I've developed this kind of duality. It's hard to think of the next 20 years or indeed the last 20 years without being very optimistic about the future of humanity.
Rents are soaring in many U.S. cities as the economy rebounds, squeezing the budgets of tenants who also face increased risk of eviction after courts overturned a pandemic-era ban.
Investment success requires that a person have a high tolerance for boredom, which means turning a deaf ear to the financial press’s investment panic-de-jour. It's good for your financial health to avoid following the advice of prognosticating financial soothsayers. Even when one of them is me.
Momentum in China’s property market remains strong so far in 2021, driven by healthy demand for housing.
April 3rd marked the 1-year anniversary of the first investments deployed by GMO’s Quality Cyclicals Strategy,1 within a fortnight of the trough that ended 2020’s quickfire bear market.
Valid until the market close on May 310 2021.
The S&P 500 closed April with a monthly gain of 6% after a gain of 4.24% in March. 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) — unchanged from last month's quadruple "invested" signal.
David Bahnsen does a podcast for National Review called Capital Record. We did a two-part series. The following is an edited partial transcript of the first part.
One of the most common reasons new clients seek me out is the loss of their long-standing financial advisor. As an advisor, the best way to protect against losing those clients is to create a team or “ensemble” approach to providing financial advice.
With the release of this morning's report on March's Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 23.57% month-over-month change in disposable income is cut to 22.94% when we adjust for inflation and an all-time high. This is an increase from last month's -7.91% nominal and -8.13% real increases last month. The year-over-year metrics are 31.77% nominal and 28.78% real.
Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month.
Today the National Association of Realtors released the March data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales increased in March, snapping two consecutive months of declines."
Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The Census Bureau has now released its latest quarterly report with data through Q1 2021.
With today's release of the February S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 1.2% increase month over month which is cut to 0.9% with inflation adjustment. The non-seasonally adjusted national index saw an 11.9% YoY increase.
Investors aggressively sold off Treasuries in the first quarter in favor of risk assets. We think this is likely to continue as the economy strengthens and inflationary pressures build, and we are maintaining a defensive duration profile to protect against rising rates.
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for February. U.S. house prices were up 0.9 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 12.3% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is up 0.45% in February and up 10.26% year-over-year (seasonally adjusted).
This morning's release of the March New Home Sales from the Census Bureau came in at 1.02M, up almost 21% month-over-month from a revised 9846K in February. The Investing.com forecast was for 886K. The median home price is now at $354.6K.
This morning's release of the March Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 6.01 million units from the previous month's revised 6.24 million. The Investing.com consensus was for 6.19 million. The latest number represents a 3.7% decrease from the previous month.
How do we preserve and grow our client's wealth at inflation-adjusted rates, consistent with long-term returns of the requisite asset class, and to do so without taking undue risk of a permanent loss of capital?
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for March new residential housing starts. The latest reading of 1.739M was above the Investing.com forecast of 1.613M and an increase from the previous month's upwardly revised 1.457M.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for March new residential building permits. The latest reading of 1.766M was up 2.7% from the February reading and is above the Investing.com forecast of 1.750M.
The Northern Trust Economics team shares its outlook for global growth in this year of reopening.
Even before the war is over, the winning side needs to consider how to “win the peace” which will follow.
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 83 is up 1 from last month's 82.
Quarterly commentary - Discussion on the historic stock market measures presently in place due to the Fed's largesse.
Hundreds of years of history shows us that investment bubbles have been a regularly occurring feature of the financial markets.
Institutions are increasingly allocating to digital assets, but their role in a portfolio is not yet well defined or studied. This piece focuses on Bitcoin and reviews its relationship with major asset classes in the context of an institutional caliber portfolio. Standard techniques are used to help advisors better understand position sizing and the associated risk/reward tradeoff.
Yes, the housing market is a bit overheated, but for reasons that make far more sense than the rationalizations of stock market bulls. Some buyers are certainly overpaying and may regret it. Nonetheless, I don’t foresee another 2008-style housing crash in the near future, nor anything like the subprime crisis. There are altogether different fundamentals working here.
