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By David Hay Don’t ask, don’t tell. Lately, I’ve begun to pose an uncomfortable question to both my investment professional friends (I still have a few) and to a handful of clients: What happens when the stock market quits going up? For now, let’s ignore the more unsettling notion of the impact of a deep correction and just focus on an extended sideways scenario. That wouldn’t be so bad, right? Unfortunately, for millions of Americans—and countless retirement plans—the reality is quite the opposite. The dividend yield on the S&P 500 is currently around 2%. Ergo, if prices plateau, that will be the sum total of the return investors will receive. As frequently relayed in this newsletter, many experts with the best long-term forecasting records are predicting precisely this scenario for years to come, though they also suspect it will be a far more volatile future than my assumed extended flat-lining. Read More

By David Hay Don’t ask, don’t tell. Lately, I’ve begun to pose an uncomfortable question to both my investment professional friends (I still have a few) and to a handful of clients: What happens when the stock market quits going up? For now, let’s ignore the more unsettling notion of the impact of a deep correction and just focus on an extended sideways scenario. That wouldn’t be so bad, right? Unfortunately, for millions of Americans—and countless retirement plans—the reality is quite the opposite. The dividend yield on the S&P 500 is currently around 2%. Ergo, if prices plateau, that will be the sum total of the return investors will receive. As frequently relayed in this newsletter, many experts with the best long-term forecasting records are predicting precisely this scenario for years to come, though they also suspect it will be a far more volatile future than my assumed extended flat-lining. Read More

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Forward P/Es are well above average and would be even more elevated without an unrealistic 20% assumed increase in Q4… Read More

Once a month, we publish EVA in the Evergreen Exchange format. This issue should be a particularly unique exchange of ideas, because Tyler Hay, Jeff Eulberg, and David Hay each selected an influential investment mind whose approach they admire. Aside from explaining the motivation for the individual they chose to write about, each author will also recap the current outlook of their choice. Our hope is to provide insight into how these luminaries view financial markets and investing in general. Read More

Once a month, we publish EVA in the Evergreen Exchange format. This issue should be a particularly unique exchange of ideas, because Tyler Hay, Jeff Eulberg, and David Hay each selected an influential investment mind whose approach they admire. Aside from explaining the motivation for the individual they chose to write about, each author will also recap the current outlook of their choice. Our hope is to provide insight into how these luminaries view financial markets and investing in general. Read More

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“This is a brand new world where money and bond markets are broken and the time value of money in some cases is being totally violated.” – Leading economist, David Rosenberg   Special message: Before we get into the main text of this month’s full-length edition, I wanted to… Read More

Special message: Before we get into the main text of this month’s full-length edition, I wanted to mention that we’ve had a format change. Our Points to Ponder (PTP) section, which also ran monthly, is now being replaced by a daily Tweet. To access those, please follow us @EvergreenGK. We will also be adding one PTP to our Daily that goes out to Evergreen clients. If you are an Evergreen client and would like to receive our Daily, please email Lindsay Hall: lhall@evergreengavekal.net. We started it, but they’re finishing it. Twice in recent years, I’ve been fortunate enough to listen to famed demographer Neil Howe address John Mauldin’s Strategic Investment Conference (SIC) in San Diego. Neil’s talk stood out both times even among the star-studded array of speakers at the SIC. I was particularly fascinated by his presentation in 2013 in which he made a thoroughly convincing case for why this decade bears a remarkable resemblance to the 1930s. As time has passed since then, domestic and global events have, in my opinion, further buttressed his thesis. The 1930s began in the shadow of a resounding crash in global financial markets at the end of the prior decade. Unemployment soared—as high as 25% in some countries—and stayed excruciatingly high for an extended period. The economic distress led to the rise of extremist political parties on both the right and the left. Read More