kit.
While the debate over the value of active investment management has intensified in recent years, the outperformance of boutique managers over non-boutiques and indices has been overlooked.
The rise of liquid alternatives not only marks an improvement on traditional fund of hedge funds, it also makes a hedge fund allocation a genuine competitor with other onshore absolute return solutions.
This report explores institutional investors' attitudes toward equity market risk and looks at the downside protection strategies they are using to insure their portfolios against volatility.
There are a number of reasons to be optimistic about China's long-term economic future, but the short-to-medium term challenges are considerable.
The US Federal Reserve is (reluctantly) ending a long period of abnormally low rates. Traditional drivers of portfolio returns such as productivity and earnings growth are set to reassert themselves.
Traditionally, risk management might have been considered as a monitoring activity only. Risk analysis, can, however, add value at the earlier stages of the investment process.
The single most important macro-trend of our time is China's attempt to transform itself from a typical (if large) emerging market into an empire. The interesting bit for investors is that growing empires usually breed strong currencies.
China is a glass both half full and half empty. It will continue to grow and become a great superpower, but its future growth rate will be significantly lower than President Xi's "new normal" 6% forecast.
The challenge in finding differential skill among active managers reflects a surfeit, not a dearth, of skill. This is the major lesson of the paradox of skill. As Napoleon was reported to say, "Ability is nothing without opportunity."
Market manipulation has become standard operating procedure in policy circles around the world. The more proactive Chinese approach is the policy equivalent of attempting to catch a falling knife – arresting a market in free-fall.
As we have just witnessed, it took an enormous effort to keep Greece in the eurozone. In the end, Europe could deal with the problem. For other members, such propping up will not always be possible. What happens next in France, Spain and Italy may well turn out to be more worrying than anything we have seen around Athens so far.
A simple ratchet-style "safe" withdrawal rate approach, where spending is increased by 10% any time the portfolio rises more than 50% above its starting value, beats the traditional 4% rule, generating equal or better retirement spending, even while being conservative enough to not require a spending cut in the event of a market pullback in the future.
This week, Chair of the Federal Reserve Janet Yellen has repeatedly said it is likely the Fed will lift its policy rate at its September meeting. It will be a minor adjustment but a momentous event. In short, I expect the first 100 basis points of Fed normalisation will have relatively little effect on long-term rates - with a critical caveat.
Will alpha eventually go to zero for every imaginable investment strategy, as suggested by Swedroe & Berkin's The Incredible Shrinking Alpha? The idea of financial singularity may seem inspiring, but real world markets are nowhere close to it.
We should acknowledge the Greek crisis for what it is - the death-knell for the European dream of empire. The growing reality is the return of borders, national preferences, and opt-outs. The euro has become a structurally weak currency and European bonds are likely to underperform those of other, nonshrinking, empires.
Despite all the negative ink that's been spilt over the recent collapse in Chinese equities, we continue to believe that a year from now there will be more marginal buyers of Chinese equities than today.
Whatever the EU now decides at its summit on Sunday (the umpteenth, by my count), it will be costly. It is unlikely to work. And it was totally avoidable.
This is a special interest subsection of our wider Perspectives library in which we present research and opinion about lifecycle investing issues.
The classic 4% rule holds withdrawals at 4% of the initial value of the portfolio at retirement. A great deal of recent research has focused on strategies that adjust withdrawals depending on investment experience.
Greece's creditors are likely to find it very difficult to compromise. Capitulate today and Greece will be back for more concessions in future. Many politicians will want to draw the line here and now, making Grexit highly likely.
We hear this one a lot. It's incredibly misleading. Bank hybrids offer better than bond returns with higher risk, and lower than equity returns with much lower than equity risk.
Recent reports covering IOOF have, in my view, widely missed the mark. The media, politicians and industry participants who have helped propel what to me looks like a witch-hunt need to stop and think.
Four "big picture" geopolitical conditions will affect policy and markets going forward - in order of importance, the South China Sea, Russia returns, the end of Sykes-Picot in the Middle East, and the unwinding of the EU.