The American Jobs Plan is not only the biggest traditional infrastructure proposal in over 50 years, but if approved, it will also fund significant investments in human and environmental infrastructure.
Well, let’s just say things are different in 2021.
Global stocks rose in the first quarter, but volatile trading patterns reminded investors that the road to normal will be bumpy.
Within the growth-vs.-value context, we’d like to discuss three Covid-related scenarios for companies.
We have all endured the Covid-19 pandemic for over a year now.
A new book explores the WeWork disaster, a bottomless money pit that has consumed billions upon billions of investor capital built largely on the spellbinding charisma of Adam Neumann, an Israeli entrepreneur.
Recently, a piece of collage art entitled “Everydays: The First 5000 Days,” by an artist known as Beeple, sold at a Christie’s auction for $69 million.
You know society is in trouble when the Prime Minister of your country stands up and says something along the lines of “of course we can afford to take on more debt – you are old-fashioned if you think otherwise”.
Throughout the pandemic, housing has been one of the stalwarts of the economy along with the sustained level of consumer spending that was made possible by massive government stimulus.
In part 1 of this two-part series on dividend stocks I covered 2 utility stocks, 4 REITs, 1 information technology company, and 2 financials.
Our economy is recovering; the stock market is booming. Yet I'm hearing investors express much more fear now than they did last March when the stock market was falling off a cliff. I see a couple of reasons for this.
Someone must pay for rampant federal spending.
The government’s COVID relief programs have cost $5.2 trillion, more than World War II, which cost $4.7 trillion. Those mountains of money will cause inflation, raise interest rates and reduce in stock prices.
I am often asked by investors why we do not have formal tactical views on growth vs. value like we do on large caps vs. small caps.
Buying or selling a home is a complicated, expensive undertaking that presents an opportunity for you to deepen your client relationships. Advisor Mike Rodenbaugh of Boardwalk Financial Strategies shares his perspective on helping smooth a real estate transaction, providing important counsel on affordability, cash flow, retirement impact, mortgage financing and estate planning. For example, he says, “down payment sourcing creativity” may be needed for a client buying a new home before selling a current home.
President Joe Biden’s economic team at the White House is determined to make good on his campaign pledge to raise taxes on the rich, emboldened by mounting data showing how well America’s wealthy did financially during the pandemic.
The last few weeks have seen increased volatility in the equity markets as rates have begun to creep back up surrounding inflation fears and investors temporarily pulling out of big tech names that have driven the S&P’s performance for the past few years.
The U.S. economy is set for a hiring boom in the months ahead as the coronavirus pandemic recedes. There are signs it’s already underway.
Last year featured a jaw-dropping list of extremes, from a once-in-a-century pandemic to record-breaking market moves. Howard Marks writes in his latest memo about approaching the investment environment left in 2020’s wake – one generating many questions and no easy answers.
In December, Aaron Moore bought an unremarkable three-bedroom house in the Toronto suburb of Brampton and, after throwing on a fresh coat of paint and laying down new hardwood floors, put it right back on the market.
Don’t fear Treasury yields killing off the stock market’s golden goose just yet.
In this issue of Sinology, we provide a macro perspective for thinking about whether an investor’s portfolio has enough exposure to China.
It’s been a long time since investors have had to worry about inflation.
Even as credit spreads have narrowed, further value remains.
Is the stock market disconnected from the economy? Perhaps, but less so lately.
As the latest COVID-19 relief bill winds through the U.S. Congress, some economists have been warning that too much stimulus could lead to the economy overheating
This commentary discusses why it might be prudent to question the assumption that the reopening of the economy will be a boom to the stock market. It also explores the crazy environment for collectibles.
Senator Elizabeth Warren said IRS funding should be bolstered so the richest Americans get audited about once every three years as part of her proposed 2% annual tax on wealth in excess of $50 million.
What normalcy will it be? I don’t expect to simply go back to the way things were. The economy as it was structured in December 2019 is gone forever. The world is different now. The economy will be different, too.
We hope you enjoy Harold Evensky's latest NewsLetter.
