Joseph Gerard Paul

In a world of ultralow interest rates, the quest for income has left many investors stumped. Bonds are generally seen as more dependable sources of income than stocks. But our analysis suggests that income streams from equities are much more stable than widely believed.

With the recent wobbles in the market, scary headlines about stock bubbles are back in the spotlight. We think all this foreboding overlooks an important point: In today’s low-return world, where better than stocks to put your money?

There seems to be a new calculus at work in the recent rash of takeovers, as investors set aside their usual wariness of deals and dealmakers for the promise of growth these combinations may bring. We think it’s a good reason to stick with stocks.

Investors have recently woken up to the reality of overpriced US momentum stocks in technology and biotech. But a knee-jerk shift toward defensive sectors isn’t the answer. 

Investors are wondering whether the bull run in US equities is over. With the economy gathering steam and interest rates likely to head higher, we think stocks are still the best game in town—and value stocks neglected in the recent rally look even better.

Passive investing strategies that emulate an index have become increasingly popular. But passive investing can go awry when sector concentrations leave investors exposed to unintended risks.

Value investing has faced a crisis of confidence after five tough years. Here’s why we think the behavioral investing principles that underpin the discipline are more relevant than ever.

Even after this year’s equities rally, market imbalances created by the financial crisis in 2008 have not disappeared. When these distortions unwind, we expect deep value stocks to rapidly recover.

When J.K. Rowling finished her first manuscript of Harry Potter and the Philosopher’s Stone in 1995, she submitted it to 12 publishers, who all rejected the book. In time, those publishers would regret missing the chance to back an unknown author who would later take the world by storm. Like the publishers who passed over Harry Potter, we believe that many investors today risk missing a historic opportunity to invest against the grain in attractively valued stocks across the globe.

Crisis-battered investors continue to favor the relative certainty of current income over the “maybe” of future capital appreciation. If you ask me, however, this hyperfixation on Now is creating some provocative opportunities in Later.

Investors have been flocking to high-dividend-paying stocks, lured by their predictable, bondlike income and downside defenses. But investors may be getting more risk than they bargained for.

The laborious pace of the US recovery has inevitably fostered comparisons with Japan. But we find several reasons why a protracted slump like Japan’s is unlikely, as my colleague Gerry Paul argues below.

Given the skimpy yields on bonds, the opportunity in equities has rarely been more provocative, at least according to one fairly reliable indicator, as my colleague Gerry Paul ably argues below.