On this week’s podcast (recorded August 11, 2014):
What we like: Fair amount of correction in the equity markets around the world; small correction also in U.S.
What we don’t like: U.S. stock market will likely correct closer to their 10% before the Fed finishes bond-buying program in October
What we’re doing about it: Hedging more during seasonally-weak time period; mindful of midterm elections
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The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.
On this week’s podcast (recorded July 23, 2014), we alter the format to provide commentary on a recent publication from the Ned Davis Research Group.
The article references an old adage that when the public gets in the stock market, it’s too late. While that’s a bit cynical, the public is not always wrong. Recently, the bond market seems to show that over the past five years, the public is pretty smart. Here are some additional takeaways:
The allocation to stocks is on the high side, but not excessive
Cash allocation seems low
Flows into equities and bonds have been good
This, and other measures, lends itself to believe that the public is in (the market), but not excessively in. However, are they in because they want to be in or because the have to be in? The Fed’s zero interest rate policy seems to drive behavior of investors towards stocks–creating a feeling that the public is not in.
The takeaway is that we have to be mindful if the allocations get too big. A defense for that is diversification across different asset classes.
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The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.
On this week’s podcast (recorded July 16, 2014) the subject matter pertains to the Congressional Budget Office’s release of their long-term outlook. It’s important to note that this forecast is a 75-year time horizon; so focus should be on the near-term debate in Washington:
What we like: Raised the long-term growth rate of the economy; lowered healthcare costs and interest rate costs which is a positive in the near term
What we don’t like: Healthcare and interest rate costs in the long term; interest rates likely to rise eventually; Social Security likely to rise in the near future; defense spending cutbacks
What we are doing about it: As citizens, being thoughtful when exercising the right to vote; keeping an eye on higher interest rates and impact on fixed income
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Source: CNBC
The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.
On this week’s podcast (recorded June 30, 2014), Bill addresses some of the things we don’t like first, then gives greater insight into what we are doing about it:
What we don’t like: Interest rates are stubbornly low; expectations were that they would rise over the first-half of the year; low interest rates hurt retirees ability to generate income
What we like: How we are handling this financial repression
What we are doing about it: Emphasizing three themes in fixed income: yield, shorter maturity bonds, and inclusion of absolute return
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The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.
What we like: A string of good economic news; earnings season looks strong; expectations rising; Fed tapering showing that they are being reasonable about their exit
What we don’t like: Fed seems to be ignoring the increased inflation
What we are doing about it: Emphasis on real assets; watchful of a summer correction.
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The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.
On this week’s podcast (recorded June 5, 2014): Bill reacts to the long-awaited policy change announcement from Mario Draghi, president of the European Central Bank.
What we like: Announcement met or exceeded expectations; lower interest rates; bank lending stimulated; a wide variety of positives overall
What we don’t like: Didn’t deliver the “helicopter”; fell short of establishing a program to buy securities, similar to quantitative easing
What we are doing about it: Leaning towards a more bullish posture in Europe; looking at emerging market companies that would benefit from the lower interest rates
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The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.
On this week’s podcast (recorded May 22, 2014), Bill gives a review on the controversial book, Capital in the Twenty-First Century by Thomas Piketty:
What we like: Emphasis on returns to capital (savings); savers will continue to be rewarded.
What we don’t like: Modern-socialistic state belief using high tax rates in order to deal with societal inequalities.
What we are doing about it: We encourage opening savings accounts for children and grandchildren; fund 401(k)s to the max; watching if some of the societal inequalities as outlined by Piketty are dealt with sooner than later.
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The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.
What we like: Bob Doll’s comments on favoring the economy more than the stock market; positive economic data post-winter
What we don’t like: Stock market no longer a bargain, now more fully valued
What we are doing about it: Focus more on larger themes and individual active managers; looking out for potential rise in interest rates during summer
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The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.
The sentiments below were inspired by Dalbar’s 20th annual investor behavior analysis. You can read a summary of the study here, via ThinkAdvisor.
What we don’t like: Investors have underperformed the markets, often due to fear and poor timing
What we like: Potential market correction during the summer; important for investors to heed the advice of their advisors and stick to investment objectives
What we are doing about it: Focus on the positives like energy renaissance, manufacturing renaissance, and goals-based solutions
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Source: Dalbar, ThinkAdvisor
The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.
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What we like: Strong stock market last year with $5.6 trillion added to shareholder wealth
What we don’t like: Blowout tax-collection season as a result of this wealth creation; tax burden reaching into the middle class demographic
What we are doing about it: Expect more demand for municipals
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Source: Strategas Research Partners, Policy Outlook, April 16, 2014
The views expressed are those of Brinker Capital and are not inteded as investment advice or recommendation. For informational purposes only. Holdings are subject to change.
Bill Miller, Chief Investment Officer
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