Category Archives: Investing Money

Strange Machinations

InvestMy Comments:There is an old adage about stock prices being a function of earnings, earnings, earnings. It’s similar to the adage about real estate prices being a function of location, location and location. You and I know there are other variables, but how to identify and quantify those variables is another matter.

Perhaps you’ve noticed a lot of pricing volatility in the world these days. This means there is more uncertainty than usual about stock prices, about interest rates, and about which countries across the world should be included in your mix of investments. As a result, the perception of risk, both for the short term and the long term plays a role in what you do today and your expectations. It also matters what you mean when you say “short term” and “long term”. (I once knew someone who traded stock positions daily across the world based on currency values. For him, a “long term” position was about 3 days!)

by Scott Minerd, Guggenheim Partners on May 15, 2015

What to make of markets that are no longer on speaking terms with their fundamentals.

I can’t recall in my career where I had such an accurate forecast on the economy, and then was so surprised by the market’s reaction. Weeks before first-quarter U.S. gross domestic product (GDP) was announced, we were forecasting extremely weak economic growth—near zero or even negative for the quarter. Market consensus was 1 percent, so the shock of just 0.2 percent GDP growth should have driven rates down. Since 2010, GDP disappointments like this have led 10-year Treasury yields to fall by 5.5 basis points on average in the two days following the release. This time around, the opposite occurred—yields rose by double that, and continued to rise.

Many have speculated about what caused this selloff because it was so out of line with what one would expect following a surprisingly weak GDP print. I think the reason had more to do with what was happening in Europe than what was going on in the U.S. economy. European bond market volatility has been extreme. The yield on the German bund has gone from a low of 8 basis points on April 20 to around 70 this week, a move of over 800 percent (by the way, if you purchased a bund at the bottom in yields, it would hypothetically take 65 years’ worth of yield to erase such losses). Violent convulsions like these are not based on fundamental changes but relate to technical factors resulting from market distortions created by quantitative easing and macroprudential policy. Similarly, the backup in U.S. rates is likely a result of market machinations. Call it a volatility overflow from Europe.

Ultimately, all of this unusual market behavior should prove to be just noise. We are likely to continue down the road we’ve been on, with a flood of liquidity coming into the system as foreign investors pursue relatively attractive yields in the United States. The reality though is that Europe cannot abort its quantitative easing program early. In fact, I expect the European Central Bank will soon confirm that it will stay the course until September 2016 as it seeks to calm the nerves of the market.

For the moment, given the rise in interest rates that we’ve had, the market has discounted a fair amount of risk and has repriced for that. On balance, we’re better positioned today in terms of value than we were two or three weeks ago. The risk-on trade remains intact, despite recent market irrationality, and the sensible reaction is to remain long equities and credit.

In equities, the old adage “Sell in May and go away” usually has a high statistical significance of working. This year, it may not. Since 1980, the average U.S. equity return through this point in the year is nearly 5 percent. So far, however, performance has been sluggish, with the market up just 3 percent. This may mean there is headroom for stocks heading into the summer months. This view is reinforced by the fact that stocks have historically performed well in the period leading up to the first Federal Reserve rate hike. The S&P 500 has historically gained on average more than 9 percent in the five months prior to tightening by the Fed, which I continue to believe will commence in September.

Dog Days of the U.S. Expansion

moneyMy Comments: How is your money growing? Is it growing? Do you care? Are you prepared for pain when it stops growing and shrinks, perhaps dramatically?

As a professional in this world, I’ve long since given up worrying about this. All anyone can do is pay attention, or pay someone to pay attention for you. But it’s NOT different this time, and some of us will get hammered and some of us not so much. Here’s a clue to follow.

The Kentucky Derby marks the beginning of summer, but ultimately investors must prepare for the coming winter.

May 08, 2015 Commentary by Scott Minerd, Chairman of Investments and Global CIO

Ever since I was a child, the Kentucky Derby has always been for me a symbol of the changing of seasons—winter is over, spring is in air, and, most importantly, summer is right around the corner. Back in 2009, at the time of the annual “Run for the Roses,” I wrote a memo to our clients using this analogy to explain where we are in the business cycle. The ravages of winter were over, I wrote, and we were headed for the warmth of summer with bright prospects for investors. Six years later, the summer sun continues to shine on credit and equities, but the question I am consistently asked—especially during times of heightened volatility, like this past week—is how much longer can it last?

