Posted by Brent Everett on Thu, Jan 26, 2012 @ 12:05 PM
Another recent article in Investment News addressed outflows from American Funds due to real or perceived performance issues. In the article, American Funds spokesman Chuck Freadhoffe stated "We don't feel that over the long term, investors will do as well with a passive investment as they will active management, and we have the long-term track records to back that up."
We disagree with Mr. Freadhoffe, so we looked for the "long-term track records" that he mentioned. In doing so, we found this document. At first glance, it looks impressive. But, upon further examination there are some glaring issues. First, the performance numbers on the first page don't take sales loads into account. That's misleading, since most investors in these funds pay them. At least that is disclosed at the top of the page and the second page contains load-adjusted returns. A bigger issue, however, is comparison to inappropriate benchmarks. For example, comparing value funds to the S&P 500 Index (dominated by growth companies and, at best, a blend of growth and value). American Funds could have chosen a value index, like the Russell 1000 Value, but that wouldn't have made the comparison look as good. Even more egregious is the comparison of their emerging markets fund to a world ex-US index instead of an emerging markets index that would have shown that it underperformed. This is very misleading.
So, we sent Mr. Freadhoffe the following letter. If anyone at American Funds responds, we'll follow up with an analysis. I'm not holding my breath, though. The really silly thing about all of this is that the long-term returns of most American Funds offerings really aren't that bad - at least, in comparison to their actively managed peers. Retail investors and retail distribution channels are fickle and tend to place far too much emphasis on short-term performance. American Funds is a victim of that flawed psychology. Their defense of their long-term performance is perfectly valid, but they didn't need to make misleading inappropriate comparisons to bolster it.
January 23, 2012
Dear Mr. Freadhoff:
In a recent interview with Investment News, you stated that “we don't feel that over the long term, investors will do as well with a passive investment as they will active management, and we have the long-term track records to back that up.”
We believe in passive management and disagree with your statement, but would like to be objective in our analysis. Can you please provide us with the long-term track records that you referred to in the Investment News article? So far, all that we have found is a document produced by American Funds for the ten year time period ending December 31, 2010 that used benchmarks that, in many cases, do not appear to be the best fit or appropriate for the style of the fund.
I have enclosed a copy of this document. Has this been updated through the end of 2011? Why were your value funds (American Mutual Fund, Washington Mutual Investors Fund, Capital Income Builder, The Income Fund of America) compared to the S&P 500 Index when a more appropriate comparison could have been made to a value index? Is it because the poor performance of the S&P 500 over the past ten years as compared to the Russell 1000 Value Index made the fund performance look better? Was the S&P 500 actually a better statistical fit for all of these funds?
Why was your New World Fund, which invests in emerging markets, compared to the MSCI All Country World Ex USA Index instead of an emerging markets index? Is it because it underperformed the MSCI Emerging Markets Index over this time period?
I look forward to your response.
Regards,
J. Brent Everett
Chief Investment Officer
cc: Jason Kephart, Investment News
Posted by Greg Schmitz on Thu, Jan 19, 2012 @ 03:52 PM
Many business owners and 401(k) plan sponsors are scrambling to understand and comply with the new Department of Labor mandated fee disclosure regulations that will become effective only a few months from now. The new regulations explained under sections 408(b)(2) and 404(a) of the Employee Retirement Income Security Act of 1974 (ERISA) require additional disclosures to be made to plan sponsors and plan participants, and require all plan service providers to furnish much more information about their services, expenses and fees. ERISA section 408(b)(2), the service provider rules, become effective April 1, 2012, while the new 404(a) participant disclosure rules become effective May 31, 2012.
After understanding the factors that necessitate these changes, you may find it surprising that these new regulations were not enacted for all plan service providers years ago. Approximately 70% of the nation’s 401(k) plans were installed and are overseen by broker-dealers that are not plan fiduciaries. It’s very important to avoid confusing “overseer” or “plan provider” with fiduciary. A fiduciary is required by law to always act in the best interest of a client (in this case, the plan). Unfortunately, non-fiduciary plan providers dominate the 401(k) marketplace and are not required under ERISA law to act in a client’s best interest.
