Presidential Election Cycle Theory: A Bullish 2023?
What are the strengths, limitations, and nuances of presidential election cycle theory and what does the current political context foretell regarding whether 2023 will follow the predicted trend?
View ArticleThe Size Factor Matters for Actual Portfolios
The size factor contributes to portfolio diversification and risk control.
View ArticleIs the Copper–Gold Ratio a Dependable Leading Indicator on Rates?
Earlier this year, the copper–gold ratio was, in Jeffrey Gundlach's words, “screaming that the 10-year should go lower.”
View ArticleRethinking Retirement Planning Outcome Metrics
Retirement, like life, is fundamentally uncertain. That's why we need to provide clients with more context about what missing their retirement-income goals might look like.
View ArticleIs the 60/40 Portfolio Still Relevant?
How do portfolios with asset allocations of 100% equity, 100% bond, 60/40, and 80/20 in the US, UK, Italian, Swiss, and global markets perform over time?
View ArticlePartnering for Impact: Institutional Investors and the Net-Zero Transition
A well-managed, low-carbon transition requires systemic change from all corners of the global economy.
View ArticleRegret and Optimal Portfolio Allocations
To understand risk for portfolio optimization purposes, we need to consider regret.
View ArticleSEC Scrutiny of ESG-Related Disclosures: What to Expect
What should investors know about the SEC filing review process and how it may affect ESG-related disclosures?
View ArticleMindy Lubber: A Sustainability Story
Climate risk is financial risk, according to Mindy Lubber.
View ArticleA Sea Change: Howard Marks, CFA, on the End of Easy Money
“I'm not saying that interest rates are going to go back up. I just think they're done coming down,” Howard Marks, CFA, told Marg Franklin, CFA. "And if that's true, I think we're in a different...
View ArticleA Global Proxy Voting Database: An Idea Whose Time Has Come?
The proxy voting system has taken on added importance amid growing interest in environmental, social, and governance (ESG) issues and how investors vote on related shareholder proposals. So, how can we...
View ArticleThe 800-Pound Gorilla: Office Real Estate
"Office has replaced retail as the worst six letter word in real estate.”
View ArticleFactor Portfolios and Cap-Weighted Benchmarks: Bridging the Tracking Error Gap
Can we retain the benefits and economically sound basis of a factor approach to equity investing while more closely aligning a factor portfolio’s performance to a cap-weighted benchmark?
View ArticleThe Predictive Power of the Yield Curve
The predictive power of the yield curve is a widely accepted causal narrative. But the history shows that the causal correlation between long and short rates is actually quite weak.
View ArticleWhen Hindsight Becomes Foresight: Replicating Investment Performance
Most investment products simply provide exposure to the stock market in complicated wrappers.
View ArticleESG Affirmations and Surprises: Asset Managers Look to the Future
ESG considerations are transforming how asset managers approach their jobs and serve their clients, according to the latest Index Industry Association (IIA) survey.
View ArticleThe Fitch Downgrade: The Principal–Agent Problem in Modern Finance
Fitch Ratings' US credit downgrade highlights a latent principal–agent problem in modern financial markets: Investors have outsourced much of their risk management to the rating agencies.
View ArticleThe First US Real Estate Bubble and Three Lessons from the Mount Tambora...
How can the 1815 eruption of Mount Tambora inform investors today?
View ArticleClimate Change, Risk Management, and the Freedom to Invest Responsibly
The freedom to invest responsibly and the principle of risk management must be defended, and that requires us to go back to basics.
View ArticleMyron Scholes on Black–Scholes, Decarbonization, AI, and Parenting
"If life were unchanging, then options would not be as valuable, but life is always changing, which makes options and the ability to deal with uncertainties very precious." — Myron Scholes
View ArticleDo Better ESG Ratings Boost Bond Holders?
Does the bond market view companies with better ESG ratings as better credit risks?
View ArticleProject Finance: Beware Interest Rate Miscalculations
To navigate the storms of interest rate variability, we need foresight and flexibility.
View ArticleRethinking Corporate FX Hedging: Seeing the Forest through the Trees
Why are publicly traded companies so often blindsided by FX volatility?
View ArticlePortfolio Confidential: Five Common Client Concerns
What are the five most common client concerns and how can we address them?
View ArticleMarkets in Chaos: A Return to the Gold Standard?
The grand monetary experiment of the last decade and a half has undermined the global financial system and necessitates a radical solution.
View ArticleHow Can Family Offices Leverage Artificial Intelligence? Four Applications
AI will revolutionize family office operations. That's why each office must be intentional about its AI adoption formula, governance procedures, and long-term AI roadmap.