I answered this question recently at the Milken Institute Global Conference. If the economic “summer solstice” was mid-2009, then today we are somewhere in “late-August.” The expansion is now over 70 months old and is entering its mature phase, having already exceeded the average length of prior cycles of 57 months. However, “late-August” means there still is time left in summer and room left in this expansion. The past three cycles have also been longer than normal, averaging 94 months. Additionally, growth has been abnormally sluggish in this recovery (which, as I’ve written, is a byproduct of macroprudential policy). Slower growth means the current expansion may have more headroom than is typically the case at this point in the cycle.

What can investors expect as summer draws to a close? Our view of the future is that the Federal Reserve will likely begin interest rate “liftoff” in September of this year, and will continue to tighten at a steady pace until it nears the terminal rate (or peak Fed funds rate) in the cycle. This will likely occur toward the end of 2017 or early 2018 in the range of 2.5 to 3 percent. Recent experience suggests that a recession typically occurs about a year after we reach the terminal rate. If this tightening cycle plays out as we suspect, the U.S, economy will face its next recession in late 2018 or early 2019.

While the best of the post-crisis returns are now behind us, the good news is that historically, until central banks remove the proverbial punch bowl of accommodative monetary policy, the party can continue for investors. As a matter of fact, our research shows that both the lead up to, and the first year after, the Federal Reserve begins a tightening cycle have been positive for both credit and equities. Historically, U.S. equities have returned close to 4.5 percent in the 12 months after a Fed tightening cycle begins, based on an average of the last 13 cycles, while bank loans returned an average 5.8 percent, high-yield bonds returned 3.9 percent, and investment-grade bonds returned 3.3 percent in the three cycles since 1994 (when the data for fixed-income asset classes became available). The 12 months prior to a Fed hike have proven even better for investors, with equities returning an average 16.4 percent, high-yield bonds returning 8 percent, and investment-grade bonds returning 9.9 percent.

I don’t want to sound overly bullish, however. My view is that it is prudent to start to recognize what stage of summer we are in, and to understand that long-term investors need to start planning for winter, even if winter is a couple of years away. This doesn’t mean there aren’t opportunities between here and there—the punch bowl is out, the party is still going on, and we should drink long and deep for as long as we can. The European Central Bank has told us that it won’t halt its quantitative easing program until September 2016 at the earliest, which is another positive for credit and equities, even as the Fed raises rates in the United States.

So let’s enjoy the end of this long summer party. There are still some golden, halcyon summer days ahead and it would be premature to put on our winter clothes just yet. Indeed, on the extreme end, the expansionary cycle of the early 1990s lasted over 118 months. However, when all is said and done, the easy money in this expansion has already been made and investors should be thinking about the winter to come.

Luddites Fear Humanity Will Make Short Work of Finite Wants

LudditesMy Comments: A conversation yesterday with a good friend resulted from her comment about the absurdity of Obamas’ suggestion that college education should be free for all students. Mindful that some of them will not qualify, and some will not want a college education, I argued that it was a great idea, that many employers today cannot find workers with the skills necessary to get the work done. Rather than stifle employment, a free track to acquire additional skills will, in my judgment, result in a net economic gain for all of us.

Walter Isaacson / March 3, 2015 / The Financial Times

If new technologies really cut jobs, we would all be out of work by now, writes Walter Isaacson

Ada, Countess of Lovelace and Charles Babbage understood the potential of technological innovation.

Lord Byron was a Luddite. The Romantic poet’s only speech in the House of Lords defended the followers of Ned Ludd, who were smashing the mechanical looms in England during the early 1800s because they feared the machines would put people out of work. Back then, some believed that technology would create unemployment. They were wrong. The industrial revolution made England richer and increased the total number of people in work, including in the fabric and clothing industries.

Byron’s daughter Ada, Countess of Lovelace, was more prescient. On a trip through the English Midlands, she admired how punch cards instructed the looms to produce beautiful patterns, and envisaged how such cards could enable the numerical calculator being designed by her friend Charles Babbage to process not just numbers but words, music, patterns and anything else that could be encoded in symbols — a computer, in other words.

Today’s pessimists predict that these computers will put people out of work. These latter-day Luddites are also wrong. Technology can be disruptive. It can eliminate jobs, from weavers to buggy-whip makers. But 200 years of data show it improves productivity and increases wealth, leading to more demand and new types of jobs.