Many unsuspecting business owners and plan sponsors mistakenly assume their plan provider is acting in their best interests and more importantly, those of their participants; but caveat emptor. Unless the plan overseer is defined as an ERISA fiduciary for the purpose of making plan investment decisions, they are not liable for breach of fiduciary duty (Hecker vs Deere & Co; United States Court of Appeals, Seventh Circuit - Argued Sept. 4, 2008. -- February 12, 2009). More specifically, non-fiduciaries do not have to disclose excessive and unreasonable costs and fees, unnecessary risks or other conflicts of interest. Instead, they hide behind a smoke screen of misunderstood and misapplied industry terminology. Many recent cases filed involve plan investment options that bear unreasonable costs.
Insurance agents, like broker-dealer representatives, are commission driven sales reps that typically operate in a non-fiduciary capacity when providing 401(k) plans. When you add the number of insurance company sold 401(k) plans to broker-dealer sold plans, the potential for non-fiduciary provided 401(k) plans in our nation dramatically increases.
ERISA 408(b)(2) will also require clear disclosure of who is acting as a fiduciary. This one will no doubt catch many business owners and plan sponsors by surprise when the enormous fiduciary liability on their shoulders is finally uncovered. As a fee-only Registered Investment Advisor operating in an ERISA 3(38) fiduciary capacity, our 401(k) plans are free from the above mentioned conflicts of interest and have provided full fee disclosure and fee transparency since their inception. An RIA, like Talis Advisors, assumes, in writing, the role of a fiduciary to the 401(k) plan.
Posted by Brent Everett on Tue, Jan 17, 2012 @ 03:19 PM
According to a January 16 article in Investment News, investors withdrew a net $81.5 billion from American Funds in 2011, including a net outflow of more than $33 billion for the company's flagship product, Growth Fund of America. No other mutual fund even came close to matching that amount of outflow. In fact, there was not an entire fund family that matched the outflow of just this fund. Fidelity Investments came closest with outflows of $28 billion. According to Morningstar, Inc. analyst Kevin McDevitt, Growth Fund of America ranked in the bottom 25th percentile of all large-cap growth funds for 2011.
A few years ago, we heard a lot about American Funds and it seemed that almost every brokerage firm was pushing them. I remember going to a local Chamber of Commerce meeting where there were three representatives from different local offices of the same brokerage firm - all singing the praises of American Funds.
In 2011, investors showed a strong shift away from actively managed funds. As a result, the Vanguard Group took in $29.5 billion in mutual fund inflows, the most of any mutual fund family. Could it be that a larger group of individual investors has finally caught on to the fact that active management is an expensive failed strategy?
Posted by Brent Everett on Tue, Jan 10, 2012 @ 01:24 PM
The past year reminded investors that they should hope for the best, prepare for the worst, and be thankful when reality does not match their fears. Investors entered 2011 with hopes that the world economy would continue recovering from a long and painful deleveraging process. Equity markets had posted two straight years of positive performance, central banks remained committed to pro-growth monetary policy, and major developed nations were focused on reducing debt.
By mid-year, however, optimism faded as troubling events around the world dominated headlines. The devastating earthquake and tsunami in Japan, political unrest in the Middle East, rising oil prices, a US credit downgrade, the threat of another global recession, and an escalating debt crisis in Europe weighed heavily on markets. As stock market volatility returned to global financial crisis levels, investors faced a major test to their discipline and staying power.
Although US stocks experienced some of the highest volatility in years, the broad US market delivered flat performance in 2011. Developed markets logged negative returns, and emerging markets had mixed performance, with most countries also underperforming the US. The bright spots were in the fixed income arena, where a flight to quality triggered by the euro debt crisis and US credit downgrade boosted returns on US government securities, inflation-protected securities, and municipal bonds.
Click here to access the entire report.
Posted by Brent Everett on Mon, Jan 09, 2012 @ 05:13 PM
Another great article from Weston Wellington at DFA in his "Down to the Wire" column:
Equity investors around the world had a disappointing year in 2011 as thirty-seven out of forty-five markets tracked by MSCI posted negative returns. The US did well on a relative basis and was the only major market to achieve a positive total return, although the margin of victory was slim. Total return for the S&P 500 Index was 2.11%, and the positive result was a function of reinvested dividends—the index itself finished the year slightly below where it started.
Throughout the year, investors seeking clues regarding the strength of business conditions or the prospects for stock prices were confronted with ample reason to rejoice or despair. Optimists could cite the strong recovery in corporate profits and dividends, the substantial levels of cash on corporate balance sheets, low interest rates and inflation, a booming domestic energy sector, continuing strength in auto sales, and record-high share prices for leading multinationals such as Apple, IBM, and McDonald's. Pessimists could point to persistently high unemployment, slumping home prices, tepid growth in retail sales, worrisome levels of government debt at home and abroad, and political gridlock in both Congress and various state legislatures.
