(New York)

There are a lot of articles discussing data points which can help investors predict markets. Most have some value in them (though not all). In this vein, the Wall Street Journal has done some digging to assemble the eight best historical market signals. The first thing to know is that all eight predictors, each of which has a great track record, show that market returns over the next decade will be below average. Even the most bullish of the group says that returns will be way below what they have been over the last decade. Some of the eight predictors include the Household Equity Allocation, the Q Ratio, the Buffett Indicator, the CAPE, and the Dividend Yield. The Household Equity Allocation has historically been the most accurate, as households tend to have the highest allocation to stocks right before a crash.

FINSUM: That is quite a data set stacking up against the market. We expect a rough market and a recession within 18 months, but the gains until then could be good.

(New York)

We do not cover Bitcoin very much, but we thought it would be worthwhile to give an update today, especially as advisors may have some clients who are very interested in the area. Most are aware that the cryptocurrency has plunged from late last year, but had been enjoying a minor rally of late. That has come to end abrupt end though, capped off by another SEC rejection/delay of a Bitcoin ETF. The SEC delayed a decision on a new Bitcoin ETF until the end of September, which sent the market plunging ~8%. Bitcoin is now trading around $6,500, way down from its $20,000 peak.

FINSUM: This newest Bitcoin delay is more worrisome as it was the most promising proposal on the table. The proposal, in part from top ETF provider Van Eck, was to actually hold Bitcoin instead of Bitcoin futures, which one would think would alleviate some of the SEC’s worries. We think this will eventually make it through, and when it does, Bitcoin might become a more mainstream asset class.

(New York)

With all of the bearish stories swirling around lately (us included), it was refreshing to find an alternative view today. Bloomberg has put out an argument that there will be no bear market in store for Treasuries. The story is from the top ranked bond strategist in the world, who points out that a decline in structured credit and related products means that Treasuries are a much higher component of overall fixed income indexes these days. This concentration is likely to keep rising over the next decade, which means indexes and benchmarks will need to buy Treasuries, a critical factor which will keep demand high. Another important point is that the stock market is losing its appeal compared to short-term Treasuries, as the yield of the latter is way ahead of the former and likely to stay that way.

FINSUM: This is excellent analysis from a highly reputably source. Our only addition would be to point out that US and global demography also reinforces the key points, as the aging of the world means there will be a higher demand for income investments over the next decade.

(New York)

Are you a growth investor or value investor? This has long been a bifurcating question, and has taken on increased importance in the last decade, as the former strategy has outperformed the latter by a wide margin. However, there are some occasions where a stock can be both. Using a simple screen, here are some companies priced like value stocks, but with the core expansion characteristics of growth companies. These include: Micron Technology, Energen Corp., Callon Petroleum, Cal-Maine Foods, Valero Energy, TimkenSteel Corp, and TRI Pointe Group.

FINSUM: Many of these might not be familiar names, but the selection is an interesting methodology and we think they are worth a look.

(San Francisco)

Here is some good news for mutual fund investors. While many ETFs have been absolutely hammered by the selloff in FANG shares, many mutual funds have largely evaded the losses. According to Goldman, the average large cap mutual fund is underweight three out of four of the FANGs. Mutual fund managers had frequently grown uncomfortable with the FANGs’ soaring valuations, and as such, many had trimmed their exposure.

FINSUM:Some of the benefits of active management (and the downside of passives) are really exemplified in this data. A win for mutual fund investors.