Real Estate

After a decade of steady growth and rising asset prices, economies and financial markets were rocked by the COVID-19 pandemic. The global health crisis forced most governments to lock down their communities, halting economic activity almost overnight and causing financial markets to reprice lower at an unprecedented speed.

Valid until the market close on July 31, 2020.

The S&P 500 closed June with a monthly gain of 1.84% after a gain of 4.53% in May. All three S&P 500 MAs are signaling "invested" and three of five Ivy Portfolio ETFs — Vanguard FTSE All-World ex-US ETF (VEU), Vanguard REIT Index ETF (VNQ), and Invesco DB Commodity Index Tracking (DBC) — are signaling "cash".

With today's release of the April S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.33% month over month which is cut to 0.16% with inflation adjustment.

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 May data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales mounted a record comeback in May, seeing encouraging contract activity after two previous months of declines brought on by the coronavirus pandemic."

More infections lead to more worry, while the commercial real estate and tourism sectors are put to the test.

With the release of this morning's report on May Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal -4.91% month-over-month change in disposable income was at -5.00% when we adjust for inflation. This is a decrease from last month's 13.07% nominal and 13.59% real decreases last month. The year-over-year metrics are 8.28% nominal and 7.69% real.

A simple mix of stocks and short to medium-term bonds is probably a better bet than investments widely peddled as inflation protection.

Pundits, prognosticators, and even investment boards often make misleading declarations that an asset class is broken, that its prospects for earning investors a reasonable future return are very dim. These proclamations can lead to investors’ abandoning these assets to chase recent winners.

The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for April. U.S. house prices were up 0.2 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 5.5% (nonseasonally adjusted). After adjusting for inflation and seasonality, the index is up 1.37% in April and up 6.28% year-over-year (seasonally adjusted).

This morning's release of the May New Home Sales from the Census Bureau came in at 676K, up 16.6% month-over-month from a revised 580K in April.

Email marketing is a powerful tool to grow your business. But be aware of etiquette as well as some common pitfalls and mistakes that can cost you.

This morning's release of the May Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 3.91 million units from the previous month's 4.33 million. The Investing.com consensus was for 4.12 million. The latest number represents a 9.7% decrease from the previous month and a 26.6% increase year-over-year.

In this latest survey, 68 leading bond and currency managers considered valuations, expectations and outlooks for the coming months.

Coronavirus cases and hospitalizations are spiking again in several countries, including the U.S. California had its biggest one-day jump in infections. Arizona, Florida and Texas are also turning into new hotspots.

Looking to generate income from your nest egg? Make sure you don’t get it all from just one basket. Karen explains two funds designed to provide income that aren’t over reliant on any one source.

Tim Wang and Julia Laumont of Clarion Partners dig into the state of the U.S. commercial real estate market and where they are finding bright spots of opportunity.

Over the course of history, during world wars, pandemics, financial crises, and deep recessions, municipal bond defaults have been an extremely rare occurrence. There have been less than 700 rated municipal bond defaults in the over 100 years of public finance existence. As a point of comparison, we saw over 117 corporate defaults in 2019 alone.

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for May new residential housing starts. The latest reading of 974K was below the Investing.com forecast of 1.095M and a slight increase from the previous month's revised 934K.

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for May new residential building permits. The latest reading of 1.22M was an increase from 1.066M in April and slightly below the Investing.com forecast of 1.228M.

What kind of role does private markets play in building a resilient portfolio in the post-Covid world? Mike explains.

It pays to be a senior executive in a U.S. family office.

Having trouble helping your clients appreciate a balanced portfolio? These charts may help.

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 58 is up 21 from last month's 37.

The way to get people to think about death is to imagine that by doing so they will never die. Recognizing this universal character trait will lead to more productive planning outcomes.

The latest Fed balance sheet shows a total net worth that is 84% above the 2009 trough. The nominal Q1 net worth is down 5.6% from the previous quarter and down 0.3% year-over-year.

Many consultants now offer portfolio-wide assessments of physical climate risks that companies face. Who should you rely on?

Companies see suspensions as a way to boost cash flow and avoid or limit job cuts -- although furloughs and layoffs have been plentiful this year.

