Markets on the whole do a decent job of synthesizing information at the micro level, but they often get the macro signals wrong as was noted by Paul Samuelson. In his 1998 paper, Samuelson argued that there is no persuasive evidence that macro market inefficiency is trending towards extinction. One factor behind this inefficiency is that markets can progress at times based on memory rather than a random walk. This has particularly been the case for interest rates since the Greenspan Put was put on steroids in 1998 when Long Term Capital Management defaulted. The so-called Greenspan Put is where

Property and real estate investments are in general considered as safe-haven investments because bricks and mortar are real assets which can survive a storm in the equity markets. This claim can be considered as true if an investor invests directly into property. But as fund managers try to optimize the return for their investors, this might not be true for direct property funds and real estate investment trust (REIT) funds investing in commercial properties in the aftermath of the COVID-19 pandemic. Under current economic conditions, the optimization of returns— especially the use of leverage (debt capital)—may cause a problem for

The American economist Paul Samuelson once remarked that investing should be more like watching paint dry. If you want excitement, he noted, take $800 and go to Las Vegas. Samuelson’s comment in many respects strikes at the heart of the asset allocation versus stock selection debate. It’s all in the allocation Brinson et al’s 1986 paper on asset allocation stated that just over 90% of the variance in investment performance based on a fixed asset allocation portfolio was explained by boring old asset allocation, with only 10% arising from the excitement of market timing and stock selection. That 90% of