Fasten Your Greek Belts Christel Aranda-Hassel et al., Credit Suisse, February 2, 2015 The rise of Syriza in Greece has turned the market’s attention once again to the possibility of the country leaving the Eurozone. The European economics team at Credit Suisse contends that it is in the best interest of both Greece and Europe…
Better earnings growth and attractive relative valuations support a slight overweight to Japanese equities versus US equivalents The multi-faceted nature of the Japanese earnings recovery has made Japanese equities more attractive. Further, structural reforms in Japan have been more successful than many thought would be the case early last year, and prospects for further success…
The European Central Bank’s (ECB’s) recently announced QE package—wherein the bank will buy €60 billion of public and private securities a month through at least September 2016—was widely anticipated, and as such much of the impact on markets had transpired long before Thursday. While the announcement does represent a watershed moment given the ECB is…
VantagePoint is a quarterly publication from our Chief Investment Strategist summarizing C|A’s total portfolio advice. Advice in Brief We have been recommending since the middle of last year that investors shift more capital into safer assets—more fundamentally driven hedge funds and Treasuries—as equity markets become more expensive, even as we remain neutral on equities on…
Not yet. Commodity prices have indeed tumbled this year, with crude oil falling by one-third while prices of copper, corn, and other key commodities also declined. And while as value investors we typically look to increase exposure to an asset as prices fall, in this case it is useful to review the broader picture, including…
2014 has been a perplexing year for many investors and 2015 may prove no less vexing. Weighing the macro, micro, and “known unknowns,” portfolios may struggle to generate returns next year comparable to those in 2013 or perhaps even those seen this year. In this piece we briefly review the year nearly past and then…
Despite the ongoing efforts of central banks to debase their currencies through increasing their monetary bases and some outright calls for devaluations, consumer prices remain weak across much of the developed world, and many market observers have begun to focus on the too-real possibility of the global economy falling into a deflation “trap.” Deflation now…
No Fear of Commitment: The Role of High-Conviction Active Management Laurence B. Siegel and Matthew H. Scanlan, The Journal of Investing, Fall 2014 When constructing a portfolio of managers, investors should consider including high-conviction, or concentrated, managers. Including high-conviction managers can generate alpha and help to achieve a high information ratio at the portfolio level….
Investors should be prepared for increasing stress in China that will impact global markets and create opportunities There are several valid reasons why China may avoid a financial crisis or hard landing given the unique characteristics of the Chinese economy. However, investors should not be complacent. Our view is that the Chinese economy will slow…
Investors today should consider holding cash—or preferably, increase sovereign bond allocations—given the extraordinary number and scope of current unknowns Current valuations, the role of central banks, a murky outlook for many global economies, and increasing geopolitical flashpoints add to uncertainty in the current environment. Holding some cash as dry powder to buy assets when they…