“The world…has witnessed an extensive history of financial bubbles, expanding credit, and subsequent crises…We put inaccurate beliefs at the centre of the analysis of financial fragility”.
Category: Behavioural Finance
One of the major market trends so far this year has been the outperformance of the US equity market relative to most other global regions. But with some identifying US moves as ‘the longest bull market in history’ and a prevailing sense that the US economy is… Read the article
A major study released last month found that non-retired UK investors are saving a higher proportion of their income for retirement than many parts of Europe. Before we start celebrating, there are two important points to consider.
First, estimates are that the UK still… Read the article
Remember last year when most financial commentary was saying that market volatility was too low? That was a pretty unusual state of affairs.
Most of the time market commentary presents us with a very different picture of markets. Asset prices “plunge,” “plummet,” “sink” and of course “crash.” Or they… Read the article
Today, the US imposed tariffs on $34 billion of Chinese imports, marking what some see as the official start of Donald Trump’s ‘trade war.’ The trade war story has come to dominate market commentary as the second quarter has progressed, deflecting attention from the… Read the article
Eric recently wrote a fascinating piece on the ‘volatility virus’ which has contaminated the professional investment community. This blog post builds on that piece by considering the use – more specifically, the misuse – of quantitative ‘analysis’ more generally.
It is important to point out I am… Read the article
Remember the ‘fragile five’? These were five emerging market currencies that were deemed to be most at risk of US policy tightening during the ‘taper tantrum’ of 2013. The main concerns for these economies centred on their vulnerability to foreign capital outflows.
Recently we’ve seen a re-emergence… Read the article
Volatility returned in February, but not the kind of volatility we have been used to for much of the period since the financial crisis.
Instead of being about growth fears, the catalyst for the equity market drawdowns in early February was pressure on valuations caused by rising… Read the article
This latest ‘flash crash’ is a notable event. There have been only three phases in last 25 years when the S&P500 has moved this rapidly in this short a period of time, a fact drawn to my attention by my perceptive colleague, Marc Beckenstrater (see figure 1). Similar moves in… Read the article
Stuart wrote last year on some of the challenges associated with relying solely upon the Shiller P/E as a measure of equity valuation. This debate has been widely covered and is somewhat moot at any rate, given that the US market is looking expensive relative to history… Read the article