Salient to Investors: Since 1926, intermediate US government bonds earned about 2.5% above inflation, stocks about 7% above inflation. Currently TIPS yield negative 0.5%. Assuming stocks continue to outperform bonds by 4.5%, then future real returns on stocks will only be 4%, and on a 60-40 balanced portfolio will only be 2.5%. Therefore, central
READ MORE... →Salient to Investors: Mes Aynak in Afghanistan is one of the largest undeveloped copper deposits in the world as well as home to vast archeological ruins. Read the full article at http://www.npr.org/2012/09/24/161677990/foreign-policy-golden-buddha-hidden-copper?ft=1&f=1057&sc=igg2
READ MORE... →Salient to Investors: Smaller stocks are outperforming larger stocks in 2012. Top sector is healthcare, followed by consumer discretionary, telecom and financials. Bottom is utilities, followed by energy, industrials, technology, consumer staples and materials. Read the full article at http://seekingalpha.com/article/884011-best-performing-russell-3-000-stocks-and-sectors-in-2012?source=intbrokers_regular
READ MORE... →Salient to Investors: Nate Silver at FiveThirtyEight.com says to improve our ability to forecast, avoid overconfidence and become Bayesians Burton Makiel said earnings multiples were elevated in the early 1990s yet the 1990s produced extraordinarily generous equity returns. Earnings multiples were even higher in December 1996 yet the stock market rallied
READ MORE... →Salient to Investors: Aon Hewitt report consumer-directed health coverage were offered by 58% of employers in 2011 versus 41% in 2010. 19% of large employers surveyed by the National Business Group on Health said consumer-directed plans would be the only option they offered for 2013. For healthy people, consumer-directed plans can
READ MORE... →Salient to Investors: Scott Anderson at Bank of the West says the economy is in a soft patch, with consumer spending suggesting moderate growth and resilience in auto sales and building materials a bright spot. Carl Riccadonna at Deutsche Bank Securities said lasting damage is being done by the threat of the fiscal cliff. Read the
READ MORE... →Salient to Investors: Chad Morganlander at Stifel Nicolaus said a structural shift in China’s economy and European economic woes will pressure commodity prices – China over the last few years artificially torqued its economy. China is the world’s biggest consumer of everything from copper to pork to soybeans, while the U.S. is the largest user of crude oil and
READ MORE... →Salient to Investors: Song Guoqing at Peking University said the economic slowdown may run into 2013 amid a lack of funding for approved infrastructure projects. Song expects growth of 7.3 to 7.4 percent in Q4 and 7 to 7.5 percent in half1 2013. Wu Kan at Dazhong Insurance sees room for the market to drop. The Shanghai index is
READ MORE... →Salient to Investors: Toru Higuchi at Japan’s Teachers’ Mutual Aid Co- operative Society will start investing in REITs and hedge funds. Japan’s has the world’s second-largest retirement pool, after the U.S., with only 6 percent in alternative assets versus 25 percent in the U.S. and 24 percent in Australia. Read the full article at
READ MORE... →Salient to Investors: Morningstar reported that investors withdrew $300 billion net from actively managed U.S. equity stock funds in the 3-yr period through July 31, while buying a net $140 billion of passively managed funds and ETFs, and bond funds took in $734 billion. $3 trillion-plus is invested in equity mutual funds and ETFs.
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