Latest Research

AdvantHedge was down 2.3% in December, ahead of the inverse S&P 500 (-4.5%) and in-line with the inverse Russell 2000 (-2.2%).

The Leuthold Core and Global portfolios both performed well in December as markets surged into year-end. Global performed particularly well on a relative basis as the equities had an outstanding month.

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Bond mutual funds had a stellar 2021. With data available through November, this subset has already amassed YTD net-cash inflow trumping 2009’s all-time record.

The S&P 500 closed out 2021 with a solid +4.4% monthly price gain. For the year, it clobbered all other indexes—foreign and domestic—with a +27% jump.

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It’s once again that time of year for what our founder deemed the great “thermal pollution.” Market pundits and prognosticators will divine, guess, and predict all that the market will bring in the new year.

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The S&P 500 is flirting with new all-time highs, and the news gets even better for followers of seasonal patterns: The Santa Claus rally has yet to officially begin!

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A replay of a Zoom Call with Chief Investment Strategist, Jim Paulsen where he shared his thoughts and observations on today's market and what he sees looking ahead. The slides are available through the PDF Download.

With the most speculative year in U.S. stock market history drawing to a close, we could probably all use a rest. How about a rest that lasts 12 months?

The year 2022 on the Jewish calendar is a Shmita year—historically considered to be a year of rest, or sabbatical, following six years of work. Unfortunately, markets have frequently taken this suggestion quite literally! There’s been a major financial disruption in seven of the eight Shmita years dating back to 1966:

Extremely loose monetary and fiscal policies during the pandemic have created distortions and disequilibria throughout the economy. The most visible bubbles may be in financial markets, evidenced by the boundless valuations applied to visionary startups and the speculative fascination for digital assets of all types. This report examines a bubble of a different kind; not a financial bubble but rather a real-world bubble in “fun”. Producers of recreational goods are flourishing during the pandemic, posting massive sales gains and a tripling of net income, yet selling for miniscule valuations.

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Growth has been outperforming Value since 2007, but the magnitude varies widely by market cap.  Large Cap has seen Growth outperform Value by a greater amount and with more consistency than has the Small Cap space. We use the S&P style indexes for reference.

Financials, Energy, and Information Technology remain at the top of our sector scores. Materials advanced up to 5th from 8th. Consumer Discretionary made the largest drop as it moved from 4th down to 8th. Communication Services joins Industrials and Utilities to round out the bottom three worst-rated sectors.

Financials has occupied the #1 overall ranking for all of 2021, thus far, but its absolute score has increased throughout the year due to well-rounded strength across the factor spectrum, reaching levels not seen in more than twenty years.

In April, we suggested that an antidote for high valuations on the S&P 500 might be an extra bite or two of the “Donut” Portfolio—an equal-weighed portfolio of several of the usual asset allocation suspects excluding the S&P 500. That proved to be good advice for about two months.

It’s easy to misread where the true “consensus” stands on any financial forecast. Here’s a disconnect we see in current consensus thought: The “crowd” seems broadly bullish on commodities, yet the same crowd (previously known as Team Transitory) thinks consumer price inflation is near a cycle high.

With the market getting less sensitive to each iteration of new variant, we believe the impact of Omicron is unlikely to be as significant as the global-tightening cycle.