Equity Shock Absorbers Pass October Test

Kent Hargis (pictured) and Chris Marx After nearly nine months of calm, equity market volatility has returned and is threatening investors with the prospect of losing money. We believe the recent episode in US and global stocks reinforces the case for having a strategic allocation to equities that can withstand shocks.

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Volatility in Retirement—What a Drag!

Chris Marx (pictured) and Kent Hargis With markets so calm, it’s easy to become complacent about the corrosive effects that volatility can have on long-term investment success. If you don’t need the money for a long time, you can ride out the inevitable market squalls. But if you’re close to or already drawing from those [...]

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Security Check for Equity Declines

Sharon Fay (pictured) and Kent Hargis Protecting against stock-market declines is a top priority for many investors. But with lower-volatility stocks looking expensive today, will they get the job done if equities fall from new peaks?

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Seeing Through Emerging-Market Volatility

Stock markets in emerging markets (EMs) have gotten off to a rough start this year after a challenging 2013. Valuations have fallen and volatility remains high. So should investors add exposure to emerging markets—or is it better to steer clear?

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Building a Better Passive Mousetrap

Michael DePalma (pictured) and Richard Abramson In a recent blog, Passive Management Does Not Equal Passive Investing, we showed how passively managed portfolios actually create an active investment in which volatility isn’t benign and risk exposures can vary wildly over time. So if we could fix the problem and reduce exposure to spikes in market [...]

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Passive Management ≠ Passive Investing

Michael DePalma (pictured) and Guoan Du Passive investments are often misunderstood. Instead of providing static positioning as implied by the label, they can be very capricious because of market and sector turbulence. To tame a passive asset, we think investors need to exert more active control over the dynamics of volatility.

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Predicting Death to Find Life in Emerging Market Stocks

Over the past year, investors have become excessively cautious about emerging markets. To compensate for the additional uncertainty, many underestimate the upside potential. Paradoxically, to get a better handle on the risks, we believe they should assume the worst. By using this “pre-mortem” approach, not only do they have a better chance of avoiding disaster, [...]

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For Abenomics, the Hard Part Is Still to Come

Prime Minister Shinzo Abe’s “Abenomics” program, designed to revive Japan’s economy, was a big success in its first five months, easily surpassing low expectations. But it’s drifted off course since it began, and the going is sure to get tougher from here. Still, it’s too early to write off this policy experiment.

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