Lower risk means higher equity prices, and we maintain our expectation of solid equity returns.
Free cash flow growth rates combined with shareholder yield measures will dominate equity returns going forward.
The more disciplined and successful the management, the bigger the potential boost in gold equity returns.
History shows well that corporate profits and valuations and not Washington, ultimately drive equity returns.
It is true that dividends, rather than capital appreciation, have provided a big chunk of long-term equity returns.
Real equity returns in the lowest quintile for inflation were 11.7% a year.
Where available, we break down the public equity returns into their geographic components.
More intermediaries also mean more costs, at a time when nominal equity returns have been very low over the past decade.
Europe's debt issues are having a negative impact on dollar-denominated equity returns.
Equity returns before valuation adjustments are a function of earnings growth (which have their root in GDP growth) and dividend yield including stock buybacks.
Too much optimism about expected equity returns could have painful consequences.
Since private-equity returns still top most other investments, money is expected to continue to flow to buyout pros, even if it comes at a slower pace.
And even if private-equity returns are disappointing in the long term, just placing the buyout bet lends a boost to earnings in the here and now.
And even if private equity returns are disappointing in the long term, just placing the buyout bet lends a boost to earnings in the here and now.
In October, the University of California became the latest pension-fund investor, after state pension funds in California, Texas and elsewhere, to bow to legal pressure to release private-equity returns.
Positive political surprises could be the impetus for idle cash to begin creating a virtuous cycle of more jobs and higher equity returns begetting consumption and even greater job creation.
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Private plans' use of a bond-based discount rate reflects that higher equity returns are not a free lunch--the firm will be required to cough up extra cash if the assets underperform.
They argued that accidents of history, survivor bias, changes in corporate culture and many other factors had made equity returns look higher than they really were over the past 75 years.
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In his paper "Private Equity Performance: Returns, Persistence and Capital Flows, " published a few years ago with Antoinette Schoar of MIT, Kaplan suggests that private equity returns are worst when fundraising is strong.
As for sovereign wealth funds from the Middle East, these cash-rich buyers do not need the kind of aggressive, short-term private-equity returns that propelled buyers like Harry Macklowe and his lenders to take outsized risks.
This both increases the volatility of equity returns and transfers value from debt to equity in the presence of default risks but has little to do with the Modigliani-Miller theorem in which default risk plays no part.
Sobering conclusions have also come from academics at the London Business School, whose analysis of equity returns since 1900 shows that, before the last bull run, only two decades, the 1950s and 1960s, had produced real rates of return of over 10%.
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Although some active managers may experience more short-term volatility and higher tracking error with their benchmarks, this growing trend should lead investors to look to active managers with long-term track records of strong risk-adjusted performance, as I foresee on-going attractive equity returns in the years ahead.
There has been much debate lately about the concept of "decoupling, " or the idea that international markets can deliver strong economic growth and robust equity returns in the face of a recession, or at least a very sharp slowdown in the U.S. In the short run, that may be wishful thinking.
Given their positive correlations with stocks and extreme cheapness, post-crisis, many of these types of bonds have simply been a lower-beta, lower-volatility way to access the strong equity market returns since 2009.
Andrew Haldane, a colleague of Mr Tucker's, has found that the pay of bank bosses correlated well with returns on equity, but not with returns on assets in other words, managers prospered by gearing up bank balance-sheets.
But as Treasuries sink like stones, junk bonds yields have crept higher, serving up equity-like returns.
In fact, emerging market sovereign bonds have produced equity-like returns at times in the past (with commensurately high volatility, of course).
And they concluded that the outlook for equity and bond returns in the short term was about the same: between 2% and 4%.
ECONOMIST: Investment: In search of those elusive returns | The
In fact, he has invested in some bond ETFs, which because of the market downturn have given equity-like returns despite being in the fixed-income category.
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