U.S. TIPS Look Before You Leap
With real yields of just 1.6%, ten-year U.S. TIPS are currently an expensive inflation hedge.
With real yields of just 1.6%, ten-year U.S. TIPS are currently an expensive inflation hedge.
With valuations more concentrated, style and market cap should be weaker drivers of return.
The financial sector contributed 30%–40% of S&P 500 earnings in 2002–04, but odds are against this trend continuing.
While the latest rally has been far more explosive than others since the onset of the bear market in 2000, from an historical perspective it is rather pedestrian.
This paper provides a framework for assessing nonpublic defined benefit pension plans by examining the key characteristics of pension liabilities, various risks to consider during the asset allocation process, and risk immunization. Exhibits cover pension fund performance, liquidity constraints, liability duration, and a comparison of asset allocation differences between pensions and endowments.
In the fall of 2002, a confluence of factors supported greater risk taking. Today, the same factors suggest that investors focus on risk reduction and diversification.
Is the bear market over? Not likely.
There is no simple explanation for mid caps’ recent outperformance.
The S&P 500, while not exorbitantly expensive as in 2000, remains pricey nonetheless.
With corporations awash in cash, investors should expect (and demand) higher dividends.