House lawmakers kicked off an effort to tackle dominant technology companies, vowing a revamp of competition laws to curb their power.
The Great Inflation of the 1960s and 70s, the earliest stages of which were already underway when Graham spoke at the St. Francis Hotel, eventually produced some of the most astonishing economic dislocations in U.S. history.
Target date funds should be designed to reduce the risk of rash selling.
Franklin Small Cap Value Fund Portfolio Manager Steve Raineri discusses why he thinks the near-record underperformance of higher-quality, profitable small-capitalization (small-cap) value stocks relative to lower-quality, unprofitable companies could present a compelling opportunity for longer-term investors as the US economy continues to recover from the COVID-19 pandemic.
We think this is an excellent time to ponder the thoughts of Buffett and Munger.
U.S. stocks have the highest CAPE ratio of any global equity market, but they are still the place to invest. But the inventor of that metric, Robert Shiller, says that stocks are indeed risky.
Many investors think there are only two options in a market where participants have become overly exuberant, either 'I want in' or 'Get me out.' Our strategies are more nuanced, and we believe fit better with what we expect to transpire.
Millions of Texans were without power this week when the state was hit with a record setting winter storm. An overhaul of its aging infrastructure would require massive amounts of metals and other materials, which would be positive for miners and producers.
It’s tempting these days for some investors to question the role of fixed income in portfolios. After all, real yields have plunged, potentially leading to less income today and smaller capital gains tomorrow.
The object of the game was to get to the finish line first and then become the leader the next round. The stock market has its own game of “Simon says” and that is in the mall property world.
Maybe you’ve heard: The pandemic is killing cities, fueling a rush to spacious houses in the suburbs. But beyond pricey New York and San Francisco, real estate demand is booming in downtowns across America.
Rick Rieder and team think that today’s potent policy cocktail holds important implications for the path of economic growth, markets and the value of a dollar.
Fortunately, human behavior has a history of repeating itself at extremes. The worst buying decisions are made at the top. Just like bonds, the convexity is true when yields rise going forward. It’s a slippery slope and could be vexing.
The fundamental concept that you must understand about LinkedIn is this: It is not a meritocracy, it’s an attention-getting contest.
In making the case for a mammoth $1.9 trillion economic relief package, President Joe Biden and his acolytes had maintained that economists across the board agreed that now is the time to go big in the fight against the pandemic.
Inflation is not dead. It is not gone. It has not been tamed. We know it seems like it, especially after the past few decades which generated in many an "inflation-complacency" that feels justified. After all, following the 2008 Financial Panic, many predicted Quantitative Easing would cause hyper-inflation.
With fixed income yields stubbornly low, should clients prepay their mortgage instead of investing in bonds? I argue this question is based on a false equivalence.
Former New York Yankees star Alex Rodriguez joined the roster of wealthy celebrities backing blank-check companies with a filing to raise $500 million for Slam Corp.
February begins with a stack of important economic scorecards. Among them are the last of the fourth-quarter corporate earnings reports, last week’s assessment of the 2020 gross domestic product (GDP), unemployment figures, consumer spending, as well as all the other regular reports that give us a snapshot of our recent economic history.
In a year that offered a pandemic and an election as reasons for investors to bail on risky assets, 2020 turned out to be a great year for those that stayed the course. A 60/40 portfolio of diversified stocks and bonds increased by a double-digit percentage, exceeding expectations.
The rationale behind the meteoric rise of Gamestop, a chain of videogame rental stores, and AMC, one of the nation’s largest cinema operators, is too unlikely to be believed. In just one month both stocks had risen by more than 600%.
The headline data on both new and existing home sales indicates a strong housing market, but some underlying data is showing signs of weakness that may lead to slower growth. Despite historically low mortgage rates, the rapid increase in home prices is reducing affordability and banks are tightening underwriting standards on both government and subprime mortgages. If these trends continue, housing momentum could begin to wane.
The Mortgage and Structured Finance Sector Team discusses key themes in the securitized market in 2021.
