Asset Allocation Bi-Weekly
Confluence Investment Management offers various asset allocation products which are managed using “top down,” or macro, analysis. We publish asset allocation thoughts on a bi-weekly basis, updating the piece every other Monday.
Asset Allocation Weekly (July 8, 2016)
by Asset Allocation Committee One of the great characteristics about working in financial services is that there are always surprises. Recently, we came across a situation in the S&P earnings data that we had not noticed before. It is well known that earnings have two variations—as reported and operating. As reported earnings include all costs. Thus,… Read More »
Asset Allocation Weekly (July 1, 2016)
by Asset Allocation Committee The Brexit situation is dominating the financial news, and rightly so—such events are unusual and their outcomes are usually uncertain. As part of our asset allocation process, we examine these types of issues and adjust our portfolios to account for them. Although our process is cyclical, meaning we pay particular attention to… Read More »
Asset Allocation Weekly (June 24, 2016)
by Asset Allocation Committee Last week, St. Louis FRB President Bullard issued a position paper that represents a significant departure from what has been standard policy at the Federal Reserve. Our first hint that something had changed was noticed in the dots chart. First, there were two dots that indicated no change in policy in 2017… Read More »
Asset Allocation Weekly (June 17, 2016)
by Asset Allocation Committee Our asset allocation process has generally favored longer duration fixed income instruments. We have expected inflation to remain low due to continued globalization and deregulation. Over time, low inflation brings low long-term interest rates. In recent weeks, domestic long-term interest rates have declined significantly. Although this isn’t a huge surprise to us,… Read More »
Asset Allocation Weekly (June 10, 2016)
by Asset Allocation Committee In our asset allocation process, we focus on cyclical trends—trends that tend to have three- to five-year time horizons. Two examples of these sorts of trends are the business cycle and the monetary policy cycle. Although both cycles can last longer or less than three to five years, in general, these types… Read More »
Asset Allocation Weekly (June 3, 2016)
by Asset Allocation Committee The prolonged weakness seen in capital spending is a concern for the economy and equity markets. This chart shows the yearly change in the three-month smoothed non-defense capital goods orders excluding aircraft. The Census Bureau changed how it calculates this series in 1992; we have overlapped the yearly change in the earlier… Read More »
Asset Allocation Weekly (May 27, 2016)
by Asset Allocation Committee As promised, this week we will discuss how President Clinton’s policies would likely affect the financial markets. It should be noted that, unlike Mr. Trump, Sen. Clinton has published most of her policy positions. However, there have been apparent shifts in her policy positions as Clinton adjusts her campaign to react to… Read More »
Asset Allocation Weekly (May 20, 2016)
by Asset Allocation Committee As promised, this week we will discuss how President Trump’s policies would likely affect the financial markets. It should be noted that Mr. Trump has not published any clear policy papers, so our descriptions are based on his public comments. Next week, we will discuss the expected policies and financial market effects… Read More »
Asset Allocation Weekly (May 13, 2016)
by Asset Allocation Committee With Donald Trump and Hillary Clinton becoming the presumptive nominees for the Republican and Democratic Parties, respectively, this week’s Asset Allocation Weekly will offer some of our initial thoughts on this election cycle. We will offer more in-depth analysis in the coming months but these highlights express our starting points about the… Read More »