Take those mechanical looms. They were invented just after 1800 by Joseph Marie Jacquard in Lyon. Did that end up reducing employment in the textile industry in eastern France? No. Two centuries later, Lyon is Europe’s top centre for high-tech textiles. The city is the home of the Textile and Chemical Institute, 40 labs and schools, 140 companies and 10,000 textile jobs. Nor did the machines destroy employment in England, as Lord Byron feared.

The combination of computers and the internet began transforming our economy decades ago. The “app economy” is the latest example. It began in 2008 when Steve Jobs yielded to the advice of his team at Apple and decided to let outside developers create apps for the iPhone. The global app economy last year was worth $100bn, more than the film industry. This is an industry that did not exist seven years ago.

Apps and other advances in technology have helped create new forms of work, such as the “sharing economy” in which enterprising folks can rent out rooms on Airbnb and provide rides on Uber and Lyft. Likewise, online marketplaces such as Amazon and eBay have recreated the kind of artisanal cottage industry that existed in the pre-industrial age. If you have a good recipe or can make a cool product or service, you can find customers. If you create a book or song, you now have ways to self-publish and distribute. If you dream up a new specialism — ethical hacker, pet psychologist, nutrition coach? — you have a chance of finding takers. More than 600,000 people nowadays earn a living by selling on Amazon and eBay.

If new technologies reduced the total number of jobs, we would all be out of work by now. But times of technological advance have been times of job creation. Last year, as whole new waves of robotic systems were introduced, the US added 3m jobs. The unemployment rate hit a six-year low, and average hourly earnings for private sector workers rose.

Be wary of those who lament the demise of jobs for checkout clerks and meter readers, as if preserving such jobs will lead to a healthier economy. This Luddite fallacy is based on a presumption that there is only a set amount of goods and services people want. If technology permits those things to be produced more efficiently, Luddites argue, there will be less work to do. In reality, technology leads to an increase in productivity and wealth. That in turn leads to increased demand for goods and services and thus more jobs, including ones in fields we can barely imagine.

The writer is chief executive of the Aspen Institute and author of ‘The Innovators

http://www.ft.com/intl/cms/s/0/9e9b7134-c1a0-11e4-bd24-00144feab7de.html#axzz3TRNNs64q

Get Ready For The Biggest Margin Call In History

My Comments: Like a broken clock that is right twice every 24 hours, I’ve been talking about the probability of us having a severe market correction for the past 12 months or more. It’s obviously not happened yet.

But every time I turn around, there are new observations from people who understand this better than I do. Most of them agree it’s going to happen. Each of us in our own way, depending on where we are in life and what we expect to achieve with our savings and investments, need to pay attention. There are ways to protect yourself and it won’t cost an arm and a leg to make it happen.

Chris Martenson | Apr. 20, 2015

Economist Steen Jakobsen, Chief Investment Officer of Saxo Bank, believes 2015 will be another “lost year” for the economy. And he predicts the Federal Reserve will indeed start to raise rates later this year, surprising the market and taking the wind out of asset prices.

He recommends building cash and waiting to see how the coming storm – which he calls the “greatest margin call in history” – plays out:
0% interest rates at $0 down has not created the additional momentum to the economy The Fed was hoping for. The trickle down effect, the wealth effect, has instead made for bigger inequality in society. So I think we’re set for a rate hike in either in June or in September. I think this will be the biggest margin call in history on the asset inflation created by the Fed.

That’s where I differ from most Fed watchers. Everyone else is looking at employment, inflation targeting. I don’t think Fed is at all looking at those. They are saying “Listen, the 0% interest rate is getting us absolutely nowhere, we think it’s very, very important for us to move to a more neutral place”. At the same time we will communicate that we are open-minded to additional programs or whatever needs to be done to secure the long term growth of the economy. But that will be on the down side, not on the up side. And as year has progressed, and I’ve said this publicly, I think 2015 is already lost in terms of recovery here. And that will take the market by surprise.

The market will ask in September when the Fed hikes: “Why are you hiking interest rate when growth is below target, inflation below target”? Well, the Fed’s response will be “Because this is the biggest asset inflation we’ve seen in human history and we need to address it“.

