Inflation Plus 5%: Still a Reasonable Goal?
Many US endowments and foundations plan to give 5% of assets annually, while seeking to preserve the inflation-adjusted value of their assets. That’s become a very challenging goal.
read moreHow to Diversify When Markets Are Highly Correlated
With economic and political developments driving big gyrations in equity markets, at first blush it seems that all stocks are moving together and diversification benefits have diminished. But as my colleague Andrew Chin explained in a recent article, spreading exposures across the spectrum of equity risk and return factors is now more important than ever.
read moreMore Emerging Markets, Less Volatility?
The steep drop in returns for emerging-market stocks this year—even worse than the drop for developed-market stocks—provides a useful reminder that the asset class remains risky, despite its many attractions. How can investors capture the strong economic and earnings growth in emerging markets without taking on so much risk? I see two ways: One is [...]
read moreDo Investors Really Think Earnings Are Going off a Cliff?
Investor concerns about the future of global and US economic growth and corporate profitability are understandable. But corporate profitability has never been as low as the equity risk premium (ERP) now suggests. Thus, we believe the long-term upside potential in equities is extraordinary, as my colleague Joseph G. Paul explains in the article below.
read moreRisk Revisited
Institutional investors ready to give up on stocks should first consider whether they should lift some of the restrictions they impose on their equity managers, as my colleague Patrick Rudden recently explained in an article for our European newsletter, Pension KnowlEDGE.
read moreLooking for a Haven from Stormy Markets?
It’s easy to understand why investors are seeking a safe haven now. The 2008 financial crisis is still a fresh memory, and the global economic recovery appears to be losing steam. Meanwhile, politicians in both Europe and the US cannot decide how to address their pressing problems. Every bad piece of news seems to push [...]
read moreIs the 2011 Crisis a Rerun of the 2008 Crash?
The equity market meltdown of the past two weeks has raised widespread fears that we’re headed for a repeat of the wealth destruction seen in 2008. There are certainly some close parallels, but I also see some very big differences in the root causes of the two crises.
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