20 Adams Street | Suite 200 | Boston, MA 02129

Monthly Archives: February 2016

Feeling a Bit Deflated This Year?


With the rough start to 2016 most investors are feeling a bit deflated.  Not only are most asset classes in the red but now there is even talk about the dreaded D word – Deflation.

In this report we look at deflationary conditions around the globe and the likelihood that such forces persist over the foreseeable future.

We share our thoughts on the issue of negative short-term interest rates and the ability of monetary policy to spur growth to levels more consistent with the potential productive capacity of the global economy.

Finally we assess the implications for key asset classes in the face of changing inflation expectations.

Some of our report conclusions:

  • The specter of deflation is already present in countries such as Greece and Switzerland and is not far off in a large number of other economies particularly those in Continental Europe
  • Over the last ten years no country in our sample has experienced a negative annualized inflation rate but Switzerland (0.25%) and Japan (0.31%) have come close
  • When using the Output-Gap to measure the divergence between current and potential levels of production, global growth has been disappointing for seven straight years
  • Despite massive monetary stimulus, the negative global Output-Gap of the last seven years highlights that impediments to global growth are likely to be structural in nature
  • Using negative policy rates are unlikely to sufficiently boost global growth and most likely will bring about an increase in investor uncertainty
  • Equity oriented asset classes would dis-proportionally benefit from an increase in inflationary expectations while high quality bonds would suffer
  • According to our macro risk factor model, the primary beneficiary of rising inflationary expectations would be at the moment Emerging Market Equities


Click here to download the report: “Being Back That Old Inflation Please



Eric J. Weigel
Managing Partner and Founder of Global Focus Capital LLC


Looking for a Second Income? Take a Look at Dividend Stocks.

newspaper-job-section-1427231-639x372How about adding dividend stocks to your portfolio to complete the job that bonds can’t at the moment?

For some ideas regarding the difference between high yield stocks and dividend growth equities take a look at our latest white paper – Click here to download the report: “Equity Income For the Yield Starved Investor

Some of our report conclusions:

►High Dividend Yield stocks tend to be inexpensive but lacking in growth and historically have been members of distressed categories

►High Dividend Growth stocks are only slightly more expensive than their lower growth peers but exhibit much higher rates of prospective earnings growth as well as superior profitability

►Our overall conclusion is that High Dividend Growth stocks are not materially over-valued versus lower growth companies and that there is an adequate margin of safety to fund dividends out of earnings growth

►We strongly suggest employing dividend growth strategies as the preferred way to implement income generation programs

►We also believe that significant dividend growth opportunities exist outside of the major equity markets so a global perspective is recommended

►Finally, priority should be given to the analysis of company fundamentals in terms of their ability to increase dividends in a financially responsible manner while also allowing the investor a margin of principal (price) protection


Eric J. Weigel
Managing Partner and Founder of Global Focus Capital LLC


HTML Snippets Powered By :