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‘Diworsification’ – The Current Plight of Global, Risk-Based Investing

Author: Benjamin Lavine, CFA, CAIA

These past several years have not been kind to quantitative / systematic-based strategies, and the latest period spanning October 2018 through April 2019 has felt like additional salt thrown onto a festering wound. Looking back over the 10-year bull market, investment principles such as risk-based investing and diversification could have been thrown out the window in favor of investing in just one style: U.S. equities (and technology growth stocks in particular).

April 2019 Market Commentary - King Dollar

Author: Benjamin Lavine, CFA, CAIA

Global stocks (MSCI All-Country World Index or ACWI) returned 3.4% led by the U.S. and Europe, up 4.0% and 3.6%, respectively while Emerging Markets and Japan lagged returning 2.1% and 1.4%, respectively. As this 10-year bull market continues to advance despite an extended economic cycle, the U.S remains the place to be.

Speaker Highlights from the Grant’s Conference, Plaza Hotel in New York, April 9, 2019 – Part 2

Author: Benjamin Lavine, CFA, CAIA

The following are excerpts of selected presentations taken from the Grant’s Conference held at the Plaza Hotel in New York on April 9, 2019. This is Part 2 where we highlight Edward McQuarrie’s presentation, “Asset Allocation Reconsidered.” Permission has been granted by Grant’s Interest Rate Observer for 3D Asset Management to publish these excerpts. 3D interjects its own commentary and views throughout the excerpts.

Speaker Highlights from the Grant’s Conference, Plaza Hotel in New York, April 9, 2019 – Part 1

Author: Benjamin Lavine, CFA, CAIA

3D had the privilege of attending Grant’s Conference held at the Plaza Hotel in New York on April 9, 2019. This is Part 1 where we highlight Russell Napier’s presentation, “The Coming Monetary Storm.” Permission has been granted by Grant’s Interest Rate Observer for 3D Asset Management to publish these excerpts. 3D interjects its own commentary and views throughout the excerpts.

1st Quarter 2019 Market Commentary - Pull the Chute!

Author: Benjamin Lavine, CFA, CAIA

Global risk assets rebounded strongly in the first quarter led by U.S. stocks and high yield even with global interest rates falling at quarter-end over concerns of a global economic slowdown. Between the strong performance in U.S. large caps (small caps and value, not so much) and corporate credit along with a bull steepener in the yield curve, we could be seeing a set-up for renewed risk-taking as the market has been given the all-clear from the Fed that rates are not going up anytime soon, barring a major inflation scare.

Happy 10th Anniversary Bull Market

Author: Benjamin Lavine, CFA, CAIA

This is the fourth bull market anniversary piece published by 3D since my arrival at the firm in 3Q2015. From the market closing low reached on 3/9/2009, the S&P 500 Index has achieved an annualized return of 17.45% versus 10.98% for ex-U.S. developed markets (MSCI EAFE) and 10.80% for MSCI Emerging Markets. If the employment picture holds up and we see progress on global trade disputes, the global equity markets should resume their advance. World central banks have largely backed away from coordinated tightening, so the market should benefit from liquidity tailwinds and easier financial conditions.

February 2019 Market Commentary

Author: Benjamin Lavine, CFA, CAIA

With this year’s recovery in ‘risk-on’ assets (cyclical equities, commodities, credit spreads) against a soft bond market (U.S. Treasury Yields), a strong U.S. dollar (heightened demand for liquidity), and a global economy feeling the effects of a China slowdown – the Fed finds itself on a tightrope between being patient versus the risk of allowing near-term inflationary pressures to run ahead of policy.

The Flock to Quality

Author: Benjamin Lavine, CFA, CAIA

If you’re an asset allocator concerned about the near-term market environment – slowing global economy, global trade conflicts, Hard Brexit – but want to remain fully invested and avoid timing the markets, while reducing the ‘stress’ in your portfolio, what do you do?

January 2019 Market Commentary

Author: Benjamin Lavine, CFA, CAIA

We believe the markets are pricing in a slowdown but not a recession, based on January’s strong performance following dovish Fed policy-signaling and a thawing in the U.S./China trade dispute. We think global equities got ahead of themselves in January as market valuations expanded in the face of a slowing earnings growth environment (emerging markets, notwithstanding).

Gaming Brexit

Author: Benjamin Lavine, CFA, CAIA

We’re publishing this brief Brexit update in response to a recent article, “Game Theory Says Don’t Bet Against a No-Deal Brexit,” published by Leonid Bershidsky, European opinion columnist for Bloomberg. Bershidsky is skeptical the EU will agree to a deal that excludes the Irish backstop, because the EU is playing a different game than the U.K.