Capital Growth

2019 was a very good year for investors. Surprisingly, both offensive and defensive sectors did well, which is a marked about-face compared with 2018. We believe this is mostly due to a central bank shift to policy easing, especially in the U.S., coupled with a relatively steady economy.

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?

Since 2002, S&P Dow Jones Indices has published its SPIVA reports, which compare the performance of actively managed equity funds to their appropriate index benchmarks. It also puts out a pair of scorecards each year that focus on persistence of performance. Here are the latest results.

Advisors can provide tax-planning services to grow their client base and provide more value to the people who trust them with their hard-earned money.

The GMO Asset Allocation team has released its latest 7-Year Asset Class Real Return Forecasts

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.

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.

Nikko Asset Management’s Global Head of Investments examines key factors that has driven the diverging roads of performance by Sony and Panasonic, as well as the key lessons that can be learned from their stories.

The recent runup in valuations has reduced the margin for error in today’s markets.

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.

This morning's release of the December Existing-Home Sales fell to a seasonally adjusted annual rate of 5.54 million units from the previous month's 5.435 million. The Investing.com consensus was for 5.43 million. The latest number represents a 3.6% increase from the previous month and a 10.8% increase year-over-year.

Maybe you don’t have a goals-based tracking and reporting system, but you want to have illustrations to show whether a client is on track (or not) to meet their goals.

Five out of eight indexes on our world watch list posted gains through January 21, 2020. The top performer is our own S&P 500 with a gain of 1.93%. Germany's DAXK is in second with a gain of 1.27% and in third is Tokyo's Nikkei 225  with a gain of 0.88%. Coming in last is Hong Kong's Hang Seng with a loss of -1.96%.

Only 2% of mutual fund assets are managed by women. One of them is Rupal Bhansali, who also happens to be a woman of color. She offers some insights into the keys to her successful career path, as well as the top contrarian opportunities she sees in the non-U.S. markets.

Last New Year’s Eve, most would not have forecasted the extent of the gains experienced by the U.S. stock markets this year. On the heels of the worst December since 1931, the Federal Reserve’s (the Fed) 180-degree turn, from restrictive to accommodative policy, fueled the S&P 500’s roughly 30 percent surge and pushed the U.S. economic expansion into record territory.

A strong economy will help U.S. consumers meet their financial resolutions in the new year, while residents of France and Australia have bigger worries.

A decade of central bank easing and the resulting low-volatility environment have made many investors complacent about risk management. We believe the next 10 years will be more volatile than the last 10 years, and risk management will be central to the delivery of consistent alpha.

Advisor Perspectives has announced its Venerated Voices™ awards for commentaries published in 2019.

Of all the arguments put forth by market pundits and talking heads about the coming end of the current bull market, the weakest is that it is “long in the tooth.” I get this argument, but it doesn’t make sense. Other bull markets have lasted far longer than this one.

Navigating between the despotic extreme of authoritarianism and the unbridled liberty of anarchism is the challenge of society in its quest for good government. A new book looks at the choices facing policymakers to achieve the proper balance and to improve the prospects of those countries outside the “narrow corridor” of effective governance that lies between those extremes.

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?

Among the biggest contributors to the bitcoin rally is the hope that 2020 could finally see institutional investors move into the digital field en masse, prompted by growing client demand and more attractive ways to get exposure.

Let's take a closer look at recent activity in US Treasuries. The yield on the 10-year note ended January 17, 2020, at 1.84% the 2-year note ended at 1.28% and the 30-year at 2.29%.

We are bullish on emerging market (EM) equities for 2020 given valuations, continued low interest rates and cyclical and structural growth in many of these countries.

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.

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.

The publication this week of the U.S. — China trade deal and the final macro numbers for 2019 should set the stage for healthy economic performance and stronger market sentiment in China in 2020, but the risk of a return to tense relations between Washington and Beijing looms over 2021 and beyond.

