View of the Day

What ‘late cycle’ means for investors

Pundits have been saying that we’re in the “late cycle” for five years or more but markets have raced away, continuing the bull market that has been taking place for the best part of a decade.

Thanksgiving 2019: will investors enjoy further returns?

November 28, 2019

The holiday season is typically a positive time of year for US markets. However, there are reasons to be cautious. What can investors expect from US markets and the economy as we move into 2020? Here are several viewpoints.

The flaw in ‘value’ index funds

Value index funds have a fundamental flaw.

This flaw is not in the principles of “value investing”. Those are sound, and trace back to at least 1934, when two of the first value investors, Benjamin Graham and David Dodd, wrote that investors should “be concerned with the intrinsic value of the security [stock] and…discrepancies between the intrinsic value and the market price”.

Is this another tech bubble?

The chart below frightens people: after such sustained performance, is the tech sector about to collapse? I am regularly asked “Aren’t we in another tech bubble?”

Seven years of Abenomics: where next?

Seven years ago, Shinzō Abe assumed leadership of a country burdened by stagnant economic growth, unfavourable population dynamics and a mountain of debt. He adopted a “three arrows” approach – dubbed Abenomics – to counter these trends, centred on loose monetary policy, fiscal stimulus, and structural reform.

Why the ‘natural income approach’ pays dividends

A natural and intended consequence of quantitative easing following the global financial crisis has been the reflation of asset prices. Trough to peak, the global equity market has climbed 210% and the S&P 500 has risen by an extraordinary 350%.  

How far will the monetary boost go?

The central banks of the world are keen to boost economies. Many are using the scope of falling US interest rates to do something similar themselves. Some are worried about the lack of money in the markets, and are taking action to boost liquidity. Some are concerned about a low rate of new borrowing reflecting poor rates of capital investment. They are making more money available on easier terms for lending.