Northern Trust Capital Market Assumptions Five-Year Outlook: 2021 Edition
In recent years, global equities had slightly outpaced market forecasts for lower equity returns. Then the COVID-19 pandemic hit the global economy, putting an end to the 10-year bull market. Equity markets have now started to recover, but the pandemic introduced and exacerbated challenges that we expect to subdue financial market returns over the next five years.
Money Managers Are Punished by a Runaway S&P 500
A 60/40 portfolio of global stocks and bonds has returned a respectable 8.4% annually over the past five years, but also a heartbreaking 6.2 percentage points a year less than the S&P 500. And the difference seems to be all investors care about.
Value’s Lifeblood is Performance Chasers
While listening to Rob Arnott on a recent Morningstar podcast, I became enamored with something that Arnott was emphatic about. He pointed out that the structural advantage of being a contrarian isn’t being smarter. Every winning purchase in the stock market comes as an opportunity cost to the seller.
2Q 2020 GMO Quarterly Letter
In a new quarterly letter to GMO cl
Light in the COVID Tunnel
We’ll be okay, but we’ll have problems first. Both can be true; the difference is in the timing. It’s important to keep this straight in our minds. Extreme things can happen, for either good or bad, but they don’t last forever. We have to maintain mental balance between the extremes.
The World Outside Apollo
Multi-billion dollar funds are now launched in such frequency that they might almost be considered mundane. In fact, more than 50 ‘B Funds’ were launched between January and June of 2020. Typically featuring a minimum check size of $100M-500M, 3 to 5 year terms and no shortage of well educated, Oxford suit wearing partners ready to play “let’s make a deal."
Bond Real Yields: What’s Happening Beneath the Surface
Treasury bond yields have been drifting quietly lower since early June. But there is more going on beneath the surface than it might seem at first glance. Real yields—nominal yields less inflation—have declined steeply into negative territory. While nominal yields are near record-low levels from the deep economic decline, inflation expectations are picking up.