With a combined market capitalization of $10 trillion, the Shenzhen and Shanghai stock exchanges are the second largest in the world, writes Tony Tan, DBA, CFA, and recent research demonstrates that, contrary to popular perception, they don't move in lockstep or mostly in response to macro factors. Investors searching for alpha cannot ignore them.
The common assumption is that lower tax rates should increase corporate profits, share prices, investment, and consumption, and thus lift the entire economy. Unfortunately, this is not quite how it happens in the real world.
Why bother with long-term return expectations? For asset owners or asset managers compiling a strategic asset allocation, long-term forecasts are relevant and necessary. When combined with estimates for risk and correlation, these forecasts allow investors to fine-tune their long-term benchmarks and consider trade-offs between asset classes to enhance the implied risk and return profile of the fund.
President Richard Nixon's decision to untether the US dollar from gold has left a harsh and lasting legacy for economies all around the globe.
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