Many institutional investors have shed their skepticism and are dipping their toes into the crypto market, adding exposure through crypto funds, futures, and other emerging investment options. However, the world of crypto investing is still relatively uncharted territory. It is important to understand what cryptocurrencies are before investing or accounting for them. Organizations that take a step-by-step approach to due diligence and gain experience with small, low-risk projects involving cryptocurrencies may find they present exciting, new opportunities.
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Most private equity professionals agree that a bear market correction, which is typically defined as a 20 percent decline in the broader stock market, is in sight. What no one can predict is the next recession’s duration and severity.
Direct investments for wealthy individuals and family offices can be challenging when competing with the experience, intellectual capital, and the deep network of relationships forged by a private equity firm. The good news is that the thoughtful structuring and the focused implementation of direct investment programs can help in setting private clients up for success.
A portfolio’s asset allocation reflects an investor’s goals and temperament—the need for return and ability to withstand the financial markets’ inevitable turbulence. Over time, as the returns of higher- and lower-risk assets diverge, a portfolio can take on exposures that are inconsistent with the investor’s risk and return objectives. Rebalancing from one asset class to another can put the portfolio back on track. A deeper analysis suggests three best practices when setting expectations for and executing a rebalancing strategy.
Over the past decade, exchange-traded funds (ETFs) have become popular among investors in building investment portfolios. Although sometimes portrayed as unique instruments, ETFs are overwhelmingly similar to mutual funds, from both a regulatory and a structural standpoint. They also possess important features stemming from the method by which investors transact in fund shares, namely to create low-cost, broadly diversified investment portfolios, especially when implementing index-based strategies.
The Internet of Things (IoT), a network of easily deployed sensors and smart devices, combined with advanced analytics platforms and cloud services, has the potential to disrupt and strengthen products and services across multiple industries. Looking to the future, the amount of data produced by IoT usage is expected to hit 4.4 zettabytes by 2020, up from just 0.1 zettabytes in 2013.
Despite the concerns regarding the amount of user data collected, the social media industry is a powerful growth engine, with one million new users reported daily. With a growing preference for a more personalized and relevant online experience, companies have come to realize they will need the insights of younger generations to better market their brands, retain customer loyalty, and be competitive and profitable. The surge points towards the monetization of social media and a long-term growth opportunity for investors.
No one can predict with certainty which areas of financial technology (FinTech) will lead to the next significant wave of disruption. However, there are several growth catalysts for FinTech, including the rise and practical application of artificial intelligence, distributed ledger technology, or DLT (that is, blockchain); and the wide adoption of mobile technology. Advances in FinTech are poised to lead future generations of growth across capital markets, the financial services value chain, and developing economies.
Even as the financial markets have rallied in early 2019, recession concerns have dominated investor discussions. We continue to believe that the U.S. economy will avoid recession this year. However, economic policy uncertainty increased and financial conditions tightened significantly in late 2018 and early 2019. We explore the extent to which these twin risks are expected to spill over to the real economy.
The inversion yield curve is widely viewed as one of the most reliable and accurate predictors of economic slowdown. The traditional warning sign has garnered significant attention and has intensified the debate on where we are at in the economy. If you follow the financial media, you have most likely been exposed to some of these deliberations. What follows is a primer on what the yield curve is, some perspective on what an inversion has meant in the past, and whether investors should care.