Putting it all together, it seems likely that we are dealing with a short but sharp recession. The resultant recovery will initially look strong from a momentum point of view. That’s because the economy will quickly open up, egged on by the positive effects of record monetary, fiscal stimulus and over time with the reshoring of manufacturing jobs.

In our 2020 Global Market Outlook, we cited many indicators pointing to heightened risk of a recession; now we highlight increasing signs of a recovery from one.

A network of more than 400 family offices and a venture backed by hedge fund billionaire Paul Tudor Jones are partnering to help simplify deal-making for the ultra-wealthy.

This year marks the 100th anniversary of the renowned investment firm Tweedy Browne. The firm was originally a broker, and one of its clients was Benjamin Graham. I interviewed six members of Tweedy, Browne’s investment committee.

In a new quarterly letter to GMO clients, Ben Inker, head of asset allocation discusses the current uncertainty over the market and economic outlook and the decision to significantly reduce net equity exposure in the GMO Benchmark-Free Asset Allocation Strategy. Alongside Inker’s letter, Jeremy Grantham writes in “The Virus, The Economy and The Market” ...

India's government is taking incremental steps toward re-opening its economy, starting by bringing production and manufacturing facilities back online.

In the current market environment, both the bulls and the bears have data points on which they can stake their case. In this note we highlight both sides of the argument and then look at each asset class in an objective way to get a sense for what the market truly believes.

The dominant question we’ve been getting from investors is about the perceived disconnect between what’s happening on Main Street and what’s happening on Wall Street.

While qualified opportunity funds can offer very real benefits to suitable clients, be aware of some important caveats before advising your clients to add them to their holdings.

As troubling as these developments are, it’s important not to lose sight of the good that appears to be taking place right now. Investors that focus only on the negative tend to miss out on the opportunities.

I’m trying to think of a year when rebalancing has been more important. None come to mind.

Is it too soon to think about downsizing our space?

Against this backdrop of anything-goes spending, the idea of having a national currency backed by a real asset like gold seems less and less crazy to some. Doing so, it’s believed, would force lawmakers to practice fiscal discipline, reign in inflation and normalize international trade.

We finished the Virtual Strategic Investment Conference yesterday. I shared some highlights in last week’s letter, will tell you more today.

On April 9, Memphis-based Southeastern Asset Management announced that it was re-opening its Longleaf Partners Small-Cap Fund (LLSCX). It had closed the fund to new investors in August 1997. I interviewed two of the fund’s managers, Staley Cates and Ross Glotzbach.

As fixed-income markets have started to recover following the massive selloff and liquidity crunch in March, credit risk-transfer securities (CRTs)―agency mortgage securities not guaranteed by Fannie Mae and Freddie Mac―have been slower to do so. Investors are wondering: Where do CRTs go from here?

We're seeing that there are meaningful differences between the last downturn and this one.

For years I have been warning that during the age of permanent stimulus (which began in earnest with the Federal Reserve’s reaction to the dotcom crash of 2000), each successive economic contraction would have to be met with ever larger, increasingly ineffective, doses of monetary and fiscal stimulus to keep the economy from spiraling into depression.

Over the long haul the two series offer a compelling study of trends in residential real estate. Here is an overlay of the two series since the 1959 inception of the Starts data and the Permits data, which began being tracked a year later.

Wall Street will proclaim that any increase in economic activity is a good sign. But, according to Jim Bianco, even a recovery to 90% of pre-crisis levels will be terrible.

What to own, how to do so, and when are the most important questions investors face. In my article, I discuss how a framework of collateral, leverage, and volatility can be used to help answer them.

The legal framework by which paper money and coins came to be accepted for use in private transactions and international trade was established in the 18^th century by George Washington and Alexander Hamilton.

• Central bank policies are more desperate than ever to fight the deflation of financial markets;
• Once countercyclical policies unravel, it is hard to escape the dire whirlpool of side effects;
• Can the Tocalino Index say anything about the bouts of exuberance in U.S. stock exchanges?

The economic effects from COVID-19 will be devastating. Stock and asset prices will fall dramatically and will take years to recover. U.S. Treasury yields will turn negative. Sell “risk-on” assets, increase cash, and buy Treasury bonds.

