Japan – The Long Road to Recovery
We continue to be neutral on Japan despite low valuations, as the catalyst for outperformance remains elusive.
Authored by: Aaron Costello
Into the Unknown
The current investment environment is one in which the range of possible outcomes, both positive and negative, remains wide. Investors need to be prepared for another volatile macro-driven year, as markets grapple with divergent pressures on growth and inflation stemming from the unknown effects of unconventional monetary policy.
Emerging Markets Equities: Still Cautious
Stretched valuations and macroeconomic uncertainty leave emerging markets equities vulnerable.
U.S. Dollar: The Cyclical Versus the Secular
Cyclical factors appear to be dollar supportive against other major developed markets currencies, while secular fundamentals argue for continued U.S. dollar weakness against emerging markets currencies.
Asia ex Japan Outlook: Grab the Tiger by the Tail
While Asian economies seem poised for faster economic growth than the developed world, these superior prospects are already incorporated into equity valuations, leaving Asian equities vulnerable to near-term disappointment.
Japan: Will the Sun Ever Rise?
Japanese equities are again oversold, unloved, and undervalued to the point where in the past the market has managed to post subsequent relative outperformance. However, it may be some months before Japanese equities decisively outperform, given the headwinds of a strong yen and uncertainty surrounding economic policy and the strength of the global economic recovery.
Now What?!
This is the eighth in what has evolved into a series of occasional papers, Asset Allocation in the Current Environment, on the evolution of the secular bear market in equities and our thoughts on how investors can best cope with the prevailing uncertainties.
S&P 500 Earnings: Gazing Across the Abyss
The collapse in S&P earnings over the past year and the range of future possible earnings estimates create high uncertainty around U.S. equity valuations.
The Trouble With Treasuries
With U.S. Treasury yields at their lowest levels in over 50 years, the effectiveness of Treasuries as a “deflation hedge” has been greatly diminished. While the current environment still demands that investors maintain deflation protection, investors should take advantage of the recent rally in Treasuries to rebalance allocations back to target and actively seek to…
Hard Choices for Hard Times
The macroeconomic outlook remains extremely challenging as the long overdue global rebalancing begins; investors need to make sure they are prepared for what may be a prolonged period of volatility and the possibility of new lows in asset markets.