Forecasting the weather or stock prices is a mostly mundane matter, but the unforeseen can exact a heavy toll. For investors, economic data improve the precision of market forecasts....
Product proliferation in smart beta often coincides with wonderful historical returns. These returns can be an alpha mirage caused by rising valuations. Investors need to be mindful of this to avoid performance chasing, a wealth-destroying activity....
The discrepancy between official headline inflation and its underlying components is perplexing, and its implications for monetary policy (i.e., accommodative) suggest inflated asset prices and lower forward-looking returns....
Four market conditions now parallel the extremes last experienced in December 1998, setting up 1999 as the first year in a decade of outperformance by inflation-fighting and diversifying assets. Now is the time to rotate into these unloved asset classes....
Recently enacted NIRP in several major developed economies means not only lower current yields but also lower future expected returns—and thus lower accumulated wealth—for investors investing in these markets....
The Fed’s inflation model relies heavily on consumer and market-based expectations, both notoriously poor predictors. We propose an alternative bottom-up approach that analyzes the components of CPI, and arrive at a forecast very close to the Fed’s target rate....
According to Hsu and Cornell, active fundamental managers, as agents of the end investor, drive asset prices through the discount rate used in their asset pricing models. The model itself, as a means to estimate the rate, then becomes a determinant of expected returns....
The value-oriented investor, still in the throes of a long harsh winter, should be heartened in the knowledge that summer will inevitably arrive on the predictable warm breeze of mean-reverting valuations....
You are now leaving the Research Affiliates, LLC website. The following link may
contain information concerning investments, products or other information. Research
Affiliates, LLC is not responsible for the accuracy or completeness of information
on non-affiliated websites. The material available on non-affiliated websites has
been produced by entities that are not affiliated with Research Affiliates, LLC.
Descriptions of, references to, or links to products or publications within any
non-affiliated linked website does not imply endorsement of that product or publication
by Research Affiliates, LLC. Any opinions or recommendations from non-affiliated
websites are solely those of the independent providers and are not the opinions
or recommendations of Research Affiliates, LLC, which is not responsible for any
inaccuracies or errors. THIS INFORMATION IS NOT AN OFFER TO BUY OR A SOLICITATION
TO SELL ANY SECURITY OR INVESTMENT PRODUCT. SUCH AN OFFER OR SOLICITATION IS MADE
ONLY BY THE SECURITIES' OR INVESTMENT PRODUCTS' ISSUER OR SPONSOR THROUGH A PROSPECTUS
OR OTHER OFFERING DOCUMENTATION.
620 Newport Center Dr, Ste 900
Newport Beach, CA 92660
Phone +1 (949) 325-8700
Receive Our Latest Research via Email. Sign up Today!