Helping you make wiser investment decisions

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An Italian Bank Run Could Crack the Euro

The Italian government is defying the European Commission’s request that it revise its draft budget for 2019 to reduce the deficit. Bond yield spreads are widening and Italian banks are under pressure. Should a bank run ensue, could the euro fall apart? After German reunification, interest rates rose to over 9% in the early 1990s. […]

The Dark Side of Low-Volatility Stocks

Marketing Ingenuity in Finance Smart beta may be the best marketing concept ever invented in finance. Buying something labeled “smart beta” makes you intuitively feel both smart and good about the investment. But if smart beta is the best investment product label ever, low volatility is a strong contender for second place. It isn’t hard […]

Diversity and Inclusion: Driving Change in Investment Management

The investment management industry has a failing grade when it comes to diversity and inclusion. But a new CFA Institute report hopes to change that with a number of recommendations and a call for “experimental partners” as part of a broader effort to move the sector forward. “Driving Change: Diversity & Inclusion in Investment Management,” which […]

Investing in a Winner-Take-All World

This time is different for the giant companies leading the global economy. That’s according to chief economist Erik Weisman, PhD, and research analyst Sean Cameron, CFA, of MFS Investment Management. At the CFA Institute Fixed Income-Management 2018 Conference, the two explained that economic activity has become more concentrated among fewer companies, and the dominant firms […]

Jeopardy! and Gender Parity on Investment Teams

Why does gender parity matter for investment teams? The first and most important reason is because it is the right thing to do. Seriously. Even if there was no return on investment (ROI) for equality, would you think it was okay to discriminate against half the population? But apparently doing the right thing hasn’t been […]

Fixed Income: “Take What the Market Gives You”

The CFA Institute Fixed-Income Management Conference is an annual event focused on global debt markets, fixed-income sectors, security selection, and portfolio construction. The Fixed-Income Management 2019 Conference will bring together researchers, analysts, portfolio managers, and top strategists in Boston, Massachusetts, on 17–18 October. Gregory Peters, managing director at PGIM Fixed Income, describes the bond analyst’s […]

Andrew W. Lo: To Survive Adaptive Markets, Look to Biology

Do market prices reflect all available information? It depends. The 2013 Nobel Prize in economic sciences, which recognized the work of Eugene Fama, Robert J. Shiller, and Lars Peter Hansen, acknowledged the efficient market hypothesis (EMH) as a good starting point for understanding asset price behavior, but also suggested that other factors should be considered when […]

Mr. Market’s Split Personality: Can Sector-Driven Factors Help?

Mr. Market has been in a volatile mood since we last analyzed his mood swings and offered a potential solution based on Fundamental Momentum. Indeed, his volatility ruled the first quarter of 2018. The Fundamental Momentum indicator anticipated this well and provided warning signs as early as mid-February 2018. But what can we do about Mr. […]

Payment Decisions: Reflections of Culture, Options, and Self

The global payments industry is dramatically improving due to technology. Mobile has changed everything. Payments are getting faster and smarter. Payment options are constantly evolving. Competition is intense. And payments are revolutionizing markets in the developing world even faster than in the developed world. “The untapped potential is enormous,” Kosta Peric wrote. “In just the next […]

Cryptocurrencies: Initial Coin Offerings (ICOs)

This is the third installment in the Cryptocurrencies series. It explores the structure, investment potential, and risks associated with initial coin offerings (ICOs). Previous editions covered the rise of decentralized money and the inner workings of blockchain technology. What are initial coin offerings (ICOs)? Initial coin offerings (ICOs) describe a borderless funding mechanism that raises capital for early-stage cryptocurrency […]

Factor Investing in Micro and Small Caps

Treasure Hunting in the Wild West of Equity Markets FAANG stocks like Apple (AAPL) are covered by dozens of highly trained financial analysts. Galaxy Gaming (GLXZ), on the other hand, is followed by exactly zero analysts. Galaxy Gaming who? Galaxy Gaming, which produces table games and betting platforms for the casino industry, has a market […]

Building an Inclusive Work Culture

Culture is key to creating a diverse and inclusive workplace, one in which everyone feels valued. But what does a culture of inclusion look like? And what steps can leaders take to ensure that they are being inclusive? These were among the questions that Lori Nishiura Mackenzie, executive director of the Clayman Institute at Stanford University, […]