Although the broad market indices showed little change for the year, there were opportunities to make a bundle—or lose one. Among the thirty constituents of the Dow Jones Industrial Average, thirteen had double-digit total returns, including McDonald's (34.0%), Pfizer (28.6%), and IBM (27.3%). But losing money was just as easy: The three worst performers in the Dow were Hewlett-Packard (–37.8%), Alcoa (–43.0%), and Bank of America (–58.0%). If nothing else, the substantial spread between these winners and losers discredits the argument we often hear that all stocks are now marching in lockstep and that diversification is ineffective.
Achieving even modest results in the US market required more discipline than many investors could muster, since investor sentiment fluctuated dramatically throughout the year and the temptation to enhance returns through judicious market timing often proved irresistible.
For fans of the "January Indicator," the year got off to a promising start as stock prices jumped higher on the first trading day, pushing the Dow Jones Industrial Average to a twenty-eight-month high. Bank of America shares jumped 6.4% that day, the top performer among Dow constituents. With copper prices setting new records and factory activity worldwide perking up, the biggest worry for some was the potential for rising prices and higher interest rates that might choke off the recovery. "Overheating is the biggest worry," one chief investment strategist observed. By April 30, the S&P 500 was up 8.4%, reaching a new high for the year.
Stocks wobbled through May and June but strengthened again in July. On July 19, the Dow Jones Industrial Average had its sharpest one-day increase of the year, jumping over 200 points, paced by strong performance in technology stocks. Just a few days later, however, stocks began a precipitous decline that took the S&P 500 down nearly 17% in just eleven trading sessions. The century-old Dow Theory—a sentimental favorite among market timers—flashed a "sell" signal on August 3, and on August 5, Standard & Poor's downgraded US government debt from AAA to AA+. As investors sought to assess the implications of sovereign debt problems in both the US and Europe, stock prices fluctuated dramatically, with the S&P 500 rising or falling over 4% on five out of six consecutive trading days in early August. Rattled by the sharp day-to-day price swings, many investors sought the relative safety of US Treasury obligations in spite of the rating downgrade, pushing the yield on ten-year Treasury notes to a record low. Stock prices hit bottom for the year on October 3 as some market participants apparently lost all confidence in equity investing. A Wall Street Journal article cited a number of individual investors as well as professional advisors who had recently sold all their stocks and did not expect to repurchase them anytime soon. "I feel like a deer in the headlights," said one.
As it turned out, the article appeared in print on the second day of a powerful rally that sent the Dow Industrial Average surging over 1,500 points during the next 19 trading days, putting it back into positive territory for the year.
What can we learn from a difficult year like 2011? As Dimensional founder David Booth is fond of saying, the most important thing about an investment philosophy is that you have one. Many investors (as well as some allegedly professional advisors) apparently decided to switch from a buy-and-hold philosophy to a market timing strategy in the midst of an unusually stressful period in the financial markets. We suspect few of those adopting the change would have been able to clearly articulate their investing beliefs and why they had shifted.
Legendary investor Benjamin Graham offered the following observation nearly forty years ago: "There is no basis either in logic or in experience for assuming that any typical or average investor can anticipate market movements more successfully than the general public, of which he himself is a part."
Good advice then, good advice now.
Mark Gongloff, "Investors' Forecast: Sunny With a Chance of Overheating," Wall Street Journal, January 3, 2011.
Jonathan Cheng and Sara Murray, "Stock Surge Rings in Year," Wall Street Journal, January 4, 2011.
Matt Phillips and E.S. Browning, "Tech Sends Stocks Soaring," Wall Street Journal, July 20, 2011.
Steven Russsolillo, "'Dow Theory' Confirms It's an Official Swoon," Wall Street Journal, August 4, 2011.
Damian Paletta, "U.S. Loses Triple-A Credit Rating," Wall Street Journal, August 6, 2011.
Tom Petruno, "Investors Stampede to Safety," Los Angeles Times, August 19, 2011.
Kelly Greene and Joe Light, "Tired of Ups and Downs, Investors Say 'Let Me Out'," Wall Street Journal, October 5, 2011.
Benjamin Graham, The Intelligent Investor (New York: HarperCollins 1949).
