How Should Investors Alter Portfolios Considering the War in Ukraine?
Thoughtfully, if at all. At this stage most investors should examine portfolio risks related to the war and monitor market developments.
Investment Planning
Is Bitcoin a Better Disaster Hedge Than Gold?
While bitcoin and gold share some qualities, these two assets are different and should not be viewed as interchangeable in investment portfolios.
US Inflation Tests New Heights but Should Ease in 2022
US consumer prices increased 7.0% year-over-year in December, which is the fastest annual rate since 1982, according to government data released today. We expect US inflation will moderate in the coming months, in line with consensus forecasts, but we anticipate it will settle in a higher range than the previous cycle.
Inflation Pressures Central Banks to Begin Normalizing Policies
This week, the Federal Reserve, the Bank of England, and to a lesser extent the European Central Bank all acted to tighten monetary policies. These tightenings came as inflationary pressures have surged in many countries and as other central banks have looked to rein in simulative policies. But, when combined with above-trend growth expectations next year and central banks’ likely cautious tightening approach, we suspect financial conditions will likely remain accommodative and supportive of risk assets.
Does the New German Government Herald a Return to Fiscal Austerity for Europe?
No. While there is no danger of the fiscal floodgates opening in Europe, the ‘traffic-light’ coalition of the Social Democratic Party (SPD), the Greens, and the Free Democratic Party (FDP) looks set to oversee some loosening of the fiscal purse strings in Germany.
Overestimating Liquidity Needs Can Undercut the Return Potential of US Pension Plans
Many defined benefit plans sponsors may be denying themselves valuable opportunities to generate additional returns by overestimating their liquidity needs. Targeting a liquidity supply/demand ratio of 2x–3x can help portfolios tolerate periods of market stress.
The Rise in Inflation: A Look at the Dynamics at Play
This chartbook reviews the dynamics at play and includes global commentary on the recent inflation rate spike.
Is the United States Likely to Enter a Period of Stagflation?
No. While inflation could continue to run hotter than central banks expect, the US employment situation is improving, and economic growth is unlikely to stagnate.
VantagePoint: China – Reassessing Risks and Opportunities
As the second largest economy in the world, China remains an important destination for global investor capital. Yet, the pace and scope of China’s regulatory crackdown are causing concern. In this edition of VantagePoint, we review the nature of regulatory developments and their impact on the investment opportunity set. We believe that dedicated, strategic allocations to Chinese assets are still warranted. Investors should carefully consider their sector exposure and evaluate managers’ capabilities in the current regulatory and geopolitical environment.
Research Digest: Infrastructure Economics
With a large influx in infrastructure investment seemingly around the corner in the United States, the third quarter 2021 edition of Research Digest features three papers on the economic effects of public infrastructure.