Is the Euro Zone at the Beginning of the End of Muddling Through?

This week’s series of high-level meetings in Europe is being billed as make or break for the euro. The good news is that European politicians finally seem to realize the extreme seriousness of the current situation. But any agreement at this Friday’s summit of all 27 euro-area countries is likely to stop short of anything resembling a full fiscal union, in my view. (more…)


Read More


How to Diversify When Markets Are Highly Correlated

With economic and political developments driving big gyrations in equity markets, at first blush it seems that all stocks are moving together and diversification benefits have diminished. But as my colleague Andrew Chin explained in a recent article, spreading exposures across the spectrum of equity risk and return factors is now more important than ever.  (more…)


Read More


More Emerging Markets, Less Volatility?

The steep drop in returns for emerging-market stocks this year—even worse than the drop for  developed-market stocks—provides a useful reminder that the asset class remains risky, despite its many attractions.

How can investors capture the strong economic and earnings growth in emerging markets without taking on so much risk? I see two ways: One is by investing in developed-market stocks that benefit from rapid demand growth in emerging markets. The second, perhaps less familiar, strategy, is a multi-asset approach, as described below by my colleague Morgan Harting.

(more…)


Read More


Do Investors Really Think Earnings Are Going off a Cliff?

Investor concerns about the future of global and US economic growth and corporate profitability are understandable. But corporate profitability has never been as low as the equity risk premium (ERP) now suggests. Thus, we believe the long-term upside potential in equities is extraordinary, as my colleague Joseph G. Paul explains in the article below. (more…)


Read More


Looking for a Haven from Stormy Markets?

It’s easy to understand why investors are seeking a safe haven now. The 2008 financial crisis is still a fresh memory, and the global economic recovery appears to be losing steam. Meanwhile, politicians in both Europe and the US cannot decide how to address their pressing problems. Every bad piece of news seems to push investors further toward supposedly safe assets.

But what investments are really safe?

(more…)


Read More