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That is a peculiar list.Simon would you care to share what funds you have that are up 65% ytd ?!
Check out this link for top 20 fund performance.
https://www.financial-planning.com/slideshow/best-mutual-funds-and-etfs-ranked-by-ytd-returns
Have a nice day, Derf
Here is one explanation for why that hasn't happened yet.....The debt of the United States now exceeds the size of its gross domestic product. That was considered a doomsday scenario that would wreck the economy. So far, that hasn’t happened.
https://nytimes.com/2020/08/21/business/economy/national-debt-coronavirus-stimulus.html
.....since the 2008 financial crisis, traditional thinking about borrowing by governments — at least those that control their own currencies — has further weakened, as central banks in major developed markets became enormous buyers in government bond markets.
“Fiscal constraints aren’t nearly what economists thought they were,” said Daniel Ivascyn, chief investment officer for PIMCO, which manages nearly $2 trillion in assets, mostly in bonds. “When you have a central bank essentially funding these deficits, you can take debt levels to higher debt levels than people envisioned.”
(Italic text emphasis added.)A reserve-currency issuer should play an outsize role in global trade, which encourages partners to draw up contracts in its currency. A historical role as a global creditor helps to expand use of the currency and encourage its accumulation in reserves. A history of monetary stability matters, too, as do deep and open financial markets. America exhibits these attributes less than it used to. Its share of global output and trade has fallen, and today China is the world’s leading exporter. America long ago ceased to be a net creditor to the rest of the world—its net international investment position is deeply negative. Soaring public debt and dysfunctional government sow doubt in corners of the financial world that the dollar is a smart long-run bet.
Challengers have for decades failed to knock the greenback from its perch. Part of the explanation is surely that America is not as weak relative to its rivals as often assumed. American politics are dysfunctional, but an often-fractious euro area and authoritarian China inspire still less confidence. The euro’s members and China are saddled with their own debt problems and potential crisis points. The euro has faced several existential crises in its short life, and China’s financial system is far more closed and opaque than the rich-world norm.
The global role of the dollar does not depend on America’s export prowess and creditworthiness alone, but is bound up in the geopolitical order it has built. Its greatest threat is not the appeal of the euro or yuan, but America’s flagging commitment to the alliances and institutions that fostered peace and globalization for more than 70 years. Though still unlikely, a collapse in this order looks ever less far-fetched. Even before the pandemic, President Donald Trump’s economic nationalism had undercut openness and alienated allies. Covid-19 has further strained global co-operation. The IMF thinks world trade could fall by 12% this year.
Though America’s economic role in the world has diminished a little, it is still exceptional. An American-led reconstruction of global trade could secure the dollar’s dominance for years to come. A more fractious and hostile world, instead, could spell the end of the dollar’s privileged position—and of much else besides.
In 2011, then-President Barack Obama attended an intimate dinner in Silicon Valley. At one point, he turned to the man on his left. What would it take, Obama asked Steve Jobs, for Apple to manufacture its iPhones in the United States instead of China? Jobs was unequivocal: “Those jobs aren’t coming back.” Jobs’s prognostication has become almost an article of faith among policymakers and corporate leaders throughout the United States. Yet China’s recent weaponization of supply chains and information networks exposes the grave dangers of the American deindustrialization that Jobs accepted as inevitable.
Since March alone, China has threatened to withhold medical equipment from the United States and Europe during the coronavirus pandemic; launched the biggest cyberattack against Australia in the country’s history; hacked U.S. firms to acquire secrets related to the coronavirus vaccine; and engaged in massive disinformation campaigns on a global scale. China even hacked the Vatican. These incidents reflect the power China wields through its control of supply chains and information hardware. They show the peril of ceding control of vast swaths of the world’s manufacturing to a regime that builds at home, and exports abroad, a model of governance that is fundamentally in conflict with American values and democracies everywhere. And they pale in comparison to what China will have the capacity to do as its confrontation with the United States sharpens.
In this new cold war, a deindustrialized United States is a disarmed United States—a country that is precariously vulnerable to coercion, espionage, and foreign interference. Preserving American preeminence will require reconstituting a national manufacturing arrangement that is both safe and reliable—particularly in critical high-tech sectors. If the United States is to secure its supply chains and information networks against Chinese attacks, it needs to reindustrialize. The question today is not whether America’s manufacturing jobs can return, but whether America can afford not to bring them back.
The United States’ industrial overdependence on China poses two profound national security threats. The first is about access to the supply of critical goods.
The second risk of U.S. industrial dependence on China is about the integrity of powerful dual-use commercial technology products: civilian goods such as information platforms, social network technology, facial recognition systems, cellphones, and computers that also have powerful military or intelligence implications.
