Beyond Bulls & Bears

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Value Emerges Outside Glare of US Markets

Today, we see much more undervaluation outside of the United States, including two emerging markets—South Korea and China—that have been out of favor in recent years.

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Reading Fed Tea Leaves

Clearly, inflation plays a large role in fixed income instruments. We see fairly benign inflation, albeit probably ticking up as the labor market improves. That said, we are probably not as optimistic as the Fed on the inflation front.

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Alternatives

Sukuk: An Asset Class Goes Mainstream

Instead of keeping conventional investors out of the Sukuk market, we see an opportunity. We believe that through thorough independent credit research, global investors can uncover attractive opportunities in this exciting and rapidly expanding, but still relatively unfollowed, asset class.

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A Revolutionary Idea: Investing in Europe (even Russia)

Investing in Russia has generally been risky, and its current clash with Ukraine provides yet another example of why. There are times, however, when we think investing in Russia makes sense.

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“You’re Going to Need a Bigger Boat”: Alpha and Interest Rates

The implication of rising rates for individual and institutional portfolios, particularly for fixed-income investments, could be troublesome – depending upon the magnitude and velocity of the rate rise. Alternative strategies, we believe, may potentially offer a better boat to help navigate this interest-rate sea change.

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Global Economic Perspective: September

The global reach for perceived safety and for yield has been driving demand for long-dated Treasuries and seemingly trumping fundamentals. There also appears to be a widespread expectation that even after the Fed embarks on monetary policy normalization, rate increases are likely to be modest.

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Will the Russia-Ukraine Crisis Chill Europe’s Recovery?

While the situation in Ukraine currently looks troubling, I do not believe Russia can afford a prolonged crisis. The Russian economy could already be in recession or heading toward one, and the lost production, supply shortages and higher consumer prices that Russians are facing could erode President Putin’s support over time.

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Are US Stocks Reacting Rationally?

Even with valuations increasing, we believe many of the same factors that drove the market higher in the last few years appear to remain in place. In particular, we think low inflation and accommodative monetary policy around the globe, combined with improving economic data and corporate profits in the United States, could be supportive of continued market growth in the years ahead.

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ECB Measures Highlight Draghi’s Determination

The ECB remains focused on getting liquidity into European banks and encouraging them to do something with that money.