In terms of the long-term effect on economic outcomes, the disease is likely to be anything but an equalizer.

Late last year, there were three people that we observed as optimistic about the prospects of the oil business. These people were Warren Buffett, Sam Zell and Peter Lynch. In revisiting their comments before and after the shutdown of the economy, we can see that two of the three have significantly altered their opinion.

David Rosenberg bluntly told attendees Monday at John Mauldin’s Virtual Strategic Investment Conference 2020 that the stock rallies in recent weeks ignore reality and don’t recognize that the United States is likely entering a depression, facing double-digit unemployment for at least three years, secular changes in consumer spending and saving, and deflation followed by stagflation.

Some speculate they’re just starting the worst slump in years, spelling trouble for anyone late to the private-asset party.

The economic calendar is a normal one and is beginning to include data from after the start of the crisis. This week includes small business and consumer sentiment surveys, as well as April data for retail sales and industrial production. I will also be watching jobless claims, both new and continuing.

The recent market volatility has caused stress, fear and even panic. But that emotional toil can be alleviated by constructing what we call “dedicated portfolios,” rather than blindly following the precepts of modern portfolio theory.

This century is barely 20% complete, yet investors have suffered through three extreme bear markets. Let’s look at which asset classes provided the much-sought diversification to offset losses in U.S. equities.

Leverage is probably one of the most controversial subjects in investing. Used properly (and given a bit of good fortune), the benefits of leverage can be amazing. Leverage is the reason why home ownership is often viewed as one of the best ways of building wealth.

Research Affiliates discusses how the All Asset portfolios seek to capitalize on opportunities amid pandemic-related market volatility and a strengthening U.S. dollar.

In all his years in the Texas oil patch, the billionaire Russell Gordy has never seen a bust like this.

We rely upon the ‘history’ of the market and the ‘science’ of evaluating economic indicators, but this period of uncertainty has pushed us to ‘think outside the box,’ and add an element of creativity to our investment views.

Retail, hospitality, travel, live entertainment and professional sports are some of the industries he sees continuing to struggle, but he disagrees with conventional wisdom that big cities like New York are doomed and warehouses are the smartest bet in commercial real estate.

Plunging interest rates and volatile equity markets are creating a once-in-a-lifetime chance that’s keeping wealth advisers busy even as they work from home.

While an oft-cited risk of expansionary monetary policy is runaway inflation, Global X’s CIO team reminds that policies only become inflationary if stimulus extends beyond the required period of need.

Some investors use a set-it-and-forget-it approach to their portfolios, but there are times when the asset mix may need to be recalibrated to achieve one’s goals.

As investors struggle to find attractive yield-generating opportunities in a lower-for-longer interest rate environment, many are diversifying into corporate real estate. But not all real estate is created equal. Fundamental Income focuses on the Net Lease real estate sector, which encompasses corporate properties leased to single tenants under long-term, “triple-net” leases. Fundamental Income’s sector-defining approach can help financial advisors access total return strategies that target sustainable income and predictable growth. The key is long-term, contractual cash flows.

Tiny investors signed up in droves for accounts at discount brokers like Schwab and TD. Their combined buying has helped the market claw back losses.

See how the coronavirus pandemic is impacting manager viewpoints across key geographic and equity regions.

There is no shortage of negative economic and financial news that has been announced over the last week that I could continue to write about today. But the truth is, I’m tired of being all negative all the time. So today, I want to shift gears and tackle a topic that most Americans probably haven’t thought about, but one that I think we should.

The economic calendar is packed with important reports. In normal times we would all be very interested, but the times are far from normal. Several of the reports emphasize April data, the first full impacts of the pandemic and shutdowns.

The capital markets are a highly complex system, where perturbations can cause a tidal change. Every business around the world has been affected by Covid-19. For a profitable business anywhere, this is a calamity. For a business that was losing money before this, it’s a tombstone.

The spread of the COVID-19 virus has blindsided conventional risk models. By understanding what went wrong, investors can develop a more forward-looking approach to risk management that considers multiple scenarios for a highly uncertain market environment.

Over the last decade, the general trend has been consistent: The rate of home ownership continues to struggle. The Census Bureau has now released its latest quarterly report with data through Q1.