As we reflect on the last eight years, various stages of the economic and market recovery have unfolded like chapters in a book. Many parts have told a predictable tale and, at various times, we have been left wondering if there would be an unpredictable twist or a surprise ending. While the story may be … Continued
With another year in the history books and equity markets off to a strong start in 2017, we can’t help but reflect on the Federal Reserve’s role in this elongated period of appreciation in the stock market. Recently, the improvement in the economic outlook has resulted in the Fed initiating a tightening cycle which has … Continued
Recently a client asked about the short rebate and whether it was to blame for disappointing hedge fund performance. We thought we would write about it here in case there were others with the same question. What is the short rebate? When a hedge fund shorts a security it must first borrow it. In order … Continued
Forecasting in 2016 was a tough business to be in given the wild year politically, the meaningful jump in interest rates – and rising geopolitical uncertainty broadly. It is hard to imagine the U.K. decision to leave the European Union or the U.S. election outcome making the world a more predictable place, yet each of … Continued
In a year characterized by the unexpected, maintaining a disciplined approach to managing your portfolio was our primary objective. During the unsettled economic environment that existed during the first half of the year, we used market volatility to rebalance your portfolio into the extreme sentiment we observed. In the second half, given the noteworthy risk … Continued
When companies have excess cash on their balance sheet, they have a few buckets they can allocate towards. However as it relates to sharing that cash with stockholders, it all comes down to buybacks and dividends. Whereas companies have long returned cash to shareholders, momentum shifted earlier this decade towards share repurchases with corporate America … Continued
The unexpected victory of Donald Trump has been a reminder of the growing dissatisfaction many Americans have with the political establishment of this country. Even though we can look to history, which tells us elections and presidents don’t typically have a lasting impact on financial markets, many are questioning whether it will be different this … Continued
These were the three topics most of us were raised to believe should never be a part of polite conversation, but with a hard fought and contentious presidential election campaign just weeks away from completion, such taboo subjects are inevitably top of mind for many investors. And while every presidential cycle tests our emotions, particularly … Continued
The third quarter marked one of the least volatile market environments since 1971 as the S&P 500 did not move over 1% from close-to-close for 43 consecutive days. Few would have predicted such an outcome given Great Britain’s vote to leave the European Union two weeks before the quarter began, sparking a brief pullback and … Continued
It has been a tough couple of years for the hedge fund industry. The HFR Global Hedge Fund Index showed returns of -0.6% in 2014, -3.6% in 2015, and +0.8% through 8/31 of this year significantly underperforming the S&P 500 which returned +13.7%, +1.4%, and +7.8% during the same periods. This was not a case … Continued