For all Millennial readers, if you visited a casino in your lifetime only to see your money quickly disappear, you have not seen anything compared to trading versus professionals. So to all you Robinhood traders I say, “Welcome to the Jungle.”
Calls for fiscal stimulus measures to target infrastructure are growing. But new research shows that infrastructure investments have offered few benefits to investors.
There are two incorrect assumptions in most stock return forecasts.
Even after the remarkable market performance of 2020, we still see potential for continued growth in 2021.
Our outlook for 2021 is formed by the need to get away from the crowd and to expect some very stormy weather in the U.S. stock market. We are not afraid of drowning. Therefore, we will review the circumstances at the bottom of the market in 2009 with today’s market to see where the crowd is and where we need to go to avoid the coming storm.
Every January, I start keeping track of the predictions for the upcoming year I hear in the financial media and from advisors and investors. With the arrival of 2021, it’s time for my final review of how the 2020 forecasts played out.
Founding Father Benjamin Franklin said it best: “They who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.” In this light, what are we to make of Trump’s social media suspension?
The pandemic housing market rally, a bright spot for the U.S. economy, may already have peaked as the growth in home prices starts to slow.
Over the holidays, I spent a lot of time reading forecasts for 2021 from leading economists, big banks, think tanks and other so-called experts. Coming off one of the most volatile economic years in history due to the coronavirus pandemic, I was very interested to see what forecasters were predicting for the New Year.
In his forecast for 2021, Jeffrey Gundlach predicted a “regime change.” Investors should prepare for themes that reverse prior trends: U.S. equities will underperform the rest of the world, inflation will rise, volatility will be higher, and the dollar will weaken.
Real Estate
This Kind of Duality
I've developed this kind of duality. It's hard to think of the next 20 years or indeed the last 20 years without being very optimistic about the future of humanity.
Rents Soar for Millions of Americans as Threat of Eviction Looms
Rents are soaring in many U.S. cities as the economy rebounds, squeezing the budgets of tenants who also face increased risk of eviction after courts overturned a pandemic-era ban.
Housing Market Shows Risk of Expert Predictions
Investment success requires that a person have a high tolerance for boredom, which means turning a deaf ear to the financial press’s investment panic-de-jour. It's good for your financial health to avoid following the advice of prognosticating financial soothsayers. Even when one of them is me.
China Property Sector Remains Robust Despite Policy Headwind
Momentum in China’s property market remains strong so far in 2021, driven by healthy demand for housing.
A Year Of Investing In Quality Cyclicals
April 3rd marked the 1-year anniversary of the first investments deployed by GMO’s Quality Cyclicals Strategy,1 within a fortnight of the trough that ended 2020’s quickfire bear market.
Moving Averages: Up 6% in April
Valid until the market close on May 310 2021.
The S&P 500 closed April with a monthly gain of 6% after a gain of 4.24% in March. 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) — unchanged from last month's quadruple "invested" signal.
Anomaly of a Recovery
David Bahnsen does a podcast for National Review called Capital Record. We did a two-part series. The following is an edited partial transcript of the first part.
Educate Clients About the Need for a Team Approach to Advice
One of the most common reasons new clients seek me out is the loss of their long-standing financial advisor. As an advisor, the best way to protect against losing those clients is to create a team or “ensemble” approach to providing financial advice.
Real Disposable Income Per Capita in March, All-Time High
With the release of this morning's report on March's Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 23.57% month-over-month change in disposable income is cut to 22.94% when we adjust for inflation and an all-time high. This is an increase from last month's -7.91% nominal and -8.13% real increases last month. The year-over-year metrics are 31.77% nominal and 28.78% real.
Moving Averages: Month-End Preview
Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month.
Pending Home Sales Up 1.9% in March
Today the National Association of Realtors released the March data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales increased in March, snapping two consecutive months of declines."
Home Ownership Rate: 65.6% in Q1 2021
Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The Census Bureau has now released its latest quarterly report with data through Q1 2021.
February S&P/Case-Shiller Home Price Index: National Index up 12% YoY
With today's release of the February S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 1.2% increase month over month which is cut to 0.9% with inflation adjustment. The non-seasonally adjusted national index saw an 11.9% YoY increase.
