We hosted Brad Kotler of SSGA to discuss the mechanics underlying fixed income ETFs. As the AUM within these ETF’s now is over $1 trillion, more people are concerned about their impact on the credit markets. We discuss how ETFs are created and redeemed and the role they play within the changing fixed income market.
Liquidity—the growing scarcity of it right now—is something that has bothered us for a while. It’s getting harder to turn an asset into cash. Higher liquidity implies the ability to sell quickly at a price similar to recent pricing. One way of thinking about liquidity is to consider the difference in the liquidity of a house (not very liquid) versus publicly-traded equity (typically very liquid). You can often measure in months, or even years, the time from the moment of the first action to sell a house to the point where the proceeds of the sale are in your bank
Wins above replacement (WAR) is a baseball metric that describes a player’s value in terms of how many more wins he brought to his team than a replacement-level player at his position would have. It is a measure of the effectiveness of an individual within the team and a statistical attempt to quantify if he is worth what he is being paid. Ranking players by WAR might seem harsh, but a company’s resources are finite; it has to deploy its capital strategically and responsibly.
The same can be said for selecting suppliers and partners. Replacement of a supplier may not be
The global equity markets provide the closest thing we have to a free lunch. With little effort, they provide individuals with the means of growing their money over time and above the rate of inflation, thereby providing a savings method that not only preserves purchasing power but increases it.
However, your mom was right when she said there is no such thing as a free lunch. The cost of achieving the markets’ potential is suffering through its volatility. All publicly traded investments likely will gyrate around the eventual trend of progress they can produce. Some of those gyrations will be large
Boston, MA—February 26, 2019— Auour Investments has been awarded a Top Guns designation by Informa Investment Solutions’ PSN manager database, North America’s longest-running database of investment managers. Four of the firm’s investments strategies were recognized for their 1 or 3-year performance for the period ending December 31, 2018.
“We are pleased, once again, to be recognized for our performance. Our processes became more defensive at the beginning of 2018 and continued to signal a period of heightened uncertainty throughout the year” stated Joseph Hosler, managing principal of Auour. The firm focuses on delivering ETF-based investment strategies that target full participation in
After a very dismal December (one of the worst market declines in history) and a powerful rebound in January (one of the best months in history), February has been relatively calm. But before you get giddy, we are not convinced the storm has completely passed. As we wrote in our 2019 Outlook, this will be a time for patience. As the drawdown chart below shows, we have not even recovered from our last de-risking event in late November.
We wrote in a recent newsletter (Binary Options, Non-binary Outcomes) that the dire headlines concerning Brexit, U.S.-China trade disputes, and U.S. government shutdown
“The art of simplicity is a puzzle of complexity.”
The Quarter in Review
The fourth quarter ended in rough shape with major equity markets around the globe experiencing one of the worst ends to a calendar year. Equity markets peaked in September when many hoped the U.S. growth engine would be able to lessen the pain from international uncertainty. Unfortunately, that did not last as trade concerns grew and international economic reading deteriorated. U.S. growth companies were particularly hit hard. With their high exposure to international markets and being some of the biggest beneficiaries of global trade, market participants decided that
In their book The Fourth Turning, William Strauss and Neil Howe argue that American history has moved in cycles that last roughly as long as a human lifetime, within which are four distinct two-decade eras, or turnings. They say that although we think our time is unique, the way people feel today—or at any time—echo the feelings and attitudes and behaviors of past times. Mark Twain’s quote “History doesn’t repeat itself, but it often rhymes,” is a good summation.
These four turnings are like seasons. The first is spring, the birth of a new order, followed by
October was quite a month for world markets, with many hoping November would be different. Though investors left the trough quickly for the second time this year, October’s losses felt different than February’s. February’s seemed merely ‘technical.’ October’s seemed more fundamental. The immediate context for February’s market losses were 13 months of positive returns, an optimism that the world economy was in a synchronized growth profile, and the reassuring sense that the impact of the new U.S. tax laws were still ahead of us.
The October selloff was different: World economies outside the U.S. are experiencing a material slowdown. China is