Quant Coalescence

June, 2016: Brexit goes mainstream and more performance awards for PCM

Those of us that work in the financial markets have been talking and pondering about the outcome of the June 23rd “Brexit” vote for several months now. As you probably all know, this is the referendum vote that allowed citizens in the U.K. to decide if they wanted to remain in the European Union or reclaim their independence. It has been big news in financial services, as it was feared that it could greatly impact world economies, bond and equity markets.

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Market Pulse

PCM 2016 Market Outlook: January 11, 2016

I believe that the U.S. financial markets may be nearing the end of the third stock market bubble in fifteen years. By some measures, equity valuations have reached the most extreme point in history. Market "internals" are starting to break down. Unless one has a 25 year time horizon, now is one of the worst times in history to enter into a traditionally allocated "buy and hold" equity and bond portfolio.

Using seasons as a metaphor, it is late fall in the U.S. equity market and economic cycle. There is a winter season coming. Between now and 2022, broad U.S. equity indexes are at risk of falling 50% to 60%.

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