We continue to be optimistic that earnings will validate market prices, suggesting equities will offer greater reward than bonds. Selected equities also have dividend yields above those available from investment-grade bonds. In many instances, these dividends are supported by growing earnings, raising the likelihood of their increase.
We remain vigilant in assessing near-term and longer-term risks, including U.S. austerity, resurfacing of Eurozone tensions, a Chinese economic slowdown, and oil prices/conflict in Iran. Market gains from here will be built on the back of these risks further receding and the maintenance of global economic growth. We have more confidence in the latt...
The effect of high oil prices on the financial markets is not clear, as there is evidence to support both a benign and more worrying view. In general, investors will start to discount a worse economic environment if we sustain significant future price increases, but the current level of global oil prices should not be a deal-killer for growth or ri...
Although a multitude of risks remain, including the unresolved situation in Europe, geopolitical risks from Iran, and fiscal austerity in developed nations around the globe, markets are enjoying the moment, allowing risk assets to flourish and volatility, at least as measured by the VIX index, to retrench to a seven-month low.
Equity valuations are at historically cheap levels given slowly recovering growth in developed markets, robust emerging market demand, global monetary easing, and signs of an improvement in corporate earnings prospects. We believe that this interesting combination of circumstances will underpin continuing buoyancy in equity markets, particularly in...
Over the last year, Perrybell Investments, Inc., the family office of the James Ford Bell family, has made cutting-edge changes in the structure of family office ownership. The resulting company, Family Financial Strategies, now contracts with the Bell family for comprehensive family office services and has also accepted a limited number of new fa...
Profile of the Brumley family.
India's private equity market offers opportunities for investors who are focused, patient, opportunistic and agile. Success requires being familiar both with the economy's internal currents and target companies as money is abundant but trust is harder to come by.
It is our view that inflation should be moderate over the near term. However, we recognize that portfolios of different investors have different sensitivities to sharp increases in inflation. To that end, the discussion here centers on methods to hedge unexpected inflation in those specific portfolios.
We believe one of the most important economic developments to monitor is whether the U.S. economy can wean itself off government stimulus before bond vigilantes take the matter into their own hands. In short, we are in the midst of a cyclical recovery that could be overshadowed at some point by the longer term structural challenges.
Allowing private debt to rise has been an easy short-term solution, but the countries of Western Europe, the United States and Japan now have to address the internal conflicts hidden by rising debt. Taking corrective action earlier would be easier while creditors are still friendly, but a broader financial crisis may be needed to spur such action.
Euro area countries need to coordinate their economic policies better to prevent macroeonomic imbalances. The proposed set of policy indicators would identify such imbalances and indicate action to be taken if thresholds are too high or low. But this system has structural problems related to timing, response and proactive planning.
Despite the natural volatility of the stock market, three themes unfolding over the next decade should benefit equity investors: innovation in technology, healthcare and energy; the rise of developing nations and their demand for consumer goods; and global expansion of trade in goods and services.
The ongoing trends of urbanization and wealth generation in Asia, and the investment opportunities these trends create, make Asia worth a serious look by investors. Increasing consumption trends are in their infancy and may last 10 to 20 more years.
Heightened market volatility is emerging as the new framework for investment decisions. Suggestions for succeeding in this environment include focusing on a dual-asset allocation approach, taking into account a greater number of worst-case scenarios, assessing liquidity and leverage carefully, and looking for volatility-related opportunities.