How’s that three-factor model working out for ’ya?

The famous Fama-French model from the early 1990s that inspired investors to allocate a portion of their equity strategy to so‑called value and small‑cap stocks has had a rough ride in recent years. But the tide may finally be turning—or so one can argue based on year‑to‑date performances. The question is whether the recoveries are another short-run burst of strength that runs out of road, a scenario that’s played out several times in recent years.

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The total return forecast for the Global Market Index (GMI) continued to tick higher in August for the long run outlook. Despite the increase in the GMI forecast in recent months, today’s estimate remains well below the index’s trailing 10‑year return.

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The majority of the major asset classes rose in August, led by commodities for a second straight month, based on a set of ETF proxies. Only property shares in the US and abroad lost ground.

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Developing a clear read on the economic outlook is challenging these days, a reality underscored by the widening split between two of the market’s most closely watched yield curves.

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● Running Against the Herd: Battling Biases to Make Better Investment Decisions
Eddie Perkin
Summary via publisher (Columbia U. Press)
Why do smart, capable individuals and teams so often make poor decisions? Running Against the Herd offers new answers to this question by blending insights from behavioral economics with hard-earned lessons from a twenty-five-year investing career. Eddie Perkin draws on his extensive experience leading global investment teams to identify biases that shape our decisions, not just in markets and boardrooms but also in sports, gambling, and everyday life. He shows how groupthink and mental shortcuts—from anchoring and framing to short-termism—impair judgment and shares practical tools to counteract them. Through real-world examples and data from hundred-million-dollar investment decisions, Perkin demonstrates that success depends less on predicting the future than on designing teams and processes that challenge assumptions, welcome dissent, embrace uncertainty, and learn from mistakes.

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Diversifying into foreign bond markets has been a win for US investors this year, based on a review of a set of ETFs through yesterday’s close (Aug. 27). The strongest gains have come from the riskier segments of overseas fixed income and from inflation‑linked securities, which together have delivered most of the lift for international bond portfolios from a US‑based perspective.

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The July inflation report wasn’t surprising, but it was revealing.

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The bond market has had a rocky year, but several fixed‑income sectors are posting gains so far in 2026, based on a set of ETFs through Tuesday’s close (Aug. 25). The main downside exceptions: medium‑ and long‑term Treasuries, which are modestly in the red this year.

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Treasury Secretary Scott Bessent is escalating the government’s campaign to cap, if not lower, long‑term yields. After last week’s expanded buyback plan failed to sway the bond market, the government raised the stakes again on Monday, floating the prospect of a dramatically larger pool of funds to step up purchases of government debt.

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US economic activity remains on track to strengthen in the third quarter, based on the latest nowcasts compiled by The Capital Spectator. But the degree of the estimated rebound has softened lately amid recent hints that headwinds are building.

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