Wealth Management
Global stocks are anticipated to recover from recent market turmoil and gain modestly in the coming months, driven by expectations of forthcoming interest rate cuts by major central banks, according to a Reuters poll of over 150 equity strategists.
Despite a sharp decline in early August due to the unwinding of leveraged positions and weaker U.S. jobs data, the MSCI global index has regained most of its losses, now up 14% for the year. Analysts expect corporate earnings to outperform in local markets, supporting further growth in key equity indices, though at a slower pace compared to last year.
While 13 of 15 major indices are forecasted to post single-digit gains by year-end, with no outright global correction anticipated, the pace of gains in 2024 is expected to moderate, reflecting a tempered outlook amidst a resilient macroeconomic picture.
Finsum: We’ll monitor how exchange rates fluctuate as inflation normalizes across countries.
Books offer a richer, deeper way to understand our ever-changing world. Instead of relying on quick searches, consider diving into the wisdom of experts through well-crafted nonfiction. Whether you're exploring complex topics like wealth inequality, algorithmic influence, or conservative culture wars, or seeking personal growth through memoirs about identity, grief, or marriage, this list of the best nonfiction books of 2024 (so far) has something for everyone. These three titles promise to expand your mind and offer new perspectives on the world around us:
- "Filterworld" by Kyle Chayka explores how algorithms shape our lives, urging a more intentional approach to consuming culture.
- "Limitarianism" by Ingrid Robeyns argues for capping extreme wealth to combat societal issues, presenting a bold vision for economic reform.
- "I Heard Her Call My Name" by Lucy Sante offers a deeply personal memoir on her gender transition at sixty-six, reflecting on identity and transformation.
Finsum: Digging deeper into filterworld might give a better framework as to how we can understand how we are manipulated by the technology we use.
Rising interest in commodities like gold, oil, and grains, fueled by concerns over inflation and climate change, is impacting the design of fixed indexed annuities and registered index-linked annuities. This shift appeals to clients seeking hedges against inflation and additional asset diversification.
While traditional indices like the S&P 500 dominate annuity allocation options, commodity indexes are emerging as viable alternatives, offering potential returns between 3% and 5.5% annually. Index exposure varies, with some annuities offering direct access to single commodities, like gold, while others provide diversified commodity index options.
The inclusion of these indexes signals a broader trend toward more diversified and defensive investment strategies within annuity products, catering to clients' evolving needs in a changing economic landscape.
Finsum: These annuities could provide a natural way to get industry exposure and hedge against key issues like inflation.
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Vice President Kamala Harris is positioning herself as a supporter of policies that foster the growth of emerging technologies, including the digital assets industry. Her campaign adviser emphasized her commitment to stable, transparent regulations that promote innovation while safeguarding consumers.
This approach contrasts with former President Donald Trump's stance, which has garnered support from some in the cryptocurrency community due to his promises to reduce regulation.
Harris aims to balance innovation with responsible oversight, addressing concerns about economic stability and corporate responsibility. Additionally, she has made multiple statements around cutting red tape and bureaucracy for innovation.
Finsum: The path to higher bitcoin prices might be stable regulation in the long run.
Interval funds offer investors a way to diversify their portfolios with assets like real estate, private equity, and debt instruments, but they come with unique features. Unlike mutual funds, interval funds allow for liquidity only at specific intervals, such as quarterly or annually, rather than daily.
This limited liquidity provides fund managers with greater flexibility in choosing investments. Despite their higher fees and limited redemption opportunities, interval funds are growing in popularity, especially among those nearing retirement, due to their potential for steady returns from less liquid assets.
Investors should be aware of the fund's redemption process, minimum investment requirements, and the varying performance of these funds. Firms like KKR and Capital Group plan to launch interval funds.
Finsum: Liquidity concerns are real, but relaxing this constraint lets opportunities blossom.
Investors are increasingly turning their attention to small-cap stocks and ETFs due to a combination of favorable valuations, historical trends, and recent market dynamics. This renewed interest has been highlighted by a significant rally in small-cap stocks, particularly during July when the Russell 2000 recaptured much of its earlier underperformance relative to large-cap indices.
Analysts suggest that small-caps are still undervalued, with some estimates indicating a 20% to 30% discount compared to larger stocks. This presents a potential opportunity for prolonged outperformance in the small-cap sector. Notable options include the iShares Russell 2000 ETF (IWM), which tracks a broad index of small-cap companies, and the Vanguard Small-Cap Value ETF (VBR), which focuses on value-oriented small-cap stocks.
Each of these ETFs provides investors with a strategic entry into the small-cap market, with varying levels of risk and potential return depending on their investment goals.
Finsum: Also note that as interest rates come down small caps are historically in a position to take advantage because they are more levered.