This analysis considers investor psychology within the larger tapestry of economic stress points and equity valuations. Although investor sentiment has sobered over the last year, it has not approached the level of despair or pessimism that typically signals capitulation at market bottoms. Optimists cite several macroeconomic indicators as reasons for their continued confidence, while pessimists…
Over the last five years, investment in technology grew at an average annual rate of 25% in real terms, accounting for anywhere from 20% to 33% of total economic growth. Having over-invested during the expansion’s heady years, corporations are in the uncomfortable process of digesting excesses. If the virtuous cycle indeed turns vicious, the slowdown…
The persistent disparity among valuations across different sectors indicates the likelihood that high P/E stocks will continue to disappoint; while overlooked issues at the other end of the valuation spectrum should outperform. The proportion of lofty P/E stocks within the overall market is gradually shrinking. Despite value’s trouncing of growth last year, we suspect this…
This report focuses on TIPS` behavior during severe economic contraction, evaluating whether a portfolio composed of equities and TIPS will weather a prolonged economic contraction as effectively as a more conventional portfolio composed of equities and nominal bonds. The report provides a supplement to our previous research report on TIPS.
An introduction to U.S. TIPS, their performance and correlations to other assets classes, as well as the various rationales for a TIPS allocation and investing strategies.
Investors index to achieve portfolio diversification at the lowest possible cost, but abandon any chance of outperforming the chosen benchmark. In contrast, active investors pay higher fees and incur the risk of underperforming the benchmark because they believe their managers will add value over time. With lower fees than active management, close benchmark tracking, but…
This guide to indexing addresses methods (replication, sampling, optimization), benchmarks, transactions costs, fees, and client servicing.
This report analyzes diversified growth/value active manager structures and their underperformance relative to common benchmarks.
A summary of manager selection and evaluation.