Recently, there has been a widening in the spread relationship between LIBOR (London Interbank Offered Rate) and OIS (Overnight Interest Swap Rate). This prompts the question: Should this be of concern? Is it a “canary in the coal mine” signaling possible problems with overall bank credit, or is there some other viable explanation?Read More
The Fed has communicated that it anticipates raising the federal funds rate three times in 2018, while the futures market implies only 2.5 hikes and many investors are calling for four moves. We fall into the three-hike camp.Read More
Many private real estate strategies are set up as closed-end vehicles, a type of fund structure that can expose investors to “vintage risk.” Vintage risk is the risk that a large portion of a real estate fund’s properties are acquired during a period of high prices, making it difficult to sell them for a gain...Read More
In our view, high-quality income generation—and not capital appreciation—will be the primary determinant of real estate returns over the next few years.Read More
Given the surprisingly solid bond market performance of 2017, what might fixed income investors expect in 2018? Unfortunately, lower returns. Despite favorable risk asset performance expected from strong earnings growth and ongoing demand, in our view investors should not expect to earn a return higher than the yield of the Bloomberg Barclays Aggregate Index, which...Read More
For several years, we have referred to the US economy as a “caterpillar” economy. Since the 2008 Great Recession, the economy has inched along, alternately accelerating and decelerating, as it continues to steadily gain ground. For 2018, we foresee another year of caterpillar-like growth.Read More
The challenges of the current low-yield environment call for investing strategies beyond conventional rising-rate investment solutions. Fixed Income investors seeking higher income, principal protection, and risk mitigation should consider diversifying their bond holdings with a portfolio of low-duration, mid-grade securities.Read More