What the Fed is saying is that we have unintended consequences of low interest rates. Money is chasing yield: it’s going to real estate making it over-valued, and flowing into the equity markets making them over-valued. And then the Fed says “Well, we have two choices. We can allow the market to run into a bubble, or we can burst the bubble and start all over again”. But they wrongly, in my opinion, believe they can actually micro manage that, even macro manage this. So what they would rather do is “lean up against the market”. To take some of the excess out of prices by going in and telling in the market “We are concerned, we don’t want you to have more leverage. We want you to have less. And we certainly would like to see that market become flat-lined for a while in terms of return.” Which by all metrics of measurements is actually also the expected return of the stock market. Don’t forget three, five and seven years expected return at the present multiples is exactly 0%.

Given this, at a bare minimum, I recommend taking the leverage out of your own portfolio so you sit with a nice pot of cash if the market does correct. If it doesn’t, you’re not really losing out much because again, they expect a return is 0% for the next couple of years.

Some time the best advice to anybody is to do nothing. And of course being, part of an online bank I’m not exactly popular with management for putting this advice out there. But I have to give the advice I believe in and share what I do myself; and I’m certainly reducing whatever equity I have in my portfolio to a minimum. So I’m scaling back to where I was in January last year.

I’ll put it another way. I’m advising a hedge fund in London, analyzing 10,500 stocks from the bottom up. How many do you think of these 10,500 world stocks are cheap? Only 23. Which means 98% of all stocks are either fairly-priced or expensive.

Click the link below to listen to Chris’ interview with Steen Jakobsen (40m:27s)

https://www.youtube.com/watch?v=fnp5ETnKylU

Time US Leadership Woke Up To New Economic Era

CharityMy Comments: As many of you know, my professional life has revolved around financial issues and economics. The world I’ve lived and worked in was largely shaped by the global forces at work following World War II. That era has ended.

We can shake our heads and whine about what might have been but it will serve little purpose to do so. The sooner we as a nation come to terms with all this and make the necessary adjustments, the sooner we, and here I imply ALL OF US, can get on with creating a framework that will allow our children and grandchildren an optimistic future.

Admittedly, Larry Summers is a Democrat with questionable management skills. But I can’t fault his analysis below and his thoughts about our collective future. And I will add that the aggressive stance of Israel re the Iran agreement underway, is a self-serving effort to maintain the post WWII status quo and avoid hard decisions about the future.

By Lawrence Summers, April 5, 2015

This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system. True, there have been any number of periods of frustration for the US before, and times when American behaviour was hardly multilateralist, such as the 1971 Nixon shock, ending the convertibility of the dollar into gold. But I can think of no event since Bretton Woods comparable to the combination of China’s effort to establish a major new institution and the failure of the US to persuade dozens of its traditional allies, starting with Britain, to stay out of it.

This failure of strategy and tactics was a long time coming, and it should lead to a comprehensive review of the US approach to global economics. With China’s economic size rivalling America’s and emerging markets accounting for at least half of world output, the global economic architecture needs substantial adjustment. Political pressures from all sides in the US have rendered it increasingly dysfunctional.

Largely because of resistance from the right, the US stands alone in the world in failing to approve the International Monetary Fund governance reforms that Washington itself pushed for in 2009. By supplementing IMF resources, this change would have bolstered confidence in the global economy. More important, it would come closer to giving countries such as China and India a share of IMF votes commensurate with their new economic heft.

Meanwhile, pressures from the left have led to pervasive restrictions on infrastructure projects financed through existing development banks, which consequently have receded as funders, even as many developing countries now see infrastructure finance as their principal external funding need.

With US commitments unhonoured and US-backed policies blocking the kinds of finance other countries want to provide or receive through the existing institutions, the way was clear for China to establish the Asian Infrastructure Investment Bank. There is room for argument about the tactical approach that should have been taken once the initiative was put forward. But the larger question now is one of strategy. Here are three precepts that US leaders should keep in mind.

First, American leadership must have a bipartisan foundation at home, be free from gross hypocrisy and be restrained in the pursuit of self-interest. As long as one of our major parties is opposed to essentially all trade agreements, and the other is resistant to funding international organisations, the US will not be in a position to shape the global economic system.

Other countries are legitimately frustrated when US officials ask them to adjust their policies — then insist that American state regulators, independent agencies and far-reaching judicial actions are beyond their control. This is especially true when many foreign businesses assert that US actions raise real rule of law problems.

