Most pension plans and other institutional investors with long-term liabilities are faced with an enormous mismatch between the return assumptions in their actuarial models and the combination of sky-high equity valuations and rock-bottom bond yields. Some have chosen to address their funding gaps by adding leverage to their portfolios
In an era of near zero interest rates, few investors have sufficient retirement savings to live off the income produced by a portfolio of low-risk bank deposits and Treasurys. Investors can strive to address this shortfall by reaching down the scale of fixed-income credit quality (to aptly named “junk” bonds) or through exposure to high volatility, high-yielding alternative asset classes.
In an era of near zero interest rates, few investors have sufficient retirement savings to live off the income produced by a portfolio of low-risk bank deposits and Treasurys. Investors can strive to address this shortfall by reaching down the scale of fixed-income credit quality (to aptly named “junk” bonds) or through exposure to high volatility, high-yielding alternative asset classes.
At the 73rd CFA Annual Conference, Aswath Damodaran, Professor of Finance at New York University’s Stern School of Business was asked for his thoughts...
While May’s Retail Sales Report showed a historic rebound versus historic plunges in March and April, we expect most economic data to normalize at lower levels and continue to stay volatile.
Key Points
• Stock markets often over-react, the truth mostly lives in the middle.
• We have likely begun the stagnation part of our economic reality.
•...
Joined by good friend Corey Hoffstein (Newfound Research), the team analyzed the aggressive recovery in stocks over the last few weeks and the apparent disconnect from the harsh broader economic reality.
Joined by good friend Corey Hoffstein (Newfound Research), the team analyzed the aggressive recovery in stocks over the last few weeks and the apparent disconnect from the harsh broader economic reality.
For months, investors have been scaling what feels like an endless wall of worry. Each concern that gets resolved seems to spawn new uncertainties, yet the market has continued its relentless climb higher.
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