Contrary to most of headlines, the astonishing weekend events in Greece will almost certainly prove bullish for risk assets around the world and especially in Europe.
The current focus on the downpour in Greece is understandable. But we should not be so distracted that we fail to prepare for two other possible storms – and the possibility that they converge into a perfect storm.
As always, PortfolioConstruction Forum Symposium is the highlight of my year in terms of professional development. This year's was probably the best to date. Here are the key takeouts I sent to my clients.
The 2014-2015 Academy Resources Kit is a rich repository of continuing education material including the presentations, podcasts, and research papers from the Academy Seminars for the 2014-2015 curriculum year...
The 2013-2014 Academy Resources Kit is a rich repository of continuing education material including the presentations, podcasts, and research papers from the Academy Seminars for the 2013-2014 curriculum year...
The 2012-2013 Academy Resources Kit is a rich repository of continuing education material including the presentations, podcasts, and research papers from the Academy Seminars for the 2012-2013 curriculum year.
The 2011-2012 Academy Resources Kit is a rich repository of continuing education material including the presentations, podcasts, and research papers from the Academy Seminars for the 2011-2012 curriculum year.
The 2010-2011 Academy Resources Kit is a rich repository of continuing education material including the presentations, podcasts, and research papers from the Academy Seminars for the 2010-2011 curriculum year.
PortfolioConstruction Forum Academy Winter Seminar 2015 featured four sessions. This Resources Kit contains the materials for preparing for the Seminar, as well as the presentation slides.
If the "no property bubble" camp is to gain credibility, they need to develop much stronger arguments than many trotted out recently.
I am convinced that both economies and markets are reaching a point of transition where one of two discrete outcomes is likely. Portfolios must offer the potential for reasonable performance in either eventuality.
Michael Edesess has encouraged investors to be skeptical of the strategies being marketed under the moniker of "smart beta". I'm compelled to cross-examine his accusations.
Symposium 2015 featured 20+ leading investment professionals arguing their best, high conviction ideas about the markets, strategies and investing.
Does smart beta deserve the attention it is getting? I can't see how it's possible to have more diversification benefit using a factor approach to constructing portfolios than any other approach.
Macro liquidity is feeding asset booms and bubbles in equity, bond, and other asset markets. As more investors pile into overvalued, increasingly illiquid assets – such as bonds – the risk of a long-term crash increases.
The surprising result of a recent study is that the "conventional" view that earnings rise steadily (above inflation) throughout our careers is not accurate. Good spending habits established early on can make an astounding difference to wealth over a lifetime.
We now have enough history to determine who the winners were from 25 years of globalisation. The answer? Small countries. The investment conclusion is obvious - overweight good companies listed in small countries.
This week, Portugal's sovereign bonds traded on negative yield - flying in the face of any sensible assessment of credit risk. There seems to be little chance that the ECB's belated and oversized QE program will end gracefully. Policy blunders never do.
In a world dependent on robust economic growth to solve or postpone debt problems the over-reliance on an apparently slowing US economy is of major concern.
I think we have seen the low in European bond yields and that we have commenced on the path - at long last - of secular reflation.
With NZ fixed interest portfolios arguably harder to build than ever before, this paper introduces a framework for practitioners to build fixed interest portfolios for to meet the needs of individual clients.
Globally, technology shares are cheap on a relative basis. Tech investing has significant challenges but it remains the fastest growth segment and appears to have attractive valuations.
The ACSI Governance Guidelines, which hold a wealth of information about what constitutes good corporate governance, are a valuable resource for any investor (or business owner).
Lower oil prices and a wave of monetary policy accommodation are a net positive for the global economy, but there are losers as well as winners, especially in some emerging market economies.
When combining managers together to form a multi-manager global equity portfolio, investors should aim to keep active share relatively high.
The collapse in oil prices in the second half of 2014 is very large in a historical context. This paper explores the implications for portfolios.
Since the beginning of the year, more than 20 central banks have eased monetary policy. Upward pressure on the US dollar has been sharp. America's entry into the fray was only a matter of time.
