The Pier 88 Investment Team is constructive on the convertible bond asset class given a historically high Sharpe ratio, competitive yield, positive correlation with interest rates, risk-reward profile, and a plethora of new issuances allowing for a diversified portfolio to express thematic views.
In a “market mania,” retail investors are generally “long confidence” and “short experience” as the bubble inflates. While we often believe each “time” is different, it rarely is. It is only the outcomes that are inevitably the same.
The markets took a tumble to start last week as rising interest rates and inflationary pressures begin to weigh on outlooks. Those worries quickly diminished as Jerome Powell changed the rules to reassure Wall Street that “QE” is here to stay.
As discussed in Friday’s #Macroview, stimulus, mainly when it comes from debt, does not create organic economic growth. In the second part of this analysis, we delve into why Powell is wrong when he says more stimulus will solve the employment problem.
2021 has certainly started off interesting. From Reddit readers chasing the most heavily shorted stocks, to the new administration discussing more stimulus, investors have had plenty to deal with. A market review seems appropriate as the bulls seem to remain bulletproof even as the mania grows.
2021 has certainly started off interesting. From Reddit readers chasing the most heavily shorted stocks, to the new administration discussing more stimulus, investors have had plenty to deal with. A market review seems appropriate as the bulls seem to remain bulletproof even as the mania grows.
The Fed recognizes their ongoing monetary interventions have created financial risks in terms of asset bubbles. They are also aware that most policy tools are likely ineffective at mitigating financial risks in the future. Such leaves them being dependent on expanding their balance sheet as their primary weapon.
After a challenging July that saw investors sell off high-flying technology stocks, buyers returned to the market in August, bidding up risk assets across the board.
Allocators add new exposures for a variety of reasons; diversification, returns, risk mitigation, etc. Understanding this, what is the most over-owned and expensive sector today?
After a red-hot June built on expectations that the Federal Reserve may succeed at killing inflation without killing the economy, July saw investors begin to question the soft-landing narrative.
It looks like a big margin call started in Japan. The Japanese Yen has become a funding currency in recent years, a source of cheap financing with the proceeds reinvested in better returning assets – such as US$ listed AI stocks.
Catalyst Funds
Rational Funds
Strategy Shares