Not in our opinion. Recent market leadership by the so-called FAAMG stocks is not extraordinary relative to history, and their valuations and fundamentals, combined with this year’s relatively healthy market breadth, mean that they don’t necessarily present an outsized threat at this time.
August 2017
Answers to our clients’ questions about market action and the market environment in a few paragraphs every two weeks. We are not ready to pronounce the strong dollar cycle dead, but do admit the US dollar is in critical condition. Investors should remain partially unhedged or prepared to ride out a period of currency volatility. […]
August 2017
Answers to our clients’ questions about market action and the market environment in a few paragraphs every two weeks. Prospects for a continued turn in the cycle look promising. US outperformance relative to other developed markets peaked in November 2016, as the chart below shows, raising the prospect that the cycle has indeed turned. US […]
July 2017
This quarter’s edition covers the very overvalued US equity market, reviewing what late cycle looks like in the US and casting a critical eye at the consensus view of an overly concentrated market. Also discussed are the better prospects for ex US markets and the importance of remaining diversified.
July 2017
Since 2009, US equities have outperformed every major asset class by a considerable margin, returning 14.5% a year on average. And, over the same period, a simple 70% US equity/30% bond portfolio* returned 11.4% per year, on average. These kinds of results can tempt even the savviest investors into abandoning their long-term discipline and chasing […]
June 2017
Answers to our clients’ questions about market action and the market environment in a few paragraphs every two weeks. Yes. Issuance of ultra-long Treasury bonds (greater than 30 years to maturity, including potentially 40-, 50-, and 100-year maturities) would benefit multiple constituents. Ultra-long Treasuries would extend the investable Treasury curve for pension plans and life […]
June 2017
Answers to our clients’ questions about market action and the market environment in a few paragraphs every two weeks. Investments with the potential to earn returns competitive with equities—without a dependence on economic growth—are especially valuable diversifiers for portfolios. Such investments are varied, sometimes niche, and require skilled implementation. Many require some illiquidity, but may […]
May 2017
Answers to our clients’ questions about market action and the market environment in a few paragraphs every two weeks. Although the election results provide a powerful “risk-on” catalyst in the short term, the underlying long-term problems facing France and the Eurozone are unlikely to go away under a Macron presidency, so the old adage “sell […]
April 2017