Tradition… Inflation? – Total Return Outlook, Second Quarter
Investors aggressively sold off Treasuries in the first quarter in favor of risk assets. We think this is likely to continue as the economy strengthens and inflationary pressures build, and we are maintaining a defensive duration profile to protect against rising rates.
FHFA House Price Index: Up 0.9% in February
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for February. U.S. house prices were up 0.9 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 12.3% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is up 0.45% in February and up 10.26% year-over-year (seasonally adjusted).
New Home Sales Highest Since 2006
This morning's release of the March New Home Sales from the Census Bureau came in at 1.02M, up almost 21% month-over-month from a revised 9846K in February. The Investing.com forecast was for 886K. The median home price is now at $354.6K.
Existing-Home Sales Down 3.7% in March
This morning's release of the March Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 6.01 million units from the previous month's revised 6.24 million. The Investing.com consensus was for 6.19 million. The latest number represents a 3.7% decrease from the previous month.
Constructing Anti-Fragile Portfolios Amidst Financial Repression
How do we preserve and grow our client's wealth at inflation-adjusted rates, consistent with long-term returns of the requisite asset class, and to do so without taking undue risk of a permanent loss of capital?
New Residential Housing Starts at 1.74M in March
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for March new residential housing starts. The latest reading of 1.739M was above the Investing.com forecast of 1.613M and an increase from the previous month's upwardly revised 1.457M.
New Residential Building Permits: Up 2.7% in March
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for March new residential building permits. The latest reading of 1.766M was up 2.7% from the February reading and is above the Investing.com forecast of 1.750M.
Global Economic Outlook: Upward Together
The Northern Trust Economics team shares its outlook for global growth in this year of reopening.
Winning the Peace
Even before the war is over, the winning side needs to consider how to “win the peace” which will follow.
NAHB Housing Market Index: Builder Sentiment Inches Up in April
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 83 is up 1 from last month's 82.
The Day the Music Died
Quarterly commentary - Discussion on the historic stock market measures presently in place due to the Fed's largesse.
The Next Bubble?
Hundreds of years of history shows us that investment bubbles have been a regularly occurring feature of the financial markets.
Bitcoin: An Asset Allocator’s Perspective
Institutions are increasingly allocating to digital assets, but their role in a portfolio is not yet well defined or studied. This piece focuses on Bitcoin and reviews its relationship with major asset classes in the context of an institutional caliber portfolio. Standard techniques are used to help advisors better understand position sizing and the associated risk/reward tradeoff.
Tiny Housing Bubbles
Yes, the housing market is a bit overheated, but for reasons that make far more sense than the rationalizations of stock market bulls. Some buyers are certainly overpaying and may regret it. Nonetheless, I don’t foresee another 2008-style housing crash in the near future, nor anything like the subprime crisis. There are altogether different fundamentals working here.
Quick Thoughts: The American Jobs Plan is Not Just an Infrastructure Plan
The American Jobs Plan is not only the biggest traditional infrastructure proposal in over 50 years, but if approved, it will also fund significant investments in human and environmental infrastructure.
Q1 2021 Strategy Letter
Well, let’s just say things are different in 2021.
Global Equities: Reviewing the Risks to Recovery
Global stocks rose in the first quarter, but volatile trading patterns reminded investors that the road to normal will be bumpy.
Market Leadership Shifted as Investors Gained Confidence in a Post-Covid Economic Rebound
Within the growth-vs.-value context, we’d like to discuss three Covid-related scenarios for companies.
Light at the End of a Long Tunnel
We have all endured the Covid-19 pandemic for over a year now.
How WeWork Vaporized Billions of Investor Wealth
A new book explores the WeWork disaster, a bottomless money pit that has consumed billions upon billions of investor capital built largely on the spellbinding charisma of Adam Neumann, an Israeli entrepreneur.
You Wanna Buy A Bridge?
Recently, a piece of collage art entitled “Everydays: The First 5000 Days,” by an artist known as Beeple, sold at a Christie’s auction for $69 million.
