Is the Euro Zone at the Beginning of the End of Muddling Through?

This week’s series of high-level meetings in Europe is being billed as make or break for the euro. The good news is that European politicians finally seem to realize the extreme seriousness of the current situation. But any agreement at this Friday’s summit of all 27 euro-area countries is likely to stop short of anything [...]

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Where’s the Euro’s Lender of Last Resort?

Spain was back in the spotlight today, as rising bond yields suggested that investors remain unimpressed by the victory of the Popular Party in Sunday’s election. But the stress is spreading well beyond the euro area’s so-called periphery.

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How 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. 

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Excessive Leverage: The Root of All Financial Crises

Today’s European sovereign-debt crisis has much in common with other seemingly unrelated crises of the past decade. The common element? Too much leverage.

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New Governments in Greece and Italy Could Contain Damage

As political casualties of the European sovereign-debt crisis mounted this week, it’s easy to understand why financial markets panicked. But all hope is not yet lost.

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More 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 [...]

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Do 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.

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Investing in a Range-Bound Market

What do you do when equity markets are highly volatile within a relatively narrow trading range as a result of low levels of investor confidence? Keep a foot in both the contrarian and momentum camps.

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Risk 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.

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Looking 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 [...]

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