Midway through the Twenties
We find ourselves in the midst of the 2020s—a remarkable moment in time. Much like the “Roaring Twenties” a century ago, we are experiencing both a productivity boom and a free-market surge. This is the only time in the past hundred years that such a conjunction has occurred.
Chart of the week: The average return does not exist
Every year, I look with some amazement at the annual forecasts from the major financial institutions—particularly the expected returns that sit squarely near the long-term average. You can be almost certain these predictions won’t materialize.
Room for more optimism
These are worrying times. Geopolitically, a new world war seems imminent. The challenges in Europe are so significant that the valuation of European stocks has halved compared to the American markets.
Chart of the week: China’s broken growth model
The financial media are buzzing with stories about the impact of Donald Trump as president, questions surrounding the supposedly high valuation of equities, the collapse of Germany, and the meteoric rise in the price of bitcoin. However, these headlines overshadow the troubling developments in the world’s second-largest economy. It’s time to address that imbalance.
Luxembourg’s balancing act
How much state is too much state in Luxembourg’s financial sector? Gregory Kennedy explores the fine balance between social welfare, competition, and the role of the state in finance.
Chart of the week: sentiment boost
“History doesn’t repeat itself, but it often rhymes.” A cliché in financial markets, but no less relevant because of it. The “surprising” surge in confidence among American smallcaps is no exception.
Chart of the week: How a forgotten recession indicator is becoming even more important
Some macroeconomic indicators carry more weight than others. But does this mean investors always pay attention to the right ones? I doubt it. That’s why, in this column, I focus on a once-reliable recession predictor whose effectiveness is fading, and another indicator that actually determines recessions—but is largely overlooked.
Certificate inflation
The number of candidates taking CFA exams has declined again, according to the latest figures. At its peak in 2019, over 270,000 individuals registered, but the most recent figure stalled at 163,000. As is often the case, there are likely multiple explanations for this trend.
Chart of the week: fade the trade
Financial journalists and market experts have a new gimmick: the “Trump trade”. With another four years of the Trump show ahead, we might derive all sorts of investment ideas from the yet-to-be-implemented policies. But I have my doubts about most of these trades—not only whether they will yield good returns, but also whether they even exist in the first place.
Luxembourg: Living parallel lives
Gregory Kennedy reflects on Luxembourg’s unique identity, its state-driven economy, reliance on cross-border workers, and finance-dominated private sector. Is Luxembourg a “real” country?