The argument for re-adjusting accepted wisdom about passive investing ..... from a passive investing

ref :- "Index Funds are not to blame for market volatility" , The Financial Times, Opinion The first thing to say about this contribution in the FT is that it comes courtesy of Gregory Davis, CIO of Vanguard. For those not in the know, Vanguard blazed a trail for so-called passive investing way back in the dim-and-distant past by being the first to offer an index-tracking fund, and remain market leaders in the field (second only to Blackrock ?). His defence of the role played by index-tracking funds (or rather, the lack of it) in this month's equity market turmoil is therefore hardly a shock. That doesn't make his case any less valid of course .... it just means that when we read Mr Davis'

It's all relative : "Relief" for Italy, and the US "slows"........

ref :- "Italian Bond Revival begins as S&P Holds Fire on Rating Cut" , Bloomberg Markets When the going gets tough, you'll take whatever good news you can find ..... and without doubt the rating agencies have delivered some good news to Italy. A little more than a week ago Moody's retained their investment-grade appraisal of Italy's sovereign debt. Not by much, mind .... but maintaining that rating and avoiding a potentially disastrous move into "junk" territory was crucial. Late on Friday S&P Global Ratings downgraded its outlook on Italy to "Negative", but kept the rating at two levels above junk. Cue : a bounce in Italian bonds (BTPs), and a fall in yields, of course. Societe Generale are

Rallies ? Or just Dead Cat Bounces ? China and Italy ......

ref :- "Market Forces" by Michael Mackenzie , The Financial Times, Companies and Markets Arguably, anytime that any market has a better day after a prolonged period in a downtrend you could ask the same thing : are we just taking a breather, or is it time to reassess ? Right now though, it seems a particularly pertinent question given the geopolitical forces at play when it comes to both China and Italy, and how high the stakes are for both those countries and global investors. Yesterday, China's CSI 300 share index , more than a bit sickly of late, had its best day for nigh on three years. At the close, it had recorded a rise of 8% since the lows set last week. Reasons to be cheerful (as t

History's lesson for you-know-who... but we doubt that he's listening

ref :- "Carter's lesson for Trump : keep your hands off the Fed" , Opinion by Stuart Eizenstat, The Financial Times We love a bit of history... To those who question the value of studying the subject, the standard (and utterly correct) response is that we do so to learn from our mistakes of the past and to avoid making them again in the future. In which case, they might well say, we must be pretty poor students. Fair enough... the human race does indeed make the same mistakes time and again, but we should put that down to the shortcomings of the species rather than history's lack of relevance to the present and the future. It certainly seems pretty relevant right now, as President Trump tak

Taking a breather, or finally running out of steam ? Where now for stocks .....?

ref :- "Bear or Bull ? Five reasons to claw or thunder " , Reuters Markets Market commentators who are not required to make investment decisions have a much easier ride than those who actually stand or fall on their market views .... not nearly as profitable as those who get it right of course, but at crunch moments much the most comfortable place to be is sat firmly on the fence offering both sides of the argument. Last week's sell-off in share prices, including the biggest single-day drop in the S&P 500 since February, has once again prompted debate about whether we are facing one of those crunch moments. Was last week's action a major alarm bell for the longest ever bull run in US equitie

Something for everybody : Italy, the Yield Curve, Currency Manipulation and Brexit

ref :- A selection from Bloomberg Markets As the markets take a welcome breather at the end of a turbulent week, just time to point you in the direction of a few Bloomberg pieces that catch the eye this morning : Italian Lawmakers Approve Deficit Goal as EU Showdown Nears : Quite simply, with the two populist coalition parties holding sway in both houses of parliament you can only say "Well, they would, wouldn't they ?" Much more to the point will be the EU's reaction to Italy's proposed budget, and that has to be submitted to Brussels by the close of business Monday. The government has reined back from earlier suggestions that they were aiming a budget deficit - to - GDP ratio of 2.4% for

Not so much analysis, more stream of consciousness...

ref :- General We've been "off air" for a bit, which is possibly a bit unfortunate as there's been plenty going on. So much so in fact that taking a brief tour around the markets to reacquaint yourself with things might just be enough to make you wonder whether something significant's afoot... whether we might just be entering a new phase. Commentators are always ringing alarm bells, warning of potential disasters. Most of the time these portentious alerts come to very little, which of course gives rise to those accusations of "crying wolf". But those commentators would argue -- and they'd have a very fair point -- that all investors should be aware of the dangers that might pose a threa

What happened to all those nightmares about reversing QE, by the way?

ref :- "No need to get queasy about the unwinding of QE", David Smith's Economic Outlook in the Sunday Times, Business Section Seems like an odd moment to reach back to the weekend's press... after all, it's not as though there's nothing going on. After yesterday's upbeat reaction to the US / Canada / Mexico trade deal (which President Trump will push as a vote-catcher but is not wildly different to the old NAFTA), it's all a bit dark and "risk-off" today as Italy and its budget rears its ugly head again. Well, it was always going to. The sparks that prompted today's moves were primarily : Head of Lower House Budget Committee Claudio Borghi saying that Italy would not be facing its current p

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