Central Banks

13 Apr

What The Last 100 Years Can Tell Us About Our Long Term Returns

At the beginning of this century, London Business School professors Elroy Dimson, Paul Marsh, and Mike Stauton wrote a seminal book on stock market investing titled Triumph of the Optimists where he described what has happened over the past 100 years.

Today, we’re going to go through his findings and through his updated findings that he publishes annually for Credit Suisse in order to see what we can expect from long term investing returns.

We all think the stock market is the best and only thing one should invest in, but is it really and were the last 100 years just the triumph of the optimists? Let’s find out. More →

By Sven Carlin Central Banks Inflation Interest Rates Investing Strategy Investiv Daily Passively Managed Funds
06 Feb
This Is What Could Keep The Stock Market From Crashing
There are scenarios that could see stocks double from current levels, no matter how crazy those scenarios might look now.

I’ll explain what’s going on, why, and what can you do about it.

No one can know exactly what will happen, so the key is to be prepared for anything.

Introduction

After yesterday, many are expecting a stock market crash. And by looking at what happened in 2000 and 2009, it seems pretty logical that the market will crash as things are looking ridiculous. More →
By Sven Carlin All-Weather Portfolio Bank of Japan Central Banks ECB FED Inflation Investing Strategy Investiv Daily
29 Jan
At Davos, Dalio’s Message Tells You Everything You Need To Know
Dalio didn’t say that cash is trash or that it is stupid to hold cash.

I’ll explain in more detail what Dalio said.

Is the biggest risk nobody is seeing—with the exception of Dalio—political in nature?

Introduction

I love Davos because there is always a Bloomberg interview with beautiful mountain scenery and a freezing Ray Dalio.

Perhaps because of the cold, Dalio always wants to keep the interview as short as possible and spits out all his thoughts on the economy, markets, etc. Some of it will be misinterpreted by the market, but the key message is always extremely important to hear. More →
By Sven Carlin Bonds Central Banks FED Inflation Interest Rates Investiv Daily Market Forecast Ray Dalio
10 Jan
Why The Current Financial Environment Is Crazy
It has never before been so easy to get money. The consequence is bubbles.

Some bubbles are innocuous and even funny, other bubbles are extremely dangerous.

The most important thing is to know how to behave in this environment, and we’ll discuss that today.

Introduction

Financial bubbles are always repeating. Sometimes they are small, just like the meal delivery businesses (like Blue Apron) craze of the last two years. Sometimes they are a bit bigger, like cryptocurrencies have been lately. Sometimes they are huge, just like the current stock or debt markets. More →
By Sven Carlin Bonds Central Banks Cryptocurrencies Emerging Markets Inflation Interest Rates Investiv Daily
18 Dec

There Are Big Global Risks Out There – Here’s How To Invest For Them

If there’s one thing that I’ve learned from my research on financial markets, it’s that you always have to expect the unexpected. Nothing is linear, everything works in cycles and what monetary policy makers say is usually wrong.

Last week when the FED raised interest rates, Janet Yellen said: “We’re in a synchronized expansion. This is the first time in many years we’ve seen this.”

That might be true, but the fact is that every economy today is a global economy and the global economy isn’t synchronized. At some point, it will crack somewhere as it always does. The important thing for us is to be prepared for something like that and to see how to best position our portfolios for the consequences that a financial shock might create. More →

By Sven Carlin Bank of Japan Central Banks Emerging Markets European Union FED Global Risks Great Britain Interest Rates International Diversification Investiv Daily
27 Nov
This Is Why International Diversification Is So Important
The 30% international revenue exposure the S&P 500 offers isn’t enough.

It’s possible to add significant returns and lower your risk when investing internationally.

A look at economic health and fundamentals will show where it’s best to invest now.

Introduction

An often overlooked part of investing and portfolio strategies are currencies.

The easiest way to look at it is to say that it all evens out over time and that the only thing important is to be diversified. By owning the S&P 500 or companies that have global revenues, we could say that a portfolio is well diversified. More →
By Sven Carlin Brazil Central Banks China Emerging Markets Interest Rates International Diversification Investing Strategy Investiv Daily Ray Dalio
23 Nov
The Stock Market Will Crash In 2018 – Here’s What Could Trigger It
All indicators show a stock market crash is imminent, but what will the trigger be?

I’ll discuss what can happen and how bad it could get.

As for the timing of it, the best thing is to be prepared for anything.

Introduction

To see whether the stock market will crash in 2018 or not, we have to first see what makes a stock market crash and the best way to do that is to look at the 2001 and 2008 market crashes because the financial environment prior to those crashes resembles the current market environment. More →
By Sven Carlin Bank of Japan Black Swan Events Central Banks Commodities Debt European Union FED Global Risks Inflation Investiv Daily Leverage Market Forecast Recession US Economy Valuations
13 Nov
Inflation Points To A Recession On The Horizon – Here’s What You Need To Know
Everybody expected high inflation after 2009, but it didn’t happen. There are specific reasons for that.

However, higher food and energy prices are pushing inflation higher. The low unemployment rate should help too.

Today, I’ll discuss how to best position yourself for an inflationary environment.

Introduction

There is one little bell always ringing in my mind: inflation, inflation, inflation.

From all my analysis, inflation is something that could really shock the financial world. In today’s article, I’ll first show the current inflation levels for the most important economies, and then will dig deeper into what can happen in the next few years and how could that affect your portfolio. More →
By Sven Carlin Bank of Japan Central Banks ECB FED Inflation Interest Rates Investiv Daily Market Forecast
08 Nov
Is Everything Now Too Big To Fail?
Today, we’ll discuss how the “too big to fail” concept has evolved since it was first used back in 1984.

The U.S. stock market to pension funds relation shows that even the stock market is simply too big to fail.

In Europe, the situation is even worse. Everything there is too big to fail, from countries to corporations to junk bonds.

Introduction

“Too big to fail” is a concept that you probably recognize from the 2009 financial crisis when many corporations, particularly financial institutions, were considered too big to fail due to the negative impact their demise would have on the whole economic system.

In order to prevent massive negative effects on the economy, and also to prevent a 1930s depression-style situation, governments intervened and bailed out the distressed assets. More →
By Sven Carlin Banks Bonds Central Banks FED Financial Engineering Inflation Interest Rates Investiv Daily Stocks US Economy
25 Sep
These 5 Charts Say A Recession Is Near
A recession usually takes everyone by surprise.

The current environment is ripe for a recession, we just need a trigger.

The stock market will react as investors react, which is usually completely irrationally. Be prepared.

Introduction

The latest FED meeting didn’t give us much news.

The monetary policy remains accommodative with the interest rate between 1% and 1.25%, while the balance sheet normalization program is purely cosmetic with minimum monthly asset sales.

We shouldn’t expect anything else from the FED as their objective is to maintain full employment and stability. As long as there isn’t significant inflation, the low interest rates help lower the unemployment rate. More →
By Sven Carlin Central Banks FED Interest Rates Investiv Daily Market Forecast Recession US Economy