The problem with low interest rates for so long is they have encouraged the misallocation of capital. We see it everywhere throughout the entirety of the financial system from consumer debt, to subprime auto-loans, to corporate leverage, and speculative greed.

Almost by definition, value investing rarely performs well in the short run. This is especially true when you are in a strong bull market like we’ve been in since March 2009. Most companies as represented by the S&P 500 are currently trading at fundamental multiples that are significantly above historical norms.

The US and China formally signed a phase-one trade deal Wednesday after several months of negotiations. We see the deal as a near-term positive for markets—but it also leaves the thorniest issues between the two countries unresolved.

There are a number of factors that have us tactically concerned about a period of over-exuberance among equity investors. Those include record low put/call ratios and extreme inflows into equity ETFs. But among the more troubling facts of late is the breakdown in breadth we are witnessing even as the equity markets rally to new cycle or all-time highs.

Emerging markets ended 2019 on a high note, but can the momentum continue? Our emerging markets equity team weighs in, highlighting the market news and events it has an eye on.

One of the biggest concerns some investors might have right now is that the U.S. business cycle is maturing and possibly reaching its “natural end.”

Franklin Equity Group’s Fred Fromm gives his take on global oil markets amid elevated tensions between the United States and Iran.

As the worries mount, it’s worth addressing whether these concerns are truly warranted, or overblown to an extent. Let’s dive right in and tackle this, as well as look at how much of a handbrake such a high level of debt may have on Chinese growth.

Quantitative value investors have traditionally relied on price-to-book as the metric to classify stocks. But new research shows that price-to-enterprise value is a more powerful tool to construct portfolios. That research also sheds light on the question of whether the value premium is risk- or behaviorally-based.

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.

The Census Bureau's Advance Retail Sales Report for December was released this morning. Headline sales came in at 0.33% month-over-month to one decimal and at below the Investing.com forecast. Core sales (ex Autos) came in at 0.75% MoM (to two decimals).

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.

As Mark Twain once said, history never repeats itself, but it does often rhyme. The House vote to impeach President Trump coming in mid-December of 2019 certainly feels like a couplet with the Clinton impeachment, which occurred in mid-December 21 years ago. Indeed, there are similarities, but also key distinctions.

The many gloomy predictions for 2019 did not come to pass, but can we be more optimistic for 2020? Franklin Templeton Fixed Income CIO Sonal Desai draws the key lessons from last year and outlines what we should expect for the year ahead and her main concerns, with political uncertainty top of the list.

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.

Forget those fears of a global “Population Bomb” and worldwide famine which were made popular several decades ago. While the world’s population is still growing, birth rates in most developed nations are falling, including the United States.

One of our favorite financial writers is Bloomberg’s John Authers. He recently wrote a tongue-in-cheek article about an investment company by the name of Hindsight Capital. In hindsight, or in the company’s case, Hindsight Capital, he talked about what the firm did and what you should have done over the last ten years to produce outstanding returns.

A new decade, seismic shifts and the importance of diversification.

When your clients ask what to do about a life insurance policy they can no longer carry, don't assume they should surrender the policy. Conduct a thorough, detailed analysis of their situation, and work with them to come up with a proper game plan.

Many advisors haphazardly update their websites. Here are the five costliest mistakes I commonly see.

Read the latest Weekly Headings by CIO Larry Adam.

Research Affiliates provides its outlook for 2020 and discusses where it sees attractive return opportunities across the globe.

The January edition of Macrogram highlights the current state of the economy. The chart-based newsletter shows the weakness in manufacturing, calls attention to the current slope of the yield curve and covers key macroeconomic indicators. Macroeconomic insights at-a-glance.

A restrained reprisal by Iran following the assassination of its top military commander has led markets to conclude that the latest threat to the global economy has been removed. But just because Iran and the United States have so far avoided a full-scale war does not mean that markets are out of the woods.

Risk assets begin 2020 at lofty price levels. Are stocks fully valued, or rather a relative value versus global bonds?

Read a conversation with Thornburg Chief Investment Strategist Brian McMahon who surveys the unfolding investment landscape.

