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The New Investment World is Not Near, It's Here
by Russ Koesterich of iShares Blog,
The recent pace and magnitude of economic change has left many investors disoriented, to say the least. Russ K explains why this new environment is unlikely to change any time soon, which may have implications for investors' current and long-term strategies.
Look Out Below! The Fiscal Cliff Steepens
by Russ Koesterich of iShares Blog,
Despite the recent happy headlines, most measures of US economic activity point to slower growth, which makes the threat of the fiscal cliff pushing the US economy into a recession even greater. Russ K explains how investors can prepare.
Housing Recovery? Try Long Convalescence
by Russ Koesterich of iShares Blog,
The US Federal Reserve's decision to expand quantitative easing is dramatic, but we don't think it will have a significant impact on the US housing market. While the extra liquidity is supportive of risky assets in the very near-term, lower mortgage rates are not a game-changer for a consumer still struggling with little income growth and too much debt.
QE3: Ineffective Parachute for Fiscal Cliff
by Russ Koesterich of iShares Blog,
While the most likely scenario is that Washington reaches a compromise at the last minute, until then the uncertainty will keep the markets volatile and potentially drag down fourth quarter growth. Given recent comments out of Congress, there is also a non-trivial chance that we will, at least temporarily, go over the cliff. If that happens, QE3 will not be a particularly effective parachute.
Ready, Set, Fed! Weak Jobs Report Raises QE3 Odds
by Russ Koesterich of iShares Blog,
Russ says the US Federal Reserve Open Market Committee has more reason to consider quantitative easing at this week's meeting, after the latest payroll report suggests the US economic recovery is likely to remain weak into the end of the year.
An Upgrade of UK Equities
by Russ Koesterich of iShares Blog,
With UK economic growth showing signs of stabilization, the downside of investing in the region now appears more balanced versus the potential benefits. Russ believes it's time to upgrade equities from the United Kingdom to a neutral status.
Prepare Now for the Looming Fiscal Cliff
by Russ Koesterich of iShares Blog,
The general election season is finally upon us, and investors should begin shifting their focus from theoretical discussions about the impending fiscal cliff of potential tax hikes and spending cuts to more concrete action plans of what to do about it.
Russ Ks Guide to Economic Indicators (Infographic)
by Russ Koesterich of iShares Blog,
Pundits like to throw around a lot of numbers when trying to predict the direction of the US economy. The most popular economic indicators, however, aren't necessarily the best. Russ K explains why the economic indicators you hear most often are overrated and identifies which indicators you should use instead.
The Bullish Case for Energy Stocks
by Russ Koesterich of iShares Blog,
Lower crude oil inventories and less spare capacity among OPEC oil producers are just two of many reasons why I continue to be bullish on energy and energy stocks over the long term.
As I've been writing about for months, oil supply remains tight by historical standards. Among the reasons I gave in a post early this summer, I expect crude prices to rebound in the long term...
Groundhog Day: Will Septembers Sell-off Repeat?
by Russ Koesterich of iShares Blog,
Investors might feel they are trapped in their own version of Groundhog Day this year as Russ K expects September, which has historically been the worst month of the year for capital markets, to once again fall victim to its well-documented negative seasonal bias.
Thinking about Treasuries? 2 Reasons to Think Again
by Russ Koesterich of iShares Blog,
The Fed will soon own more long-term Treasuries than the entire private sector. Russ explains the implications of this milestone for US long-dated debt and shows investors where to look for more attractive alternatives.
Global Telecom Stocks Lose Luster
by Russ Koesterich of iShares Blog,
As their prices have increased in recent months, global telecommunication stocks have started to lose some of their luster. Russ K explains why factors such as valuation and profitability have prompted him to change his view of the sector.
CASSH-ing In
by Russ Koesterich of iShares Blog,
Many of the large, developed markets, including the United States, are mired in excess debt and prolonged deleveraging. Russ believes that some of the smaller developed countries the ones he refers to as the CASSH countries -- are proving more resilient.
Whither Global Stocks? Be Sure to Track This Data
by Russ Koesterich of iShares Blog,
Sometimes, either weak economic numbers or strong economic numbers can point to a surge in US and global equities. This could be one of those weeks. Russ has his eye on two important economic reports that are being released this week, and he explains why weak data may be positive for global equities.
Days of Reckoning - The Potential Impact of the 2012 Elections on the Markets
by Russ Koesterich of iShares Blog,
Elections can, and often do, matter for markets, but not necessarily for the reasons investors tend to emphasize. For example, there is little historical evidence that markets perform better or worse depending on which party occupies the White House. There is also no concrete evidence that markets do better under divided government, a myth that seems to have taken hold thanks to the bull market of the 1990s.
