The Federal Reserve announced that it was raising the target range for the Fed funds rate by 75 basis points (bps) to 1.50%–1.75%. An apparent briefing to the financial press last week meant that this course of action was fully priced in by the rates market beforehand, despite just 50 bps being priced as recently […]
June 2022
US small-cap stocks have underperformed large-cap peers in recent years, opening a significant valuation discount that seems hard to justify based on relative earnings strength or balance sheet health. Looking ahead, the sector exposure of small-cap stocks may make them better positioned for the current environment of rising interest rates and high commodity prices. While […]
June 2022
Portfolio management for families of significant wealth is distinctly different than for institutions, or those with traditional wealth management needs. For these families, the wealth typically exists in a much more complex ecosystem—among real estate investments, operating companies, or multiple generations, by way of example. These factors should have a meaningful impact on investment strategy, […]
June 2022
Yes, we think corporate earnings expectations are likely too high. This is because earnings are well above the long-term trend, and we expect inflation and higher policy rates will put downward pressure on profits margins. After growing by more than 50% in 2021, global corporate earnings are significantly higher than the long-term trend. However, nominal […]
June 2022
Credit assets have sold off in recent weeks in unison with other risk assets, as market concern has shifted from one extreme of growth and inflation running too hot to another of stagflation, or even outright recession. Despite the improvement in credit pricing, we believe investors should be patient when adding to high-beta credit portfolios. […]
May 2022
Yes. We do expect venture capital (VC) returns to be negatively impacted in the coming quarters but doubt that impact will be as pronounced and wholesale as it was during the dot-com era. To this day, the US VC 1999 vintage year fund cohort still reports an overall negative internal rate of return and has yet to return […]
May 2022
As entrepreneurs know well, the process of creating and managing a successful business is complex and requires great skill, insight, and hard work. Successful management of significant wealth requires similar attributes; however, not all the characteristics fundamental to entrepreneurial success translate to effective portfolio management. This can create challenges for entrepreneurs—whether they are still actively […]
May 2022
Yes, although such investments are not for the faint of heart. As we have seen in 2022, both stocks and bonds have lost value as inflation expectations have escalated. The current environment favors building robustness into portfolios, and exposure to commodities—in addition to high quality bonds—could be a part of this, particularly for investors whose […]
May 2022