The expected risk premium for the Global Market Index (GMI) for the long run continued to tick higher in December. Today’s revised estimate rose to an annualized 5.5%, based on current data. That’s up from last month’s 5.3% projection. These forecasts represent long-run outlooks for the index’s performance over the “risk-free” rate via a risk-based model (details below).

Continue reading →

* US Senate control hangs in the balance in today’s Georgia runoff election
* South Korea tanker diverted to Iran by Iranian Revolutionary Guard troops
* Chicago Fed president: monetary policy will be accomodative ‘for a long time’
* NYSE halts delisting of Chinese telecom companies
* Retail, jobless data suggest German economy remains resilient during pandemic
* UK recession threat deepens as new pandemic lockdown unfolds
* Global mfg growth held near decade highs in Dec, according to PMI survey data
* US construction spending rose to record high in November
* US mfg recovery from pandemic endured in December via PMI survey data:

The year just passed left deep scars on humanity and the global economy, but there were few signs of trouble in the 2020 returns for the major asset classes. With the exception of broadly defined commodities and US and foreign property shares, global markets posted solid gains last year.
Continue reading →

* Trump, in phone call, urges Georgia officials to overturn election results
* US officials consider half doses of vaccine to accelerate rollout
* Economists expect rough Q4 data for US followed by 2021 rebound
* Pelosi re-elected as House Speaker
* Survey: US political divide is biggest risk on world stage in 2021
* Smaller cryptocurrencies are rising after Bitcoin’s surge
* Eurozone manufacturing growth strengthened in December
* UK Manufacturing PMI rose to 3-year high in December
* US Treasury inflation forecasts start 2021 trading at two-year-plus highs:

Welcome to the New Year — and the sequel to last week’s first installment of notable titles that appeared in The Capital Spectator’s weekly Book Bits column in 2020. Happy reading!

Continue reading →

In this issue:

• Stock In Asia Ex-Japan Shine In 2020
• Beta Risk Provided Strong Tailwinds For Portfolio Strategies In 2020
• A Red-Hot Year For Our Managed Volatility Strategy But Minimum Vol Stumbled

Asia Ex-Japan Equities Led 2020 Returns: If you held a healthy share of equities across Asia excluding Japan in your investment strategy last year, congratulate yourself. This slice of global asset classes not only posted the strongest return this week; Asia ex-Japan also outperformed the rest of the field for our list of proxy ETFs representing the major asset classes on a global basis.

continue reading at The ETF Portfolio Strategist

The Capital Spectator has left the building. So long to 2020, and good riddance. We’ll be back in the new year, starting with Best of Book Bits 2020: Part II on Saturday, Jan 2, followed by the resumption of the usual routine on Monday, January 4. Meantime, best wishes to our readers for 2021! Our model-free forecast assumption: relief is coming.

Designing and managing portfolios that maximize diversification is challenging in the best of circumstances. In the wake of this year’s coronavirus pandemic, the task has become even tougher.

Continue reading →

* House passes bill to raise stimulus checks to $2,000
* Debate over $2,000 Covid-19 aid checks shifts to Senate
* House overrides Trump’s veto of a $740.5 billion defense policy bill
* New York lawmakers pass bill that bans most evictions
* Manufacturing activity expanded for 7th month in Texas in December
* US stock market (S&P 500) jumped to record high on Monday:

The year’s penultimate trading week was short but it didn’t lack for drama. A broadly defined, equal-weighted measure of commodities led a mixed run for the major asset classes while stocks and bonds in emerging markets posted the deepest losses, based on a set of exchange traded funds at the close of last week’s trading (Dec. 24).
Continue reading →