Key Observations

A fixation on the direction of interest rates continues to drive prices in the short term, including in May. Rates moved lower, pushing rate-sensitive asset classes ahead of their peers.

However, we take this opportunity to step back from the short-term focus on rates and discuss the findings of our latest long-term study on the efficient allocation of active and passive investing.

Notably, 92% of 10-year top-quartile managers spent at least one 3-year period in the bottom half of their peer group, highlighting that success is not linear. We have also added nuance to our review of efficient allocation in markets most likely and profitable to engage in active investing.

• Escalating conflicts in the Middle East have led investors to question what impact expanded conflict may have on their portfolios. Increasing oil prices has modestly priced in risk of expanded conflict into neighboring petrostates Iran and Israel.

Ben Hockema reviews the first quarter performance and updated economic data, while also looking ahead to the rest of 2024.

Stocks advance in February with indexes like the S&P 500 and the NASDAQ hitting new highs. While a new high for an index is not a new thing, in fact it happens quite regularly and often without material consequence, there was a recent new high that is worth reflecting on. The Japanese equity index (the Nikkei 225) hit a new all-time high for the first time since 1989! We’ll do the math for you: that’s 34 years…