Sector Momentum Update
May 2015
Global Asset Allocation Update
May 2015
10 Year Expected Returns and the Taylor Rule
After 3 decades of disinflation and 15 years of very aggressive monetary policy, asset prices are high. Returns are expected to be below average for the next decade. Given the hyper-aggressive monetary policy of the last 6 years, the historically low yields on bonds means multi-asset class portfolios will be hampered by low returns on fixed income. Will the [...]
Allocating to Global Growth is a Value Play
America is a powerful economy. Its health and appetite can determine the direction of the global economy. Macro factors show building momentum in the global economy. At the same time, the investment marketplace has a near term obsession with equities coined "safe plays" or "defensive stocks." This obsession, to me, appears frothy; safe plays have become perceived safe plays. The obsession has [...]
A Closer Look: World Markets
Since November of 2014, the S&P 500 Index (IVV) has been traded within a range of 150 or so points. During that time, it has broken the 50-day moving average a total of 10 times, but has yet to break support at the 200. It currently finds itself at the high end of the range after an emphatic run following Friday's [...]
A Closer Look: Market Style
The S&P 500 Index ((IVV)) zig-zagged with no certain direction for the first part of the year, gaining just over 3% during this somewhat volatile period. The index sits right above support at the 50-day moving average. Holding that level while also breaking through the 2120 level will be key to the direction of the market in the coming weeks. The S&P [...]
Monitoring Markets
A look at relative value for the 2 major asset classes. Historic valuation measures indicate more risk currently in bonds than stocks. Momentum favors equities over bonds. The macro economic backdrop is likely to be more favorable for equities than bonds. The macro economic backdrop suggests that one should look for yield by taking on more credit risk as opposed to [...]
A Closer Look: Market Cap
After stagnating in January and March, the S&P 500 Cap-Weighted Index ((IVV)) continued its surge to new all-time highs in April. The index has been straddling the 50-day moving average for some time now. If it can’t blast through the 2120 level, look for the index to retest the 50-day moving average yet again. The S&P 500 is up 3.50% for [...]
The silver lining in Europe’s Greek cloud
To date this year, the European stock market has performed better than its US counterpart. The ETF tracking the MSCI EMU is up 154% more than the S&P 500 and our holding, HEDJ, the currency hedged European ETF offered by Wisdom Tree is up 495% more than the S&P 500. The out-performance has occurred in spite of [...]
A Closer Look: Commodities
The GSCI Commodity Index ((GSG)) consists primarily of Energy, but also includes Agriculture, Industrial Metals, Livestock, and Precious Metals as part of its holdings. The index broke down during the month of July on the backs of a stronger US Dollar and Saudia Arabia’s strategic decision to hold production levels. It now finds itself just over the 50-day moving average [...]
Stay In Touch