Eras of political and economic consensus define the risk characteristics of assets; what is risky and what is safe depends on the regime we are living in. As an example, the Cold War era produced very different return profiles and correlations to the ‘neo-liberal’ phase that has characterised… Watch the video
Earlier this year, Matthew Klein at FT’s Alphaville, made a typically punchy and well-argued case for abandoning a cornerstone of the current macro policy framework – the NAIRU.
This inelegant acronym (“Non-Accelerating Inflation Rate of Unemployment”) refers to the rate of unemployment which is consistent with stable inflation.… Read the article
It has been a tough five years or so for active equity managers in the US. In the main, correlation between different stocks has been high and the dispersion low.
This has meant, even if you have successfully picked the right stocks there has been less reward on… Read the article
Why is the Bank of Japan (BoJ) trying to raise the rate of inflation? Taking account of its demographic profile, Japan’s economic performance has been impressive by developed world standards, as Anne Richards at Bond Vigilantes recently points out, and the economy appears to be at close to… Read the article
Behavioural Finance Economics Markets
In the depths of market pessimism in the middle of last year Aaron wrote about how investors seemed to have given up any hope of interest rates ever increasing. That now seems a long time ago, at least if you consider market commentary.
It certainly seems… Read the article
Investment Industry Markets
There are a couple of (related) subconscious assumptions that investors seem to hold today. The first is that we are in a low return world, and the second is that investing for income is harder today.
Both of these beliefs are ultimately driven by the very low levels of government… Read the article
Behavioural Finance Markets
The weekend’s news has again illustrated the strong emotional responses produced by politics today and by Donald Trump in particular. It is no coincidence then that the current prevailing sentiment among investors is that returns and price behavior in the coming year will be determined by the actions of President… Read the article
Investment Industry Markets
The past week has been rich in press conferences, speeches and comments from world leaders and entrepreneurs. Despite some inconsistencies, surprises, and doubts, they all seem to agree on an improvement in the underlying economy, be it already in place or about to come.
In the US, better economic conditions,… Read the article
In 2015, Tony discussed the growing popularity of ‘Diversified Growth Funds’ (DGFs). DGFs typically seek to generate returns comparable to the stock market but with lower volatility. They have been successful at raising assets in a world where many institutional investors have been ‘de-risking’ and the… Read the article