Top Five Articles from October: Elections and Equities, Alternatives to the Risk-Free Rate
1. Does the US Presidential Election Impact the Stock Market?
Depending on who you talk to, or which articles and headlines you read, the responses run the gamut. Here’s a quick summary of some of the most recent research on how presidential politics impacts equities. Recently updated to include new articles.
2. Rethinking the Risk-Free Rate: Offering Alternatives
In an earlier post, Jason Voss, CFA, criticized the concept of the “risk-free rate of return” as both illogical and not reflective of reality — and proposed renaming it the “lowest-available-risk expected rate of return.” In this follow-up post, he offers some alternative bedrock rates of return for consideration.
BlackRock Chief Investment Officer Rick Rieder recently contended that the fixed-income market is undergoing structural changes in the wake of the Great Recession that have not been present for at least 20 years. Among the major elements of this shift: The long-term continuation of artificially low interest rates and a shortening of investment time horizons.
4. Modern Portfolio Theory: Bruised, Broken, Misunderstood, Misapplied?
If the global financial crisis has left us with any enduring lessons, it’s that asset return distributions can be significantly skewed and asymmetrical with fat-tails. So how can investment practitioners manage this new reality?
5. The Canadian Model: Ontario Teachers’ Turns Pension Investing on its Head
Three key insights on successful pension fund investing from Institutional Investor magazine’s profile of the C$117 billion Ontario Teachers’ Pension Plan.
Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.
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