Salient to Investors: Laurence D. Fink at BlackRock says: Investors should get out of cash and low-yielding bonds and buy high-quality stocks, ETFs and higher-income products. The economy is a year away from being more robust. The US banking system is far better than others, while housing crisis is 90 percent behind us. Chris Leavy at BlackRock said equities
READ MORE... →Salient to Investors: Prices to buy and rent houses and apartments in Rio’s top neighborhoods have risen six-fold in the past decade – as expensive as New York and Paris. On discovery of vast deep-water oil deposits in 2008; on hosting the 2016 Olympic Games; on a surge in world demand for Brazil’s commodities. The
READ MORE... →Salient to Investors: Ramin Toloui at Pimco says: Brazil, South Africa and Mexico offer the best emerging market local-currency bonds because they offer higher yields than the debt of developed nations – very slow global growth and very low core industrialized yields are a strong force pulling rates down over time. Flows into emerging-market debt will
READ MORE... →Salient to Investors: Peter Hooper at Deutsche Bank said it’s clear the stock market is the most important transmission mechanism of monetary policy – the stock market will have to carry the load. Hooper says the Fed will stick with the bond-buying strategy through next year, and end up buying $800 billion of Treasuries
READ MORE... →Salient to Investors: Stock recommendations from David Einhorn at Greenlight Capital. Read the full article at http://www.bloomberg.com/news/2012-10-02/einhorn-says-gm-s-stock-is-cheap-while-betting-against-chipotle.html
READ MORE... →Salient to Investors: James Paulsen at Wells Capital Mgmt said recovering manufacturing will significantly reduce recession fears, while fears regarding the euro zone have been diminishing in recent months. mutual loan Richard Sichel at Philadelphia Trust said people should focus on economic news – equities end up being the investment of choice. Barron’s reported
READ MORE... →Salient to Investors: Michael Feroli at JPMorgan Chase said the moderately expanding economy should keep overall manufacturing growing, but it’s hard to see material acceleration going forward. Dirk Chlench at Landesbank Baden-Wuerttemberg said US manufacturing looks surprisingly good against a weak China and EU area and the fiscal cliff. Read the full article at http://www.bloomberg.com/news/2012-10-01/ism-index-of-u-s-manufacturing-increased-to-51-5-in-september.html
READ MORE... →Salient to Investors: A fund is highly correlated to its benchmark index if its R-squared reaches 90: at 95, it is considered a ”closet” index fund. The steady rise in correlations among all stocks is making it more difficult than ever for actively managed funds to differentiate themselves from their benchmarks. Morningstar
READ MORE... →Salient to Investors: The traditional move to fixed-income-heavy asset allocation in retirement planning poses risks and limitations, especially given expanding life expectancy. First, today’s unconventional monetary policy raises the inflation risk. Second, long-duration government bonds and high-grade debt carry the risk of capital loss. A 10-year Treasury and similar debt could decline more
READ MORE... →Salient to Investors: David Kelly at J.P. Morgan Funds recommends a balanced portfolio because most investors are very conservative, bonds are expensive, and stocks are cheap. Kelly said: Valuations are extreme, which only makes sense if you believe we are on the brink of a financial disaster. All we have to do is
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