Brexit and trade talks provided lots of uncertainty this year. Last week saw progress on both fronts.
Expecting a Market Downturn? Make Sure You’re Following the “Noah Rule”
Predicting a major economic or financial event—whether that’s a recession, market downturn or even your own retirement—requires that you also take action. Otherwise your prediction was meaningless.
Time to Do the Hard Thing
Much of the reaction to last week’s Inflationary Angst letter boiled down to, “Get government out of the way and the free market will work.” Others said the opposite: Government must help people even more than it already does. I wish it were that easy. Neither of those options are what we need, and today I will explain why.
UK Election: Will Tory Victory Bring Investors Back to UK Equities?
As widely expected, the Conservative Party emerged victorious in the UK general election. Our Colin Morton anticipates UK equity markets will welcome the outcome, but cautions that some uncertainties remain.
UK Elections: Conservatives Win Big, Brexit Will Happen – What Kind of Brexit Is Still Unclear
While the election outcome was quickly reflected in the pound exchange rate, the direction from here depends on what kind of relationship Boris Johnson really (really) wants to have with the EU. Find out more from our currency expert.
The 2020 Economic Outlook
U.S. economic activity is expected to remain mixed in 2020, with moderate strength in consumer spending and general softness in business fixed investment and manufacturing.
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
Troubled Times Can Give Birth to Opportunity
Asia goes into the global deceleration with already-lean companies and a valuation advantage.
A review of last month’s market-moving events across countries and asset classes.
Three Highlights from the MarketCounsel Summit
MarketCounsel’s Summit, held earlier this week in Miami, lived up to its reputation as the “all-star game” of financial advisor conferences, attracting top-level executives from throughout the investment industry. Here are three highlights from Tuesday’s sessions.
Insured municipals offer investors additional assurance
Insured bonds continue to pay interest and principal even if an issuer defaults.
The Fund That Isn’t Following the ESG/SRI Herd
In the U.S., between one quarter and one third of all assets managed are done so with an ESG or SRI mandate. Outside the U.S., that percentage is even higher. The Vitium Global Fund, formerly the Vice Fund, buys what most ESG/SRI investors scorn, stocks in the tobacco, alcoholic beverage, gaming and aerospace/defense industries.
Gundlach on the Biggest Risk Facing Bond Investors and the Likely Next President
Fear among bond investors is focused on rising rates, but Jeffrey Gundlach says you should worry about something more sinister. In his webcast yesterday, he also offered his updated 2020 presidential election prediction.
Is Now the Time to Overweight Real Estate?
With REITs posting strong returns this year, should investors overweight them?
Emerging Markets Record Diverse Performances in November
It was a mixed month for emerging markets in November, as shifting expectations about a trade deal between China and the United States continued to drive market sentiment. Our emerging markets equity team explains why US-China trade issues may not be that big of a concern for some emerging markets, and provides an overview of the news and events shaping markets during the month.
2020 Global Market Outlook: Cycle, Interrupted
Central bank easing and the cooling China-U.S. trade war have set the scene for a global economic rebound in 2020. Our forecast pushes the risk of recession into late 2021, giving equity markets modest upside potential for 2020.
Sifting Through the Froth
Positive returns across asset classes in 2019 may limit tax loss selling in closed-end funds, but we see potential long term value in select sectors where investors can still buy assets at a discount.
College Planning: Is the ROI in the College or the Major?
Over the course of 20+ years, families have been bamboozled into spending trillions on top-end colleges, while overlooking the fact that it's actually the academic major that is far more important.
NFIB Small Business Survey: "Small Business Optimism Sees Major Spike in November"
The headline number for November came in at 104.7, up 2.3 from the previous month. The index is at the 93rd percentile in this series.
A Primer on Retirement Plan Compliance
The purpose of this article is to better acquaint plan sponsors and service providers, like BDs and RIAs, dealing with 401(k) plans with the requirements they must understand and adhere to under ERISA.
2020 Market Outlook: U.S. Stocks and Economy
The U.S. economy likely will remain split in early 2020.
The November Employment Report
Nonfarm payrolls rose more than expected in the initial estimate for November (+266,000), with upward revisions to the gains for September and October (a net 41,000 higher). In contrast, the ADP estimate of private-sector payrolls rose more modestly (+67,000). What to believe?
From One CFO to Another: An Insider View on OCIO Decision Making
Considering investment outsourcing? Our CFO weighs in on key and peripheral issues to contemplate.
Ending a Busy Year for the Federal Reserve
Rate cuts and overnight operations were important developments this year. Where will the Fed go from here?
