The financial and economic crisis continues to create a broad and deep range of investment opportunities, many of which remain attractively valued, even after taking the recent rally into account. Given the risk that cheap assets will end up worthless, we emphasize the importance of careful manager selection across the board. Further, we caution that…
In March 2009 a group of U.S. colleges and universities were invited to participate in a brief survey on spending policy as an update to a similar survey that was conducted in 2008. The survey asked about the policies in place, as well changes that were being implemented or were under consideration for future implementation….
During prolonged bear markets, investors naturally focus on how best to allocate portfolio assets to ensure they are not wholly exposed to the full brunt of declining equity prices. However, as the economy deteriorates and the financial sector in particular suffers declining revenue and job losses, investors should also consider whether they have increased exposure…
This report on asset allocation in the current environment is the fifth in what has evolved into a series of occasional papers on the evolution of the secular bear market in equities and our thoughts on how investors can best cope with the prevailing uncertainties. While recognizing that conditions could certainly remain benign for some…
Valuations remain compressed, making identification of relatively attractive opportunities hard to find.
Consensus earnings expectations seem too high considering the strong market headwinds and advanced nature of the earnings cycle, while valuations remain elevated.
While there is some cause for cautious optimism on earnings, earnings growth is cyclically stretched and more likely to decrease than continue to rise. Consensus expectations for profit margins and earnings expectations set a high bogey.
Normalized P/E ratios that adjust for earnings cyclicality suggest that these markets are quite a bit more expensive than do standard P/E metrics.
U.K. charities that must operate under income-only spending policies should actively monitor and manage the potential biases a high dividend yield strategy may introduce.
Valuations remain reasonable and upside potential outweighs downside risks.