Our Q3 commentaries are available now
This quarter, portfolio manager Geoff MacDonald explains why it's important to invest like a rational business owner, while fixed-income analyst Derek Skomorowski discusses why relying on others to do your credit work doesn't pay off.
America’s middle class can’t afford its cars
Car loans that are increasingly stretched out are a pronounced sign that some American middle-class buyers can’t afford a middle-class lifestyle. For many, the availability of loans with longer terms has created an illusion of affordability. It has helped fuel car purchases that would have been out of reach with three-, five- or even six-year loans. Low rates in effect served as a bailout for the auto industry over the last decade.
A growing share of car buyers won’t pay off the debt before they trade in their cars for new ones, either because the car is in need of repairs or because they want a newer model. A third of new-car buyers who trade in their cars roll debt from old vehicles into their new loans.
A growing share of car buyers won’t pay off the debt before they trade in their cars for new ones, either because the car is in need of repairs or because they want a newer model. A third of new-car buyers who trade in their cars roll debt from old vehicles into their new loans.
Americans have been borrowing to buy their cars for decades, but auto debt has swelled since the financial crisis. U.S. consumers held a record $1.3 trillion of debt tied to their cars at the end of June.
So far this year, dealerships made an average of $982 per new vehicle on finance and insurance versus $381 on the actual sale.
Momentum. After one year of outperformance, the next 9 are usually bad
Momentum strategies show a tendency towards long-term reversal. Starting from around the one year point onward, they underperform. The green column shows the initial one-year annual excess returns of Winner portfolios over Loser portfolios. The blue column shows the excess returns of those same portfolios from the end of the 1st year to the end of the 10th year.
Momentum strategies show a tendency towards long-term reversal. Starting from around the one year point onward, they underperform. The green column shows the initial one-year annual excess returns of Winner portfolios over Loser portfolios. The blue column shows the excess returns of those same portfolios from the end of the 1st year to the end of the 10th year.
Free cash flow as a % of GDP is at a record high in the U.S.
Source: Empirical Research Partners
Paying for stability
Source: Empirical Research Partners
Demographics
Artist Profit Sharing
Don't go chasing waterfalls...