The substantial economic calendar features inflation reports and housing, but also includes Michigan sentiment, the Fed’s Beige Book, and NFIB sentiment survey. We will also get the first earnings reports for the Q4 season.

What really is a bet? How does one make decisions under uncertainty and with imperfect information? In his latest memo, Howard Marks weaves his own life story to discuss the process of thinking in bets, parses the world of gambling, and draws parallels between investing and games of chance.

The headline number for December came in at 102.7, down 2.0 from the previous month. The index is at the 85th percentile in this series.

So as we stand today, the opportunity in value stocks is quite significant. The spread between value and growth stocks is as wide as it’s been at any point in the last almost 20 years.

Foreign trade ends up being cleared through international money – a currency that the world accepts as final payment, even in places where it is not legal tender.

Value investing is an active management strategy that considers company fundamentals and the valuation of securities to acquire that which is undervalued. But as Graham and Dodd defined it, passive strategies are not investing; they are speculating.

Good economic news over the last couple months belies the fact that a recession could strike as soon as March 2020.

For nearly three years we’ve been tactically recommending overweighting large caps (S&P 500) and underweighting small caps (Russell 2000)—time for an update.

With simmering trade tensions, sputtering growth worldwide and a historically long, but slow, U.S. economic expansion, investors will have to brace themselves for a challenging investment environment in 2020. Change, adaptability and diversification are the key words. Here are steps you can take early in 2020 to position your investment program well for the rest of the year.

Comparison-created unhappiness and insecurity is pervasive, judging from the amount of spam touting everything from weight-loss to plastic surgery. The basic principle seems to be that whatever we have is enough, until we see someone else who has more. Whatever the reason, comparison in financial markets can lead to remarkably bad decisions.

This is the year-end letter I sent to our clients. Feel free to adapt it for your own use.

In Part 1 of this forecast I described my relatively benign outlook for the next 12 months. The calm may last into 2021 and even beyond. But beneath the surface, pressure will still be increasing. It will grow slowly, almost imperceptibly, but eventually explode.

On Tuesday of this week, the U.S. dollar experienced a “death cross,” a bearish signal that takes places when an asset’s 50-day moving average crosses below its 200-day moving average. We haven’t seen this from the greenback since May 2017.

Will 2020 be more of the same? Our teams are encouraged by differences they see in the new year; but they remain alert for unexpected downturns.

The best environment would be moderate U.S. growth, a sideways U.S. market and a weaker U.S. dollar.

With this article I am going to present several ways that investors, especially retired investors, can beat the market without fail. However, what I will be presenting may not be what you are expecting, particularly if you have a narrow notion of what beating the market means.

With bond yields near record lows, can fixed-income markets generate solid returns in 2020 without forcing investors to take too much risk? From a fraught geopolitical landscape to a global slowdown, we assess today’s biggest challenges—and opportunities.

As we kick off the new year, market prognosticators are busy making their 2020 predictions. David Mann, our Head of Capital Markets, Global Exchange-Traded Funds (ETFs), offers some thoughts on trends and milestones within the ETF industry he thinks could come to fruition in 2020.

Tensions between Iran and the United States brings a stressful start to 2020.

Four reasons for optimism about emerging-market stocks despite their general underperformance and higher volatility over the last decade.

This morning's employment report for December showed a 145K increase in total nonfarm payrolls, which was below the Investing.com forecast of 164K.

2019 was a triumphant year for the US large cap equity market, with the S&P500 index up 31% on a total return basis. The resolution of two major concerns in the year, namely the US Fed being too aggressive on rate hikes, and the US/China trade relationship hanging in a total impasse, drove the market higher, particularly in 1st and 4th quarter.

Always being alert and anticipating the next inflection point in the business cycle can help you actively manage your investments while taking advantage of emerging profit opportunities and more importantly protect your wealth from the inevitable cyclical declines. This exceptionally long business cycle appears set to emerge from its third growth slowdown and has now reached the stage where a cyclical bull market in commodities can be expected.