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 – Small Caps and the Hope for a Soft Landing (June 24, 2024)
by the Asset Allocation Committee | PDF They don’t call him Maestro for nothing. In the mid-1990s, Federal Reserve Chair Alan Greenspan achieved what was once thought of as impossible: an economic soft landing. As the US labor market showed signs of tightening, he raised interest rates from 3% to 6% in 1994 to preemptively… Read More »
Asset Allocation Bi-Weekly – Copper, Gold, Treasurys, and the New World (June 10, 2024)
by the Asset Allocation Committee | PDF Early 2023 served as a stark reminder that correlations can break down when least expected. Last year, a decline in the copper/gold ratio led many investors to anticipate a fall in longer-term yields, particularly for the 10-year Treasury note. However, these expectations were shattered as yields not only… Read More »
Asset Allocation Bi-Weekly – The Importance of the Federal Reserve’s Inflation Target (May 28, 2024)
by the Asset Allocation Committee | PDF Money has three characteristics: medium of exchange, store of value, and unit of account. When money is taught in undergraduate economics classes, these three functions are treated as self-evident, but careful observation suggests that that the first two characteristics are contradictory. If a monetary authority emphasizes the medium… Read More »
Asset Allocation Bi-Weekly – The Immigration Paradox (May 13, 2024)
by the Asset Allocation Committee | PDF Throughout history, immigration has been a politically charged issue, creating a rift between capital and labor. Employers have advocated for looser immigration policies to fill job vacancies, particularly for positions that don’t offer high pay. Conversely, labor unions often push for stricter policies to prevent an influx of… Read More »
Asset Allocation Bi-Weekly – The Peace Dividend, Government Debt, and Yield Curve Control (April 29, 2024)
by the Asset Allocation Committee | PDF Danish Prime Minister Mette Frederiksen recently castigated the European governments that slashed their defense spending at the end of the Cold War and then remained far too complacent about the growing threat from Russia in recent years. According to Frederiksen, hiking their defense budgets as is now necessary… Read More »
Asset Allocation Bi-Weekly – The Incremental Uranium Demand for Weapons (April 15, 2024)
by the Asset Allocation Committee | PDF In our Asset Allocation Bi-Weekly report from March 4, 2024, we began to explain more fully our recent decision to introduce uranium and uranium miners into our Asset Allocation strategies. Our key thesis was that current and planned investments in new nuclear reactors for electricity generation, especially in… Read More »
Asset Allocation Bi-Weekly – Gold, Gold Miners, and Central Banks (April 1, 2024)
by the Asset Allocation Committee | PDF One challenge for investors seeking to benefit from rising gold prices has been that trading and holding the yellow metal is often more expensive than trading or holding stocks or other financial assets. Buying physical gold can involve fat commissions and large costs for storage and insurance. Buying… Read More »
Asset Allocation Bi-Weekly – The Fed’s Other Policy Tool (March 18, 2024)
by the Asset Allocation Committee | PDF While the Federal Reserve’s dual mandate focuses on achieving maximum employment and stable prices, managing long-term interest rates has also played a significant role since the enactment of the Federal Reserve Act in 1977.[1] Recent actions have raised questions about the Fed potentially anchoring the 10-year Treasury yield… Read More »
Asset Allocation Bi-Weekly – Uranium Demand, Supply, and Investment Prospects (March 4, 2024)
by the Asset Allocation Committee | PDF In an important adjustment to our Asset Allocation strategies last October, we introduced an exchange-traded fund focused on uranium producers into our mid-cap equity exposure. At the time, we noted in our Asset Allocation Quarterly that the move aimed to take advantage of government policies around the world… Read More »