Answers About Wealth

Thinking in Real Terms

Submitted by Martin A. Smith | Published: March 2012 | The Market
Since the onset of the financial crisis in late 2007, the Federal Reserve has used interest-rate cuts and other policy tools in an effort to fuel economic growth. Economists can debate the effectiveness of these policies, but everyone can agree that today’s low interest rates are a two-sided coin. Consumers,...
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Lessons in Mutual Fund Flows

Submitted by Martin A. Smith | Published: March 2012 | The Market
Since 2008, economic uncertainty and market volatility have tested the staying power of investors around the world. Many people fled equities during the worst months of the global financial crisis, while others waited for signs of a turnaround before investing more. Their emotional reactions may have exacted a large price...
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Sovereign Debt Ratings and Stock Returns

Submitted by Martin A. Smith | Published: March 2012 | The Market
In early August, Standard & Poor’s downgraded US government debt from a top-rated AAA to AA+.1 In the weeks preceding the event, some market observers expected a downgrade to result in higher interest rates and lower stock returns. After the downgrade, yields on US government securities fell across the term...
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Municipal Bond Worries

Submitted by Martin A. Smith | Published: May 2011 | Fixed Income, Investment Management, Q and A
In 2010, prominent industry analysts warned of a looming fiscal crisis among state and local governments. Some experts even predicted widespread municipal bond defaults in the US.1 Investor fears intensified in late 2010 when the municipal bond market experienced one of its largest selloffs in decades, which drove up bond...
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Posted in Fixed Income, Investment Management, Q and A | Comments closed

Does Monetary Expansion Stoke Inflation?

Submitted by Martin A. Smith | Published: April 2011 | Investment Management, The FED, Top Five
Since the financial crisis hit in late 2008, the US monetary base has more than doubled, from about $800 billion in mid-2008 to about $2 trillion in November 2010.1 When the Federal Reserve announced a second round of quantitative easing (QE2), it raised investor concerns that such actions would stoke...
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Posted in Investment Management, The FED, Top Five | Comments closed

What’s “New” about a New Normal?

Submitted by Martin A. Smith | Published: February 2011 | Investment Management, The Economy
The 2008 global market crisis and the struggling economy have left many investors fatigued. Despite two years of strong equity returns, some investors have been slow to regain market confidence. Many are accepting the talk about a “new normal” in which stocks offer lower returns in the future. ...
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Posted in Investment Management, The Economy | Comments closed

2010 Review: Economy & Markets

Submitted by Martin A. Smith | Published: January 2011 | Investment Management, The Economy
The past year offered an interesting mix of positive and negative news as investors around the world eagerly anticipated signs of economic recovery and financial stabilization. While most financial markets logged positive returns for a second straight year, investors had to endure a host of troubling news and pessimistic market...
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Posted in Investment Management, The Economy | Comments closed

Deficits, Debt, and Markets

Submitted by Martin A. Smith | Published: December 2010 | Fiscal Policy, Investment Management
As government spending hits record levels around the globe, some politicians, economists, and pundits are warning that rising indebtedness may drag down economies and financial markets. This issue has raised concern among investors who assume that a government’s fiscal policy is closely linked to the country’s economic growth and market...
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Posted in Fiscal Policy, Investment Management | Comments closed

Navigating Structured Products

Submitted by Martin A. Smith | Published: December 2010 | Investment Management, Structured Products
In recent years, structured products have gained favor among retail investors in Europe and the US. Investment banks promote these securities as sophisticated tools to help investors manage downside risk, enhance returns, or achieve other investment objectives. Sales have grown briskly since 2006, and despite a decline after the 2008...
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Portfolio Endurance

Submitted by Martin A. Smith | Published: October 2010 | Investment Management, Portfolio Management
The need for retirement planning doesn’t end with the onset of retirement. A new retiree’s focus shifts from building wealth to managing and preserving it. One major challenge is to make the investment portfolio supply cash flow for the duration of life—and through different economic and market conditions. Experts have...
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Posted in Investment Management, Portfolio Management | Comments closed