DB Insight
Return Forecasting Isn’t Prediction — It’s Disciplined Preparation
Photo credit: Unsplash Long‑term investors don’t need a crystal ball — they need a framework. Forecasting returns is not an exercise in predicting the next market swing, but in understanding the structural forces that reliably drive outcomes over full cycles. By focusing on observable inputs like income, real earnings growth, inflation, and credit losses —…
Read MoreThe Silence Before the Storm: Legendary Investors and Market Signals
Photo credit: Pixabay For decades, investors have sought clarity in a noisy financial world. While no single indicator can perfectly predict a market peak, the actions and commentary of seasoned, valuation-conscious investors—those who have successfully navigated multiple cycles—often provide signals worth heeding. When these figures, typically advocates of long-term optimism, begin to show caution through…
Read MoreIs AI Heading Toward a Capital Expenditure Bubble?
Photo credit: ideogram.ai The debate over whether artificial intelligence (AI) is inflating a financial bubble has intensified, drawing unsettling parallels to the dot-com era’s excesses. A complex web of deals, surpassing $1 trillion, reveals circular financing at play, where massive investments such as a $100 billion infusion into a leading AI firm loop back as…
Read MoreGlide Path 2025: Does Heightened Market Volatility Require a Change in Strategy?
Photo credit: Unsplash Highland addressed this topic in 2023, reflecting on the previous year’s challenges and the looming threat of a recession. While the financial landscape has evolved, certain concerns persist. However, the dominant force shaping market volatility in 2025 has been policy shifts, primarily from the new administration, with less emphasis on monetary and…
Read MoreA Perspective on 2025 Tariffs
Photo credit: unsplash Why Tariffs to Restore Trade Balances Won’t Always Lead to a 1:1 Price Increase for Consumers, and Shouldn’t Throw Your Strategies Off Balance There’s a widespread assumption that tariffs—taxes on imported goods – automatically result in a direct, 1:1 price increase for consumers, meaning a 25% tariff would raise prices by 25%…
Read MoreMake Your Own Luck: Navigating Pension Risks in a World of Terminations
Photo credit: Dreamstime The legal drama “Suits” follows the lives of ambitious lawyers at a prestigious New York City firm. If you’ve not seen it, at the heart of the series is Harvey Specter, a successful senior partner known for his arrogance and ruthless ambition. A master in the courtroom, Harvey outmaneuvers opponents with his…
Read MoreThe Buffett Indicator
Photo credit: ID 336907040 © Yaroslaf | Dreamstime.com What do lizards, Blizzards, and underwear have in common? Warren Buffett and Berkshire Hathaway. And do the lizard and the DQ Blizzard (and Berkshire Hathaway holdings, in general) predict a freeze in an exceedingly hot investment market? Possibly. More on that later. The Omaha-based conglomerate counts GEICO, Dairy Queen, and Fruit of…
Read MoreThe Elusive 5%: Is It Making a Comeback?
photo credit: Pixabay For over a decade, we lived in a world of near-zero interest rates, making it incredibly challenging for plan sponsors and corporate asset managers to create low-risk portfolios yielding 5%. But as market dynamics shift, the landscape is changing, bringing new opportunities—and new decisions—to the forefront. The Challenge of the Last Decade…
Read MoreClients Ask: What Is a Yield Curve Dis-inversion?
Photo credit: Pixabay Clients Ask What is a Yield Curve Dis-inversion? Will Fed Rate Cuts Help a Slowing Economy? Or Will Fed Rate Cuts Re-ignite Inflation? Highland Responds After an extended period of inversion, the U.S. yield curve has recently undergone a significant change by dis-inverting. Our Highland clients have wanted to know what this…
Read MoreBuckle Up: A Wild Ride Part 2
Photo credit: Unsplash Unprecedented Movements in the Market: What’s Happening? In early August 2024 stock markets around the world declined precipitously, ending what seemed to be a never-ending low volatility trading environment. From peak to trough, the S&P 500 index declined approximately 10% in a handful of trading days; the volatility index as measured by…
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