Nose Blind to Inflation
The Federal Reserve doesn’t see the inflation others notice. Their data says inflation isn’t a problem, so they ignore indications otherwise. We see this in their policy decisions. And it’s not just the Fed; other central banks, Wall Street analysts, economists, and politicians have the same affliction.
Five Multi-Asset Strategies for 2020’s Challenges
The last decade produced great performance across most asset classes. But in the 2020s, we expect investment market returns will be lower and risk harder to manage. Looking forward, a disciplined multi-asset approach will be especially valuable to identify opportunities and help mitigate setbacks.
The Need for Private Credit
Private credit relies less on broad market trends and more on the strength of each specific investment. For individuals facing retirement, institutions looking to satisfy long-term pension liabilities or even private investors looking for alternative investments, it offers high current income, low correlations with public markets and lower default risks than yield spreads would imply.
Oops! They QE’d Again
The US Federal Reserve (Fed) has gone back to expanding its balance sheet. Some claim that quantitative easing (QE) is back; the Fed denies it. What we call it isn’t the point, says Sonal Desai, Franklin Templeton Fixed Income CIO—what matters are the implications of this “permanently loose” policy stance for asset prices, investment strategy and market volatility.
The Stay Rich Portfolio (or, How to Add 2% Yield to Your Savings Account)
In this piece, let’s do what Batista should have done – spend a few minutes focusing on the “stay rich” part of the equation. If you’re an investor who has already amassed great wealth and “won the game” what’s the right market approach that will help you keep (and potentially even grow) your wealth?
Are Low-Volatility Stocks Too Expensive?
Even as global stocks climbed in 2019, market volatility persisted. By some measures, lower-volatility stocks now look quite expensive. But in fact, high-quality stocks that can help protect portfolios can be found at reasonable prices, if you know where to look.
Q4 2019: "New Highs"
It has been a great year for equity investors. The S&P 500 index posted a 31% annual return, the Dow 25%, and the NASDAQ a spectacular 39%. More than $6T of equity paper wealth was created for domestic investors this year alone.
Allocation Views: Taking a Nimble Approach to 2020
Although easing US-China trade tensions have renewed investor optimism about global economic growth, Franklin Templeton Multi-Asset Solutions’ Ed Perks and Gene Podkaminer still see some potential geopolitical headwinds on the horizon.
Trends Diverge as Markets Enter 2020
The U.S. economy split sharply in 2019—manufacturing activity lagged services, corporate profits lagged stock performance—while investor sentiment surged. How long will these divergences continue in 2020?
What the Current U.S.-Iran Tensions Could Mean for Asset Allocation: Lessons from past Conflicts
We analyze the historical reactions of various assets to past U.S. military actions in the Middle East to provide insight into what the current U.S.-Iran tensions may mean for markets in 2020. We examine the S&P 500, crude oil, gold, U.S. dollar, and U.S. 10-year Treasuries.
Forecasts or Nowcasts? What’s on the Horizon for the 2020s
Now is the season for forecasting as one decade turns into the next. Pundits and market prognosticators too often treat nowcasts as true market forecasts, which can be very dangerous for investors’ financial health. Our forecasts for the decade ahead rely on empirically driven quantitative models.
Investment Lessons from 2019
Every year, the markets provide us with lessons on prudent investment strategies. Many times, markets offer investors remedial courses, covering lessons it had taught in previous years. That’s why one of my favorite sayings is that there’s nothing new in investing, only investment history you don’t yet know.
Repetition Can Be a Form of Change
Despite Sauron and Einstein’s failed attempts at unified theory, 2019 was simply the tenth year whereby interest rates were low and went lower, credit remained both cheap and plentiful, the economy was “good enough,” and those who can print money re-dedicated themselves to a willingness to print money. The logical conclusion to this set of events is to buy and hold U.S. equities. Drop the mic—again.