After the Downgrade: German Stocks or Bonds?
by Russ Koesterich of iShares Blog,
Amid rising uncertainty surrounding Europe, Moody's earlier this week lowered its outlook for Germany. Now, given the likelihood that Europe will continue to be a source of economic risk and investor angst, many investors are wondering whether they should stick with German assets. Should investors stick with German assets? Russ says the answer is yes on German stocks but no on the country's bonds.
US Utilities: Don't Overpay for Yield
by Russ Koesterich of iShares Blog,
As short-term interest rates remain at or close to zero, investors starved for income should be wary of overpaying for yield, particularly when it comes to US utilities. In the search for yield, Russ believes investors have pushed US utilities prices too high. His advice: Don't overpay for yield.
Global Slowdown: Preparing for a Recession
by Russ Koesterich of iShares Blog,
While Russ believes that the most likely scenario for the global economy in 2012 is continued slow growth, he explains what's behind the recent global slowdown and what investors may want to consider doing if it grows worse.
4 Reasons to Like China
by Russ Koesterich of iShares Blog,
The Chinese central bank last week announced its second surprise rate cut within a month. The action from the central bank was an acknowledgement that the worlds second largest economy is slowing. Despite Chinas economic slowdown, Russ continues to hold an overweight view of Chinese equities for four reasons.
Swimming with Black Swans: The Volatile Decade Ahead
by Russ Koesterich of iShares Blog,
So long smooth sailing. Russ Koesterich explains why he expects the rest of this decade to be characterized by more market volatility and why seemingly out-of-the-ordinary Black Swan events could become more frequent.
After the EU Summit a Host of Unresolved Questions
by Russ Koesterich of iShares Blog,
Last weeks European summit went better than it might have, according to Russ, but it fell far short of solving the regions structural issues. Here he outlines the big questions facing the European Union and why the regions crisis will drag on.
The Coming Oil Supply Gap
by Russ Koesterich of iShares Blog,
Prices at the gas pump are falling and slow global growth is expected to keep oil prices down in the near term. But Russ has a handy new chart showing why he expects crude prices to rebound in the longer term: global oil demand is likely to greatly outstrip supply by 2030.
The Rocky Road Ahead This Year
by Russ Koesterich of iShares Blog,
Back in February Russ warned that an eerie quiet had settled over the market and investors should prepare for an increase in volatility. Well, four months later that eerie quiet has lifted, and Russ outlines three reasons he expects the second half of this year to be much more volatile than the first.
Where in the World is Risk Today
by Russ Koesterich of iShares Blog,
With the sovereign debt crisis centered in the developed world, the traditional notion that all developed markets are less risky for investors than all emerging markets doesnt hold up anymore. Today, while developed markets certainly top the list of the least risky countries and vice versa for emerging markets, some developed markets are now just as risky as emerging markets. At the same time, some emerging countries are now just as safe as their developed market counterparts.
After the Greek Vote, Now What?
by Russ Koesterich of iShares Blog,
The relief rally Monday following Sundays Greek election was short lived. To be sure, the outcome of Sundays election is near-term good news for investors. A government led by the pro-bailout New Democracy is likely to follow more of the austerity program and to try, at least for now, to keep Greece in the euro. That said, there are two main reasons why markets arent continuing to celebrate the Greek vote.
Why Oil Prices Can Move Higher
by Russ Koesterich of iShares Blog,
With oil prices down roughly 25% from their 2012 peak, many investors are asking about the future direction of crude.
In my opinion, while fears of a hard landing in China and overall weakness in global growth are likely to keep prices down in the near term, crude should rebound in the longer term for three reasons.
4 Reasons Europe is a Major Risk for US Stocks
by Russ Koesterich of iShares Blog,
Some investors have argued that events in Europe are having a disproportionate impact on US stocks. Their logic: the US is in the midst of a recovery, albeit a fairly anemic one, that is unlikely to be derailed by Europes travails. Its true that the US economy is doing much better than Europes, and especially southern Europes. But from my perspective, the trajectory of the US economy and the US stock market are very much tied to eurozone events. Here are four reasons why US investors should not underestimate the potential impact of events in Europe.
After Disappointing Jobs Data, Now What?
by Russ Koesterich of iShares Blog,
Stocks tumbled Friday after particularly disappointing May jobs data. Russ provides his take on what the report means for the US economy and stocks going forward. First, the implications for the economy: As jobs numbers tend to lag broader economic activity, the report doesnt in itself suggest that the United States is slipping back into recession. In addition, its worth calling out that according to the new data, the United States created only 69,000 net new jobs in May, less than half of what economists were expecting and the slowest rate of net new job creation in a year.
The Eurozone Crisis: 4 Developments to Watch
by Russ Koesterich of iShares Blog,
With the future of Greece and the eurozone still so uncertain, many investors are asking how they might predict what the most likely outcome is.