The United States’ slow drift toward deindustrialization is not a threat to Democrats or a threat to Republicans—it’s a threat to the United States. Addressing it will require an American solution that transcends party lines. It will require an extensive collaborative effort between the government and private sector to take inventory of the products salient to national security—determining which high-tech and vital goods must be produced domestically, which can safely be sourced from allies and friendly democracies, and which can still be imported from the global market, including from authoritarian states like China. Carrying out this strategy and operationalizing it will take time and substantial resources.
Reconstituting America’s domestic production capacity will be contingent on procuring a reliable, abundant supply of key natural resources at a low cost, building up a large talent pool of skilled industrial workers, and making substantial investments in fostering hotbeds of innovation.
Full disclosure: I have a small position in MCSMX.For starters, the goal of reopening factories won’t be economically sustainable if the United States can’t ensure cost-effective access to natural resources and raw materials those factories need to produce finished, manufactured products. China has made acquiring premium access to resources such as zinc, cobalt, and titanium a national priority. By making investments and loans worth hundreds of billions of dollars across the developing world—particularly in Africa—it has established a model of trading technology and infrastructure for resources. In one such case, China struck a deal with a Congolese mining consortium, Sicomines, to secure access to critical minerals for electronics like copper and cobalt in exchange for investing in essential infrastructure projects like hospitals and highways.
To compete, the United States and its allies will need to play a shrewd game of macroeconomic chess, offering their own funding for infrastructure and development, but without the predatory debt-trap qualities that often accompany Chinese funding. Many African countries have interlocked their economic futures with China because they see little alternative—if Chinese loans once came with few strings attached, they now often require adherence to a variety of CCP norms. Last month, the Senate Foreign Relations Committee offered one idea: an International Digital Infrastructure Corporation that would offer these countries the financial incentive and support to buy and install American-made hardware. Providing that alternative—assistance and financing that authentically empower recipient governments and benefit the local population—could shift the economic orientations of nations that would prefer to be less entwined with an expansionist authoritarian power. It could also serve as a powerful tool to supply U.S. and allied manufacturers with critical raw materials needed for the production of strategic hardware.
Article:Despite the longest economic expansion in U.S. history, the gap between the present value of liabilities and assets at U.S. state pensions is measured in trillions of dollars. To make matters worse, pensions are now faced with the reality that standard diversification — including extremely low-yielding bonds — may no longer serve as an effective hedge for equity risk.
While I was at CalPERS, concerns arose in 2016 about the effectiveness of standard portfolio diversification as prescribed by Modern Portfolio Theory. We began to recognize that management of portfolio risk and equity tail risk, in particular, was the key driver of long-term compound returns. Subsequently, we began to explore alternatives to standard diversification, including tail-risk hedging. At present, the need to rethink basic portfolio construction and risk mitigation is even greater — as rising hope in Modern Monetary Theory to support financial markets is possibly misplaced.
At the most recent peak in the U.S. equity market in February 2020, the average funded ratio for state pension funds was only 72 percent (ranging from 33 percent to 108 percent). That status undoubtedly has worsened with the recent turmoil in financial markets due to the global pandemic. How much further will it decline and to what extent pension contributions must be raised — at the worst possible time — remains to be seen if the economy is thrown into a prolonged recession.
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There's more at the link. Check it out. Buy a subscription if you can afford it.Since 2008, banks have kept more capital on hand to protect against a downturn, and their balance sheets are less leveraged now than they were in 2007. And not every bank has loaded up on CLOs. But in December, the Financial Stability Board estimated that, for the 30 “global systemically important banks,” the average exposure to leveraged loans and CLOs was roughly 60 percent of capital on hand. Citigroup reported $20 billion worth of CLOs as of March 31; JPMorgan Chase reported $35 billion (along with an unrealized loss on CLOs of $2 billion). A couple of midsize banks—Banc of California, Stifel Financial—have CLOs totaling more than 100 percent of their capital. If the leveraged-loan market imploded, their liabilities could quickly become greater than their assets.
How the pandemic will change financial markets foreverQuestion: You’re not predicting outstanding returns from equities either.
Answer: No, but you will have some returns. The traditional 60/40 equity/bond split, which earned 10% a year over the past 40 to 50 years, is now down to 3½%. Even if you’re tilted to equities, you’re still not going to get 10% again. You’re going to get something below 5%, but investors really have to contemplate what their overall asset-allocation parameters will be. In a world of zero yields, Is 80/20 the way to go? Asset classes that are a hybrid between “safe” bonds and equities—such as high-yield bonds and loans, collateralized loan obligations, commercial mortgage-backed securities, convertibles, and equity and mortgage REITs—offer equity-like returns. There’s a case for emerging market debt, because I think yields will have to come down further in emerging markets as well. China is going into [J.P. Morgan’s global bond] index this year, and our longer-term view is that China is going toward zero yield.
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