Why the Dollar Hasn't Plunged This Year -- And Why Bond Yields
If it's considered a sure thing, it almost certainly isn't.
Investors are convinced that bond yields will rise sharply, that the dollar will plunge and that low stock returns lie ahead. But if this is the consensus, shouldn't it already be reflected in market prices?
The fact is, despite all the chatter about higher yields, a lower dollar and modest returns, these forecasts haven't been borne out by the market's recent behavior. What is going on? My hunch: Investors may indeed be right. But I'm not sure they will be right anytime soon.
? Losing interest. For the past few years, market commentators have talked about the likelihood of rising interest rates.
For instance, in late 2003, economists were, on average, predicting that the 10-year Treasury note would yield 5.17% by year end 2004, according to a Wall Street Journal survey. Instead, the yield on the 10-year note fell slightly during the year, finishing at 4.24%. But economists are sticking to their guns, once again predicting that the 10-year note will be above 5% by year end.
"When I look at the consensus forecast, my inclination is always to think that it will either go up less than that or more than that," says Kenneth Fisher , chief executive of Fisher Investments in Woodside, Calif. "Will interest rates go up as much as people are forecasting? Unless you get abundant inflation, I think it's unlikely to happen."
Mr. Fisher may sound like a knee-jerk contrarian. But his position makes a lot of sense. Market prices reflect the collective judgment of investors. If the vast majority of folks reckon rates are headed higher, presumably they have revamped their portfolios accordingly and thus this belief is already built into today's prices.
"Markets are discounters of widely known information," Mr. Fisher says. "The things that move markets are the things that investors don't expect to happen. It's surprises that move markets."
? Gaining currency. Could a surprise drive interest rates higher? If foreign central banks pull their foreign-exchange reserves out of Treasury bonds and shift the money into other currencies, that could send the dollar reeling and cause U.S. interest rates to skyrocket.
At this point, however, "diversification" by foreign central banks has been so widely discussed that it would hardly constitute a surprise -- and the possibility may, in fact, be reflected in current currency values. "The dollar is really an accident waiting to happen," says New York economic consultant Peter Bernstein. "But an accident may not happen."
Or it may not happen for a while. In his latest letter to shareholders, Berkshire Hathaway Chairman Warren Buffett cogently lays out the case for a weaker dollar. But he adds -- parenthetically -- that "the fact that so many pundits now predict weakness for the dollar makes us uneasy." Sure enough, despite all the hand-wringing, so far this year the dollar has strengthened against the euro, yen and British pound.
? Looking out. That brings me to another piece of conventional wisdom: that stocks returns will be modest in the decade ahead. "Everybody you talk to makes the same observation about long-run returns," Mr. Bernstein says. "But you don't see it in market prices."
Indeed, despite forecasts of low long-run returns, investors appear to have a healthy appetite for stocks. The market had a gangbuster 2003 and a respectable 2004, and shares remain richly valued compared with dividends and corporate earnings. Mr. Bernstein wonders whether earnings growth could prove surprisingly robust, leading to better stock returns than expected.
He may be right. Still, I believe the market consensus is at least partly correct. Over the next 10 years, the Standard & Poor's 500-stock index's performance will probably fall short of its eight-decade average of 10.4%, as calculated by Chicago's Ibbotson Associates.
Problem is, investors appear to be treating this long-run likelihood like it is a short-term market forecast. "It seems reasonable to say that stock returns in the decades ahead will be lower than in the decades before," says Meir Statman, a finance professor at Santa Clara University in California. "But translating that into what will happen in the next year or the next five years is really treacherous."
You can make the same point about a whole heap of sensible investment assumptions. For instance, it seems likely that our huge trade deficit will eventually damage the dollar's foreign-exchange value, that the developing world's rapid growth will mean healthy gains for emerging-markets funds, that property prices won't continue climbing at today's heady clip and that -- after two decades of falling inflation and falling interest rates -- the next big move will be up.
And those assumptions have some key investment implications: Favor shorter-term bonds, so you aren't so vulnerable to rising interest rates. Don't sink too much of your wealth into big homes and vacation properties. Save diligently to compensate for low stock returns. Dedicate 25% or 30% of your stock portfolio to foreign shares, including a decent stake in emerging markets.
Keep in mind, however, that these are long-run assumptions and long-run strategies. What about the short term? In any given year, there's every chance these strategies will appear utterly foolish. One warning sign: You sound off about your investment views -- and nobody disagrees.