The Dilemma - Why investments Must Be Boosted But Also Why Society May Not Be Able to Afford It
You know society is in trouble when the Prime Minister of your country stands up and says something along the lines of “of course we can afford to take on more debt – you are old-fashioned if you think otherwise”.
The Housing Market is Running on Fumes
Throughout the pandemic, housing has been one of the stalwarts of the economy along with the sustained level of consumer spending that was made possible by massive government stimulus.
17 Dividend Stocks for High Retirement Income: Part 2
In part 1 of this two-part series on dividend stocks I covered 2 utility stocks, 4 REITs, 1 information technology company, and 2 financials.
Inflated Fears of “Rigged” Markets and Hyperinflation
Our economy is recovering; the stock market is booming. Yet I'm hearing investors express much more fear now than they did last March when the stock market was falling off a cliff. I see a couple of reasons for this.
The Fed’s Naïve Mindset is Driving Societal Rift
Someone must pay for rampant federal spending.
COVID has Cost More than World War II and We Haven’t Paid the True Price Yet
The government’s COVID relief programs have cost $5.2 trillion, more than World War II, which cost $4.7 trillion. Those mountains of money will cause inflation, raise interest rates and reduce in stock prices.
It's What You Value … and Where You Find It
I am often asked by investors why we do not have formal tactical views on growth vs. value like we do on large caps vs. small caps.
Mike Rodenbaugh Real Estate
Buying or selling a home is a complicated, expensive undertaking that presents an opportunity for you to deepen your client relationships. Advisor Mike Rodenbaugh of Boardwalk Financial Strategies shares his perspective on helping smooth a real estate transaction, providing important counsel on affordability, cash flow, retirement impact, mortgage financing and estate planning. For example, he says, “down payment sourcing creativity” may be needed for a client buying a new home before selling a current home.
Biden Determined to Tax the Rich After Windfalls From Covid Crisis
President Joe Biden’s economic team at the White House is determined to make good on his campaign pledge to raise taxes on the rich, emboldened by mounting data showing how well America’s wealthy did financially during the pandemic.
Increased Market Volatility Creates Opportunities in Alternative Strategies
The last few weeks have seen increased volatility in the equity markets as rates have begun to creep back up surrounding inflation fears and investors temporarily pulling out of big tech names that have driven the S&P’s performance for the past few years.
Bars and Restaurants Are About to Go on an Epic Post-Covid Hiring Spree
The U.S. economy is set for a hiring boom in the months ahead as the coronavirus pandemic recedes. There are signs it’s already underway.
2020 in Review
Last year featured a jaw-dropping list of extremes, from a once-in-a-century pandemic to record-breaking market moves. Howard Marks writes in his latest memo about approaching the investment environment left in 2020’s wake – one generating many questions and no easy answers.
The Housing Boom That Never Ends Already Wiped Out All the Short-Sellers
In December, Aaron Moore bought an unremarkable three-bedroom house in the Toronto suburb of Brampton and, after throwing on a fresh coat of paint and laying down new hardwood floors, put it right back on the market.
Wall Street Is Rethinking the Treasury Threat to Big Tech Stocks
Don’t fear Treasury yields killing off the stock market’s golden goose just yet.
Why China? A Macro Perspective
In this issue of Sinology, we provide a macro perspective for thinking about whether an investor’s portfolio has enough exposure to China.
Is Your Portfolio Prepared for Inflation?
It’s been a long time since investors have had to worry about inflation.
Staying on Offense: Fixed-Income Outlook
Even as credit spreads have narrowed, further value remains.
Is the Stock Market Disconnected From the Economy?
Is the stock market disconnected from the economy? Perhaps, but less so lately.
Focusing on Inflation May Miss the Bigger Risk
As the latest COVID-19 relief bill winds through the U.S. Congress, some economists have been warning that too much stimulus could lead to the economy overheating
Reopening: Markets vs Our Economy
This commentary discusses why it might be prudent to question the assumption that the reopening of the economy will be a boom to the stock market. It also explores the crazy environment for collectibles.