Investment managers have a better chance of adding alpha if they have a clear philosophy of how they generate it, according to research on the importance of a robust investment philosophy.
I have a sense of a secular bull market ending with a whimper, not a bang. Only the timing is in doubt. Because of this, I have increasingly a great unrest. You should too.
In recent years, academics have been at war over whether the small cap premium exists. This recent paper finds it does - if you control for quality - and that it is significant, and not time or market specific.
To maintain "no taxation, no representation" deal with its people, China's leadership seems to be going down a path that'd see index funds as forced buyers of Chinese equities.
A surprise rate cut in November 2014 and investor expectations of further easing measures have triggered a strong rally in China equities - both A shares, and in the last three weeks, H shares. Can it last?
Is it time to start thinking more about E/P ratios than P/E ratios? After all, predicting that returns may be higher or lower with a low (or high) earnings yield (and a corresponding P/E ratio) really isn't so controversial.
Fixed income markets seem to have gotten the correct message, albeit perhaps for the wrong reasons – short-term interest rates will stay low for a long time.
These are words that I utter with the utmost caution - this time, it really is different. For something genuinely new to the modern experience, consider the curious case of collapsing equity volatility.
Low GDP growth, very low real rates, higher PEs and valuation multiples - it's a new world. We all need to get used to it. In particular, we should review client spending plans.
House and land prices should come down, in real terms. But there isn’t anything obviously irrational about house prices as they are.
Fund research is something of a dark art - there is little quality information available on how to go about it. But here are two great papers covering qual and quant analysis of funds and managers.
Grant Spencer's interview on Radio New Zealand's Checkpoint last night answered one of my questions. It seems that Spencer, and the Reserve Bank, now favour a capital gains tax.
Even the most skillful active managers will sometimes underperform. And, in some market environments, most active managers can be expected to underperform.
Indexing, as I have written before, is a form of socialism, since capital is allocated not as it should be. It is hard to think of a more stupid way to allocate this scarce resource.
I had been going to write something about housing this morning, but got distracted in the WEO database. House prices, especially in Auckland, are a political and social scandal.
A German exit from the eurozone would give Germany the currency it deserves and leave the rest of the eurozone with the carcass of a currency well suited for its needs.
What does dollar parity say about New Zealand and Australia? It is a tale of two different countries. And, it is a tale of a major role reversal.
While it has offered a very bumpy and challenging ride in recent years, I suspect those prepared to buy and hold some gold exposure today will be well rewarded.
Even if it's not your intention to recommend stocks, understanding financial analysis in general and ratios in particular, can enhance your ability to analyse equity funds.
Fundamentally, there are three ways to make money in financial markets. A well structured, well-diversified portfolio should encompass all three, across all geographies.
Now the Fed has opened the door to normalising interest, what constitutes "normal"? Take care in stretching for yield now the Fed is no longer making promises.
PortfolioConstruction Forum Academy Autumn Seminar 2015 featured four sessions. This Resources Kit contains the materials for preparing for the Seminar, as well as the presentation slides.
Hardly a day passes that a Greek government official does not add a needless provocation to the bailout debate. Is this just madness? Or is there method in it?
After more than six years of near zero interest rates, the Fed seems set upon the long journey back to more normal monetary policy. What are the investment implications?
This paper by Rob Arnott and Denis Chaves looks the effects of different age cohorts on GDP and asset class returns.
The world is increasingly characterised by divergence - in economic performance, monetary policy, and thus, in financial markets.
When faced with a huge majority of experts expecting international equities to outperform Australian equities, I blurted this out. I was wrong, and on a few counts.
The US dollar is hitting new 12-year highs almost daily and the euro seems to be plunging to below parity. But there are at least four factors pressuring it the other way.
The recent listing of the Magellan Global Fund has essentially introduced a new structure into the ASX-listed and quoted fund universe. With more choice comes more complexity.
This paper offers a surprising amount of info and interesting ways of framing investment issues in retirement, and some good analysis of longevity risk.
