This year’s first-quarter US GDP is expected to increase 1.9%, based on the The Capital Spectator’s average econometric nowcast. This is the initial estimate based on limited Q1 data and so the projection is a preliminary guesstimate that’s sure to be revised as new economic reports are published. The official Q1 GDP report is scheduled for release on April 26, when the Bureau of Economic Analysis will publish the first of three estimates. (All GDP percentage changes cited are quoted as real seasonally adjusted annual rates.)
Monthly Archives: February 2013
Slicing Up The Global Equity Market Pie
One of the key issues in structuring an asset allocation strategy is deciding how to divide up the world’s equity markets. Everyone has an opinion, but it’s usually best to start with the standard benchmark, otherwise known as relative market values based on capitalization. You may choose to second guess Mr. Market’s equity allocation, but you should at least have an idea of what you’re modifying, if only for perspective. Are you making a big bet in Asia vs. Europe? Is your US allocation hefty vs. foreign developed markets? Are you underweight Japan vs. the rest of Asia? Knowing the answers to these type of questions isn’t a silver bullet, but as a general rule it’s useful to know how your choices on risk factors compare before you start reshuffling the market portfolio. Indeed, the information on relative market caps may end up informing your decisions on how to customize a portfolio.
Book Bits | 2.2.13
● The Little Book of Market Myths: How to Profit by Avoiding the Investing Mistakes Everyone Else Makes
By Ken Fisher
Summary via publisher, Wiley
Everybody knows that a strong dollar equals a strong economy, bonds are safer than stocks, gold is a safe investment and that high PEs signal high risk…right? While such “common-sense” rules of thumb may work for a time as investment strategies, as New York Times and Wall Street Journal bestselling author, Ken Fisher, vividly demonstrates in this wise, informative, wholly entertaining new book, they’ll always let you down in the long run. Ken exposes some of the most common—and deadly—myths investors swear by, and he demonstrates why the rules-of-thumb approach to investing may be robbing you of the kinds returns you hope for.
Private Payrolls Rise A Modest 166k In January
Private payrolls expanded by a less-than-expected 166,000 in January on a seasonally adjusted basis, the Labor Department reports. Last month’s level of jobs creation represents a considerable slowdown from December’s upwardly revised 202,000 rise. The annual pace of growth has also slipped, with a 1.9% gain in private payrolls for last month vs. the year-earlier level. For comparison, private payrolls gained 2.0% on the year through December. Overall, today’s employment report reminds that the labor market continues to expand slowly. The trend isn’t impressive, at least not relative to what’s needed to boost the economy to a substantially higher level of growth. But today’s jobs report is still far from fatal as it relates to assessing the business cycle.
Major Asset Classes | January 2013 | Performance Review
Risky assets generally started the new year on a strong note, led by handsome gains for equities in the US and the developed world. The leading source of red ink last month: government bonds in developed markets. Overall, the unmanaged market-value weighted Global Market Index (GMI) gained 2.5% in January, building on a strong run in 2012.