We have expressed our concerns with the bond markets, specifically the negative rates being experienced around the globe as central banks attempt to boost economic activity through low rates. These actions have taken a toll on the increasing number of retirees that had depended on the income from their savings as they have seen the “riskless” government bonds go from 5%+ to less than 1%. It also, from our perspective, has not accomplished the goal of increased economic investment and the recovery to pre-2008 global economic growth. And in recent weeks, we have heard an increasing number of
Is Minimum Volatility Investing becoming more risky?
With the dramatic market losses of the Global Financial Crisis still so fresh in investors’ minds and because of the length of the market’s upward movement since then, investors have felt a growing desire to protect assets. This sentiment has been prominent in the fixed income market, and we believe we are seeing similar signs in the equity markets. Pricing within the market can have a profound significance at times, and, as a result of this trend, we believe something meaningful is happening in the pricing of “safer” assets, also
Auour Investments and Riskalyze Partner to bring Risk Number® to the Instinct Family of Downside Protection Strategies
Auour Investments, an investment firm focused on downside protection through risk regime detection, and Riskalyze, a platform that enables advisers to capture a quantitative measurement of client risk tolerance, have formalized a partnership to bring Auour Investment’s Instinct family of ETF-based downside protection strategies to the Riskalyze community. Through this combined effort, both firms aim to broaden the reach of core portfolio protection strategies that reduce the overall drag to portfolio performance. The five core portfolios that compose the Auour Instinct family are now available through the Riskalyze platform.
Auour Investments is a pioneer in the regime-based investing space,
On Thursday, Britain held a referendum to decide whether or not to leave the European Union. Leave won with 52% of the vote, while Remain lost with 48%. This referendum will likely result in the United Kingdom’s institution of Article 50, which would begin a withdrawal from the European Union. We have provided some information below to help you put Brexit into context:
The UK has been in the EU for 43 years.
Britain, and especially London, has served as the financial center for the European continent.
S&P gave the UK a AAA credit rating prior to the vote.
Britain is a net importer
Historically, many countries have centralized their economies in an effort to improve productivity, raise living standards, and increase economic growth. In reality, the opposite has often occurred, resulting in stagnant economies and falling standards of living. Conversely, history demonstrates that creating increasingly open and fair markets activates economic potential that lay dormant under more authoritarian regimes.
This concept is particularly relevant currently, as we witness harm to the majority as a result of the hubris of the minority. Nowhere is this more evident than in the actions of central bankers across the world, US central bankers excluded
The lesson this month is that investment timing is important. Not just a little, but a lot. But let’s first start with an analogy. This past week a Toyota Tundra pickup barreled into our office space during work hours, laying waste to all contents. Thankfully, no employees were in the office at the time as we were all traveling on business. The driver also escaped without harm.
Of course, our first thoughts were thankfulness that no one was harmed. After that, it went to taking inventory of all that was lost. And then lastly, it went to writing about it as
Increased volatility and lower market prices have led commentators to wonder if this is a correction, the start of a major bear market, or just a bear (cub) market. However, with U.S. equity markets down in excess of 15% over a very short timeframe, discussing the names that characterize this period is only helpful for financial news “entertainers”. Investors care less about what this decline is called and more about how much they suffered during this uncertain and volatile time.
We have been positioned conservatively, holding substantial cash, through the second half of 2015 and the beginning of 2016. We also
Within the investment industry, there is an ongoing debate on passive versus active investing. Vanguard has been one of the more vocal participants at evaluating active managers and the consequences of stock-based investment strategies. Our own research into the matter confirms Vanguard’s hypothesis. Most managers that claim themselves to be active are not consistently adding value on top of the market’s natural return. Each year, we hear that this will be the year that active management wins, yet that seldom comes true.
This begs the question as to why?
A majority of the investment community attempts to add
Over the course of this year, concerns within global financial markets have been forming. Our past few newsletters have discussed the events resulting in us being conservative throughout the summer. Those concerns are not receding at this point, even as the equity markets have recovered. Therefore, we maintain a defensive position, looking for our concerns to pass and investment opportunities to present themselves.
Over the past month, we have witnessed the following events: the collapse of the Portuguese government threatening a timid recovery, the Catalonia region voting to separate from Spain resulting in their debt downgraded to junk status, an oil
“This is not a crisis, its turbulence.” – Fauzi Ichsan, Head of the Indonesia Deposit Insurance Corp
The time between our last newsletter and today feels like an eternity, yet is only 30 days. In that time, we have witnessed a dramatic increase in market volatility (a swift fall followed by a uneven rebuild in prices), mass emigration from Syria into Europe, the Federal Reserve holding firm on being loose, fringe political parties advance in global elections, and a Brady victory over NFL commissioner, Roger Goodell. It has not been the easiest of paths for summer to come to an end