Second-half 2021 outlook

The first half of 2021 has proven very favorable to financial markets. This was due to a convergence of three important factors: low interest rates  defendable valuation levels ongoing recovery from the covid crisis The first factor is likely to remain for a long period of time no matter the talk about increases in interest […]

Year in review

2015 proved a tough year for investors worldwide. All asset classes suffered declines with almost no place to hide. Bonds were affected by the expectation for the hike in US interest rates which the Fed finally announced on December 16. Equity in most developed markets were weak on the backdrop of both demanding valuations and […]

Negative Interest Rates Are Spreading Like The Zika Virus

We are opening this quarterly review with this recent quote from legendary bond investor Bill Gross as it addresses what is maybe the most critical financial issue of the time(1). While the first three months of 2016 have largely been characterized by a financial roller coaster in equity markets, commodities and oil we think that […]

Brexit time

To the surprise of most observers the Brexit happened. The most immediate impact has been a sharp drop of the British pound which lost 11%, an exceptionally brutal move. The impact on the stock markets has been very limited. European markets initially lost 6% and have recovered half of the loss while the S&P 500 […]

Health and the Election Year

In these last weeks leading to the US presidential election the actuality is dominated by the highly acrimonious and not unentertaining diatribes between the candidates. According to the polls a Clinton victory seems much likelier than a Trump win. However, as was recently shown by the Brexit vote, elections can always reserve surprises particularly considering […]

Living in a world of uncertainties

The November surprise happened! While the world has gotten used to it in the meantime, less than two months ago the prospect of a Trump presidency looked remote. This development was unexpected to most, both to political experts and to simple citizens, in America and abroad. The measure of the surprise is even clearer considering […]

Entering the roller-coaster

The period following the big financial crisis of 2008, has been characterized by an extreme, almost abnormal level of stability for a long period of eight years. Markets have risen steadily and most of the major global economies were able to avoid significant downturns. Central banks made this possible through their determination to support markets […]

Getting paid for illiquidity

If you follow financial matters and sometimes talk about this subject with others, one sentence you might have heard in the last 5-10 years was: “How can you make money when the interest in the bank is zero?” This resigned, cynical statement has surprisingly been quite widespread both among financial laymen and investment professionals. The […]

Staying awake at the helm

2017 ended up as another strong year in the decade long bull market. Almost all major asset classes produced excellent returns particularly the equity markets with the S&P 500 reaching a new all-time high. After so many years of strong performance and low volatility the challenge for many investors might be to stay awake at […]

Market Review, first-half of 2018

The first half of 2018 has been weak for virtually all asset classes except the particularly volatile commodity sector. In equities the S&P 500 was almost flat (+1.7%) and most other equity markets were flattish or down -3% to -5%.  In fixed income the iBoxx Corporate Investment Grade index was down 4.3%. We view this […]