16 Jul 2018

What’s Your China Exposure Amid the Trade Skirmish?

One of the interesting things about the current trade skirmish (I’m not willing to call it a war yet), is that we are fighting on multiple fronts. Even though we have tariffs on aluminum and steel from Canada, Mexico, and the European Union, we all know that the primary combatant in this altercation is China. Even more interesting, perhaps, is that we have more exposure to China than ever before,… Read More

18 Jun 2018

What Happened to International Stocks?

As we approach the halfway point of 2018, some things are looking very different from last year. Although it has been a bumpier ride compared to last year, US stocks are on track to have another good year as the S&P 500 is up more than 4.5 percent and the Russell 2000 Index is up more than 10 percent. But unlike last year, international stocks have effectively been flat, flipping… Read More

26 Jun 2017

Buying China

Quick – name the country with the second largest stock market in the world! Obviously, we know that the US has the largest stock market in the world.  But did you guess Japan, Great Britain or France?  Those are good guesses since they are the three largest developed markets in the world. Maybe you guess China, which is the fourth largest market in the world as measured by the weight… Read More

23 Aug 2016

Allocating to Risky Assets

What’s the right allocation to a risky asset class like emerging markets stocks? Since the launch of the MSCI EAFE EM index that tracks emerging markets in 1988, the returns have outpaced the S&P 500 by 0.33 percent per year: 10.56 percent versus 10.23 percent.  (All data from Jan 1988 through Jun 2016). As you might expect, the extra return has come with extra risk: the emerging markets index has… Read More

19 Jul 2016

Turkey’s Failed Coup and Your Portfolio

Personally, I was a little surprised that stocks held up as well as they did yesterday after the failed coup in Turkey. Even though the political regime ultimately didn’t change, I thought that tanks rolling through the capitol would be enough to remind everyone that emerging markets (EM) are risky. Instead, the MSCI Emerging Markets index gained 0.26 percent and the two main ETFs that track EM stocks both gained 0.88 percent… Read More

15 Apr 2016

Yale Bets Big Overseas

One of my favorite reads of the year is from the Yale Investments Office, which manages their $25.6 billion endowment.  You can find the report by clicking here. Yale is routinely the best-performing endowment in the world and has earned a remarkable 13.9 percent return over the last 30 years – well above the 10.7 percent return for US stocks, 8.7 percent return for foreign stocks and 7.1 percent return… Read More

26 Oct 2015

Jack Bogle Doesn’t ‘Do” International Investing

Jack Bogle, the founder of Vanguard, is one of my heroes.  Earlier this year, there was a petition to award him the Presidential Medal of Freedom (that I asked you to sign) and he wasn’t even close to getting enough signatures for the President to consider the petition.  I was both surprised and disappointed. I’ve read several of his books and whenever I see him interviewed, I pay attention.  A… Read More

22 Apr 2015

A Real Greek Tragedy

We may not be happy with the slow and choppy recovery from the 2008 financial crisis, but I think we would all agree that we can thank our lucky stars that we aren’t suffering like the Greeks. The definition of an economic depression isn’t precise, but I think we can all agree that Greece is mired in a horrible depression: the economy is almost 30 percent smaller on an inflation… Read More

10 Apr 2015

To Hedge or Not to Hedge

For the most part, the returns associated with foreign stocks and bonds have two components: the return of the stock or bond and, secondly, the return of the foreign currency.  Over the past eight months, the impact of the exchange rate has been unusually high.   For example, a German investor that owns an index fund in the DAX is up 24.04 percent so far this year through yesterday.  For… Read More

24 Mar 2015

ALM Insights – March 2015

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: At Least We Aren’t Europe Bond of The Day – When Does 2% ≠ 2%? More Problems… Read More