Asset allocation is one of the integral aspects of portfolio management, with strategic asset allocation, according to some research, (Ibbotson and Kaplan, 2000) accounting for as much as 90% of the variability in returns. Balancing risk and return and obtaining appropriate diversification are critical objectives of the asset allocator. Investment time horizons are an essential factor too,…
Financial markets can experience sudden and extreme downward movements. Investors are highly concerned about the performance of their assets in such scenarios. Some assets perform badly in a downturn in the market; others have milder reactions.
The outlook for the Global Market Index’s risk premium ticked higher for a third month in a row in November. The adjustment, due to evolving market conditions, lifted GMI’s expected long-term return to an annualized 4.9% (before factoring in a “risk-free” rate). The new estimate is fractionally above last month’s forecast (4.8%) and modestly higher […]
Advertising agency to take £11.6m hit as it issues second profit warning in three monthsM&C Saatchi’s share price has plunged by 45% after the advertising agency admitted its accounting scandal was much worse than previously thought and issued a second profit warning in less than three months.The embattled group, which has clients including O2 and Sky in the UK, said that after an external…
Equilibrium bond-pricing models rely on inflation being bad news for future growth to generate upward-sloping nominal yield curves. We develop a model that can generate upward-sloping nominal and real yield curves by instead using ambiguity about inflation and growth.
Shared ownership works well if share prices are rising, but the ad firm’s big fall may spell troubleHere’s Jeremy Sinclair’s entry into the book of silly things said by advertising folk: “2018 was our 10th year of growth,” declared the chairman of M&C Saatchi in the annual report in May. “Growth of profit, earnings and dividends. Whilst it might be too early to say we’ve cracked it, it does…
Summing up the outlook for 2020, Schroders’ CIO thinks that superficially, overall market valuations look uninteresting. But dig a little deeper and there may be reasons for active investors to be enthusiastic about 2020.
Many reports and analyses interpret the release of new economic data based on the headline surprise—for instance, total inflation, real GDP growth and the unemployment rate. However, we find that headline news alone cannot adequately explain the responses of market prices to new information. Rather, market prices react more strongly, on average, to non-headline news such as the composition of GDP…