The Future of Investing: Evolution or Revolution?
PIMCO
It is important to recognize that the aftermath of an economic and investment bubble transitioning from levering to delevering, globalization to deglobalization and lax regulation to reregulation leads to an across the board rise in risk premiums, higher volatility and, therefore, lower asset prices for a majority of asset classes. full article »

Global Economic Comment: Inflection Point of the Recession
Credit Suisse Securities (USA) LLC
Eventual recovery may not quickly restore an adequate level of economic activity for quite some time. That is to say, the economy will be doing better but not yet doing well. This will pose a real-world experiment in the relative importance of sequential growth rates versus levels of activity. Instinct tells us that growth rates can, and often will, drive bear market rallies while levels are the sine qua non of actual bull markets. full article »

Economic Review and Outlook
Fiduciary Trust Company International
There is still great uncertainty about how far 2009 earnings will fall. Emphasize non-dollar exposure and inflationary hedges. Favor short-term, high-grade corporate and high-yield bonds as an attractive alternative to cash due to the current low yields on cash and Treasurys. We would not add to equity weights in portfolios. We emphasize the use of high-quality companies for the equities we do own. full article »

Fear of Risk Is Quickly Normalizing
Clearbrook Partners
Regardless of the measure of risk we look at today, all metrics are pointing to a clear easing of investor fears. The VIX Index is at its lowest level since September of last year and has decidedly broken below its 200-day moving average. For a reference point, the VIX peaked on Nov. 20 at 80.86 and is now resting at 36.17. full article »

The Financial Crisis and Its Aftermath
UBS AG
We think even fairly defensive investors can boost risk-adjusted returns through corporate bond exposure. Investors with a sufficiently long time horizon and the ability to withstand further market volatility should consider adding more significant exposure to equities, given that deflation is an extreme scenario and not our base case. full article »

First Signs of a Thaw
Barclays
We are now looking at pro-cyclical asset classes with limited current downside potential. Top of the list in this regard is credit, which looks like an asset class with plenty of room for spread narrowing and, thus, decent returns. Credit, both investment grade and high yield, is where we have the biggest overweights. We remain somewhat cautious on equities, although we expect they will recover during the second half. full article »

The Confidence Game
The Northern Trust Company
Equity markets continue to bounce between fears of further systemic and economic weakness and the hope of bank stabilization and that the worst of the financial losses are over. The potential scope of the Fed’s various initiatives, including the recent quantitative easing plan, increases the chances of eventual success. While we remain defensively positioned overall, we recently decreased our recommended cash position to reflect an improved risk environment. full article »

Breaking the Loop: The Moose is Loose as Reflation Efforts Gain Traction
U.S. Trust Bank of America Private Wealth Management
We have moved away from a defensive risk-neutral stance that emphasized fixed income toward a more aggressive positioning and emphasis on reflationary assets: equities in general, energy, commodities, certain emerging markets and U.S. small caps. We are maintaining our alternative investment allocation in hedge funds and private equity as opportunities are building rapidly in specific areas. full article »

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