Damaging Investor Behavior, Home Country Bias and Relative Value Analysis – Entasis Newsletter 3Q17

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Section Summary

  • Investor Behavior – Here is what we know from experience – being invested when the market corrects can be costly, BUT not being invested as the market surges can be just as damaging.
  • Market Notes – Despite worries around rising tensions with North Korea and extreme weather disrupting many major southern cities and states, the underlying fundamentals signal the U.S. economy is healthy and on track for moderate growth. Equity and fixed income returns broadly continued to move higher.
  • Equity & Fixed Income Comments – Within our equity allocations we continue to emphasize domestic large-cap growth stocks, foreign small-/mid-cap equities and emerging market equities. Fixed income allocations remain short interest rate risk and underweight corporate credit risk.
  • Research Focus – Our relative value analysis is a key component of our asset allocation process. We review our recent decision to increase the amount of emerging markets exposure we have allocated within client equity allocations.
  • Client Focus – What is Home Country Bias? We discuss the pitfalls.