The legitimacy of US leadership depends on our resisting the temptation to abuse it in pursuit of parochial interest, even when that interest appears compelling. We cannot expect to maintain the dollar’s primary role in the international system if we are too aggressive about limiting its use in pursuit of particular security objectives.

Second, in global as well as domestic politics, the middle class counts the most. It sometimes seems that the prevailing global agenda combines elite concerns about matters such as intellectual property, investment protection and regulatory harmonisation with moral concerns about global poverty and posterity, while offering little to those in the middle. Approaches that do not serve the working class in industrial countries (and rising urban populations in developing ones) are unlikely to work out well in the long run.

Third, we may be headed into a world where capital is abundant and deflationary pressures are substantial. Demand could be in short supply for some time. In no big industrialised country do markets expect real interest rates to be much above zero in 2020 or inflation targets to be achieved. In the future, the priority must be promoting investment, not imposing austerity. The present system places the onus of adjustment on “borrowing” countries. The world now requires a symmetric system, with pressure also placed on “surplus” countries.

These precepts are just a beginning, and many questions remain. There are questions about global public goods, about acting with the speed and clarity that the current era requires, about co-operation between governmental and non-governmental actors, and much more. What is crucial is that the events of the past month will be seen by future historians not as the end of an era, but as a salutary wake up call.

The writer is Charles W Eliot university professor at Harvard and a former US Treasury secretary

‘It’s the Weather…!’

My Comments: The cacaphony of negative comments by Republicans about the Obama administrations efforts re the economy used to be deafening. Now, not so much.

As an economist, I’m sensitive to the fact that there are too many variables at play to attribute success or failure to an individual in the White House or to a political party. But taking credit or placing blame is a tricky exercise. These comments by Scott Minerd, which to my mind describe events this past winter that can be attributed to global warming, are a lesson not to be missed.

April 10, 2015
Commentary by Scott Minerd, Chairman of Investments and Global CIO, Guggenheim Partners

When Bill Clinton beat George H.W. Bush in the 1992 presidential election, campaign strategist James Carville’s now-famous explanation was, “It’s the economy, stupid!” To paraphrase a more polite version of Carville, I believe the punch line to why real first-quarter gross domestic product (GDP) growth will thwart the consensus forecast of 1.4 percent is just as simple: “It’s the weather…!”

Severe weather conditions this winter have had a profound impact on economic activity in the United States. Based on our analysis of retail sales, industrial production, and government spending, I wouldn’t be surprised to see U.S. economic growth near zero or even negative in the first quarter. This out-of-consensus position is supported by the Federal Reserve Bank of Atlanta, which recently forecast 0.1 percent growth.

When you look at the data, the winter ravages in first quarter are clear. Consumer spending declined in December and January, and was basically flat in February, while nonfarm payrolls were up by just 126,000 in March—the smallest gain since December 2013. As a result of the harsh March weather, 216,000 people reported being unable to work, and over 560,000 people were forced to work part time. Retail data have also borne out the consumer’s frigidness this winter. In February, U.S. retail sales declined 0.2 percent, adding to declines in January and December, and making it the worst three-month performance for retail sales since 2009. Other hard-hit sectors of the economy include construction, where spending declined in both January and February, and manufacturing, with the March Institute for Supply Management (ISM) reading worse than the lows seen last winter.

Essentially, it appears we are having a replay of what happened in the first quarter of 2014, where winter weather distortions caused the economy to slow dramatically. This winter, the warning signs are even stronger, but there seems to be some cognitive dissonance among economists. A Bloomberg survey pegs consensus GDP estimates at 1.4 percent, for example. Besides the Atlanta Fed, I have not seen many forecasts approach zero. All this leads me to believe the market may not be anticipating the full impact of weather distortions on the U.S. economy. Investors’ shock at the true state of first-quarter GDP could easily send interest rates back to test the lows of January, or maybe even lower.

Rather than hit the panic button, investors should view a disappointing first-quarter GDP print as a short-term dislocation. Since 1975, a slowdown in first-quarter growth caused by winter weather has usually been followed by a significant bounce back in the second quarter. The underlying strength of the U.S. economy remains sound, so I expect a similar pattern will play out in the remainder of 2015. While noise around the economy could lead to increased volatility in equities and credit spreads, the bottom line is that weather-induced weakness may present long-term investors with an opportunity to increase their positions to risk assets at discounted prices.

