Capital Growth

Valid until the market close on December 31, 2020.

The S&P 500 closed November with a monthly gain of 10.75% after a loss of 2.77% in October. At this point, after close on the last day of the month, four of five S&P 500 strategies are signaling "invested" — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), Vanguard REIT Index ETF (VNQ), and Invesco DB Commodity Index Tracking (DBC) — an increase from last month's triple"invested" signal.

Four of eight indexes on our world watch list posted YTD gains through November 30, 2020. The top performer is our own S&P 500 with a gain of 12.1%. Tokyo's Nikkei 225 is in second with a gain of 11.74% and in third is China's Shanghai with a gain of 11.2%. Coming in last is London's FTSE 100 with a loss of 16.92%.

President-elect Joe Biden wants to reverse the decades-long trend that has seen workers get an ever smaller piece of the economic pie.

In December 2019, we made a year-end 2020 forecast of 3,650 for the S&P 500. With the index closing Friday at 3,638, that looks like a very good call.

Small-cap stocks have underperformed the broader markets since the “discovery” of the size premium in 1981. But research shows that a segment of those small-cap stocks have performed well and that now is a compelling time to invest in them.

To the extent that stock prices reflect expectations of future value, investors don’t like the prospects for oil, and oil’s demise signals muted prospects for economic growth.

The institutional investor’s role in the effort to combat climate change is misplaced.

Equity price gains in Japan may be driven by innovation over the long term. Portfolio manager Shuntaro Takeuchi discusses the opportunity set.

FINRA has released new data for margin debt, now available through October. The latest debt level is up 0.8% month-over-month.

We have recently written a couple of posts about the “exuberance” that has invaded the market since the election. Such is often seen near short- to intermediate-term peaks in markets as investors go “all-in” without a net.

Today the National Association of Realtors released the October data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales fell slightly in October."

The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, fell to 58.2 in November from 61.1 in October, which is in expansion territory. Values above 50.0 indicate expanding manufacturing activity.

So far this year, shares of HIVE Blockchain Technologies have soared an incredible 715%, well past Ethereum’s gain of 273%. 2020 has been marked by healthy expansion in mining capacity, the most recent example being HIVE’s acquisition of additional access to low-cost green energy.

Recovery from COVID-19 has been a mix of successes and setbacks.

It will continue to be important to be an active investor during this period of transition and to carefully monitor the impact of policy on credit sectors.

Applications for U.S. state unemployment benefits unexpectedly posted the first back-to-back weekly increase since July, while Americans’ incomes and savings fell last month.

As Treasury secretary, Janet Yellen is almost certain to pursue tighter coordination with the U.S. Federal Reserve next year -- repairing recent frictions -- though observers say she will be careful to avoid any specific move that could trigger a wave of Republican protests.

The biggest private equity firms in the U.S. are unleashing a flurry of new leveraged buyouts and debt-funded dividends, seeking to make up for lost time after staying on the sidelines for much of 2020.

Subversive Capital Acquisition Corp., a special-purpose company that’s growing in the cannabis business, said it acquired two California companies and named Shawn “Jay-Z” Carter as its chief visionary officer.

Liquidity issues and other business risks could prompt a wave of defaults and restructurings, in turn creating fertile ground for opportunistic investing in distressed credit.

We are cautiously optimistic about economic growth over the next year, but over the longer term, disruptive factors will likely contribute to heightened volatility and lower returns across both fixed income and equity markets.

In all this tech euphoria and COVID-19 quarantining, investors are missing a key fact. People need people.

When we explore the specifics of an advisor’s business, there are commonly asked questions around the nuances between the SEC and FINRA.

Navigating short-term risks is paramount, but we view the backdrop as favorable for income investors over the medium term.

Within the broader Asia Pacific universe, Portfolio Managers Yu Zhang and Joyce Li see attractive total return potential among dividend paying stocks.

Healthcare stocks are once again in focus as a result of promising news of COVID-19 vaccines. But investors shouldn’t hunt for the pandemic’s panacea. Focusing on business fundamentals is a much better way to find healthcare stocks with long-term potential than searching for the next big drug.

In RBA’s latest report, Rich revisits the "Earnings Expectations Life Cycle" from the perspective of growth versus value investors and outlines why growth investors need to be contrarians in 2021.

The headline number of 96.1 was a decrease from the final reading of 101.4 for October. Today's number was below the Investing.com consensus of 98.0.