How should one understand the disconnect between new highs reached by global equity indices and new depths plumbed by real interest rates worldwide?
Currency risk is a significant issue for Australian investors. This paper summarises the research on optimal hedge ratios for international equities exposures.
Since the 1980s, oil prices have fallen 50% or more over six months just twice - including last year. Was oil a bubble which has now imploded? Or is oil set to bounce back?
With 20 speakers at Markets Summit 2015, there were inevitably conflicting views of the world. This year, the bears outnumbered the bulls and the mood was noticeably downbeat compared to last year.
Despite forecasts of continued superior US economic growth, we are selling down our beloved US quality stocks in favor of the problem children of the investing world.
Markets Summit 2015 - Cyclical? Structural? Secular? - featured 19 international and local investment experts debating their best ideas on the key cyclical, structural and secular issues driving the medium-term outlook for markets - and, of course, the implications for portfolios. This Resources Kit is a deluge of videos, podcasts, and papers for all sessions of the jam-packed program so you can "attend" even if you weren't there.
In this seminal paper, Ibbotson confirms that after the decision to actually invest is made, asset allocation and manager selection are equally important.
In this not-to-be-missed session of a not-to-be-missed program few prisoners were taken in debating the moot "overweight int'l equities, underweight Au equities.
Investing globally is increasingly popular with the expectation of a continued weak AUD being a big driver. But easy currency gains may have been had.
New research suggests that the best things to do to improve our happiness may lie in NOT trying to maximise our wealth.
That the global economy didn’t kick on in 2014 may instill some scepticism among investors about 2015’s prospects. There are five important themes to consider through 2015.
Focus on structural reform and potential room for monetary easing provides a positive backdrop for India in the current global context.
EM equities and fixed income enjoyed a boom in the 2000s. Now after several years of relative underperformance, EMs appear to be on the cusp of stronger growth.
The US secondary corporate bond market is in a time of significant upheaval. Changes to regulations has caused a new, insidious liquidity risk.
After a run of historically rapid improvement in living standards in the first decade of the millennium, emerging markets will face a more challenging outlook - not a crisis - over the next few years.
As the US potentially enters its sixth year of expansion, we are optimistic its economy can continue on a steady trajectory throughout 2015. Elsewhere in the world, the outlook is murkier.
Japan has become a nation to which many investors are largely indifferent. But individual Japanese stocks offer some of the most compelling asymmetric risk/return profiles within the equity landscape.
At first glance, it appears that the US job market has healed. Unfortunately, it is not that simple. The US still has substantial excess labor supply.
An emphasis on tactical asset allocation, careful bottom-up security selection and prudent relative value decisions are going to be critical in 2015.
This Backgrounder defines the terms "cyclical", "structural"" and "secular" and provides examples, in order to increase the clarity of debate about what's really driving markets.
A puzzle challenging economists and policymakers is the persistent increase in company profits as a share of GDP in recent decades. Is it an enduring phenomenon driven by an underlying secular trend?
Who would have thought that six years after the GFC, most advanced economies would still be swimming in an alphabet soup?
Is the practice of measuring manager performance by comparing it to a market index distorting prices across the whole market? That is the conclusion of a recent paper.
Share repurchases have recently been receiving a lot of press, much of it critical. We see dividends and share repurchases as equal ways of returning excess free cash flow to business owners.
Does geopolitics have investment implications? In short - yes - and this paper provides a clear understanding of both geopolitics and its clear link to investment markets.
The consensus of FOMC participants expects core inflation to revert toward the 2% target over the next two years. I think they will be wrong.
Australia still looks like one of the holdout anomalies in global markets where the adjustment from a decade of mispriced assets has yet to fully play out.
The real distinction in retirement income philosophies is not about which are "safe" and which are not. It is whether risk is transferred or retained (and if retained, managed).
In an era when central bankers are supposed to be more open, collaborative, and communicative, why did the SNB decide to turn on a dime and shock the markets?
As long as policymakers can stay on course and avoid the policy mistakes of the late 1990s, the oil price collapse could prove more therapeutic than destructive.