Supercharge Your Gold Position With Precious Metal Royalty Companies
One of the best ways to “supercharge” your gold position is with precious metal royalty and streaming companies. Think Franco-Nevada, Wheaton Precious Metals, Royal Gold and others.
We don’t have much time to get our house in order, either in the US or globally. Everything I’ve said today applies, to various degrees, throughout the developed world. Thinking that 2% inflation or zero interest rates coupled with massive deficits will somehow help is beyond wishful thinking.
Navigating U.S. Wealth Management: Seven Ideas for Financial Advisors and Individual Investors in 20
We aim to support wealth management firms, advisors, and investors as they assess portfolio strategy and navigate the shifting trends we face in the new year.
Government Debt Is Not a Free Lunch
With borrowing costs at multi-decade lows, governments seemingly can take on much more debt without any great concern about long-term consequences. But the real risks and costs of higher public borrowing may be hidden.
Michigan Consumer Sentiment: December Preliminary Rose in December
TThe December Preliminary came in at 99.2, up 2.4 from the November Final reading. Investing.com had forecast 97.0.
Earning Season’s Good, Bad & Ugly
With the third quarter of 2019 reporting season mostly behind us, we can take a look at what happened with earnings to see what’s real, what’s not, and what it will mean for the markets going forward.
How Financial Planning Can Become a True Profession
There are many prerequisites to becoming a true profession. Have we satisfied those requirements? And if so – do we desire to take the next step – seeking true status as a profession through legislation?
My Advisors Have “Gone Rogue”
I have a team of five who do analysis, trading and help craft investment strategy for the firm. But a couple of our advisors insist on implementing their own investment philosophies.
PREP: Important Steps to Consider When Building an Outcome Oriented Portfolio
What steps are needed to help build a successful portfolio? One of our divisional directors shares his perspective.
What to Watch in 2020
What will investors be talking about in 2020? We explain how six key issues could shape the global economy and financial markets next year.
Equities Gained Ground Globally in November
The S&P 500 is up more than 25% year to date and has notched 26 record highs since January.
SMA Vehicles Facilitate New Retail Investment Opportunities in Emerging Markets Poised for Growth
With many investors seeking to diversify their equity exposure as the U.S. bull market charges into its historic 10th year, asset managers are now providing innovative and cost-effective SMA offerings that provide US investors access to the full breadth of the emerging market universe; a feature not previously available.
Don't Worry About the US Consumer
During the next couple of days you're going to see lots of stories about the strength of consumer spending. Early reports say Black Friday online sales hit a record high, up 14% from a year ago, following a 17% increase on Thanksgiving Day itself. Black Friday sales at brick and mortar stores were up 4.2% from a year ago.
The Mystery Behind the Trade War
The recent revival of import tariffs by the U.S. has created a puzzle. Why, in the midst of this “trade war,” has China not used the weakness in its exchange rate to offset the effects of President Trump’s tariffs?
U.S. Consumers: Calm Surface, Revolution Below
As Russ explains, the evolution of the consumer, still a pillar of the markets, has major implications for investors.
Advanced Topics for Social Security Planning
For the vast majority of retirees, the most consequential decision they will make involves Social Security. One must decide when to begin receiving benefits, a decision that is quickly complicated when factors such as a spouse, children or a pension are involved. My guest today is Bill Reichenstein, one of the most prominent experts on Social Security.
Need-to-Know Numbers You Might Have Missed This Week
As Thanksgiving comes to an end, and the busy holiday shopping season begins, here are some need-to-know numbers you may have missed from this past week.
Moving Averages: November Month-End Update
Valid until the market close on December 31, 2019.
The S&P 500 closed November with a monthly gain of 3.40% after a gain of 2.04% in October. All three S&P 500 MAs are signaling "invested" and four of five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard REIT Index ETF (VNQ), Vanguard FTSE All-World ETF (VEU), and iShares Barclay 7-10 Year Treasury (IEF) — are signaling "invested".
Does The Return Of QE Mean Big Gains For Stocks In 2020?
As we head into 2020, investors should be cautious in assuming that the return of central bank balance sheet growth means stocks will follow along. The real driver of the stock market in 2020 may be the outlook for growth tied to prospects for a comprehensive U.S.-China trade deal, which may revive growth in manufacturing and corporate earnings.
The Big Four Economic Indicators: Real Personal Income in October
Personal Income (excluding Transfer Receipts) in October fell 0.04% and is up 3.8% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was down 0.22%. The real number is up 2.5% year-over-year.
U.S. Household Incomes: A 50+ Year Perspective
In September, the Census Bureau released its annual report on household income data for 2018. Last year the median (middle) average household income rose to $63,572. Let's take a closer look at the quintile averages, which dates from 1967, along with the statistics for the top 5%.