View ArticleTrick or Treat? Bobbing for Multibaggers in the Small-Cap Market
Small-cap investing is a “negative art.” But in addition to steering clear of losers, small-cap investors have to demonstrate the “positive art” of picking winners.
View ArticleChatGPT and Large Language Models: Their Risks and Limitations
Inaccessible data and the limits of computing power are only two of the obstacles holding LLMs back.
View ArticleBook Review: Validation of Risk Management Models for Financial Institutions
Validation of Risk Management Models for Financial Institutions, through a set of thoughtful articles, describes how effective structuring and testing of the modeling techniques used in risk management...
View ArticleThe Innovation Advantage: Private Market Investing
The potential advantages of private market investments, specifically venture equity and venture debt investing, extend to five dimensions of performance.
View ArticleBook Review: Plunder
Brendan Ballou presents a meta-analysis of the worst of private equity investment practices, thus compelling investors to take a deeper look into their illiquid private equity commitments.
View ArticleThe FX Swap Market: Growing in the Shadows
The foreign exchange (FX) swap market ought to be both transparent and well regulated. It is neither.
View ArticlePrivate Equity: Five Lessons from the Global Financial Crisis
If a recession comes, how can the lessons of the global financial crisis (GFC) inform private equity practitioners?
View ArticleThe 60/40 Portfolio Needs an Alts Infusion
How can investors supplement the traditional 60/40 stock/bond portfolio with allocations to alternatives?
View ArticleResearch and Policy Center Five Most Popular Articles of 2023: Sustainability
For sustainability-related content, readers clicked most on "Applying Economics — Not Gut Feel — to ESG" by Alex Edmans in 2023.
View ArticleTop 10 Posts from 2023: The 10 Greatest Investors, ChatGPT, and the Active...
Enterprising Investor's most popular posts of the year include contributions from Mark J. Higgins, CFA, CFP, Larry Cao, CFA, Michinori Kanokogi, CFA, and Yoshimasa Satoh, CFA, among others.
View ArticleClimate Risk and the Future of US Commercial Real Estate
Climate risks and the CRE loan market have many points of intersection that spotlight the urgent need for community and regional banks to recalibrate their risk assessment frameworks.
View ArticleHow to Build Better Low Volatility Equity Strategies
Not all low volatility strategies are created equal. Many lack the diversification and risk control needed to guard against concentration and macro risk.
View ArticleA More Robust Macro Risk Targeting Strategy for Equities
"It is possible to construct equity portfolios that possess out of sample exposure that facilitate more precise targeting of levels of macroeconomic risk exposure."
View ArticleBad Ideas: Why Active Equity Funds Invest in Them and Five Ways to Avoid Them
Most active equity funds do not underperform for lack of stock-picking skill. Rather the investment industry incentivizes them to manage business risk at the expense of long-term portfolio performance.
View ArticleESG Investing and the Popularity Asset Pricing Model (PAPM)
When it comes to ESG investing, we have to agree that we don’t all agree.
View ArticleIt’s Not Always the Economy: Five Questions to Gauge Financial Markets
The economy matters, but it matters differently to different investors depending on their distinct objectives, timelines, and asset allocation. And it’s not the only thing that matters.
View ArticlePlan Sponsor Priorities for 2024: A Seven-Item Checklist
What topics in particular should defined contribution (DC) plan sponsors keep front of mind this year?
View ArticleBook Review: The Four Pillars of Investing, Second Edition
William J. Bernstein provides a comprehensive guide that offers important insights and practical strategies for creating and maintaining a successful investment portfolio.
View ArticleThe Low-Volatility Factor and Occam’s Razor
Will the low-volatility premium continue to be the best-kept secret in financial markets?
View ArticleAI’s Carbon Footprint: Balancing Innovation with Sustainability
The future of artificial intelligence (AI) should not just be smart, it must also be sustainable.
View ArticleVenture Capital: Lessons from the Dot-Com Days
Start-up valuations have yet to fully reflect the market's ongoing downdraft. The correction could prove as protracted as that of the dot-com crash.
View ArticleCan the Fed Pull Off a Soft Landing?
The yield curve is inverted, implying an imminent recession, but the stock market is at or near record highs. What can we make of these contradictory signals?
View ArticleClimate Transition Risk in European Equity Markets
How can investors assess climate transition risk in their portfolios?
View ArticleAI to the Rescue? Overhauling the US Power Grid on the Path to Net Zero
Once known as secure and profitable investments, utilities are now viewed as enterprises fraught with financial risks. Investors should favor utilities that employ AI and other digital strategies to...
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