Greg Woodhams, CFA, Chief Investment Officer, U.S. Growth Equity – Large Cap
In this quarter’s other CIO Insights, the discussion has been about the “normalization” of economic growth, interest rates, and financial market conditions. A more normal market characterized by higher volatility—as well as a greater dispersion and lower correlation of returns among individual securities—could present active managers with greater opportunity to generate excess performance through stock selection.
This is the year that millennials will overtake baby boomers as the largest living generation. According to population projections released by the U.S. Census Bureau in December 2014, millennials (ages 18 to 34) will number 73.2 million in 2015, just ahead of the 74.9 million baby boomers (ages 51 to 69) left in America. Generation X (ages 35
to 50) is expected to surpass the baby boom generation by 2028. Continue reading →
This quarter, we address the potential return of stock market volatility and our investment process. Whatever the market conditions—“normal” or not, more or less volatile—we apply the same multifaceted approach. One reason we use that multifaceted approach is that the underlying drivers of stock performance go in and out of favor over time. Whether conditions can be deemed to be normal or something else, it makes sense that different companies and different stocks would do well at different times.
We have so many obligations as Americans that it’s no wonder that things inevitably stress us out! The American Psychological Association recently published a report on stress, concluding that stress about money and finances are the nation’s most prevalent source of strain. In 2014, the top four sources of stress—when people were asked on an individual source basis—were money (64%), work (60%), family (47%), and health (46%). Continue reading →
David Hollond, Chief Investment Officer, U.S. Growth Equity – Mid & Small Cap
Volatility has returned to the market since all-time highs were attained in September. Stocks are currently muddling through a conglomeration of uncertainty wrought by global economic growth concerns, plummeting oil prices, the Ebola virus outbreak, as well as ongoing geopolitical risks.
Fears of slower global growth impacted stocks initially, but better-than-expected earnings results refocused investors on company fundamentals as the overall number of accelerating stocks continues to increase at an encouraging pace. We see several opportunities to tap into accelerating growth themes, including non-residential construction, health care, and banks with unique drivers of improvement.
Today’s income investors face a substantially different environment than their parents did in retirement. Inheritances and traditional pension benefits are no longer the primary sources of retirement income. Longer life spans mean retirees must rely more than ever on converting their own nest eggs to a sustainable, monthly income stream through higher-yielding investments. But a single investment focus—maximizing yield for income today—may not be the best strategy over the long term. Continue reading →
One of our favorite quotes is by the Nobel laureate Nils Bohr, who remarked that “prediction is very difficult, especially if it’s about the future.” With a likely increase in financial market volatility going forward, Bohr reminds us that we should not position for a single anticipated outcome but rather prepare for a range of potential financial results.
Phillip N. Davidson, CFA, Chief Investment Officer U.S. Value Equity
While the term “volatility” is often associated with risk, as risk managers we respect volatility and view it as an essential component of active security selection.
There has been a significant rebound in domestic equity markets over the past five years and a low-volatility equity environment—especially over the last three years—a combination of factors that has proved challenging for our process. Conversely, we believe the ideal environment for active value management is one in which securities are more likely to be mispriced and markets are less efficient (which usually occurs during increased uncertainty and volatility). Continue reading →
If jobs are hard to come by where you live, you might want to check out America’s hottest markets for employment. A recent study conducted by WalletHub sought to assess the relative strength of 150 local job markets through 16 metrics ranging from employment growth to job opportunities. The best cities to find a job included Seattle, Washington; Des Moines, Iowa; Gilbert, Arizona; Sioux Falls, South Dakota; and Freemont, California. Conversely, the worst cities to find a job in 2015 are San Bernardino, California; Moreno Valley, California; Detroit, Michigan; Hialeah, Florida; and Memphis, Tennessee. Continue reading →
Mark S. Kopinski Co-Chief Investment Officer, Global and Non-U.S. Equity
Keith Creveling, CFA Co-Chief Investment Officer, Global and Non-U.S. Equity
It appears we have reached an inflection point in the global equity markets. After a challenging year, many global investors expect a return to the higher levels of volatility and more muted returns that were previously considered “normal.”
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