Unlimited Time Off?
During the interview process, a job candidate I liked very much talked about another offer she was considering and mentioned one of the benefits was “unlimited paid time off.”
The Middle-Class Cost of Medicare for All
While most Americans support providing free medical care to those who need it most, not imposing an additional cost on the middle class has never been accomplished by any country that has universal health care.
A Program for Boomers to Liberate Pre-Tax Assets
Baby Boomers are arriving at retirement with large accumulations that have not yet been exposed to federal income tax. I describe a program that synchronizes the distribution of pre-tax assets with availability of generationally-low tax rates, while keeping the dictates of Medicare, Social Security and the governing IRS tax code firmly in view.
This Economic Indicator Is Proving the Naysayers Wrong
Flying in the face of negative economic news, U.S. factories picked up steam for the third straight month in November.
Jeremy Siegel – The Market is “Fairly Valued” But There are Two Big Risks
U.S. stocks are “fairly valued,” according to Jeremy Siegel. But in our annual interview, he also warns of two major risks to the economy and to investors.
Which Secular Bull Market Is It – 1950’s or 1920’s?
In a “secular bull’ market, the prevailing trend is “bullish” or upward-moving. In a “secular bear” the market tends to trend sideways with severe drawdowns and sharp rallies. However, what truly defines long-term secular markets are valuations, and whether those valuations are contracting or expanding.
Divided We Stand
Consumer attitude measures are divided by political affiliations. That’s nothing new. Sentiment readings have long depended partly on which party occupies the White House. Republicans currently rate economic conditions better, just as Democrats did during the Obama years (Independents fall somewhere in the middle).
5 Factors for Healthcare Organizations to Consider When Choosing an Ocio Provider
As the clock ticks toward 2020, the overall economic picture remains muddled. Ongoing trade tensions and slumping global growth have cast a cloud of uncertainty over the globe, and forward-looking return expectations continue to look less than impressive.
This Economic Indicator Is Proving the Naysayers Wrong
Although the PMI report is encouraging, there’s still reason to remain somewhat cautious long-term. The latest accounting of global debt levels was just released, and the news might be so bad that it’s good—for gold prices, at least.
Negative Rates, Payment Systems, and Protests
In the bond market, staying positive is easier said than done.
Weekly Market Snapshot
Shifting trade policy perceptions remained the dominant factor for the stock market.
What's With All the Mass Protests? (Hint: It's Not About Income Inequality)
Quick! What do Hong Kong, Chile, Ecuador and Lebanon all have in common with one another?
Corporate Governance in Emerging Markets: Progress and Opportunity
There have been improvements in corporate governance in a number of emerging markets, but it remains a work in progress.
Five Decades of Middle-Class Wages: October 2019 Update
We've updated this series to include the October release of the Consumer Price Index as the deflator and the October monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $39,816, down 11.1% from 45-plus years ago.
Is the Shift to Passive Investing Increasing Risks?
Earlier this year, passive management was attacked in two high-profile articles. Those criticisms were proven to be false – and driven by active managers seeking to protect their livelihoods. But that still left the question, which I now examine, of whether flows to passive funds have increased certain risks.
Five Big Ideas to Gain an Unfair Competitive Advantage in 2020
Let’s look here for a handful of unfair advantages to gain over the competition in 2020. These are things that are not hard to implement, which will help you become more efficient, gain new clients or stand out from your peers.
The Use of Irrevocable Trusts in Medicaid Planning
There are several things a client can do to plan for long-term care costs that may be incurred as one ages. But for the large majority of clients for whom self-insuring is not an option, what are the alternatives?
Introducing the One-Page Website. Cut!
I would derive such immense pleasure from lighting a match to the website of every single advisor in this profession and watching it burn down to the ground.
How the IMF Can Battle Gradual Irrelevance
These days, the International Monetary Fund’s policy recommendations – especially as they pertain to the advanced economies – have little impact. Although this is partly a consequence of more inward-looking national politics in richer countries, the Fund itself is not blameless.
How The "SECURE Act" Will Affect Americans' Retirement
1. Overview – What is the “SECURE Act”? 2. The Retirement Savings Crisis in America 3. One Potentially Serious Knock on the SECURE Act 4. SECURE Act is Currently Tangled Up in the Senate
Five Challenges Facing Big Data
Data, though abundant, is an ever-present challenge. Why? Consider the following five key data questions.
