One thing that you can count on at the start of every new year is a fresh set of predictions from those of us in the investment business. Last year, one of the most widely discussed and accepted views for 2017 was that the dollar would continue to gain strength, as it had for the previous three years. Instead, our currency lost about 10 percent, widely defying the consensus views…. Read More
Longtime Daily Insights readers are no strangers to the Shiller PE-ratio, a valuation metric that uses ten years of inflation-adjusted earnings to evaluate the cheapness or richness of the stock market – a search of the term on our website yields more than a dozen results. I’m very proud to say that our understanding of the Shiller PE is now greatly expanded, thanks to our own Ryan Craft. In the past,… Read More
Almost a year ago, the yield on the 10-year US Treasury hit an all-time low, falling to 1.36 percent, just below the previous all-time low of 1.39 percent, set in 2012. After the yield on the 10-year bottomed last summer, the yield drifted slowly higher until the election when, boom, it shot dramatically higher overnight. Investors were optimistic that the Trump administration might bring faster economic growth through a combination of… Read More
One of the big concerns coming out of the financial crisis was runaway inflation. Central banks around the world were buying bonds on a massive scale, which is effectively equal to printing money. In 2010, a group of highly respected economists and investors, including Cliff Asness, Richard Bove, Niall Ferguson, James Grant and John Taylor, wrote an open letter to then Fed Chair Ben Bernanke, arguing against more quantitative easing… Read More
Watching the bottom fall out for oil prices is really one of the most dramatic things that I’ve witnessed in several years. Thankfully, it hasn’t had too much direct impact on us because we don’t have straight exposure to commodities, click here for the details on why we’ve avoided commodities). Of course, we’re all affected by the price drop. The good news is easy to remember because I get a reminder every… Read More
In my judgment, the biggest stories of 2014 were falling interest rates and oil prices. I’ve written that most people expected interest rates to rise and no one expected a major drop in oil prices. The combination of those two things, plus the unexpected rise in the U.S. dollar (a big story, but not as big as the first two) means that inflation expectations have fallen dramatically in the U.S…. Read More
Last week, I wrote that REITs and TIPs are relatively pedestrian ‘alternatives’ because they are so commonly used. TIPS, which stands for Treasury Inflation Protected Security, are issued by the government – how could they be alternative? What could be more mainstream than a bond issued by the government? Back in August, I did a write up on REITs and they really are different from traditional stocks and bonds, and… 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: 2013 Bond Performance Review Economic Analysis – Taper Time ALM Model Year End Checkup
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: The Risk of Concentration Economic Update – We Want More, We Want More Unruly Interest Rates
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: The Role of Portfolio Construction Bond of the Day – Credit Securities Economic Update – The… Read More
