– The investable assets of wealthy individuals are expected to double globally by 2030, and the bulk of this wealth transfer is going to women. – Women are taking control of family private wealth and continue to create wealth through entrepreneurial ventures and other investments. – Women’s dominance in wealth and finance requires financial services firms to understand and cater … Read More

Key Points: The equity risk premium (ERP) may vary depending on the term structure. Mean reversion can impact the ERP, with longer time horizons potentially resulting in a decrease. Noise in the market can influence the value premium, independent of sentiment or other factors. The effectiveness of the CAPE ratio as a predictor of stock returns varies internationally. When testing … Read More

Key Points: Convertible Securities: A Complete Guide to Investment and Corporate Financing Strategies provides comprehensive information on investing in, hedging, or issuing convertible bonds or preferreds. The book covers a wide range of topics including portfolio diversification, capital structure optimization, and valuation methods for convertibles. Convertibles historically have provided returns similar to common stocks but with lower volatility. The book … Read More

Key Points: Hedge fund performance fees can be detrimental to clients, especially when stocks experience round-trip trajectories. Round-trip stocks are those that see significant gains over a period of time, only to fall back to their original value. Hedge funds often profit from these round trips at the expense of their investors. A notable example is Carvana, which had impressive … Read More

Key Points The increase in interest rates affects the cost of capturing alpha in hedge funds. Higher interest rates reduce the alpha captured by investors. The alpha capture ratio measures the cost of alpha. Managers with higher equity betas experience a greater decline in alpha capture with rising interest rates. Different fee structures and risk-free rates impact the alpha capture … Read More

Key Points: Retirement planning is a top priority for retail investors. Traditional stock and bond portfolios are becoming less effective for retirement savings. Many pension funds are considering allocations to cryptoassets. Asset owners are concerned about slower wage growth, an aging population, and lower investment returns. Pension funds are investing in digital assets to address potential return shortfalls and cover … Read More

Cryptocurrencies are gaining popularity, but their long-term impact on the economic and financial landscape is uncertain. Eswar S. Prasad’s book, “The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance,” explores the potential advantages and shortcomings of digital currencies. The book is divided into four parts: “Laying the Bedrock,” “Innovations,” “Central Bank Money,” and “Ramifications.” Fintech, including … Read More

Key Points: There is a longstanding belief in the financial markets that local events and trends can impact local stock returns. Research has shown correlations between local events like sports team performance, weather, and election results with stock market performance. A recent study investigated the correlation between COVID-19 case counts and stock returns in specific regions. Four sectors (communications, energy, … Read More

During the Alpha Summit GLOBAL event by CFA Institute, finance experts discussed the challenges of investing in an environment where fundamental value takes a backseat to public policy and market prices become unpredictable. The panelists highlighted the unprecedented influence of unconventional monetary policy on markets. The balance sheets of central banks, such as the US Federal Reserve and the Bank … Read More

Key Points: – The recent interest rate hike by the US Federal Reserve and two consecutive quarters of negative economic growth sparked a rally in equities and risk assets. – It is important to remember the lessons from history, especially regarding the US experience after World War I and the years preceding the Great Inflation. – The Fed is currently … Read More