We explore why extreme market concentration is unsustainable, how competition and innovation drive broader market performance, and why diversification is key as volatility rises. Don’t let market extremes catch you off guard.
In our year ahead outlook, we unveil 5 key factors we believe offer rare certainty in these uncertain times. Discover how we’re navigating this landscape and positioning portfolios to seize opportunities and mitigate risks in the year ahead.
Dan Suzuki analyzes current and historical trends in investors' stock, bond, and cash holdings to assess whether this "cash on the sidelines" narrative could be a valid catalyst for pushing the stock market to new highs.
We compare investor risk-taking behaviors at the start of the bull market with those nearly 16 years later. We also analyze key market areas that can offer essential diversification to help manage overall portfolio risk.
For most of the last fifty years, fixed income investing has been characterized by owning some combination of Municipals, Corporates, Treasuries and Agency Mortgage-Backed Securities.
For most of the last fifty years, fixed income investing has been characterized by owning some combination of Municipals, Corporates, Treasuries and Agency Mortgage-Backed Securities which has worked well with periods of secular disinflation.
The most common questions we’ve been asked as the election approaches are generally about the Federal debt and deficits. Many investors worry about a looming “day of reckoning” for US debt. They fear the US’s fiscal imprudence will eventually force a sudden and dramatic repricing of US debt. In this insight, we explore the modern history of US debt to GDP across several Presidential administrations and outline why investors should not be worried about a financial apocalyptic abyss.
The Federal Reserve's dual mandate is to maintain stable inflation and maximize employment. The Fed manages liquidity through its policy tools, but it's crucial to remember that the Fed is just one source of liquidity among several. In this quick insight, Dan Suzuki examines why tight Fed policy doesn't always equate to tight liquidity and looks into the historical data on Fed cuts.
History suggests Presidential elections are not nearly as important to the financial markets as the media plays them up to be, and a focus on fundamentals rather than political slogans has generally been beneficial. Historical asset class and sector performance shows virtually no consistent performance pattern under Democratic or Republican Presidents.
Because there is unprecedented use of the word “unprecedented,” we thought it appropriate to expand our annual Charts for the Beach from 5 charts to 10 charts and tables this year. So, probably best to stay under the beach umbrella as you read our unprecedented extended edition.
For years, the emphasis within fixed income investing has been to seek security-specific alpha in an illiquid bond market where no single security significantly impacts portfolio returns.
An increasing number of investors believe that value investing might never again be successful. We think that is a strange conclusion because valuation is critical to every transaction in the economy. An economy cannot function properly without thoughtful value assessments. In our latest insight, we analyze the differences between value and growth investing over time and outline the generational opportunities that investors may be overlooking.
The further acceleration and broadening of corporate profit growth supports RBA’s bullish near-term outlook for many regions and sectors of the stock market. However, when constructing portfolios, it has paid to separate the equity asset allocation decision from the equity selection decision.
There are many historical relationships within financial markets based on sound economic theory, which accordingly repeat cycle after cycle. High yield bonds and small cap stocks typically move in line with each other, but the two have diverged since 2022.
In our latest research insight, RBA's Senior Research Analyst, Matthew Poterba, explains the numerous positive developments that help explain China's strong year-to-date outperformance.
Investors often forget that nothing in the financial markets is permanent. Regardless of the hype or castigation, what’s hot eventually becomes cold and what’s cold eventually becomes hot. While we remain very skeptical of today’s market’s heroes, we think the range of investment opportunities is historically broad, historically attractive, and a once-in-a-generation opportunity.
The US industrial renaissance is not a new theme for RBA. We first wrote about it in 2012 when we argued that US corporations had moved operations overseas because they were too focused on labor costs, and were ignoring transportation, governmental, geopolitical, and supply chain risks.
The current speculative environment seems to increasingly resemble the Technology Bubble of 1999/2000. All bubbles eventually burst and the burst of the Tech Bubble led to the so-called lost decade in equities.
The basic tenets of building wealth, like having a well-diversified portfolio with long time horizons, are not difficult concepts that are relatively easy to implement. So, why don’t people follow them? In our latest insight, we analyze several risk/return charts across multiple time horizons and reveal the results that investors tend to find surprising.
In what was supposed to be the “year of fixed income,” 2023 proved to be an OK year, but not a generational one. As we shift gears into 2024, spreads are tight, rates are low, and the market is pricing in a whopping six interest rate cuts before year-end.
2023 will likely go down in history as a year of extreme speculation. However, we believe there are once-in-a-generation investment opportunities for 2024 resulting from that overly speculative myopia.
