A compelling multi-year track record does exactly what it is supposed to do. It attracts attention, and ultimately garners inflows of new capital. This is not a criticism of successful managers but rather a description of the investment industry cycle. However, once new investor flows begin to arrive in size, the strategy that produced the track record and the strategy that is now being managed can shift dramatically.

The change is rarely, if ever, announced but instead tends to show up in small, defensible adjustments:

1. Position sizes that quietly grow to accommodate a larger asset base
2. Holdings that are added s

With so much attention focused on what the Federal Reserve (Fed) might do at its policy meeting next week, it’s a good time to look back at history to get a sense of how stocks might respond should the Fed hike rates as the market (barely) expects. LPL Research had been characterizing the rate decision as a coin flip until Chair Warsh’s hawkish comments at the Jackson Hole meeting and the strong August jobs report released last week. With the Fed fund futures market pegging the odds of a hike at 61% currently, we now believe the odds do, ever so slightly, favor a hike.

To get a sense of how stocks might react if the F

August delivered the loudest bond market narrative in years, and almost none of it survived contact with the price action. Total public debt crossed $40 trillion on August 18. The 30-year U.S. Treasury yield reached 5.33% intraweek, a level last seen in 2007. The move was global, with the German 10-year at 3.35% and the Japanese 10-year near 2.89%, both at, or near multi-decade highs. The federal deficit is tracking north of $2 trillion. Treasury Secretary Scott Bessent intervened with an expanded buyback program. A new Fed chair delivered his first Jackson Hole keynote. Commentators reached, predictably, for bond vigilantes, buyers' stri

In last week’s Beyond the Numbers, we made the case that free cash flow deserves a prominent place in investors’ valuation toolkits. Earnings can provide a useful measure of profitability, but free cash flow (FCF) gets closer to the central economic question: How much cash does a business generate after funding the investments required to operate and grow?

Capital requirements are rising alongside the cost of capital, and investors are paying closer attention to whether reported growth is translating into cash that ultimately accrues to owners. Our analysis found that FCF yield has historically been a more effective v