Commentary

Trump 2.0: The Deregulation Agenda – No New Rules?

Deregulation is among President Donald Trump’s most enduring policy themes. In his 2016 campaign, he called for widespread deregulation and made it a central plank in both his economic and energy platforms.

Commentary

Asset Allocation Interactive at 10 Years: The Good, the Not Too Bad, and the Ugly

Ten years ago, Research Affiliates launched the Asset Allocation Interactive online tool, making our CMEs freely available to the public. With one full cycle complete, we can see what has worked well and where we can improve.

Commentary

Capitalization-Weighted Indexes, RAFI, “Smart Beta,” and Factors (JPM Series)

Index funds emerged in the early 1970s and were designed to match rather than beat the market. For decades, they were associated with the capitalization-weighted (CW) market indexes that defined their investment approach.

Commentary

The Greatest Scourge in Factorland: Revaluation Alpha = Fake Alpha (JPM Series)

We are all familiar with this SEC-required warning that “past performance does not predict future performance.”

Commentary

The Equity Risk Premium: Nine Myths (JPM Series)

Many of the myths and controversies surrounding the equity risk premium (ERP) are rooted in semantics: The same term is used for multiple purposes.

Commentary

The Efficient Market Hypothesis vs. Roaring Kitty (JPM Series)

Much of modern finance falls into one of two camps, neoclassical finance and behavioral finance. The former posits efficient markets, the latter posits the opposite.

Commentary

Past, Present, and Future of Modern Finance (JPM Series)

Accumulating inconsistencies in the prevailing paradigm then trigger a crisis, leading to the emergence of new theories and ideas, resulting in a paradigm shift where the old framework is rapidly replaced by a new one.

Commentary

Watch Out for Expensive EM Markets

The latest AI-driven euphoria, led by big tech names that include NVIDIA, has dominated investment sentiment in the post-COVID era. Of course, many investors know that this has driven the U.S. equity market to an all-time high, stretching valuations to an extreme level (U.S. CAPE is at the 98th percentile of historical observations!).

Commentary

The Shifting Sands of Alternative Risk Premia Strategies

The 2022 broad market downturn across major asset classes came as a nasty surprise to investors. Historically, such an event is very rare, and no one was expecting to see almost all asset classes down for the year. Yet, even though it might seem as if diversification was of no help in 2022, the story changes if we look beyond the major headline asset classes.

Commentary

Change Required: Immigration Reform is an Economic Necessity

News of that day included rioting in northern England, apparently in response to misinformation spread online claiming the person who stabbed to death three children and injured eight others in Southport was a Muslim immigrant.

Commentary

Elections and the Stock Market: Polarization Trumps Politics

How an election affects stock market performance depends more on how close and contentious it is than on whether the winner is Republican or Democrat, liberal or conservative.

Commentary

Nixed: The Upside of Getting Dumped

No one enjoys getting dumped. This holds true in finance and investing as much as it does in romantic relationships. When companies are dumped from the major indexes, their managers and shareholders may feel jilted and their stock may flounder post-breakup.

Commentary

Time to Reconsider Europe

Following Russia's invasion of Ukraine in the early months of 2022, and the subsequent sanctions imposed by the U.S., some investors were forced to liquidate their Russian investments. Many investors, uncertain about the potential scope of the coming war, also took the opportunity to liquidate their investments in all of Eastern Europe.

Commentary

Are You a Climate Investor or Growth Investor?

First-generation low carbon equity benchmark indices were developed almost a decade ago with the goals of mitigating climate risk and preparing for the transition to a low carbon economy.

Commentary

A Stealth Tax on Prosperity

While governments responsibly issue debt to fund public investment and dampen the business cycle, the US federal government has borrowed at an increasingly prolificate pace over recent decades.