What Should Individual Investors Do Now That the US Tax Bill Has Passed?
The new US tax bill creates little pressure for immediate action by individual investors, even though we expect the legislation to be quite impactful.
Investment Planning
What Should Investors Expect in 2018?
Investors should expect more of the same in 2018, as many of the factors that drove risk assets higher this year remain in force. Still, 2017’s returns will be difficult to top for many asset classes, and investors should keep a wary eye out for unexpected inflation and geopolitical risks.
Outlook 2018: Stick Around for Dessert
In our 2018 outlook, we review the prospects for several asset classes—developed and emerging markets equities, credit, real assets, sovereign bonds, and currencies—and share the advice of our chief investment strategist.
Investment Publications Highlights: November 2017
November’s edition summarizes two articles related to asset allocation. The first article examines the trade-off between maximizing long-term portfolio value and guarding against short-term drawdowns; the second considers how best to allocate to well-known factors.
Investment Publications Highlights: October 2017
October’s publication summarizes three articles related to the Federal Reserve. The first argues that the Fed’s decision to reduce the size of its balance sheet will have a limited impact on global government bond yields; the second argues global liquidity will remain abundant in the next few years, despite the Fed’s tightening; and the third discusses mysteries that remain from the unprecedented era of quantitative easing.
Should Investors Position Themselves for US Tax Reform?
We would not seek to position portfolios specifically for tax reform as markets have already priced in some improvement in earnings from tax cuts, and the winners and losers from the proposed tax changes will not be clear until more details are provided. Global cyclical and value stocks offer better risk/reward prospects as they should benefit if tax reforms are passed, but are not reliant on such an outcome.
VantagePoint: Fourth Quarter 2017
This quarter’s edition covers key risks to continued economic expansion, including monetary policy and inflation expectations. Also discussed are whether investors are being compensated for taking risk and different strategies for geopolitical risks.
A Balancing Act: Strategies for Financial Executives in Managing Pension Risk
As pressures on pensions mount, we believe financial executives are best served by re-evaluating major decisions in terms of the true tools at their disposal. In this paper we review four levers that are fundamental drivers of pension costs and outcomes: asset returns, liability hedging, contribution policy, and benefit management. Balancing these levers is critical to enabling greater probability of success in managing pension risk, and we introduce a framework for chief financial officers and other financial executives to use in doing so.
How Far Will Rates Rise? Revisited
Three years ago, we concluded that benchmark ten-year Treasury yields would top out in a 3.5%–4.0% range in the next monetary tightening cycle. Now that the next rate hike cycle is well underway, we revisit our analysis, finding that our original assessment remains the most probable conclusion. In fact, the low end of that ceiling appears the more likely outcome today, with one important caveat: the potential for an inflationary dynamic that surprises.
Investment Publications Highlights: September 2017
September’s publication summarizes three articles related to market sentiment. The first highlights how news articles can be used to predict future market returns; the second argues that when sentiment across markets becomes more correlated future returns are likely to be more correlated as well; and the third argues that sentiment is an integral part of asset pricing.