History shows that returns are greatest when capital is scarce. But investors need to also realize that risks escalate when there is a glut of capital.
Whether famous or infamous, the Magnificent 7 stocks have been 2023’s stock market story. However, the fundamentals of the Magnificent 7 aren't uniquely superior, and the breadth and depth of other growth opportunities seems historically large and attractive. In our latest insight, we complete an analysis of US companies with expected earnings growth greater than 25% and compare it against the Magnificent 7 stocks.
Read our latest insight to learn why we believe the economy isn't landing but that we see profits taking off suggesting a once-in-a-generation investment opportunity.
In our latest fixed income insight, we highlight four compelling investments for the remainder of 2023 and into 2024.
Read our quick insight to learn why investors should be careful when Wall Street starts to feel like Easy Street.
We started RBA in 2009 primarily because we thought the US stock market was entering one of the biggest bull markets of our careers. However, most investors did not agree with our bullishness. Now, risk aversion seems a thing of the past.
It’s time for our annual August report, “Charts for the Beach.” Each year we highlight five of our favorite charts we think consensus is currently overlooking. So, head for the beach, but be safe and heed the warning about the critical lifeguard shortages. Yet another sign the labor markets are historically tight!
Building wealth isn't difficult, so why don't people do it? As younger generations reach the point where they have finally saved enough to begin investing it may seem overwhelming to know where to start.
Many stock market observers have commented regarding the market’s narrow leadership. However, few observers agree why this narrow leadership is occurring. Some, like us, believe it's purely speculation and others believe there's fundamental justification for it.
It has been over seven months since the October lows, and during this time, the S&P 500® has rallied over 19%. Naturally, investors are pondering whether this marks the beginning of a new bull market.
A quick PSA from RBA: Beware of the coming credit crunch. The key goal of tightening monetary policy is to reduce the flow of credit. It is also important to note that the weakest links always default first. This cycle is so far no different.
We've described the past several years' stock market as a seesaw in which the "market" was the fulcrum of the seesaw. On one side of the seesaw sit the highly speculative growth sectors and on the other side, sit virtually everything else in the global equity markets.
What's on the menu? Heading into a profits recession, there are many things to consider when building a portfolio. Here's a sneak peek at what we are serving up.
Every news item these days seem to swing between extremes. When in reality, these bank failures are not atypical. Read our latest insight to learn what similarities these recent bank failures have with previous failures and what the warning signals are.
Read our latest insight where Dan Suzuki explains what investors need to know about the Silicon Valley Bank collapse.
Read our latest insight to learn why we believe this year's market rally is just speculation and how we are positioning our portfolios for a change in leadership.
Read Michael Contopoulos' latest report highlighting opportunities outside of Investment Grade corporate bonds and why one does not need to own credit to generate income at the moment.
Last year an infamous cryptocurrency ad featured the slogan “fortune favors the brave.” And while historically fortune does favor the brave, there is a difference between courage and blind faith.
During the holiday season, everyone is looking for a good deal. While searching by the highest percentage discounts seems like it may lead to a steal, the results tend to be underwhelming. Investors often make the same mistake during bear markets.
2023 may be another difficult year for investors who hope to relive the speculative markets of 2020 and 2021.
Remember, the Fed hikes short-term interest rates to slow long-term growth and inflation.
One of the reasons we formed RBA in 2009 was we thought the US was entering perhaps the biggest bull market of our careers.
It has always been important to separate one’s political views from one’s investment portfolio.
Investors see a myriad of unknowns right now, and popular discussion continues to focus on a dichotomy between growth and cyclicals. We think there is a third choice that's being ignored.
We more than doubled our portfolios’ duration in a single day this summer.
Bubbles don't deflate overnight and bear markets always signal a change in leadership, yet investors appear eager to jump back into owning prior cycle winners.
It’s time for our annual August report, “Charts for the Beach.” Each year we highlight five of our favorite charts we think consensus is currently overlooking. Load up the cooler, get your towel and chair, and enjoy the charts! And, watch out for those sharks!!
We’ve all heard the famous Yogi Berra quote, “Nobody goes there anymore. It's too crowded.” Investors today seem jazzed up on an opposite but similarly absurd concept: Wall Street thinks it’s a huge buying opportunity because everybody’s too bearish. In his latest Quick Insight, Dan Suzuki analyzes explains seven signs that suggest that investors have yet to capitulate.
Global liquidity has tightened dramatically this year, which may be a headwind to global equity markets. However, not all central banks are tightening because not all countries have an inflation problem. Our latest research insight explains why we think Japan and China warrant a closer look.