Category Archives: Economic trends

Is Protectionism the New Normal?

The age of globalization began in the 1940s with the global post-war recovery; the Bretton Woods Treaty, the creation of the International Monetary Fund, the World Bank, and the General Agreement on Tariffs and Trade collectively provided enough stability to make widespread global trade possible. Decades of globalization have brought not only an increase in international trade, but an increasingly connected world, with goods, people, and information crossing borders, as well as the birth of multinational corporations. But the 2008 crisis may have signaled a turning point, after which the globalization train seemed to curve toward protectionism. Brexit, the election of Trump, and the current trade wars evidence an escalation of this shift. Does this mean that the age of globalization is over, or are we just veering temporarily into protectionist territory? Read more »

Investing in What We Need: Food/Agriculture

Food is as critical to human survival as water, and sustaining an expanding population will require exponentially more efficient food production and sourcing. The United Nations estimates that the current global population of 7.3 billion people will grow to 9.7 billion by 2050. Life expectancy has also increased significantly among poorer countries and is expected to continue trending upward. What all of this means, of course, is that we have a growing number of mouths to feed. It’s estimated that agricultural productivity will need to rise by at least 60% to meet the needs of the global population by 2050.1 Production in developing countries, where population growth will be highest, will need to nearly double.2 Read more »

Investing in What We Need: Life Sciences

“It is health that is real wealth and not pieces of gold and silver.” – Gandhi

Humans are encountering a dichotomous situation in which we face both increasing threats to our wellbeing and rapidly emerging opportunities for improving it. Above and beyond the environmental threats mentioned in our unintended consequences blog post, we face additional threats to health through: Read more »

Major Indexes Add a New Sector to Combat Concentration: Communication Services Coming to the S&P 500

There’s no doubt that Technology stocks have dominated the U.S. large cap equity space. In past posts, we’ve discussed the concentration of the giant FAANG stocks and the fact that large cap equity indexes like the S&P 500 are heavily tilted toward the Technology sector, with tech making up 26% of the S&P 500.1 The industry has recognized the too-heavy tech weighting, and we are about to see a significant change to the sector structure. S&P Dow Jones and MSCI Indexes will be adding a new sector – Communications Services – and moving some of the tech giants, including Alphabet (Google’s parent company), Facebook, and Netflix, into this new sector. The Communications Services sector will replace its previously named counterpart, Telecommunications Services. Read more »

The Incredible Shrinking Stock Market: What’s Happening?

“In 1976, the United States had 4,943 firms listed on exchanges. By 2016, it had only 3,627 firms. From 1976 to 2016, the U.S. population increased from 219 million to 324 million, so the U.S. went from 23 listed firms per million inhabitants to 11.” This is the opening salvo of a new report from the National Bureau of Economic Research (NBER) penned by Professor René Stulz, the Everett D. Reese Chair of Banking and Monetary Economics and director of the Dice Center for Research in Financial Economics at The Ohio State University. In the report, The Shrinking Universe of Public Firms: Facts, Causes, and Consequences, Professor Stulz looks at the shift in public stock markets and its larger impact on the economy. Read more »

Investing in What We Need: Resource Efficiency

The downsides of fossil fuels are becoming ever more apparent, as we battle pollution, search for new extraction methods, and worry about declining supply. The potential for alternative energy sources to meet our energy needs in the future is becoming extremely exciting.  Bloomberg New Energy Finance estimates that renewable energy will capture most of the $11.5 trillion that will be invested in new power generation globally by 2050. 1 Read more »

The Tale of the Changing Measure of Inflation

When we hear about the current low rate of inflation, are we talking about the same inflation we might have discussed 20 or 30 years ago? You may be surprised to discover that, in fact, we are not really talking about the same thing at all. Since 1983, the government has been making major changes to the way it measures inflation, and some say the current methodology now understates true inflation.

Note: due to rounding, total may not = 100%
Source: BLS, data as of December 2017

Read more »

Investing in What We Need: Water

  • Two-thirds of the world’s population is projected to face water scarcity by 2025.1
  • In some countries already, less than half the population has access to clean water. 2
  •  80% of all illness in the developing world is water-related.3

Water has no substitute. With water resources becoming more scarce and populations facing issues of pollution and drought, water is becoming a precious commodity. But unlike commodities such as gold or steel, water is essential for life. Every sector of the economy depends on water, from agriculture to industrial, and of course, we need it to survive on a daily basis. Read more »

The Unintended Consequences of This Century and How Impact Investing Will Change the Next Century

A century ago, it would have been nearly impossible to envision the world as it is today. Who could have imagined our communication and transportation technologies, from supersonic jets to cell phones? Consider the impact of the internet and automation, robots and artificial intelligence. But perhaps most unimaginable of all are the drastic changes to the planet and the massive growth in population over just the last half-century. Who could have foreseen the issues we face trying to provide access to clean water and air, the damage done to our oceans and rivers, the depletion of the topsoil? And most would not have been able to conceive of 7 ½ billion people sharing the globe. Read more »