坚持长期投资战略
如果你认为某件事万无一失，几乎可以肯定它不会如你想像的那样。
投资者相信债券收益率将大幅上涨，美元将暴跌，股票回报率将走低。但是如果这是大多数人的观点，难道它不应该早已反映到市场价格中了吗？
事实是，尽管关于收益率上涨、美元下跌和股市回报率低的传言不绝于耳，但是市场近期的表现已经令这些预期成为空谈。怎么回事？我的直觉是：投资者实际上可能是对的。但我不确定他们的判断在短期内是否是正确的。
在过去数年，市场评论家已经谈及了利率上扬的可能性。
比如，根据《华尔街日报》(Wall Street Journal)的一项调查，在2003年末，经济学家平均预计10年期美国国债收益率到2004年年底时将达到5.17%。事实正好相反，10年期美国国债收益率在这一年中略微下跌，2004年年底时位于4.24%。但是经济学家不改初衷，再次预计10年期美国国债收益率到年底时将位于5%以上。
“当我看到大众预期时，我总是不由自主地认为实际情况要么低于这一预期，要么高于这一预期，”Fisher Investments的首席执行长肯尼斯?费舍尔(Kenneth Fisher)表示。“利率上涨幅度是否会有人们预期的那样多？除非通货膨胀高涨，否则我认为这是不可能的。”
听起来，费舍尔可能像一个下意识的反向投资者。但是他的观点不无道理。市场价格反映投资者的整体判断。如果投资大众认为利率将走高，那么他们应该已经对其投资组合进行了相应调整，因此，这种预期早已反映到今日的价格当中。
“市场对广为人知的消息并非照单全收，”费舍尔说。“推动市场的是投资者预料不到的消息。意外消息才会推动市场。”
意外消息能推动利率走高吗？如果外国央行将外汇储备从美国国债中撤出，并将资金投入到其他币种，这可能会导致美元汇率直线下跌，并推动美国利率飙升。
但是外国央行的“多样化”问题已被广泛讨论，因此它很难会生出意外消息－－实际上，这种可能性可能已经反映在当前的汇价中。“事实上大家都预计美元会直线下跌，”纽约经济顾问彼得?波恩斯坦(Peter Bernstein)说。“但是这种情况可能并不会发生。”
或者这种情况暂时不会发生。Berkshire Hathaway主席 沃伦?巴菲特(Warren Buffett)在最新一封给股东的信里中肯地描述了美元进一步走弱的情形。但是他补充说，“有如此多的专家现在预计美元走弱，这让我们感到不安。”当然，尽管失望情绪弥漫，今年迄今为止美元兑欧元、日圆和英镑却走强。
这让我想到了另外一个长久以来的至理名言：股市回报在未来二十年将不会高。“和你攀谈的每个人对长期回报率的预期都相同，”波恩斯坦说。“但是你在市场价格中看不到这一点。”
实际上，尽管预计长期回报率很低，投资者似乎对股票的胃口依然很好。2003年的市场表现耀眼，2004年的市场受人尊敬，现在市场估价与股息和公司收益相比仍然较高。波恩斯坦思忖收益增长是否会出乎意料地强劲，从而带来高于预期的回报率。
他可能是对的。但是，我仍然相信市场的主流观点中至少有一部分是正确的。据芝加哥的Ibbotson Associates计算，在今后10年，标准普尔500指数的回报率表现可能将低于80年来的平均值10.4%。
问题是，投资者似乎开始将这种长期的可能性视为一种短期市场预期。“未来数十年股市回报率将低于前几十年，这种说法似乎是成立的。”Santa Clara University的金融教授梅尔?斯塔曼(Meir Statman)说。“但是如果据此认为明年或今后5年的回报率低，这实际是一种曲解。”
这一点适用于各种合理的投资假设。比如，美国巨额贸易逆差似乎最终将伤及美元的价值；发展中国家的快速增长将意味著新兴市场基金将会取得可观收益；地产价格不会以目前的速度继续上扬；通货膨胀率和利率在历经了二十年的下降后，接下来一大走向将是上扬。
这些假设有一些重要的投资影响：买进短期债券，这样你不会对利率上涨弱不禁风；不要将你的资金过多地投到大型居住和度假产业中；坚持不懈的节省资金，以弥补股市的低回报率；将股市投资组合的25%或30%投到外国股票中，包括一小部分新兴市场股票。
但是要记住，这是长期的假设和长期策略。那么短期怎么办？在任何一年，这些策略都有可能看起来完全愚不可及。一个警告信号是；你侃侃而谈你的投资观点，但没人赞同。