While I dont have a crystal ball, in addition to paying attention to eight pivotal eurozone events happening from now until July, Im also watching for four critical developments in the run-up to the second Greece election on June 17. Heres my watch list.
The Eurozone Crisis: 8 Key Events to Watch
by Russ Koesterich of iShares Blog,
Be prepared for another volatile summer. From now until July, there are a number of pivotal events from votes to meetings that could help dictate Greece and the eurozones future, and will most certainly drive market sentiment. But because the outcome of many of these events is so hard to predict, I expect markets will remain especially volatile in the days leading up to these key dates. Among the 8 pivotal moments highlighted, key events include a May 31 Irish referendum on the Stability Treaty, and the June 17 Greek elections, among others.
The Three-Part Case for Commodities
by Russ Koesterich of iShares Blog,
With both gold and broader commodity indices down significantly month to date, many investors are asking if they should lower or even remove their commodity exposure. I believe the answer is no.
First, its useful to put the recent weakness in perspective. Both gold and a broad basket of commodities are down roughly 10% over the past three months. While the losses represent a significant correction, they are in line with the performance of equity markets over the same time period. Even more importantly, here are three reasons for maintaining a strategic exposure to commodities.
The Achilles Heel of the US Economy
by Russ Koesterich of iShares Blog,
The Achilles Heel of the US economy may just be that entitlement programs havent kept pace with US demographics, a fact that has long-term implications for investors.
According to a recent annual government report on entitlement programs, the Social Security trust fund is likely to run out of money in 2033, three years earlier than previously projected. Meanwhile, both Social Security and Medicare arent sustainable in the long term without structural changes.
The Pros and Cons of Preferreds
by Russ Koesterich of iShares Blog,
Given the universal hunt for yield, many investors are asking me what I think of preferred stocks. I believe that this asset class certainly has a place in yield oriented portfolios, but I wouldnt overweight preferred equity funds at this time and would instead remain neutral. Why? While preferred funds are certainly providing a healthy, relatively high yield in a low yield environment, the extra yield comes with a lot of volatility. urrently, preferred funds are offering a yield similar to that of a high yield bond fund, but preferred funds are also offering about 50% more volatility.
The Investing Implications of Price Creep
by Russ Koesterich of iShares Blog,
While double-digit inflation is extremely unlikely this year, the new core inflation figure shows that prices are slowly creeping up in the US. For investors, there are a couple of implications. 1.Recognize purchasing power erosion: Even if inflation stabilizes at current levels, over the long term 2.3% inflation would still cause prices to rise by 50%. 2. Consider equities and commodities: While uncertainty over Europe and Chinese growth are likely to keep volatility high this summer, investors should consider using near-term market weakness to add to long-term equity and commodity positions.
Will a Grexit Come to Pass?
by Russ Koesterich of iShares Blog,
The Greek election provided further evidence that despite all of the accords, firewalls, and bailout funds, Europes economic future remains on a precipice. In a reflection of deepening economic malaise in Greece, the majority of the May 6th vote went to far left and right parties, few of which ran on a platform of fiscal austerity or loyalty to Europe. While the election certainly raised the odds of Greece eventually leaving the euro, its too soon to conclude that a Greek exit is imminent. Greeces fate now hinges on the results of a second election, expected to occur as early as mid-June.
Inflation Fighters
by Russ Koesterich of iShares Blog,
Whether you agree with Russ that inflation isnt a short-term concern, or you fear the worst in the near future, preparing a portfolio for inflation is on many investors minds. Russ weighs in on how different asset classes measure up against inflation. TIPS provide an effective inflation hedge and having a benchmark allocation to this asset class is prudent, the many investors clamoring into TIPS are currently contributing to, and accepting, an average negative real yield across the entire TIPS curve. In addition, TIPS will not perform well if real yields rise along with rising interest rates.
The US: Stuck in the Slow Lane How Long?
by Russ Koesterich of iShares Blog,
A slow growth world does not necessarily mean the death of equities or the absence of opportunities. It does, however, suggest that investors need to have realistic expectations for the US economy, and for most of the developed world. Slower growth, lower interest rates and lower multiples are arguably consequences of higher public debt. And this may be an issue were still contending with in two decades time.
Sell in May: Volatility Isnt Going Away
by Russ Koesterich of iShares Blog,
According to the old adage Sell in May and go away, investors are supposed to cash out their stock market positions in May and then take the traditionally poorer performing summer months off. Its no wonder, then, that many investors are asking if its time to sell, a question all the more pertinent after last weeks losses. In my opinion, the answer is a qualified yes. I believe that investors should consider lightening up on certain positions and getting more defensive. But my belief is not based on the month of the year, but rather on current market volatility.
Results 551–600
of 722 found.
