Displaying items by tag: inflation

Two strategists from Royce Investment Partners believe that now is the right time to consider small-cap stocks. In an article on Wealthmanagement.com, Francis Gannon and Steve Lipper gave six reasons why they believe the current environment is a great time to invest in small-cap stocks. The first reason is that small caps currently have superior valuations compared to large-cap stocks. Another reason to invest in small caps is the fact that small caps have a history of outperformance following periods of high investor anxiety and low-risk tolerance. Small caps have also historically beaten large caps following periods of deep declines. In addition, small caps operate in their own way; meaning there are significant differences between small and large caps in their long-term performance during different market cycles. Gannon and Lipper also mention that small caps are a highly heterogeneous asset class, indicating that there are so many small-cap companies that investors can find stocks in every sector and industry. The sixth and final reason is that investors lose out by waiting to put capital to work. They noted that small-cap recoveries have historically happened very quickly.

Finsum:Two strategists from Royce Investment Partners provide six compelling reasons why investors should consider small-cap stocks now.

Published in Eq: Small Caps

While many market strategists have noted the recent failures of the 60/40 model portfolio, one investment manager still sees value in the portfolio model. Quilter Cheviot's investment manager David Henry told the Financial Times that there was still value in 60/40 portfolios despite rising inflation and geopolitical uncertainty. He commented, "But if we look at the historical numbers, maybe the grim reaper should hold onto his horses." Henry looked at quarterly returns for stocks and bonds since 1986 and found that there were nine quarters when the prices of both bonds and stocks fell in tandem and it has only happened once since 1986 in consecutive quarters, the first and second quarters of this year. He stated, "Breakdowns in diversification like we have seen this year, are rare. We then looked at 12-month forward returns for a 60/40 asset allocation following quarters where stocks and bonds fell together and returns were pretty healthy following those quarters.”

Finsum: An investment manager still believes in the 60/40 portfolio model as it is pretty rare for stocks and bonds to fall in tandem.

Published in Wealth Management

According to the findings of the Advisor Edition of State Street Global Advisors’ Inflation Impact Survey, the vast majority of investors who are currently working with a financial advisor, believe their advisors’ insight and guidance are valued more today during the current period of market volatility and rising inflation. The survey revealed that approximately three-quarters of investors have discussed inflation with their advisors and how inflation will impact their investment goals in both the short and long term. 90% say they value their financial advisors’ knowledge and guidance even more during uncertain times, and 86% believe their advisor has helped them remain confident during the current period of rising inflation and market volatility. The data follows the initial findings of State Street’s Global Advisors’ Inflation Impact Survey that showed inflation-induced stress and anxiety is influencing investor behavior with short-term budgeting and long-term financial goals.

Finsum:State Street’s Inflation Impact Survey revealed that investors are placing a higher value on their financial advisor’s guidance during times of heightened market volatility and inflation.

Published in Wealth Management

Inflation: the omnipresent bugaboo. As it continues to hang around a 40 year high in the U.S., to offset unabated volatility In the traditional stock market, many investors are plumbing for alternative strategies, according to glovenewswire.com as sourced from yieldstreet.

Now, fortuitously, in recent years. diversity and accessibility has evolved into the name of the game in alternative investment options. Yieldstreet, among other online investment platforms, have significant ratcheted up the ease with which investors can alter direction and sprinkle critical diversification into the portfolios, the site continued. 

And there’s this: given the gaggle of strategies from which to select, all investors need do is home in on the alternative investment , such as P2P Lending, real estate or crypto, best sutured to for their specific investing style and level of risk.

So, if the stock market isn’t your cup of tea, according to investables-blog.webflow.io, seven best investment alternatives include: 

  • Gold
  • Real estate
  • Cryptocurrency
  • Art
  • Wine & Liquor
  • NFTs
  • Watches

In the event inflation extends beyond 3%, the site added, there’s as much as a 32% uptick in art sales.  When conditions hit the skids in traditional finances, investors head to the best alternative investments. That, most of the time? Bingo. Art.

Published in Eq: Real Estate

U.S. Treasury yields rose on Monday with the benchmark 10-year yield hitting a five-week peak of 3.039%, while the 30-year yield climbed to a seven-week high of 3.268%. Yields rose as investors await a Federal Reserve gathering occurring later this week in Jackson Hole, Wyoming. The Fed is widely expected to reinforce its commitment to tackling inflation. Fed Chair Jerome Powell is scheduled to speak Friday morning at the Jackson Hole symposium. Last week's Fed minutes appeared to suggest that the Fed is on course to continue to increase interest rates with the central bank seeing "little evidence" that inflation was easing. The auction for shorter-dated coupons this week also added to the sell-off in Treasuries, pushing their yields higher. Traders typically sell Treasuries before an auction and then buy them back at a lower price. 

Finsum: Treasuries hit multi-week highs on Monday as investors await Fed Chair Jerome Powell’s speech on Friday morning at the Jackson Hole symposium.

Published in Bonds: Treasuries
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