Interest Rates are the Market’s New Boss

Interest rates are now more important than profits for stock performance, according to a recent article in The Wall Street Journal. “The first quarter was very good for U.S. companies, as a brew of corporate tax cuts, solid global economic growth and a weaker dollar pushed profits higher,” the article says, adding that while profits will be strong all year, the first quarter will likely be “as good as it gets.” But as growth slows,… Read More

Most Read Posts on Validea’s Guru Investor

Below are links to our most popular posts for this week on Validea’s Guru Investor blog. [1] How Long is Long Term in Investing? [2] Yardeni Says Inflation is Dead [3] Will Passive Investing Become an “Expensive Mistake?” [4] Stocks Aren’t Reflecting Improving Earnings ——- Photo: Copyright: arcady31 / 123RF Stock Photo  

How Long is Long Term in Investing?

By Justin J. Carbonneau (@jjcarbonneau) —  As investors, we are taught to try and think long term. The story goes something like this — invest in stocks, stay disciplined and patient and let your money compound over many years or even decades and you can growth your wealth. I strongly believe in that story, but the reality is for many investors the definition of “long-term” becomes too narrow and time focused. When thinking about long… Read More

Chinese Stock Market a Step Closer to Global Community

A recent Bloomberg article says, “China’s stock market is about to go global like never before,” reporting that on June 1st MSCI, Inc. added more than 200 locally-listed Chinese companies to the benchmark equity gauges that guide its investment activities. “While foreign investors still have concerns about everything from China’s debt risk to state intervention and capital controls, many are keen to increase their exposure to a $13 trillion economy that’s growing twice as fast… Read More

Institutional Investor’s Rich List

In May, Institutional Investor published its “Rich List” of the world’s 25 highest-earning hedge funds– which, it reports, earned a total of $15.38 billion (approximately $615 million each). In order to make the list, a firm had to earn at least $225 million (compared to $130 million in 2016). “This is an increase of nearly 40 percent from 2016,” the article says, “a year when the top 25 collectively earned the lowest amount since 2008.”… Read More

Stocks Aren’t Reflecting Improving Earnings

An article in Bloomberg addresses the question as to why “impressive corporate earnings results nor the synchronized pickup in global growth nor record levels of stock buybacks by companies has led to impressive gains in stocks.” According to the article, written by Allianz chief economic adviser Mohamed El-Erian, among the various potential reasons for this “decoupling,” there are three that “have an important implication for what likely lies ahead for investors”: “Positive developments are already… Read More

A New Generation of Hedge Funds

Ralph Arndt, CIO of Australia’s Future Fund, an A$166 billion ($125.3 billion) sovereign wealth fund, sees hedge fund investment as a “necessary tool to help reduce risk while providing uncorrelated returns,” according to a recent article in Chief Investment Officer. Arndt has so much faith in his strategy, the article reports, that he has more than 15% of the portfolio in hedge funds, exposure which he says serves to reduce risk, “and in particular to… Read More

Will Passive Investing Become an “Expensive Mistake?”

A recent article in Advisors Perspectives shares an interview with fund managers Matthew McLennan and Kimball Brooker, Jr. of First Eagle’s Global fund, which holds over $55 billion in assets. Here are some highlights: Regarding their investment philosophy, the managers say that they focus on two key criteria when evaluating purchase opportunities—price, and the durability of the company they’re looking at. The managers don’t have a strategic allocation to cash, but rather allow cash balances… Read More

Private Equity is Losing Its Appeal, But You’re Already Invested

“Even if you’ve never talked to a fund manager, or don’t have any idea what a leveraged buyout is, your financial future still depends on this enigmatic world of finance, full of risks and promises usually reserved for wealthy investors.” This according to a recent article in the Boston Globe. The article points out that major pension funds have billions invested in private equity and that, even if you’re not in line for a state… Read More

Is the Bull Market Tired?

A recent Bloomberg article claims that individual investors are making professional traders “nervous” this year. “Small investors’ recent interest in stock picking stands in contrast to the long-term trend in a bull market that’s more than nine years old,” the article says, adding that professional traders are “trying to make sense of a market that’s psychologically edgy.” Among traders, it explains, the adage to “buy the dip” has flipped into using any rise in the… Read More