The Not-So-Lost Decade

Today marks the 10th anniversary of the birth, or at least the conception, of the Global Financial Crisis. The US equity market peaked, before the Global Financial Crisis began, on October 9, 2007.

Thoughts on the “Brexit”

UK voters shocked the world last night by voting, in a surprise, to leave the European Union. The nation will be the first to leave the 28-nation bloc, The vote was followed by British Prime Minister David Cameron’s announcement that he will resign, and by global equity markets declining meaningfully. In the UK itself, substantial losses early in the day have partially reversed course,

2016 Capital Market Assumptions

Sellwood Consulting’s 2016 Capital Market Assumptions are available. These 10-year forward looking assumptions of asset class return, risk, and correlation are the key input variables for our client asset allocation work, including mean-variance optimization, Monte Carlo analysis, and risk budgeting.

2015 Capital Market Assumptions

Sellwood Consulting’s 2015 Capital Market Assumptions are now available. These 10-year forward looking assumptions of asset class return, risk, and correlation are the key input variables for our client asset allocation work, including mean-variance optimization, Monte Carlo analysis, and risk budgeting.

Happy Anniversary, Bull Market

It was five years ago yesterday – March 9, 2009 – that the US stock market tumbled to its lowest point in the 2008/09 market crash. The five years that followed have seen a tremendous reinflation of asset values for risky assets.

2014 Capital Market Assumptions

Sellwood Consulting’s 2014 Capital Market Assumptions are now available. These assumptions are the primary input for our asset allocation work for clients, being the input variables for mean-variance optimization, Monte Carlo analysis, and risk budgeting.

This year, though we have made incremental enhancements to our methods for gauging the future value of assets, we have maintained our focus on the primary, reliable drivers of risk and return. Our assumptions are anchored in the empirical facts

Realism in Forecasting

Readers of our 2013 Capital Market Assumptions will note that our return expectations are in many cases lower than the expectations that our consultant peers publish. We are aware that our assumptions are different from the crowd, but we believe that our assumptions are more grounded and realistic than those published by the majority of our peers.

2013 Capital Market Assumptions

Presenting Sellwood Consulting’s 2013 Capital Market Assumptions.

Our forward-looking assumptions are the primary input for our asset allocation work for clients, being the input variables for mean-variance optimization, monte carlo analysis, and risk budgeting.

Historical Perspective on Prospective Returns

A number of recent articles and research pieces have caught our eye, reinforcing our belief that forward-looking returns will be challenged by current low yields in marketable asset classes — low dividend yields in equities, and low coupon yields in fixed income.

A recent article from Buttonwood’s column in The Economist, “Home on the Range,” is a cogent summary of a recent study by Standard Life Company. The article notes,