Topics covered in this issue:
- Stock Performance in Asia Ex-Japan Outshines 2020
- Strong Beta Risk Favoring Portfolio Strategies in 2020
- A Booming Year for Our Managed Volatility Strategy, Despite Challenges for Minimum Vol
Asia Ex-Japan Equities Dominated 2020 Returns: If you strategically included a substantial portion of equities from Asia, excluding Japan, in your portfolio last year, you deserve applause. This segment of global asset classes not only recorded the highest returns this week but also outperformed all other asset categories represented by our selected proxy ETFs on a global scale.
The Capital Spectator bids farewell to 2020—a year to forget. We will resume our services in the new year with “Best of Book Bits 2020: Part II” on Saturday, January 2, followed by the usual schedule on Monday, January 4. In the meantime, we wish our readers a prosperous 2021! Our forecast, devoid of models, offers a simple assumption: relief is on the horizon.
Creating and overseeing diversified portfolios is a daunting task even under normal circumstances. The challenges have intensified due to the global impact of the coronavirus pandemic this year.
* The House has approved a bill to increase stimulus payments to $2,000.
* The debate over the $2,000 Covid-19 relief checks has moved to the Senate.
* The House overrides Trump’s veto of a $740.5 billion defense policy bill.
* New York legislators enact a bill banning most evictions.
* Manufacturing activity rose for the seventh consecutive month in Texas as of December.
* The US stock market (S&P 500) soared to a record high on Monday:
The final trading week of the year was brief but filled with excitement. A broadly defined, equal-weighted index of commodities led a varied performance across the major asset classes, while stocks and bonds from emerging markets suffered considerable losses, according to a range of exchange-traded funds at the close of trading on December 24.
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* Trump signs the pandemic relief legislation, preventing a government shutdown.
* The suspect in the Nashville explosion died in the blast, according to authorities.
* Uncertain risks linger for the global economy as the year draws to a close.
* The UK is facing a ‘bumpy period’ during the Brexit transition.
* Bitcoin is nearing a third consecutive monthly gain in December, marking its longest winning streak since 2019.
* Is the worst of the pandemic’s impact in the US yet to come?
* The 10-year Treasury market’s inflation expectation holds steady at 1.97%—the highest level since April 2019:
Topics covered in this issue:
- US small-cap stocks continue their upward momentum
- Global Asset Allocation Strategy Benchmarks Have Shone this Year
- Managed Volatility Strategy Still Thriving
As 2020, a year filled with challenges, draws to a close, let’s take a moment to appreciate one of the surprising positive outcomes of the year—book publishing. The last twelve months have seen an extraordinary array of compelling new titles in economics and finance. As part of our year-end review, we will spotlight ten noteworthy publications from The Capital Spectator’s weekly Book Bits column. Compiling a list of just ten is challenging and somewhat subjective, but we’ll give it a shot. We’ll divide this selection into two easily digestible installments, starting with five today and concluding with the remainder next week. Happy reading!
As the holiday season approaches, your editor has decided to temporarily close The Capital Spectator’s headquarters. We will be celebrating (while observing safety protocols, naturally) for the remainder of the week. We’ll return on Saturday, December 26, with our Best of Book Bits, and resume our regular updates on Monday, December 28. Wishing everyone a safe and joyous holiday season—stay merry and beware of beta coefficients masquerading as cherries in your holiday punch. Merry Christmas!
Yield-seeking investors continue to face a challenging environment in global markets. However, there is some good news: current payouts appear reasonable when compared to inflation, and arguably even attractive.