With today's release of the September S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 1.27% increase month over month which is cut to 1.21% with inflation adjustment. The non-seasonally adjusted national index saw a 7% YoY increase.

In a year that saw corporate forecasts canceled faster than travel plans, the third-quarter U.S. earnings season brought a sense of normalcy with better-than-expected profits and rising forecasts. Now a second wave of Covid-19 infections and renewed lockdowns threaten to cloud those views.

A balanced portfolio of stocks and bonds for decades was among the few venerated precepts in investing. Yet doubts about the approach grew after the pandemic hit and turned 2020 into a year like no other.

Amid historically low rates, the income solutions of yesterday are not going to cut it. Global X ETFs has recognized and reacted to this paradigm shift by developing alternative, higher-yielding strategies.

“I predict the bull market will continue next year,” says Jeremy Siegel. “Stocks are not overpriced.”

In a market ruled by historically low bond yields, income-seeking investors are being driven to products that carry risks, many of which are hard to identify or evaluate.

The data used to construct ESG portfolios differs widely among providers, meaning that funds may not be aligned with your clients’ objectives and beliefs.

Value managers often use static point in time multiples such as Book to Price to identify attractive companies. P/B is a “cheapness” indicator rather than a measure of a company’s intrinsic value, as it does not include the essential components to value a company: profitability, growth, competition, and risk. On the other hand, growth managers focus on a companies ability to growth their business assuming it will lead to creating shareholder value.

Fair trade over free trade will remain the theme in Washington.

Anne N. Mathias is a senior strategist for Vanguard and a member of the firm's Fixed Income Group, with a focus on global macroeconomics, interest rates, and foreign currency. I spoke with her about the outlook for the economy and the credit markets.

Gold “is a hedge on policymakers screwing up, and there has been a lot of screwing up in the last 20 years.”

A new normal is the norm. Changes are inevitable and therefore imaginable, even during this era of ever-growing technological breakthroughs such as cryptocurrencies, blockchain, robo-everything, 5G, EVs, AVs, AI, VR, AR, and IoT.1 We remember when ecosystem referred to a Costa Rican rain forest.

The S&P 500 has started the week off high, falling slightly at EOD Wednesday and closed the week down 0.68% from yesterday. The Friday before Thanksgiving is showing the index is up 10.11% YTD and is 1.91% below its record close. 

It was a bumpy ride for corporate bond investors this year. After the sharp, pandemic-driven selloff in February and March, total returns for most corporate bond investments have climbed their way back into positive territory.

Whether you’re celebrating in-person or virtually, we’re wishing you and your family a Happy Thanksgiving! Giving thanks may seem difficult to do in a year that’s resulted in the loss of so many lives, jobs, and businesses, but we believe this holiday is the perfect time to reflect on all we are grateful for.

In our view, inflation-fighting asset classes look considerably cheaper and offer higher long-term estimated returns than mainstream stocks and bonds.

Trading over the holidays? You’ll want to check this list—errr, article—twice.

In calling the current market the third “Real McCoy” bubble of recent decades, Jeremy Grantham described, in his own words, what I call the Iron Law of Valuation: a security is nothing more than a claim on some set of future cash flows that investors expect to be delivered into their hands over time. The higher the price an investor pays today for some amount of cash in the future, the lower the long-term return the investor can expect on that investment.

By now you may have heard that President Donald Trump signed an executive order banning Americans from investing in a select number of Chinese firms that have ties to China’s military.

I updated Bill Bengen’s groundbreaking analysis to examine the impact of investment expenses on historical retirement outcomes.

A look at why investors may need a new playbook for the next phase in the fight against COVID-19.

Sinology explores how U.S.–China relations can develop under President-elect Biden administration in three key phases.

American workers and businesses face a months-long survival test until Covid-19 vaccines become widely available as spending plunges with record daily cases prompting a sudden return to lockdowns.

The latest Conference Board Leading Economic Index (LEI) for October was up 0.7% from the September final figure of 107.5. Investing.com predicted a 0.7% increase.

This morning's release of the October Existing-Home Sales showed that sales rose to a seasonally adjusted annual rate of 6.85 million units from the previous month's revised 6.57 million. The Investing.com consensus was for 6.45 million. The latest number represents a 4.3% increase from the previous month.

With yields near zero, many investors may question the value of fixed income within a portfolio. Western Asset’s Head of Product Management, Doug Hulsey, joins our Head of Equities, Stephen Dover, to discuss fixed income investing with an active-management lens. He makes a case for the asset class for investors in light of market uncertainties and outlines where he sees opportunities today.

