MORE HEADLINES
Economic Update
Distressed homes sales represented a sizable portion of transaction activity in January.
Domestic Equity
Retail sales were higher despite looming unemployment and weak consumer confidence.
International Equity
Greece’s austerity measures led the Greek citizens to protest and strike.
Fixed Income
A shift in favor of higher quality securities led to better performance for investment grade.
Real Estate Securities
Contributing to REITs’ outperformance was the reinstatement of cash dividends.
Hedge Funds
The ratio of long positions to short positions decreased materially at the end of January.
TOO MUCH BETA - WHY HEDGED EQUITY NOW
Since the equity market lows of March 9, 2009, the S&P 500 Index returned 66.8% through February 28, 2010. Over the last two years, investors experienced some of the most dramatic swings in global equity market history. These movements were largely the result of the standard greed/fear bubble scenario that has played out since the first tulip bulb was traded with the corresponding credit crises fueling the fire. Now that the markets have busted and boomed again, we are left with an equity market that has largely been driven by macro factors for a sustained period of time and appears to be fairly valued globally. A better environment for opportunistic active managers generally follows periods such as these.
