Asset Allocation Bi-Weekly
Confluence Investment Management offers various asset allocation products which are managed using “top down,” or macro, analysis. We publish asset allocation thoughts on a bi-weekly basis, updating the piece every other Monday.
Asset Allocation Bi-Weekly – Equities as an Inflation Hedge? (March 17, 2025)
by Daniel Ortwerth, CFA | PDF A time-honored belief holds that inflation is bad for stocks, but recent developments may be challenging this view. In this report, we step through the traditional narrative, review certain recent developments, and consider what might have changed in the relationship between inflation and stocks. Ultimately, we might be entering… Read More »
Asset Allocation Bi-Weekly – Tackling Long-Term Interest Rates (March 3, 2025)
by the Asset Allocation Committee | PDF In his testimony before the House Financial Services Committee on February 12, Federal Reserve Chair Powell was questioned about why mortgage rates had not declined. In response, Powell emphasized that the Fed primarily influences short-term interest rates, not the longer-term rates such as those tied to mortgages. Despite… Read More »
Asset Allocation Bi-Weekly – Our Take on the Initial Trump Tariffs (February 18, 2025)
by the Asset Allocation Committee | PDF While investors broadly understood that the new Trump administration would impose import tariffs as a key part of its economic policy, concrete details weren’t available until the initial tariff announcements on February 1. Even though some of those tariffs were quickly “paused,” the announcements gave us our first… Read More »
Asset Allocation Bi-Weekly – American Exceptionalism and the Markets (February 3, 2025)
by the Asset Allocation Committee | PDF We suspect many investors today think the “American Exceptionalism” they studied in high school or college no longer applies to the United States, given the challenges it faces from the rise of China, the country’s own enormous debt load, or its sharp political divisions. However, as we survey… Read More »
Asset Allocation Bi-Weekly – Magnificent 7 to the Rescue! (January 21, 2025)
by the Asset Allocation Committee | PDF The traditional role of Treasurys as a safe-haven asset has eroded. For example, Treasury prices fell in the last quarter of 2024 despite escalating geopolitical tensions in the Middle East, concerns about global economic growth, and heightened political uncertainty in developed nations. This weakening in the demand for… Read More »
Asset Allocation Bi-Weekly – Household Cash Levels and the S&P 500 (December 9, 2024)
by the Asset Allocation Committee | PDF Retail money market levels remain elevated. This chart shows the weekly Friday close for the S&P 500 along with the level of retail money market funds. In general, cash being held can either remain held, be used to purchase goods and services, or be used to buy financial… Read More »
Asset Allocation Bi-Weekly – Bonds and the Post-Election Environment (November 25, 2024)
by the Asset Allocation Committee | PDF The election results are in and, contrary to expectations, voters rendered a quick and clear outcome, with Donald Trump set to return to the White House. The central case prior to the election was that the outcome would be drawn out and contentious — an outcome that would… Read More »
Asset Allocation Bi-Weekly – Let’s Talk About Tariffs! (November 11, 2024)
by the Asset Allocation Committee | PDF In recent years, tariffs have made a surprising comeback. Once widely condemned as a relic of the protectionist past, tariffs reemerged in 2016 as a policy tool against China and are now being considered for implementation on goods from all other countries. Populists tend to believe that these… Read More »
Asset Allocation Bi-Weekly – The Inflation Adjustment for Social Security Benefits in 2025 (October 28, 2024)
by the Asset Allocation Committee | PDF Even for dedicated, successful investors who have built up a substantial nest egg, Social Security retirement and disability investments can be an important part of their financial security. For many Americans, Social Security benefits may be the only significant source of income in advanced age. On average, Social… Read More »