Is it time to boost exposure to the Value factor?

Many investors are underweight Value, but market conditions may favor a shift in strategy

Time to read: 3 min

Risk isn’t a bad thing — when it’s intentionally, carefully added to a portfolio in an effort to boost returns. But hidden risks are what keep investors and financial advisors up at night. Over the past year, the Invesco Global Solutions team examined hundreds of financial advisor portfolios, and we discovered that a common source of hidden risk is unintended factor exposures that could impact the ability of the portfolios to achieve the outcomes they are looking for. Fortunately, there are ways to diagnose and address this problem.

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October lives up to its frightening reputation for investors

Weekly Market Compass: Stock market turbulence continues

Time to read: 5 min

Once again, the month of October has been living up to its frightful reputation for wreaking havoc on stock prices: 1929 and 1987 are prime examples, and we can now safely say that 2018 will also go down in history as an illustration of October’s ability to scare investors. Unfortunately, I don’t foresee this volatility easing too much over the next few weeks.

Volatility and sell-offs began earlier in the month but accelerated last week. On Oct. 24, stocks experienced a major sell-off that erased all the gains for the year in many major US indices. But that was just the beginning of the most recent roller coaster ride: The next day saw a powerful recovery, while the day after that brought another significant sell-off. As of Oct. 26, virtually all major indices around the world were in negative territory — some actually posting double-digit losses for calendar year 2018.1 In this risk-off environment, it’s not surprising that investors flocked to US Treasuries, driving the 10-year yield down to 3.077%.1

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Shining the EQV spotlight on China and Japan

Third quarter review uncovers significant hurdles for equities

Time to read: 4 min

During the third quarter, the People’s Bank of China (PBOC) remained in active easing mode and Japan’s Nikkei 225 Index reached a 27-year high. Supportive monetary policy and strong momentum can often be positive indicators for markets. However, in our analysis of recent events and likely catalysts for future direction, the Invesco International and Global Growth team continues to seek opportunities but believes both markets face obstacles that could impact future performance.

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Losses aren’t the only risk to worry about

Our balanced-risk approach is designed to manage the three main risks that all investors face

Time to read: 2 min

October greeted investors with steep stock market losses and a sense that risk had suddenly emerged after a relatively mild summer. But risk is always present for investors — and the possibility of losing money is just one form it can take. Below, I describe three principal challenges investors face, and the Invesco Global Asset Allocation team’s approach to managing those three risks.

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Stock market sell-off: The sequel

For the second time in two weeks, global markets suffered a significant drop. Why? And what could come next?

Arnab DasTime to read: 4 min

After a pause in which stocks partially recovered from their early October drop, the stock market has moved back into sell-off mode yet again.

What drove the latest sell-off?

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After the sell-off, what will earnings season tell us?

Higher interest rates represent a salient threat to valuations

Time to read: 2 min

The global market backdrop remains challenged with geopolitics, trade, Brexit, rising oil prices and central bank balance sheet contraction all introducing incremental uncertainty to the calculus around earnings growth, interest rates and valuations. For the time being, the equity market appears very much in de-risking mode, with a focus on earnings delivery and outlook statements as the third quarter earnings calendar gathers pace. Here are the issues that the Invesco International and Global Growth team is watching in the fourth quarter and beyond.

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Three reasons to reconsider emerging markets

While EM has lagged overall in 2018, some EM factors did outperform

Nick KalivasTime to read: 5 min

The numbers don’t lie — emerging equity markets (EMs) have dramatically lagged US equities in 2018 as shown in the table below. The chaos in EM is best exemplified by the Brazilian elections, Russian sanctions, deleveraging in China, and the South African land redistribution policy. However, in some cases, factor-based approaches fared better than the overall market in EM, and I believe there are three indicators suggesting it may be time to reconsider this asset class.

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Five issues rattling global markets

Weekly Market Compass: Trade tops the list once again, while central banks take center stage this week

Time to read: 5 min

There was no rest for the weary last week, as geopolitical developments came fast and furious, and capital markets reacted. Below, I cover five important issues that have continued to contribute to stock market volatility — some of which flew under the radar during the week’s flood of news — and highlight five issues to watch this week.

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Five key takeaways from the IMF annual meeting

Invesco reports from scene of the most bearish gathering in memory

Arnab DasTime to read: 5 min

The International Monetary Fund (IMF) took a decidedly bearish tone during its annual meeting in Bali earlier this month — in fact, I would say it was the grimmest gathering of the IMF that I’ve ever seen. I had the opportunity to attend the talks in Indonesia, and I came home with five key takeaways. Below, I summarize those takeaways and share the viewpoint from Invesco’s Office of the Global Market Strategist.

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Risk management and ESG strategies

Environmental, social and governance issues can present material issues for companies

Time to read: 2 min

More than ever, people want to be fully informed about what they are eating — not only the calories, but whether it’s gluten-free, pesticide-free, organic or raised with growth hormones. They even want to know if the packaging is recyclable. Why? Because they’re seeking to avoid risks to their health and to the environment. In the same way, investors today are well aware that risk can come from a variety of places — and that’s helping to fuel an interest in environmental, social and governance (ESG) investing.

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