Active Risk Allocation (ARA) update: Asset allocation has for decades been known to be the most important single factor for investment return. Our Active Risk Allocation aims to get the balance between asset classes right. Sometimes we can also derive useful...
Active Risk Allocation (ARA) update: The recommended portfolio risk allocation is slowly falling below neutral after an extended period of elevated risk exposure. Several factors are changing yet again and none of the changes are for the better. USA’s failure in...
A bungled response in the USA to the pandemic now threatens to derail the global economic recovery. The US economy will likely shrink by 3-4% in 2020-22. A Federal Reserve Governor says a “thick fog” of uncertainty is surrounding the US economy. Despite extraordinary...
On 25 May 2020 we wrote that something was afoot in the financial markets. We observed that both bond markets and stock markets were gaining on a global scale. It began to look like a rerun of the dynamics of January 2020 that led up to the stock market crash in late...
We are getting worried. Not about the progress of the Covid-19 pandemic, but about specific areas of the financial markets. We have a sneaking feeling that the markets are heading straight for a situation where a risk-off reaction could wreak havoc on the stock...
Data now indicate that very few people under the age of 60 get symptoms when they are infected with the disease and even fewer die from it. Infections and deaths are in 96% of all cases in the group of 60+ with pre-existing health conditions. As this observation...
Once the Coronavirus has been successfully brought under control, the financial markets will begin to discuss who to blame for the abysmal investment results. Only when the tide goes out do you discover who's been swimming naked Most asset managers and investment...
The growth rate of the COVID-19 virus is falling worldwide, and a few countries are now taking steps towards relaxing the lockdown initiatives. We expect that several countries will announce similar measures as they see growth rates falling below 5%. The purpose is to...
Active Risk Allocation (ARA) update: With yesterday´s news that the Japan State Pension Fund GPIF is ready to take a 31% holding in foreign government bonds, one of the final bits of a huge global puzzle fell into place. We believe that the structure of a safety net...
Could the global economies bear to simply make the private sector whole? Compensate the private sector for the brutal drop in economic activity that looks increasingly likely? Under a set of highly stylised assumptions we conclude - Yes, some countries could. Some of...