The College Tuition and Admissions Probability Estimator
College is expensive. We all know that – and that is why parents come to financial advisors to talk about how they’ll pay for it. What you and your clients’ families may not be aware of is that the posted tuitions are rarely the price anyone pays. College tuition discounts vary widely and the methodology used to calculate tuitions is not disclosed by any college.
Long Live the Bull Market
Last December, almost 12 months ago, we set our year-end 2019 target for the S&P 500 at 3,100. Many thought we were way too bullish, but our model for the stock market suggested 3,100 was well within reach. We believed the bull market had plenty of room to run.
The Surprising Results from S&P’s Latest SPIVA Analysis
S&P’s SPIVA scorecard provides persuasive evidence of the futility of active management. But its most recent scorecard illustrates something else – why active managers underperform even in the best performing asset class.
China’s Slower Growth, the Laffer Curve, and Rate Cuts in Australia
China’s economy is slowing by any measure, while Australia’s central bank takes rates to record lows.
What's With All the Mass Protests? (Hint: It's Not About Income Inequality)
The media’s inequality narrative completely ignores the fact that the global demonstrations are, at the end of the day, in response to government incompetence and failed socialist policies.
The Road to Default
We will spend the latter part of the 2020s going through a kind of worldwide bankruptcy. We won’t call it that, and it will take a lot of argument because we won’t have a court to take charge. But we will collectively realize the situation can’t go on and find a way to end it. I’ve taken to calling this “the Great Reset.”
Monthly Municipal Market Update, October 2019
A brief monthly update on what's happening in the municipal bond market.
Corporate Governance in Emerging Markets: Harnessing Winds of Change
Emerging markets provide many potential investment opportunities, but corporate governance shortfalls can present challenges. Over the years, some countries have moved faster than others to plug their governance gaps. Franklin Templeton Emerging Markets Equity’s Chetan Sehgal and Andrew Ness outline what corporate governance is and how emerging markets are making improvements in this area.
Beneath the Surface
A review of last month’s market-moving events across countries and asset classes.
Evolving Advisors Don’t Fear Change. They Embrace It.
Nearly every aspect of the advisory industry is undergoing some form of transformation today—spelling an opportunity for those advisors who are committed to continuously evolving their approach.
Optimism Returns to Emerging Markets in October
A number of factors spurred improved investor sentiment in emerging markets over the past month, including an interest-rate cut from the US Federal Reserve. Franklin Templeton Emerging Markets Equity outlines the news and events shaping market moves during October, and the reasons why the team is optimistic about the coming year.
November Global Economic Outlook
Growth Prospects and Challenges Ahead for the U.S., U.K., Eurozone, China, and Japan.
Theoretically, there is no single variable more important to the economy than productivity, or output per worker. Productivity growth is how we get improved living standards over time. Faster productivity helps to offset the impact of wage growth, supporting gains in corporate profits.
Advisor Investment Platforms on Cusp of Major Transformation
RIA investment platforms – specifically the vehicles and tools they use to manage client portfolios – are about to undergo the most profound change in a generation. With the race to zero for trading stocks, mutual funds are becoming outdated. Customized portfolios of individual stocks will be the winner.
Lazard Global Factor Report
October has historically been a volatile month for stocks. But this year, it marked the second consecutive month of positive returns for global equities. Find out why.
Income Inequality, Taxation, and Redistribution
One of our favorite economic parables is the Fish Story, from Paul Zane Pilzer's 1990 book, "Unlimited Wealth." It is an excellent tool for thinking about wealth creation, inequality and redistribution.
Advice and Resources for Getting Started with ESG/SRI Investing
If you’re an advisor looking to differentiate your practice from others, consider this article to be your first step toward a better understanding of impact investing.
Helping Crisis-Stricken Countries Recover with Single-Country ETFs
I have been studying ways of fighting major crises around the world for the last 30 years ever since I lived through one of the most devastating economic, social, and political crises in the history of the 20th century.
The High Stakes of the Coming Digital Currency War
Facebook CEO Mark Zuckerberg was at least half right when he recently told the United States Congress that there is no US monopoly on regulation of next-generation payments technology.
Should You Buy the Saudi Aramco IPO?
This is an absolute monarchy we’re talking about, after all, and so global investors should not expect to have any shareholder rights. Aramco’s board of directors will have a fiduciary duty to MBS and any future monarch, not to investors. This has some serious implications.
Slowing Down While Speeding Up
While volatility has remained subdued and U.S. stocks are at all-time highs, a near-term concern is that investor sentiment may be getting a bit too frothy. The potential signing of a “phase one” U.S.-China trade deal and rollback of some tariffs has contributed substantially to the rally; yet the proposals made have yet to be corroborated by anything in writing.