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Hindsight Is 20/20. Foresight Isn’t.

The year 2019 served up many examples of the unpredictability of markets. Interest rates that US policy makers expected to rise fell instead. American consumers’ confidence weakened as the year began,1 and news headlines broadcast fears of an economic slowdown. But investors who moved onto the sidelines may have missed the gains in the US stock market....

How Markets Work and the FAANG Mentality

Is the market getting by with a little help from the FAANGs? And does their performance stand out historically? Investors may be surprised that it's common for a subset of stocks to drive a sizable portion of market returns. The stocks commonly referred to by the FAANG moniker—Facebook, Amazon, Apple, Netflix, and Google (now trading as...

Value Judgements: Viewing the Premium’s Performance Through History’s Lens

Has value really lost its vigor? While growth stocks have outperformed in the past decade, value returns have largely tracked their long-term historical average. There’s a misconception in the markets: value stocks have lost their vigor. Value stocks have underperformed growth stocks over the past decade. In the US, the annualized compound return has been 12.9% for...

IPOs: Profiles Are High. What About Returns?

Initial public offerings (IPOs) often attract initial public interest—especially when familiar brands become broadly available to investors for the first time. In recent months, investors have had the opportunity to buy shares of ride‑hailing networks Uber and Lyft, workplace productivity services Zoom and Slack, and other high-profile businesses ranging from Pinterest to Beyond Meat. News...

Timing Isn’t Everything

Over the course of a summer, it’s not unusual for the stock market to be a topic of conversation at barbeques or other social gatherings. A neighbor or relative might ask about which investments are good at the moment. The lure of getting in at the right time or avoiding the next downturn may tempt even...

Trade Tensions

Trade negotiations have been front and center for months. Discussions with China seemed to have stalled, prompting the U.S. to increase tariffs on certain imported goods in early May. Additionally, we’ve seen tariffs used as leverage, like in the recent experience between the U.S. and Mexico over immigration. With all these moving pieces, it can make investors nervous about their...

The Randomness of Global Equity Returns

You don’t have to be an expert in every region to benefit from the opportunities those regions represent. A well-structured portfolio can help capture returns where and when they occur. Investment opportunities exist all around the globe. Across more than 40 countries, there are over 15,000 publicly traded companies. If you listen to the news, however, some countries...

When Value Underperforms

Imagine you are a competitive diver in the Olympics. You will be judged on your form, your technique and the difficulty of your dives. The more complicated a dive, the higher your potential score. But also, the higher the chances of not executing the dive perfectly. Investing is similar. The more risk you take on...