Vanguard Expects Low Market Returns

Economists at the Vanguard Group think stocks will continue to grow, but at a lower rate of return in the medium term (of between 4% and 6%), with U.S. stocks trailing international equities. This according to a recent CNBC article. In a recent report to investors, Vanguard chief economist Joe Davis wrote, “Overall, the risk of correction for equities and other high-beta assets is projected to be considerably higher than for high-quality fixed-income portfolios.” While the firm sees no signs of market bubbles, Davis argues that rising market returns have in some cases exceeded companies’ improving fundamentals. In the report, […]

Hulbert Says War Doesn’t Scare the Stock Market

While the stock market doesn’t like war, the uncertainty that precedes a foreign military operation is typically resolved soon after any U.S.-led hostilities begin, and the market responds very positively. This according to Mark Hulbert in a recent Barron’s article. Hulbert cites the countries “saber-rattling directed at North Korea and Syria” as recent examples corresponding to a dip in the Dow Jones Industrial Average (Validea note: this as of April 20th—the index has since picked up slightly). “This period of market uncertainty,” writes Hulbert,” is likely to continue so long as uncertainty remains elevated.” Note: Hulbert explains that the above-cited […]

Batten Down the Hedges?

August, typically one of the slowest months for Wall Street, has the reputation for being one of the more unstable for the financial markets. This according to an article in last week’s Investment News., which reported that last week DoubleLine Capital chief executive Jeffrey Gundlach suggested gold and gold miner stocks as a hedge against “the mounting risk across virtually all other markets and asset classes.” Gundlach says, “the stock markets should be down massively but investors seem to have been hypnotized that nothing can go wrong.” According to S&P Capital IQ, since 1945 a third of the monthly declines […]