Rising Asset Prices Sharpen US Policy Challenge
As the housing market wakes up and the stock market rallies, strong gains in asset prices are improving US household wealth and helping to reduce the federal deficit. This is a great boost for confidence, but it also sharpens the challenge facing US fiscal and monetary authorities.
read moreEquity Market Distortions Create Big Payback Potential
Joseph G. Paul (pictured) and Kevin Simms Even after this year’s equities rally, market imbalances created by the financial crisis in 2008 have not disappeared. When these distortions unwind, we expect deep value stocks to rapidly recover.
read moreLikely Rate Cut from the European Central Bank Will Be No Magic Wand
Disappointing April data suggest that the ECB is set to cut the refinancing rate at Thursday’s Council meeting. This is likely to have limited economic impact but could encourage expectations of more creative policy action later, helping to take some upward pressure off the euro.
read moreBeware of the New Systemic Risk
Ashwin Alankar and Michael DePalma It felt like there was nowhere to hide from the market declines last Monday, April 15, when stocks, bonds and commodities fell in unison across the world, well before the Boston bombings that day. We believe that this failure of diversification was instigated by increasingly powerful multi-asset funds, many of which [...]
read moreValue Investing and the Philosopher’s Stone
Kevin Simms and Joseph G. Paul When J.K. Rowling finished her first manuscript of Harry Potter and the Philosopher’s Stone in 1995, she submitted it to 12 publishers, who all rejected the book. In time, those publishers would regret missing the chance to back an unknown author who would later take the world by storm. Like [...]
read moreSafe Harbor Is Safe for Secure Lifetime Income Default Investments
The new frontier in US defined contribution (DC) plans involves qualified default investment alternatives (QDIAs) with a secure lifetime income component. Will such vehicles retain their safe-harbor protections? Yes.
read moreIndian Milk Helps Quench Thirst for Emerging-Market Growth
Evolving trends in emerging markets are not always driven by macro-economic policies or demographics. Sometimes, something as simple as a fridge can change millions of people’s lives and re-define an entire industry.
read moreIs There a Silver Lining to the Gold Price Plunge?
It’s been a volatile week for gold prices, which tumbled by the most in 30 years. Although gold is still not obviously undervalued, we think the recent market moves make stock prices of gold miners look attractive when compared with prices of the precious metal.
read moreWill Emerging-Market Stocks Close Gap with Global Equities?
Companies in emerging markets are more profitable and less debt burdened than their developed-market peers, and their shares trade at a deep discount. So when will emerging-market stocks close the gap with global equity markets?
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