The S&P data are provided by Standard & Poor's Index Services Group.
MSCI data copyright MSCI 2011, all rights reserved.
Posted by Brent Everett on Fri, Jan 06, 2012 @ 03:57 PM
Led by the excellent performance of US stocks, global equity markets posted strong returns in the quarter. Those returns, however, were not sufficient to overcome a dismal third quarter and most markets had negative returns for the year.
- Quarterly returns for the broad US market, as measured by the Russell 3000 Index, were 12.12%. Asset class returns ranged from 15.97% for small cap value stocks to 10.61% for large cap growth stocks. The strongest sectors in the quarter were energy and industrials, while the weakest one was telecommunication services. For 2011, the strongest sectors were utilities and consumer staples, while the weakest ones were financials and materials. Value outperformed growth in the quarter, but not in 2011.
- In US dollar terms, the quarterly returns for developed non-US markets were over 3%, above the historical average but far behind the US. For 2011, however, developed international markets as a whole lost over 12%. As in most of the past few quarters, there was much dispersion in performance at the individual country level. Greece, which remains at the center of Europe’s sovereign-debt woes, was by far the worst performer in the quarter and the year. At the other end of the spectrum, Ireland, the Scandinavian countries, and Australia were the top performers for the quarter.
- In US dollar terms, emerging markets gained about 4% in the quarter, in line with the historical average, but not enough to overcome their very poor performance of the third quarter. As a result, emerging markets lost almost 20% in 2011. Malaysia and other smaller emerging markets in Asia and Latin America such as Thailand and Peru posted double-digit returns in the quarter. At the other end of the spectrum, India, Turkey, and Egypt had double-digit negative returns in the quarter.
Posted by Brent Everett on Wed, Jan 04, 2012 @ 12:05 PM
We've been discussing the dangers of investing in life settlements for years, as have many other sources - including the SEC, GAO, Wall Street Journal and the Texas State Securities Board.
Life Partners, based in Waco, Texas and one of the largest brokers of life settlements has been charged by the SEC with fraud. The SEC alleges that the company was systematically and materially underestimating the life expectancy estimates it used to price transactions. Life expectancy estimates are a critical factor impacting the company's revenues and profit margins as well as the company's ability to generate profits for its shareholders.
According to the SEC's complaint filed in federal district court in Waco, Texas, Life Partners misrepresented and failed to disclose in public filings with the SEC that the company's systematic use of materially underestimated life expectancy estimates constituted a material risk to the company's revenues. Beginning in 1999, the company used life expectancy estimates provided by Dr. Donald T. Cassidy, a Reno, Nevada-based doctor with no actuarial training or prior experience rendering life expectancy estimates. The SEC alleges that Life Partners failed to conduct any meaningful due diligence on Cassidy's qualification to act as a life expectancy underwriter and instructed the doctor to use a life expectancy methodology that was created by the company's former underwriter, a part-owner of Life Partners and that the company's executives were aware that the Cassidy-rendered life expectancy estimates were systematically and materially short.
Don't say we didn't warn you.
Posted by Brent Everett on Tue, Dec 27, 2011 @ 10:20 AM
Ron Lieber, the New York Times "Your Money" columnist and editor of its "Bucks" blog has written another good article that discusses our investment philosophy. In Lieber's column, he discusses the "Larry Portfolio", which he has named after Larry Swedroe. If you're a regular reader, you know that we think highly of Swedroe's research and his publications and have recently recommended reading his latest book, The Quest For Alpha. His portfolio design and investment philosophy are based on the same principles and research that we employ.
Lieber's column states that "the point of any long-term portfolio for the vast majority of investors is to earn whatever return you need to meet your goals while taking the least amount of risk." It goes on to point out that "between 1970 and 2010, small-cap value stocks outearned the S&P 500 by roughly four percentage points annually", referring to the small-cap value research done by Eugene Fama and Ken French. "For illustration purposes, he points people to the S&P 500 index, which returned about 10 percent annually between 1970 and 2010. If you wanted to gin up a portfolio to match closely (at 9.8 percent) that performance with much less risk, all you would have needed to do was put 32 percent of your money in a fund mimicking the United States stock index of small and value companies that Mr. Fama and Mr. French developed. Then you'd put the other 68 percent of your money in one-year Treasury bills".
