The Fixed Income Channel

2018 Five-Year Investing Trends

Here’s what you need to know about the forces that we believe will shape the economic and market landscape during the next five years. We share six key themes we see emerging across the global markets and economy, and offer our outlook for equity, fixed income and real asset classes.

Rebalance or Rush Hour?

Embracing a disciplined approach to rebalancing can lead to better long-term investment outcomes. Overcoming the natural tendency to wait-and-see before repositioning our portfolios can be a difficult, but worthy, goal for investors to pursue. Advisors can help investors surmount this and other behavioral hurdles by adopting a systematic rebalancing approach that effectively institutionalizes contrarian investment behavior.

Quarterly Letter

Despite another interest rate hike in June by the Federal Reserve that raised the target federal funds range to 1.75-2.00%, along with plenty of increased tariff talk and (some) implementation by the Trump administration, the investment world was relatively calm in the second quarter of 2018.

Charts for the beach - 2018

Don’t leave home without your summer essentials: sunglasses, sunscreen, towel and RBA’s Charts for the beach.

The Latest Look at the Total Return Roller Coaster

Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $19,357 for an annualized real return of 13.28%.

Questions I'd be Asking If I Owned Tesla Stock

If I were long in Tesla’s shares I’d be asking certain questions. After all, you’re paying $50 billion for a company that trades completely on the spoils of future dreams.

Market Remains Overvalued

Here is a summary of the four market valuation indicators we update on a monthly basis.

  • The Crestmont Research P/E Ratio
  • The cyclical P/E ratio using the trailing 10-year earnings as the divisor
  • The Q Ratio, which is the total price of the market divided by its replacement cost
  • The relationship of the S&P Composite price to a regression trendline

Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator

With the latest July close data and Q2 GDP Advance Estimate, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 129.16%, down from 132.7% the previous quarter.

Cutting through the Noise: Trump, Trade and Twitter

In 2018, President Trump’s tweets on international trade have led to bouts of market volatility and concerns of a global economic slowdown. Against this backdrop, Franklin Templeton Multi-Asset Solutions’ Matthias Hoppe explains why he thinks economic fundamentals will determine the fate of the global economy more than Trump’s words will.

Should Equity Investors Lose Sleep Over the Yield Curve?

A single line chart is keeping an awful lot of investors up at night: the US Treasury yield curve. It’s been flattening steadily since the end of 2016 and is nearly the flattest it’s been since 2007. We all remember what happened after that.

What Does It Take to Be in the Top 1 Percent? Not As Much As You Think

When you think of the top 1 percent of all income earners in American households, how much do you think this group rakes in? Millions? Tens of millions? What about the top 10 percent?

Revisiting Corporate Credit amid Market Volatility

In 2018, rising inflation, higher US interest rates and escalating trade tensions have led to concerns about global economic growth and bouts of equity-market volatility.

Esg Survey: Spotlight on Integration by Fixed Income Managers

How are today’s fixed income managers integrating ESG factors into their investment practices? Learn what our latest ESG survey reveals.

Moving Averages: July Month-End Update

Valid until the market close on August 31, 2018.

The S&P 500 closed June with a monthly gain of 3.60% after a small gain of 0.48% in June. All three S&P 500 MAs are signaling "invested" and three of five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard REIT Index (VNQ), and PowerShares DB Commodity Index (DBC) — are signaling "invested".

Fixing China’s Municipal Bond Market

The rapid growth of local government debt in China is a potential threat to the country’s financial stability. At the root of the debt problem is a severe fiscal imbalance that is driven by domestic politics.