If Trees Don’t Grow To The Sky: The Next 6 Years

rolling 6 year numbersMy Comments: You’ve read my earlier comments about whether the world we now live in is a different world. The details have changed, but the fundamentals have not. The following article will cause you to think twice if have not made plans for your money to be protected going forward.

Charlie Bilello, Pension Partners, Mar. 18, 2015

Summary
• The last six years have been one of the strongest periods in history for U.S. equities.
• Investors need to lower their expectations for the next six years.
• This is quite possibly the worst starting point (looking ahead six years) for a 60/40 portfolio in history.

The Bull Market turned six last week and what an incredible six years it has been. From the depths of despair in March 2009, the S&P 500 (NYSEARCA:SPY) has more than tripled in one of the greatest six year bull market runs in history.

The Next 6 Years

There is a growing contingent of market participants today that seem to believe 20% annualized returns are the “new normal,” and the next six years will mirror the last. The crux of their argument is as follows: with central banks around the world engaging in unprecedented easing, there is no limit to how high a multiple the S&P 500 can fetch. In short, the narrative is that in the new central bank era, historical norms can be safely discarded as trees can grow to the sky.

While anything is possible, we should also consider a world where trees do not grow to the sky and mean reversion still exists. In that world, the “old normal,” a repeat performance is unlikely for the following reasons:

1) The average annualized return for the S&P 500 since 1928 is 9.3%. To expect the market to more than double this return for another six years is to expect the greatest bubble in the history of markets, far surpassing the dot-com bubble that peaked in 2000.

2) The long-term price-to-earnings ratio (CAPE or Shiller P/E) of 28 is now higher than all prior periods since 1871 with the exception of 1929 and the dot-com bubble which peaked in 2000.

3) While a terrible short-term predictor, there is a strong inverse relationship between longer-term returns and beginning price-to-earnings ratios, particularly at extremes. The worst decile of Shiller P/E values in the past (levels >26.3) have shown the worst average forward returns at 1.7%.

4) The gains of the past six years have not been lost on investors, who are about as bullish as they have ever been. The 45% spread between bulls and bears today stands in stark contrast to the -20% spread six years ago. The strongest gains in equity markets are built on a wall of worry and there is no such wall to speak of anymore.

While these factors may certainly be ignored in the short-run, they will be harder to ignore over a six-year period. At the very least, they suggest that the odds of above-average returns from here are low.

Borrowing From the Future if Trees Don’t Grow to the Sky

In the end, what the Fed has accomplished through the most expansionary monetary policy in history is not a new paradigm but simply a shift in the natural order of returns. In search of a “wealth effect,” they have borrowed returns from the future to satisfy the whims of today. They did so with the hope that the American people would borrow and spend more money and economic growth would accelerate because of short-term gains in the stock market.

Unfortunately, after six years, this “wealth effect” has failed to materialize, as this has been the slowest growth recovery in history in terms of real GDP and real wage growth. What we are left with is a boom only in the stock market, not in the real economy.

If trees don’t grow to the sky, then, future returns will have to suffer because past returns have been so strong. There is no other way unless you believe that multiples can continue to expand to infinity without reverting back to historical norms.

For anyone still saving and adding to their investments without having sold a single share, this has not been a gift from the Fed but a tremendous burden. The net savers have been forced to add money to stocks at propped-up levels, which will ultimately lower their long-term returns. The savers would have been far better off with a more moderate price advance with declines along the way which would have enabled them to buy in at lower prices and increase long-term returns. This is a mathematical truism.

In the bond market, math is also working against investors as the Fed has suppressed interest rates for over six years now. At the current level of 2.1%, the U.S. 10-year Treasury yield suggests that bond returns (NYSEARCA:AGG) are likely to be far below average in the years to come.

If trees don’t grow to the sky, the next six years will look nothing like the previous six and investors are likely to face a much more challenging environment. But don’t just take my word for it. I’ll leave you with a quote from Clifford Asness of AQR who had this to say in a recent interview with Barry Ritholtz:

“We find the 60/40 portfolio is about as bad as it’s ever been, prospectively” – Cliff Asness, February 21, 2015

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

Note: here is the URL from which I took this article to share with you: http://seekingalpha.com/article/3010966-if-trees-dont-grow-to-the-sky-the-next-6-years?ifp=0