Over the past number of years there has been a deluge of new data sources. Investors no longer have to wait for company earnings or government statistics to get a sense as to what the economy is doing. This higher frequency data can help in providing an informational edge and generating portfolio insights. Whether or not that edge is still there when it’s become available to your average Joe with a Bloomberg, is another story. Regardless, we do find it useful to help track economic activity, identify trends and pattern and gauge market dislocations.
Category: Weekly Insights
For the first half of the quarter, market participants facilitated a run of risk-on activity. The final month, however, was characterized by a pumping of the brakes on high-flying names. While the majority of markets still performed well, there has undoubtedly been a
continued divergence in equities between growth & value – more on that later.
Perhaps one of the more pressing questions for asset allocators and portfolio managers is whether or not the recent resurgence in value stocks is a true turning point or just a blip in the continued dominance of growth. It’s rare to see one style dominate for so long like growth has, with such a huge acceleration in the trend in 2020. Was 2020 a blow off top for Growth vs Value? Or has the market truly changed?
The market gyrations of holding 100% equity is simply too great for most and combining some bonds reduced the overall
portfolio volatility. This diversification, of adding various asset classes, is at the heart of modern portfolio theory and how most portfolios have been constructed.
Those four words are arguably responsible for more loss of capital than any other phrase. While certainly these can be
“dangerous” words when used to cajole the unsuspecting, markets are in fact always changing. They change because the behaviour of market participants changes. Whether the players are central bankers, active portfolio managers or a group of investors influenced by a crowd-sourcing platform, their actions constantly change and that alters how the markets function.