Interest rates are higher and once again it has a lot of investors paying attention to the interest rate risk in their portfolio. Since the Ten-year yield dropped to 2% at the depth of the financial crisis we have had multiple periods of volatility in the bond market when rates rose only to fall back down or in some cases go even lower. Each time the reason was a little… Read More
This month’s ALM Insights is a return to one of my favorite topics, bond market liquidity. In the September 2013 issue I wrote Liquidity as a Risk Factor – which highlighted the impact that liquidity can have on expected return. I wrote on liquidity again in the June 2015 issue in Is Bond Market Liquidity Gone? – where I looked into how market liquidity can change over time. Well the… Read More
When looking at the shape of the yield curve it’s easy to see that a lot has changed. Low yields overall have certainly pinched bond investors and made them look elsewhere for returns, but not all investors are so flexible. For banks who are restricted in terms of the investments that they are allowed to hold, the decision of where in the bond market to invest is an important one… Read More
It’s the second to last day here in Montreal and there is a recurring subject that I have noticed popping up in many of the sessions here at the conference – Behavioral Biases. In the investing world this refers to the psychology behind investor behavior and the effect that widespread decision making can have on markets. As an investor it’s important to understand them because they really do matter. First,… Read More
Today I attended a session on Contrarian Value Investing. During the speakers prepared remarks I began to think about whether our investment philosophy here at Acropolis could be characterized as contrarian. It’s easy to say that we are value investors. We have value biases in many of our stock asset classes, and by a slightly different definition we invest fixed income dollars with a value bias too. But are we… Read More
I suppose that the event planners at the CFA Institute know better than to cram too much technical material into the first day of a conference, especially on a Sunday. For one of the first sessions they invited Jeremy Hunter, a professor at the Peter F. Drucker Graduate School of Management and expert in the field of applying mindfulness meditation in business. Jeremy has spent the last 3-years developing a mindfulness… Read More
We at Acropolis spend a lot of time writing about what is going on inside the Federal Open Market Committee (the FOMC is the group within the Federal Reserve in charge of setting monetary policy for the central bank). Considering the amount of attention given to the FOMC in the media and investment industry, one might think the impact of the committee on financial markets is enormous. The committee meets… Read More
ALM Insights is focused on banks and other institutions that use their portfolio to manage risk on both sides of their balance sheet. It takes an in-depth look at securities investment strategies, balance sheet and asset/liability strategies, regulatory topics and general economic information. To view this issue, click the image below. In This Issue: We Have Liftoff! But I Thought Rates Went Up? Is The Canary Still Singing?
Yesterday was Veterans Day. A Federal holiday in the US where we honor those who have served in our country’s military during wartime and peacetime. But it also makes for something a bit strange in the financial markets. If Veterans Day falls on a weekday, the stock market is open while the bond market is closed. Because we are sensitive to transaction costs and realizing capital gains in our client’s… Read More
ALM Insights is focused on banks and other institutions that use their portfolio to manage risk on both sides of their balance sheet. It takes an in-depth look at securities investment strategies, balance sheet and asset/liability strategies, regulatory topics and general economic information. To view this issue, click the image below. In This Issue: Janet Blinked What if You Called Them Market Perfectly? Part II Another Debt Crisis?