Warren Backs More Audits for Rich as Part of Wealth Tax Plan
Senator Elizabeth Warren said IRS funding should be bolstered so the richest Americans get audited about once every three years as part of her proposed 2% annual tax on wealth in excess of $50 million.
The Great Jobs Reset
What normalcy will it be? I don’t expect to simply go back to the way things were. The economy as it was structured in December 2019 is gone forever. The world is different now. The economy will be different, too.
NewsLetter - February 2021
We hope you enjoy Harold Evensky's latest NewsLetter.
Tech Gets Congress Antitrust Warning: ‘Change Is Coming’
House lawmakers kicked off an effort to tackle dominant technology companies, vowing a revamp of competition laws to curb their power.
This Era May Come to Be Remembered as the Federal Reserve’s Third Great Mistake
The Great Inflation of the 1960s and 70s, the earliest stages of which were already underway when Graham spoke at the St. Francis Hotel, eventually produced some of the most astonishing economic dislocations in U.S. history.
What the Pandemic Taught Us About Target Date Funds
Target date funds should be designed to reduce the risk of rash selling.
A Value Investor’s View on US Small-Cap Stocks
Franklin Small Cap Value Fund Portfolio Manager Steve Raineri discusses why he thinks the near-record underperformance of higher-quality, profitable small-capitalization (small-cap) value stocks relative to lower-quality, unprofitable companies could present a compelling opportunity for longer-term investors as the US economy continues to recover from the COVID-19 pandemic.
Beating Bobby Fischer
We think this is an excellent time to ponder the thoughts of Buffett and Munger.
Robert Shiller: U.S. Equities are Still the Place to Invest
U.S. stocks have the highest CAPE ratio of any global equity market, but they are still the place to invest. But the inventor of that metric, Robert Shiller, says that stocks are indeed risky.
Spectate or Speculate
Many investors think there are only two options in a market where participants have become overly exuberant, either 'I want in' or 'Get me out.' Our strategies are more nuanced, and we believe fit better with what we expect to transpire.
Texas Freezes, but a New Commodities Supercycle Could Be Heating Up
Millions of Texans were without power this week when the state was hit with a record setting winter storm. An overhaul of its aging infrastructure would require massive amounts of metals and other materials, which would be positive for miners and producers.
Fixed Income: Low Yields Don’t Tell the Whole Story
It’s tempting these days for some investors to question the role of fixed income in portfolios. After all, real yields have plunged, potentially leading to less income today and smaller capital gains tomorrow.
Simon Says
The object of the game was to get to the finish line first and then become the leader the next round. The stock market has its own game of “Simon says” and that is in the mall property world.
Housing Prices Are Booming in U.S. Cities — Just Not San Francisco or New York
Maybe you’ve heard: The pandemic is killing cities, fueling a rush to spacious houses in the suburbs. But beyond pricey New York and San Francisco, real estate demand is booming in downtowns across America.
What’s the Value of a Dollar?
Rick Rieder and team think that today’s potent policy cocktail holds important implications for the path of economic growth, markets and the value of a dollar.
Vexing Today’s Convex Pricing Behavior
Fortunately, human behavior has a history of repeating itself at extremes. The worst buying decisions are made at the top. Just like bonds, the convexity is true when yields rise going forward. It’s a slippery slope and could be vexing.
How I Cracked the Code Behind LinkedIn's Algorithms
The fundamental concept that you must understand about LinkedIn is this: It is not a meritocracy, it’s an attention-getting contest.
Yellen, Summers Spar About Overheating Risk in Stimulus Plan
In making the case for a mammoth $1.9 trillion economic relief package, President Joe Biden and his acolytes had maintained that economists across the board agreed that now is the time to go big in the fight against the pandemic.
The Return of Inflation
Inflation is not dead. It is not gone. It has not been tamed. We know it seems like it, especially after the past few decades which generated in many an "inflation-complacency" that feels justified. After all, following the 2008 Financial Panic, many predicted Quantitative Easing would cause hyper-inflation.
