QUARTERLY COMMENTARY Q3: REPRICING RISK IN THE EQUITY AND BOND MARKETS.

QUARTERLY COMMENTARY Q3: REPRICING RISK IN THE EQUITY AND BOND MARKETS.

Thu, October 08, 2015

Generally speaking, equity markets climb stealthily to new high ground, but fall off precipitously when investor sentiment turns negative. Sentiment and emotion move financial markets in the short run. Secular economic trends seem to drive markets in the intermediate timeframe. Asset class relative valuations (i.e., what investors are willing to pay for an expected stream of corporate earnings, or projected stock dividend pay-out, or discounted fixed income cash flow), provide a variety of frameworks for investors to sort through their longer-term options. The direction of investor sentiment is volatile and relatively easily discerned in our interconnected age and, for the most part, media driven.