How Do You Define Success?

It is no secret that the investment industry’s reputation has suffered in recent years. Between scandals, culture crises and underperforming active management, many are questioning the validity of the investment advisor model. Indeed, more and more are turning to DIY solutions of virtual advisors and online “e-vesting”. “So why even have an advisor?” The Economist […]

The Return of Fundamentals

Quarterly earning season is upon us, and underneath the guise of downward-revised forecasts and the effects of write-downs, the story tells of U.S. corporate profits falling, not rising. These results caused The Economist to ask the question, “Are corporate profits at last running out of steam?” in its recent Buttonwood article, “Sound the Retreat.” In […]

Dire Demographics: Headwinds Facing Japan

In our 2014 Capital Markets Forecast, we closed the article “Demographic Trends: Implications for Investors” by stating that “rapidly aging populations such as Japan face a notable headwind as a higher share of the population enters retirement.” As the recent Bloomberg article “Japan’s Population Shrinks for the Third Year As Ranks of Aged Grow” acknowledges, […]

Our Perspective on Quantitative Analysis

 In our humble opinion, a key reason our long-term track record has been repeatable over several market cycles is that we harness quantitative models to provide discipline to our decision-making, particularly in the area of tactical rebalancing. Quantitative models represent part of the “Science” methodology we use in our “Art + Science” approach to investing. […]

Performance Analysis: How to Compare Apples with Apples, Not Oranges

Performance analysis is an important part of any due diligence before hiring an investment advisor. However, “quick and dirty” performance comparisons oftentimes lead to confusion and misinterpretation. In our opinion, there are at least seven important questions to ask before any conclusions can be drawn from such an analysis. Is this real performance or theoretical, […]

Warren Buffett’s Secret

Everyone’s favorite investor, Warren Buffett, was the subject of a recent Fortune article titled, “In a first, Buffett gets beat by the S&P 500 over five years. (But wins over six).” In 2013, the article explains, Buffett’s Berkshire Hathaway put up a 23 percent pretax gain versus the S&P’s stellar 32 percent. Over a five-year […]

Implementation Innovations

“Nothing is certain but death and taxes,” seventeenth century author Daniel Defoe famously quipped. In the investment world, we believe there is another item to add to that list:  fees. Fees are inevitable; the expected value added from hiring an active manager is not. A recent article in the Economist points out that the costs […]

Markets v. Economies

  Our Capital Markets Forecast estimates real (inflation-adjusted) world equity market returns at 4.3 percent over the coming seven-year cycle but only 0.3 percent for the U.S. aggregate bond market.[1] To the extent equities appear attractive, much of this hinges on the low inflation environment and the relatively positive comparison with bonds, which have a […]

Demographic Trends: Implications for Investors

Each year for our Capital Markets Forecast, Balentine’s Investment Strategy Team looks to various global socio-economic trends to see how, if at all, they will impact asset allocation and investment implementation for our clients. Based on U.S. Census Bureau data, we project that the world’s population will continue to grow but at a slower rate […]

The Market Valuation Debate

“In the short run, the market is a voting machine, but in the long run it is a weighing machine.” This famous quote is attributed to Benjamin Graham, father of value investing and mentor to Warren Buffett. Graham’s quote simply but ably encapsulates the truism that financial markets eventually return to fair value but can […]