Fed Tightens by 0.75% and Projects Softer Economy
The Federal Reserve announced that it was raising the target range for the Fed funds rate by 75 basis points to 1.50%–1.75% and made wholesale changes to its summary of economic projections.
Investment Planning
Are Global Corporate Earnings Expectations Too Lofty?
Yes, we think corporate earnings expectations are likely too high. This is because earnings are well above the long-term trend, and we expect inflation and higher policy rates will put downward pressure on profits margins.
While Great Entrepreneurs Leap, Great Investors Plan
As entrepreneurs know well, the process of creating and managing a successful business is complex and requires great skill, insight, and hard work. Successful management of significant wealth requires similar attributes; however, not all the characteristics fundamental to entrepreneurial success translate to effective portfolio management. This paper presents five recommendations for those looking to build an investment framework that can be as successful and personally rewarding as building a business.
Business Ownership at a Crossroads: Key Questions for Planning What’s Next
Private business owners who hold the majority of their wealth in one company are different from other investors. They face unique challenges when making investment decisions, including the fundamental question of whether to retain a concentrated position in their business. In this paper, we share some key questions business owners can ask themselves to help arrive at answers best suited to their own unique needs.
Would Adoption of Policies Like the Rooney Rule by Asset Allocators Encourage Greater Diversity Among Investment Managers?
No. Instead, we favor a comprehensive approach that addresses inequities throughout the manager selection process.
Keep Your Pencil Sharp on Your Active Value Exposures
The prospect of higher interest rates has contributed to recent equity market volatility and provided a wake-up call for investors underweight some traditional value sectors. What may surprise some investors is that even managers that style themselves as value-oriented may be underweight bellwether value sectors. Now is a good time to sharpen your pencil on value manager exposures.
What Long-Term Investment Implications Should Investors Be Monitoring Related to the War in Ukraine?
Investors should be patient and thoughtful in implementing any changes to portfolios.
Pension Risk Transfers Have Several Downside Risks for US Plan Sponsors
The Pension Risk Transfer (PRT) market has grown markedly over the past decade as recent regulatory changes, coupled with greater pricing competition from insurers, have increased the popularity of PRTs. However, for many plan sponsors, PRTs are not the best solution. Plan sponsors should fully understand the potential impact of a risk transfer transaction on their plan, specifically as it relates to three dimensions explored in this paper: funded status, risk reduction, and future costs. Without this understanding, the hidden cost of these transactions may go unnoticed.
Developed Markets Monetary Policy and Rates Outlook
Government bonds have sold off to start the year as central banks tighten policy in response to inflation pressures. The rise in yields this year may meet some resistance in the near-term, but likely has more room to run given the economic backdrop and policy trajectory. Of course, the war in Ukraine and its impact on the economy will be a key driver of rates for the duration of the conflict.
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.