If you've paid attention to our investment philosophy, you'll recognize this - a tilt toward small-cap and value stocks with risk controlled by adding high credit quality short-duration fixed income in various proportions depending upon a client's risk capacity.
Lieber also points out important caveats about this investment philosophy. For example, it won't track the indices that most people are familiar with, like the Dow, NASDAQ, or S&P 500. "You have to tell yourself that you are not going to have portfolio envy or listen to what Jim Cramer is saying on CNBC. Are you willing to pay that price?" If you are, you might "see years like 2001 when the Fama/French index gained 40.6 percent while the S&P 500 lost 11.9 percent". Mr. Lieber also discusses how "education is the armor that protects you from emotions" and the importance of "hiring an educator - an investment advisor - who protects you from the hair-trigger impulses that position your fingers over the sell button."
Unfortunately there aren't many responsible financial journalists. Most try to sell newspapers and magazines with dubious research (Ten stocks/mutual funds to buy now!) or sensational headlines (Financial Armageddon!). Fortunately, there are a few that provide a balanced and reasonable point of view.
Posted by Brent Everett on Fri, Dec 23, 2011 @ 03:56 PM
1968 was a turbulent year in the US and around the world. In January, the war in Vietnam exploded with the start of the Tet Offensive. Martin Luther King, Jr. was killed in Memphis and violence broke out in cities across the country. Just two months later, Robert Kennedy was assassinated after announcing his victory in the California primary. The democratic national convention was marred by violent clashes between police and war protesters. Around the world, people - particularly youth and students, were demonstrating for change.
Much like the shepherds and wise men during the first Christmas, people around the world turned their attention toward the heavens as Christmas approached that year. Commander Frank Borman, Command Module Pilot Jim Lovell and Lunar Module Pilot William Anders launched aboard Apollo 8 on a mission to become the first humans to orbit the Moon in preparation for the big event of Apollo 11. They entered lunar orbit on Christmas Eve.
The Apollo crew sent Christmas greetings and live images back to Earth and read from the book of Genesis. It is estimated that more than one billion people watched the historic broadcast or listened on the radio. The Apollo 8 crewmembers ended their history-making journey when they splashed down in the Pacific Ocean on December 27.
Here is the original broadcast:
It is said that those who ignore history are doomed to repeat it. We should also learn from history in a contextual sense, as Jim Parker mentioned in our previous article. It can be difficult to appreciate what we have without knowing where we've come from. The lessons of 1968 are relevant today. We live in a world with far less poverty and far more freedom, at least partially as a result of the struggles of the past and the technologies that were developed as we strived to meet the challenge of putting a man on the moon. If we are dissatisfied with the status quo, as many of us are, then we have the freedom and the opportunity to effect change.
From all of us to our valued clients and friends, best wishes for a safe and happy holiday season however you may choose to celebrate it. Merry Christmas. Happy Hanakkuh. Happy Festivus! And, best wishes for a New Year filled with peace, hope and prosperity.
Posted by Brent Everett on Wed, Dec 14, 2011 @ 04:26 PM
As we near the end of a tumultuous year in the capital markets, it may be a good time to view recent events with a greater sense of perspective. Jim Parker at DFA recently published an article on this topic. Jim spent 25 years as a senior editor and writer for the Australian Financial Review and holds an an economic history degree from Deakin University and a journalism degree from Auckland Technical Institute.
The Good Old Days?
"The hardest arithmetic for human beings to master," wrote the great American working man's philosopher Eric Hoffer, "is that which enables us to count our blessings."
It's a piece of wisdom worth recalling after another year that has tested the nerve of many investors and prompted questions about what current generations have done to deserve to live in such a tempestuous stage of history.
As the year winds down (if that's the word for it!), financial markets are gripped by uncertainty over developments in the Eurozone crisis. Each day brings fresh headlines that send investors scrambling from virtual despair to tentative optimism.
While not seeking to downplay the very real anxiety generated by these events, particularly in relation to their effects on investment portfolios, it's worth reflecting critically on our often second-hand memories of the "good old days."
A Brief History of the 20th Century
Nearly 100 years ago, Europe was engulfed by a war that destroyed two centuries-old empires, redrew the map of the continent, and left more than 15 million people dead and another 20 million wounded. The economic effects were significant, with widespread rationing in many countries, labor shortages, and massive government borrowing.
Just as the Great War was ending, the world was struck by a deadly pandemic—the Spanish flu, which, by conservative estimates, killed some 50 million people. About a third of the world's population was infected over a two-year period.