There is new reform legislation making its way through Congress which will significantly affect how many of us save for retirement and specifically how, and how much, we can contribute to our retirement accounts and at what ages. This is the most significant retirement saving reform legislation in years. I’ll break it all down for you below.

The yield on the 10-year note ended November 18, 2020, at 0.88%, the 2-year note ended at 0.16%, and the 30-year at 1.62%.

The US elections have implications for emerging markets in the area of global trade relations in particular, but for investors, it’s important to look at countries and companies individually within the asset class, according to Portfolio Manager Andrew Ness. He joins our Head of Equities Stephen Dover to discuss how emerging markets are navigating today’s challenges—including the COVID-19 pandemic—and note they are home to some of the most innovative and resilient companies in the world.

As Buffett said, this looks like “one helluva party” with the individual investors, professional investors and insiders all joining in the fun. As a former fraternity member in college, the best parties were always when you couldn’t find anyone missing. It wreaks of that today in the stock market.

Despite lingering uncertainty about corporate earnings growth and economies around the world, global stocks have rebounded from the COVID-19-driven downfall in March. But even following that bounce back, international stocks have lagged their US counterpoints for over the last decade. Could they be reaching an important inflection point? If so, how are astute investors casting a broader net to pinpoint the right companies outside the US?

Join us to hear from an interactive panel of investment experts from AllianceBernstein, who will cover:

• Key catalysts that could signal improved performance outside the US
• The benefits of going abroad, including less-crowded trades, lower valuations, and sourcing different alpha
• Why consider a high-conviction approach for international stock selection
• How benchmark-agnostic strategies can help identify forward-looking thematic opportunities

He is not sure when it will happen, but David Rosenberg is confident investors will face another big correction in the stock market.

When the definitive story is written about U.S. financial markets during the coronavirus pandemic of 2020, expect America’s housing market to play a starring role.

The traditional “60/40” portfolio of stocks and bonds can be saved with a few modest tweaks.

This week’s report will look at last week’s market moves in the wake of positive vaccine news (with additional and even better news today); but will also review our most recent tactical recommendation change.

The economic calendar remains less interesting than politics, market gyrations, and the coronavirus. Those will be the media topics. A bigger challenge is finding a way to identify what is important and to determine the causal relationships.

Defined outcome ETFs have quickly gathered almost $5 billion in assets; Not unexpected given their much lower drawdowns when the market crashed in March 2020; However, they are complex and expensive products and there are viable alternatives.

A brief monthly update on what's happening in the municipal bond market.

In coming years, US Congress and the Biden administration could implement spending programs and tax reforms at the national level that trickle down into state and local government policies too. Our Katie Klingensmith joined Muni Bond Team Research Director Jennifer Johnston to discuss the potential implications for the municipal bond market, against a backdrop of COVID-19.

As we await the outcome of the 2020 presidential election, advisors and investors are anticipating the results and worrying about its impact on the market to determine their next move. But what happens after November 3rd? While the election will have a significant impact on the country, we want to provide some caution from drawing too many links between who’s occupying the white house and the performance of the stock market. In this session, we will share historical perspectives and data on the impact of politics on investing as well as current developments in the political landscape.

What you will learn:

• What are the potential short-term and long-term implications of the result
• Why the markets don’t care about presidential ratings or political party, and why monetary policy often has a bigger influence on markets than presidential policies do.
• What the benefits of maintaining a long-term portfolio are and why investors shouldn’t let politics and their preferred party influence their investment decisions.

The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 90 is up 5 from last month's 85 and at its highest level in the indicator's history, exceeding its December 1998 record.

Investors in exchange-traded funds are clinging to their bets on big tech even as the high-flying sector has lagged behind the broader market over the past week.

The Census Bureau's Advance Retail Sales Report for October was released this morning. Headline sales came in at 0.3% month-over-month to one decimal and was below the Investing.com forecast of 0.5%. Core sales (ex Autos) came in at 0.2% MoM.

Give Thanks! The US economy continues to heal. Payrolls keep growing, unemployment claims - though still elevated - are shrinking, key measures of the manufacturing and service sectors remain well into positive territory, and, as this week should show, both retail sales and industrial production remain on an upward trajectory.

Abstract investment themes are much more than entertainment. They’re serious business and have roles to play in portfolios. I share my process for incorporating then into mine.

The blue shift in the White House may signal added trouble for Big Tech companies.