Four Conditions Reminiscent of 1999

Rob Arnott, founder and chairman of Research Affiliates, says that the recent market environment is reminiscent of 1999, just before the tech bubble burst. Writing in Barron’s, Arnott argues that the following four “conditions parallel the extremes of the late 1990s:” “Falling inflation expectations,” which Arnott argues “snap back in reasonably short order.” He observes […]

Diversification & Rock Bottom Valuations In the Third Pillar

Rob Arnott and Christopher Brightman of Research Affiliates recently discussed the allocation and performance of PIMCO All Asset Fund, which goes outside mainstream investments into what they describe as the Third Pillar. Arnott explains that a three-year bear market in Third Pillar investments has impacted investors’ outcomes and outlooks. Although the fund’s 7% loss from […]

Mobius: Russian Stocks Offer Major Upside

Mark Mobius, executive chairman of Templeton Emerging Markets Group, says that the Russian stock market provides investors with a tremendous value right now. Russian stocks are down 36 percent since the end of 2014, although they have rebounded and are up 20 percent so far in 2016. Still, Russian shares are trading at 0.67 price-to-book, […]

Larry Swedroe on Emerging Markets, Recency Bias, and When to Buy

Director of Research for the independent investment advisor community BAM Alliance, Larry Swedroe, offers his take on the current underperformance of emerging markets versus U.S. stocks, the importance of recognizing recency bias, and the sensibility of buying low and staying globally diversified over the long-term. He notes that from 2008-15, the S&P 500 returned 6.5% […]

Emerging Markets: Lessons From History

Jason Zweig of the Wall Street Journal draws parallels between the 19th century emerging U.S. market and today’s emerging markets, especially China. “Emerging markets aren’t lucrative investments just because they are ’emerging,’” according to Zweig. From 1802 to 1870, stocks in the emerging U.S. market gained an average of 6.7% annually. Since 1926, the average […]

Marcoeconomic Indicators Suggest Caution in Emerging Markets

Emerging markets (EM) are undergoing long-term shifts that are not favorable to EM equities, according to managers of EM funds. “Things have changed,” says the executive chairman of Franklin Templeton’s emerging-markets group, Mark Mobius. The more than 20% decline in such stocks does not make them a value, based on marcoeconomic indicators. Average expansion in […]