U.S. Equities: Boom or Bust?
On Wednesday, June 6th, 2018; CFAW organized a U.S. Equities discussion panel. Introduced by Stuart Cohen of The World Bank, the panel members included:
• David I Kass – Clinical Professor, Department of Finance at University of Maryland
• Michael P. Lebowitz, CFA – Economic and Investment Researcher at 720Global and Real Investment Advice
• Stuart Cohen, CFA, CPA – Senior Financial Officer, World Bank Group and CFA Society Programs and Education Committee Chair (Serving as moderator)
The panel started with a broad overview of a U.S. equities historical perspective from both the boom side and bust side.
Michael Lebowitz shared his insights on current U.S. equity in three parts. First, he pointed out that the macroeconomic environment is not as good as we think. He analyzed the relationship between the total factor productivity index and 10-year annual growth, demographic allocation, real interest rates, 3-year GDP growth trends, and central bank asset holdings, etc. To support his opinion, he presented data analysis for the equity valuation section and briefly discussed his recommendations for long-term strategic investment management.
Next, David Kass emphasized the positive side of U.S. equities. He analyzed the S&P 500 historical performance first. Then, he indicated that both interest rates and CPI are currently at their historical low points. Also, the change in the corporate tax rate is a good reason that corporate earning will continue to grow.
The discussion ended with a Q & A from the audience on investment strategy, what factors can impact panelists' opinions about the market, emerging markets and international markets, asset allocation, and the impact of the trade war.