The GameStop drama that has rattled US stocks reflects the growing power of individual investors to shape market events. But there are lessons for traditional, long-term investors, too. When markets ignore fundamentals, redoubling a focus on quality is the best way to produce consistent returns while reducing volatility.
The five largest US growth stocks now comprise more than a third of the Russell 1000 Growth Index. Investors should be alert to the risks of high benchmark concentration.
Economic fallout from the pandemic is devastating US retail. But companies that were already adapting well to seismic changes in the industry should prosper over time.
In the midst of a historic crisis, it’s hard to see through the fog. But investors who ask the right questions now will be able to identify companies that can make it through.
With US equities trading at relatively high valuations, earnings growth will be essential for investors to generate returns in 2020. That’s a tall order in today’s environment. Finding standout companies with sustainable growth potential will be especially important.
After a series of disappointing initial public offerings (IPOs), private and public equity investors are becoming more discerning about earnings. And for good reason. Profitable companies outperform by a wide margin over time, even among high-growth companies, which often post losses early in their lifecycles.
There’s growing evidence that private equity markets are beginning to overheat after several high-profile IPO flops. Investors in stocks should pay attention because private funding troubles are also a very public market affair.
When we think about how much leverage is being used right now by corporates, I reflect on the old saying: “It’s all fun and games until someone loses an eye.”
In today’s highly uncertain market environment, investors in US stocks are paying a premium for companies with high-dividend yields. But how much is too much—especially if interest rates stop declining? Stocks with resilient high-growth profiles deserve a closer look.
Equity markets recovered in June as the US Federal Reserve turned decidedly dovish, coming in line with most central banks around the world. But after posting strong gains, to end the quarter close to a record high, how much more steam do US stocks have left?
There are many ways to apply responsible investing principles to portfolios. But some investing approaches may be more conducive to creating a portfolio with strong environmental, social and governance (ESG) qualities than others. Concentrated equities are a case in point.
From rising sea levels to catastrophic weather events, investors can’t afford to ignore the risks of climate change. Since many companies would be vulnerable if current climate forecasts materialize, asset managers may want to consider climate change in their equity research process and engage management teams on the subject.
Many US companies have forgotten how to raise prices because they haven’t had to for a long time. In some sectors, such as retail, pricing power has been hobbled by the giant consolidated retailers, leaving other businesses unable to adequately offset inflationary pressures.
With US stocks facing multiple risks, it’s easy to lose sight of the positive trends that could help the market recover. In 2019, investors should search for select stocks with the right attributes to produce positive surprises in a potentially tricky market environment.
Finding high-quality companies is an essential component of many equity strategies. But with revolutionary forces sweeping through key industries, what really defines quality stocks? Investors must think proactively about how to identify quality in a changing world.
Equity investors appear to have voted in favor of US tax reform. But the optimism may need to be tempered. We believe that the impact of the tax overhaul on individual stocks will be mixed and will depend on several factors.
Investors today are questioning whether equities are too pricey. We think it’s important to look at valuations from both a relative and absolute perspective, while keeping an eye on what’s motivating the Fed’s rate moves.
Amazon.com has shaken up US retailers and manufacturers, a trend amplified by the recent purchase of Whole Foods Market. But despite Amazon’s dominance, investors can still find resilient businesses in a vast sector.
Healthcare continues to generate political controversy. So should investors stay away? Absolutely not. What’s important is to target companies that are positioned to deliver long-term growth no matter what happens to the US healthcare system.
Details of Donald Trump’s economic agenda remain an enigma. Yet there are already enough clues to help investors target companies that should do well in an era of unpredictable policies from the incoming president.