A little over a decade after the Great War and the pandemic, the Great Depression cut a swath through the global economy. Industrial production collapsed, international trade broke down, unemployment tripled or quadrupled in some cases, and deflation made already groaning debt burdens even larger.
In the meantime, resentment was growing in Germany over its Great War reparations to the Allied powers. Berlin resorted to printing money to pay its debts, which in turn led to hyperinflation. At one point, one US dollar converted to 4 trillion marks.
In a new militaristic and nationalist climate, fascist regimes arose in Germany, Italy, and Spain. Under Hitler, Germany defied international treaties and began annexing surrounding regions in Austria and Czechoslovakia before finally attacking Poland in 1939.
This led to the Second World War, a conflict that engulfed almost the entire globe while Japan pushed its imperial ambitions in Asia, and Germany sought to conquer Europe. More than 50 million died in the ensuing conflict, including a holocaust of six million Jews. The war ended with the invasion of Berlin by Russian and western forces, while Japan surrendered only after the US dropped nuclear bombs on two cities, killing a quarter of a million civilians.
In economic terms, the war's impact was profound. Most of Europe's infrastructure was destroyed, millions of people were left homeless, much of the UK's urban areas were devastated, labor shortages were rife, and rationing was prevalent.
While the thirty-five years after World War II were seen as a golden age in comparison, the geopolitical situation remained fraught as the nuclear armed superpowers, the Soviet Union and the US, eyed each other. The breakdown of the old European empires and growing east-west tensions led the US and its allies into wars in Korea and Vietnam.
The cost of the Vietnam and cold wars created enormous pressures concerning balance of payments and inflation for the US and led in 1971 to the end of the post-WWII Bretton Woods system of international monetary management. The US dollar came off the gold standard, and the world gradually moved to a system of floating exchange rates.
In the mid-1970s, the depreciation of the value of the US dollar and the breakdown of the monetary system combined with war in the Middle East to encourage major oil producers to quadruple oil prices. Stock markets collapsed and stagflation—a combination of rising inflation alongside rising unemployment—gripped many countries.
While the 1980s and 1990s were a relative oasis of calm—aided by the end of the cold war—there still was no shortage of bad news, including the Balkan wars, the Rwandan genocide, and recessions in the early part of both decades.
In the past decade, there have been the tragedies of 9/11; the 2004 Asian tsunami; the 2011 Japanese earthquake, tsunami, and nuclear crisis; and now, the financial crisis sparked by irresponsible lending, complex derivatives, and excessive leverage.
Another Perspective
So from this potted history, it seems fairly clear that tragedy and uncertainty will always be with us. But the important point to take away from it is that previous generations have stared down and overcome far greater obstacles than we face today. And while it is easy to focus on the bad news, we mustn't overlook the good either.
Alongside the wars, depressions, and natural disasters of the past century, there were some notable achievements for humanity—like women's suffrage, the development of antibiotics, civil rights, economic liberalization, the spread of prosperity and democracy, space travel, advances in our understanding of the natural world, and enormous advances in telecommunication. (Oh, and the Beatles.)
Today, while the US and Europe are gripped by tough economic times, much of the developing world is thriving. Populous nations such as China and India are emerging as prosperous nations with large middle classes. And smaller, poorer economies are making advances too.
The United Nations in the year 2000 adopted a Millennium Declaration that set specific targets for ending extreme poverty, reducing child mortality, and raising education and environmental standards by 2015. In East Asia, the majority of twenty-one targets have already been met or are expected to be met by the deadline. In Africa, about half the targets are on track, including those for poverty and hunger.
Alongside these gains, new communications technology is improving our understanding of different cultures and increasing tolerance across borders while providing new avenues for the spread of ideas in education, health care, technology, and business.
Through forums such as the G20 and APEC, international cooperation is increasing in the field of trade, addressing climate change, and lifting the ability of the developing world to more fully participate in the global economy.
Rising levels of education and health, and workforce participation also mean the foundations are being built for a healthier and peaceful global economy, dependent not on debt, fancy derivatives, and fast profits but on sustainable, long-term wealth building.
Anxiety over recent market developments is completely understandable, and it is quite human to feel concerned about events in Europe. But amid all the bad news, it is also clear that the world is changing in positive ways that provide plenty of cause for hope and, at the very least, gratitude for what we already have. These are ideas to keep in mind when we scan the news and long for the "good old days."