A Mortgage is Not a “Negative Bond”
With fixed income yields stubbornly low, should clients prepay their mortgage instead of investing in bonds? I argue this question is based on a false equivalence.
Alex Rodriguez Files to Raise $500 Million in Slam Corp. SPAC
Former New York Yankees star Alex Rodriguez joined the roster of wealthy celebrities backing blank-check companies with a filing to raise $500 million for Slam Corp.
Volatility Spikes; First Monthly S&P 500 Loss Since October
February begins with a stack of important economic scorecards. Among them are the last of the fourth-quarter corporate earnings reports, last week’s assessment of the 2020 gross domestic product (GDP), unemployment figures, consumer spending, as well as all the other regular reports that give us a snapshot of our recent economic history.
First Quarter 2021 Economic & Market Outlook: Looking Beyond the Traditional
In a year that offered a pandemic and an election as reasons for investors to bail on risky assets, 2020 turned out to be a great year for those that stayed the course. A 60/40 portfolio of diversified stocks and bonds increased by a double-digit percentage, exceeding expectations.
Springtime for Gamestop
The rationale behind the meteoric rise of Gamestop, a chain of videogame rental stores, and AMC, one of the nation’s largest cinema operators, is too unlikely to be believed. In just one month both stocks had risen by more than 600%.
Some Data May Be Showing Signs of a Short-Term Pause in Home Sales
The headline data on both new and existing home sales indicates a strong housing market, but some underlying data is showing signs of weakness that may lead to slower growth. Despite historically low mortgage rates, the rapid increase in home prices is reducing affordability and banks are tightening underwriting standards on both government and subprime mortgages. If these trends continue, housing momentum could begin to wane.
2021 Outlook: Three Questions for the Mortgage and Structured Finance Sector Team
The Mortgage and Structured Finance Sector Team discusses key themes in the securitized market in 2021.
Welcome to the Jungle
For all Millennial readers, if you visited a casino in your lifetime only to see your money quickly disappear, you have not seen anything compared to trading versus professionals. So to all you Robinhood traders I say, “Welcome to the Jungle.”
The Lackluster Record for Infrastructure Investments
Calls for fiscal stimulus measures to target infrastructure are growing. But new research shows that infrastructure investments have offered few benefits to investors.
Why 2021 Stock Market Forecasts Are Too Optimistic
There are two incorrect assumptions in most stock return forecasts.
Open the Door to Optimism for 2021
Even after the remarkable market performance of 2020, we still see potential for continued growth in 2021.
Outlook 2021: “Frenzy” is the Opposite of Bull Market Stew
Our outlook for 2021 is formed by the need to get away from the crowd and to expect some very stormy weather in the U.S. stock market. We are not afraid of drowning. Therefore, we will review the circumstances at the bottom of the market in 2009 with today’s market to see where the crowd is and where we need to go to avoid the coming storm.
Final Review of 2020 “Sure Things”
Every January, I start keeping track of the predictions for the upcoming year I hear in the financial media and from advisors and investors. With the arrival of 2021, it’s time for my final review of how the 2020 forecasts played out.
Signal and Bitcoin: Twenty-First Century Tools of Personal and Economic Freedom
Founding Father Benjamin Franklin said it best: “They who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.” In this light, what are we to make of Trump’s social media suspension?
Surge in U.S. Home Prices Eases in Sign Pandemic Rally May Cool
The pandemic housing market rally, a bright spot for the U.S. economy, may already have peaked as the growth in home prices starts to slow.
Outlook 2021: Light At The End Of The Tunnel, Maybe
Over the holidays, I spent a lot of time reading forecasts for 2021 from leading economists, big banks, think tanks and other so-called experts. Coming off one of the most volatile economic years in history due to the coronavirus pandemic, I was very interested to see what forecasters were predicting for the New Year.
Gundlach’s Forecast for 2021 – The Year of Regime Change
In his forecast for 2021, Jeffrey Gundlach predicted a “regime change.” Investors should prepare for themes that reverse prior trends: U.S. equities will underperform the rest of the world, inflation will rise, volatility will be higher, and the dollar will weaken.