Category Archives: Capital Markets

Capital Markets

Thoughts on the “Brexit”

UK voters shocked the world last night by voting, in a surprise, to leave the European Union. The nation will be the first to leave the 28-nation bloc, The vote was followed by British Prime Minister David Cameron’s announcement that he will resign, and by global equity markets declining meaningfully. In the UK itself, substantial losses early in the day have partially reversed course,


2014 Capital Market Assumptions

Sellwood Consulting’s 2014 Capital Market Assumptions are now available. These assumptions are the primary input for our asset allocation work for clients, being the input variables for mean-variance optimization, Monte Carlo analysis, and risk budgeting.

This year, though we have made incremental enhancements to our methods for gauging the future value of assets, we have maintained our focus on the primary, reliable drivers of risk and return. Our assumptions are anchored in the empirical facts


Historical Perspective on Prospective Returns

A number of recent articles and research pieces have caught our eye, reinforcing our belief that forward-looking returns will be challenged by current low yields in marketable asset classes — low dividend yields in equities, and low coupon yields in fixed income.

A recent article from Buttonwood’s column in The Economist, “Home on the Range,” is a cogent summary of a recent study by Standard Life Company. The article notes,