What Equity Investors Signaled That Bond Investors Missed

Posted on 09/19/2019

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This article is sponsored by MFS Investment Management.

Research paper is by Robert M. Almeida, Jr., Portfolio Manager and Global Investment Strategist at MFS Investment Management.

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In brief

Markets send signals, such as signs of credit stress over a year before the collapse of Lehman Brothers.

The nearly decade-long outperformance of growth stocks over value stocks has been sending a signal to the bond market that went unheeded until recently.

Is it possible that growth’s unprecedented outperformance over value for much of the last decade has been signaling lower – if not zero – interest rates globally?

Capital markets discount all available information. Asset prices trade based on the push and pull between investors, with varying viewpoints about the underlying assets’ future cash flows.

Disclaimer
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• Bond Market
• Fixed Income
• interest rates
• MFS
• Public Pension
• Sovereign Wealth Funds
• Value Stocks