"Look for three
things in a person–
and integrity. If they
don't have the last
one, don't even
bother with the
- Warren Buffett
"Bits and Bytes"
Commentary by Scott Bruin, Executive Managing Partner
THESE DAYS most everyone is electronically tethered to one or more communication devices that have the ability to provide detailed information on millions of subjects; more than anyone can process and understand, let alone, apply. Some are so "plugged in" that each "breaking data point" becomes the moments headline despite the actual level of real importance.
No place is this more true than in the financial markets. The landscape is dotted with experts pointing to reams of data that they believe are important launch pads or turning points for investors. The challenge is how to decide which "breaking bytes" are in the important ones and then, what to do with them.
Today at CapTrust we are well into our second decade and have cutting edge tools and strong intellectual talent that has grown to over 45 professionals to work for our clients. Many of our client relationships go back to our beginning.
Not withstanding the "bits and bytes" and their new delivery systems, our original values have proven sustainable through market and world events we could not have envisioned when our firm began. We remain independent in thought and are fortunate to be able to provide insight to our clients through the on-going development of our processes and personalized consulting. And most of all we count integrity as our most prized possession. Information is a commodity. Advice is precious.
MAKE AN INFORMED DECISION
We provide investor clients the tools to make good business decisions. The straight-forward logic of our excellent models and the helpful charts in our Market Monitor gives our clients easy command of current business circumstances.
The Ugly Friend Ignored at the Party
- A Case for Bonds During ZIRP
“In theory, there is no difference between theory and practice. In practice there is.” -Yogi
As treasury yields moved sharply higher midyear last summer and investors fled bond funds in droves, it became conventional wisdom that the bull market in bonds was officially over. While, in theory, the bond bull should certainly end as interest rates hit zero and intuitively have nowhere else to go but up, in reality, the bond market has remained resilient despite the zero rate environment. In this commentary, we consider the merits of maintaining a healthy exposure to fixed income, given several factors present in the current investment environment:
- Key interest rates – the discount rate and the Federal Funds rate – are dependent on the Fed’s interpretation of economic activity, combined with its dual mandate
- Both of the factors in the Fed’s dual mandate, core inflation and employment, lag target levels and have no clear catalyst for improvement for the foreseeable future
- Contrary to popular opinion, bond yields could continue to go lower for either two reasons:
- flight to quality
- continuation of a zero interest rate environment characterized by low growth and low inflation
Therefore, bonds continue to be an important component of asset allocation and a necessary diversifier from risk assets.