Blog Posts

The Dow Jones is one of the most popular global equity benchmarks, dating back to the mid-1880s as a daily bulletin and 1896 in terms of its formal introduction as the Dow Jones Industrial Average (DJIA). The S&P 500 came around in 1957 and the more tech-themed NASDAQ in 1971. Yet as a point of […]

In this article, we’ll go through the general outlook for financial assets and factors related to the economy and portfolio construction. In particular, we’ll talk about bull markets primarily driven by central bank liquidity and how that builds leverage and risks into the system.   The three big forces There are three big forces and […]

There are a few main reasons why countries’ monetary policies move together. i) Business conditions are correlated internationally ii) Inflation rates and commodity prices tend to be correlated iii) Countries don’t want their currencies to get too strong or too weak relative to others, so the decisions of some countries’ central banks influence those of […]

Short selling, commonly known as shorting, is risky. When shorting a stock, your upside is limited to 100 percent (the value of the short); the downside is theoretically infinite as the stock can go up many multiples. Moreover, financial assets essentially “need” to appreciate over time to get the overall system to work efficiently where […]

This article was published on August 4, 2020. What if deflation sets in and there’s not much that policymakers can do about it? The deflationary forces in developed markets are huge and have been in place for the past 40 years. This has been a huge wind to the back of asset prices (through the […]

This article was published on August 4, 2020 If you’re a saver or a bond investor, the new reality is that bonds in nearly all developed markets yield around zero percent. They yield a little bit more than zero (but not much) in some developed countries depending on their duration (e.g., US, Australia). But they […]

This article was published on July 30, 2020. A new supranational issuer is set to enter the European financial markets after the EU summit agreed to a €750 billion recovery fund, known as Next Generation EU (NGEU). Because of pre-existing issues related to stagnating productivity, aging populations, and high sovereign and corporate debt, EU borrowing […]

This article was published on July 26, 2020.   As we covered in our five-part series on trading emerging markets, Turkey is an emerging market that classically gets into the same balance of payments problem over and over again. Turkey traditionally gets into economic trouble because greater borrowing by domestic corporations pushes up the country’s […]

This is Part V, and the final part of an ongoing series on how to trade emerging markets. In Part I, we covered the early part of the cycle in emerging market economies. Part II covered the up-cycle leading to the “bubble” phase and the lead-up to the consequent top in the market. In Part III, we […]

This is Part IV of an ongoing series on how to trade emerging markets. Emerging markets are of increasing interest to many traders and investors. Interest rates in developed markets are at zero (or in some cases below zero) with the yield on longer-duration, riskier assets heading down toward those yields as well. Nominal yields in emerging markets are still […]