Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
"To start with, the report examines the post-crisis investment landscape, highlighting historically low yields on sovereign bonds, with real yields in many countries now negative. At the same time and notwithstanding the recent rally in equities, developed market returns since 2000 remain low enough for many commentators to continue asking whether the cult of equity is dead. Against this backdrop, the authors ask what rates of return investors should now expect from equities, bonds and cash. In brief, they hold that investors’ expectations of asset returns may be too optimistic.
Then, continuing the theme of investing in a post-crisis environment, they examine mean reversion in equity and bond prices. This second chapter of the 2013 Yearbook examines the evidence for mean reversion in detail, and whether investors can exploit it. In fact, it shows that the evidence on mean reversion is weak and that market timing strategies based on mean reversion may even give lower, not higher, returns.
Finally, with the improving business cycle in mind, Andrew Garthwaite and his team analyze whether inflation is good for equities. Drawing on the Yearbook dataset, they assess what type of inflation we may see in the future, and what equity sectors, industries and regions offer the best inflation exposure."
Comments
"To start with, the report examines the post-crisis investment landscape, highlighting historically low yields on sovereign bonds, with real yields in many countries now negative. At the same time and notwithstanding the recent rally in equities, developed market returns since 2000 remain low enough for many commentators to continue asking whether the cult of equity is dead. Against this backdrop, the authors ask what rates of return investors should now expect from equities, bonds and cash. In brief, they hold that investors’ expectations of asset returns may be too optimistic.
Then, continuing the theme of investing in a post-crisis environment, they examine mean reversion in equity and bond prices. This second chapter of the 2013 Yearbook examines the evidence for mean reversion in detail, and whether investors can exploit it. In fact, it shows that the evidence on mean reversion is weak and that market timing strategies based on mean reversion may even give lower, not higher, returns.
Finally, with the improving business cycle in mind, Andrew Garthwaite and his team analyze whether inflation is good for equities. Drawing on the Yearbook dataset, they assess what type of inflation we may see in the future, and what equity sectors, industries and regions offer the best inflation exposure."