VantagePoint: Third Quarter 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

Over the Long Term, Diversification Still Wins

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

Thought Mortality Was Dead? Considerations for Pensions Given the IRS’s Delay in Implementing RP-2014

The IRS’s somewhat unexpected decision to delay implementation of the RP-2014 mortality tables has impacted at least three separate aspects of pension plan strategy: calculating minimum contribution requirements; determining variable-rate PBGC premiums; and valuing lump-sum distributions to be paid out to terminated vested participants. This brief discusses what has changed and provides general considerations for all sponsors to weigh in the near term.

May 2017

In an Environment of Declining Demographics and Slow Productivity Growth, What Investments Look Attractive?

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 compensate by distributing income. Headline risk is also often a major consideration, so such investments are not for everyone. […]

May 2017

Do the Results of the First Round of the French Presidential Election Sound the All Clear for European Risk Assets?

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 in May and go away” may be vindicated yet again. Pro-Europe, pro-reform, centrist but party-less young candidate Emmanuel Macron […]

April 2017

A Stronger Union: Addressing the Unique Investment Challenges of Multiemployer Defined Benefit Plans

Adaptive and sophisticated strategies are necessary to serve the unique features, constraints, and needs of multiemployer plans. In this note, we explore some of the key challenges that many multiemployer plans face, discuss how to invest in light of these challenges, and provide thoughts on governance and the overall role of the investment advisor in the multiemployer context.

April 2017

Maintaining Strategic Direction through Peaks and Valleys

An extended bull market can tempt even the savviest investors into abandoning their long-term discipline. Resisting the impulse to switch horses in the middle of the race is hard, but necessary—the most important trait of successful investors is their ability to maintain discipline in sticking to a long-term strategy during good times and bad. Diversified portfolios—structured to earn returns comparable to their rate of spending at tolerable levels of risk—have benefitted long-term investors and grown their purchasing power for decades, and we have no reason to expect a different outcome when today’s bull market inevitably corrects.

April 2017

VantagePoint: Second Quarter 2017

This quarter’s edition discusses the reflationary environment, positioning in global equities, prospects for sovereign bonds (both nominal and inflation-linked), and USD strength. We also profile two strategies that can diversify portfolios without dependence on economic growth: life settlements and pharmaceutical royalties.

April 2017