Global Portfolio Strategy 2021 Q1 - Stimulating Exuberance

Easy credit and exciting new technologies compel the investor while sage investors remember past bubbles and speak of prudent valuations. The tune is tactical investing. The question is whether to dance or sit it out.

US Economic Outlook 2020 Q4- After the Boom, A Bill Awaits

A boom year will follow the devastating prior year with the leisure sector the primary driver. The summer travel season may be the best on record and lift the economy. Everything has a cost. Higher taxes and debt service in the future suggest targeted fiscal policy.

Global Portfolio Strategy 2020 Q4 - A Collision of Sentiment & Value

Valuation levels suggest the continued primacy of equities is doubtful, particularly for US technology. The quandary is that valuation gaps can endure for years. The primacy of sentiment makes it a year of tactical investing. Timing is everything.

Risk Parity - A Primer

The practicality of risk parity enables an asset allocation paradigm with risk management at its core. The transparency and liquidity empower a timely transition from the current state to a risk-focused future. Risk parity invests without compromise.

Demographics, Deficits, & Deflation

Secular trends are conspiring with the Pandemic to reduce demand in the US. A newfound thrift by consumers from the Pandemic would further slow growth and is unnecessary. Policy action is required to avoid a decade’s long impairment of consumption. Best pay now, rather than a higher bill later.

Global Portfolio Strategy - Third Quarter

It is the best of times for equities. It is the worst of times for employment and interest rates. The earnings season arrives with its insight into the durability of business during the Pandemic. Volatility may reign across markets. For the prepared, risk will offer opportunity.

Liquid Alternatives: A Primer

The key to successful long-term investing is managing risk. The hedge fund investment process is long, arduous, and requires experienced professionals using sophisticated analytical tools to ensure value to the portfolio. Liquid alternatives overcome these barriers for the investor.

Interest Rates: A Growth Story

Interest rates in the US are at levels never seen before. Before the Pandemic, the expectation was that the increasing productivity of the Millennial generation would modestly lift real rates. Without an effective policy response, that outcome is doubtful and could repress real rates for decades. Investors are forewarned that this time is not different.

Corporate Pension Strategy 20Q2

Monetary policy is solving one problem and creating another. A reversal of equities may not result in a corresponding increase in credit spreads due to Fed actions. Thus, an equity decline would impair assets with no similar reduction of liabilities. Sponsor beware.

A Pandemic Policy Without a Plan

During a period requiring leaders, the US had politicians. Instead of addressing the problem in front of them, their eyes are fixed on the next election and placating their adoring masses. The long-term effect may be a lost generation. The short-term outcome may be needless hardship for those industries that are primarily hit.

An Opening Act to Repudiate

A bad opening foretells show cancellation. Australia and Hawaii reveal the threat of early openings even with near eradication of the virus. Leaders face an unequivocal dilemma: limiting travel outside your bubble and gathering inside with the consequential economic impact or accepting the increased deaths and concede the prior economic sacrifice was meaningless. Plaintive politicians know these alternatives are an atrocious trade.

Global Portfolio Strategy - Second Quarter 2020

Global problems require global solutions. The United States is a pariah for its inability to address the Pandemic. The investing implications are profound. Without election and virus certainty, volatility reigns as the malevolent monarch of the markets.

Prelude to Pandemic

The first wave is just beginning, not ending. The good news is that the fatality rates appear lower than initially measured. The bad news is that the US reproduction rate’s current growth would return to the May 1st level by July 4th.

Requiem for Value Investing

Value investors are asking themselves, will the promise of value investing return to prominence? The answer is multi-faceted. Indeed, value investors experienced under-performance versus the broader market and growth stocks for the last thirteen years.

The End of Retail

Change is inevitable. The retail catastrophe occurring now highlights this statement.

Global Portfolio Strategy 2020

The US expansion is long in the tooth. The investor needs only ask one question this year: how will
global growth continue?

The Productivity Gap

The story of growth is productivity. Doing more with less. Before one can do more with less, one must learn.

US Economic Outlook 2019

The economic environment in the US has a stable consumer and supportive
fiscal policy, which should carry the US economy for the year with government
expenditures supporting. The question is whether investment will rebound or is the decade long expansion ending?

US Economic Outlook 2018

The economic environment in the US continues to show a stable consumer, rebounding investment, and supportive fiscal policy. The lone detractor from growth is the continuing drag from net exports, but this is merely an accounting identity.

Accounting for Corporate Penions

The key to a successful defined benefit pension plan is managing risk. The pension plan is a significant employee benefit that supports retention and corporate culture in the long-term. The pension plan liability may represent a considerable proportion of the corporation's balance sheet and materially impact the income statement. Accounting for a defined benefit pension plan is notorious for its arcane regulations and the dual regimes of statutory and financial accounting. A few critical elements are crucial to managing the pension.

Yield Curve Modeling

The yield curve and interest rate levels are difficult to forecast in aggregate or individually. Forecasting accuracy is improved when focusing on the factors that describe the term structure and augmenting the models with a market or economic variable.

Manager Research

As much as it is difficult to foresee what technology will change the world a decade from now, it is equally tricky identifying top investment managers in advance. A few key ingredients distinguish an environment that permits success to grow when it arrives.

Equity Factor Models

Multi-factors models are a leading portfolio management tool due to the pioneering work of Fama and French (1992) who showed that more than a single factor explained US equity market returns.

Commodities in the Portfolio

Despite a rebound in growth after the Great Recession, an index of commodity prices now stands at the same level as it was in 1975. The natural question is to ask what the role of commodities is,
specifically a commodity total return index, in a diversified portfolio.

Pandemic Paths

The way forward is measured by the degree to which we will listen to scientists and consideration for our neighbors. In essence, we will live a social experiment in real-time with thousands of lives in the balance.

Economic Epidemic

The economic epidemic is delivering uncertainty to such an extent that the equity markets fell at an unparalleled speed. The economic decline may be greater than the Great Depression and unemployment may reach 30%.

Countering COVID19

The prognosis is grim. Millions of dead, overrun hospitals, and insufficient ICU beds for the seriously ill. These are the outcomes absent mitigation strategies to slow the spread of the virus until the development of an antiviral drug for treatment or a vaccine.

US Economic Outlook 2020

The US economy shows a stable consumer with monetary and fiscal policies providing support. While betting against the US consumer is for those with the strength of conviction, broad-based declines of import and investment suggest the demise of demand and a slump of supply.

US Economic Outlook - First Quarter 2020

That this time is different is without a doubt. The question is, how different? While the depth of the contraction may have a parallel with the Great Depression, the speed of the collapse of employment is unrivaled in US history.

Global Portfolio Strategy - First Quarter 2020

The speed of the equity market decline shares a common trait with the bull market that preceded it: they are both unprecedented in their length. The longest bull market gave way to the fastest crash in US history. Investing was infected with the economic calamity that results when whole segments of an economy close their doors.