China Sentiment: The Cost of Impatience

In both life and investing, in tough times, it can be hard to hold faith in the future while observing the present. But in the words of Warren Buffett, “Someone is sitting in the shade today only because someone planted a tree a long time ago.” Let us not underestimate the heart and will of the entrepreneurs, investors, bureaucrats, and young people who are planting trees in China today.

Read More

Big Shoes to Fill: Who Can Be the Next China?

I’ve been wondering lately which country—if any—can be the next China. Much of what made China a manufacturing powerhouse didn’t happen overnight; it took generations.

For example, when I was growing up in Taipei, my grandpa took piecework from the local hairbrush factory. I would sit next to him and insert thousands of plastic bristles into wooden handles, one at a time, until we hit his quota. Then he’d return the assembled brushes to the factory and get a new order.

Read More

Q2 2023 Asset Class Update

The second quarter saw investors bidding stocks higher, swept up in a ChatGPT-inspired AI frenzy and encouraged by macro data pointing to a stronger-than-expected US economy. Meanwhile, fixed income markets came to terms with the fact that, despite a “hawkish pause” from the Fed in June, the central bank was unlikely to soon declare victory in its battle with inflation—made all too real amidst the heat by a recent Wells Fargo report, showing ice cream prices up 9% since last summer! Below, we highlight themes and data the team at Rayliant has been tracking as we turn our attention to the second half.

Read More

The Future of EM Is Worth the Weight

My interest in emerging markets is largely driven by my personal experience. My parents participated in the spectacular growth of Taiwan, where they saw their annual income increase exponentially. But not all emerging markets have been so fortunate. Why do some emerging markets “emerge,” while others do not?

Read More

Q4 2022 Asset Class Update

A ‘Santa Claus rally’ sent risk assets rallying into the new year, as markets doubted central bankers’ resolve to keep raising rates. Will 2023 bring falling inflation and a soft landing, or disappointment for investors?

Read More

Q3 2022 Asset Class Update

In our latest Quarterly Asset Class Update, we break down global markets by the numbers, offering thoughts as to where markets could be headed as 2022 heads into the home stretch.

Read More

When Smart Beta Meets Machine Learning and Portfolio Optimization

Smart beta products using common factors like value, low volatility, quality, and small cap experienced an underwhelming performance from 2005–2022. On average, long-only factor portfolios built from a wider set of global factors identified in the finance literature generated significantly positive excess returns across countries, suggesting diversifying across many factors is more prudent than selecting a handful that have performed the best.

Read More

You Are Already a China Investor

Many investors say they “don’t invest in China” at all – despite having tens or even hundreds of millions invested in an emerging markets portfolio. These investors would be well-advised to understand the extent to which their EM portfolio is, in fact, invested in China.

Read More

7 Predictions for a Stagflation Economy

Jason is making some predictions…and fully acknowledging that all of them could be wrong. There are only two sustainable options in investing: lose money fast, or compound returns slowly. Diversification remains the only free lunch in investing, and it has always been (and is likely to remain) the best way to successfully weather turbulent markets.

Read More

Q2 2022 Asset Class Update

Stagflation fear sent stocks into a bear market in Q2, while bonds tanked as the Fed debated a full-point rate hike after June’s jarring 9.1% rise in US CPI. How might the fight against inflation unfold in the second half?

Read More

The People vs. Inflation: A Political Problem (Not an Economic One)

What will happen if our politicians pursue an economic “hard landing” that weakens employment for below-median households? What if Fed rate hikes crater consumption by further reducing their real income and wealth? If these things happen, we will achieve a Friedman-esque victory against inflation … but an ultimately empty victory for Main Street. At its heart, our current inflation is a political problem. It is going to require a political solution.

Read More

This Is Not the Matrix and You Are Not “The One”

For the past decade, many investors have been living in the Matrix. Buoyed by extensive quantitative easing and overseas production, their portfolios have ballooned. They believe in their illusory world, a place they have the ability to grow wealth unimpeded and without consequence. Unfortunately for them, this is the real world—and inflation is the blue pill.

Read More

The Coming Stagflation

We are quick to criticize other countries’ regulatory and fiscal missteps, but it would be foolish to imagine the US Federal Reserve and our other institutions are not similarly capable of self-harm. It could be out of ignorance, hubris, or politics. Regardless, the coming stagflation is cause for concern in the US.

Read More