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Yahoo
5 days ago
- Business
- Yahoo
The investment chief at $10 trillion giant Vanguard says it's time to pivot away from U.S. stocks
Greg Davis visited Fortune this month dressed like a Wall Street titan—and bearing a very un-Wall-Street message about a tepid future for U.S. July 11, Davis––the president and chief investment officer of Vanguard Group––came to our offices in Manhattan's Financial District for a chat with this reporter. Though Davis works from Vanguard's mother ship (its buildings are all named for British vessels from the Napoleonic wars) in the tiny hamlet of Malvern, Pa., west of Philadelphia, he arrived attired in a tailored gray suit and purple silk tie combo that would have fit right in with the most formal of the investment banking cadre and portfolio managers headquartered Davis's message couldn't have been more contrary to the fashionable view among the neighborhood's rosy prognosticators. The 25-year Vanguard veteran's outlook contradicts the prevailing position advanced by the big banks, research firms, and TV pundits that despite serial years of big gains, U.S. stocks remain a great buy. That bull case rests mainly on optimism that the Big Beautiful Bill's deregulatory agenda and tax cuts will spur the economy, and that the AI revolution promises a new world of efficiencies that will shift earnings to super-fast track going forward. The powerful momentum that has driven the Nasdaq and S&P 500 to all time highs this week bolster their argument for more to come. Davis follows the Vanguard mindset that, arguably more than any other, revolutionized the investing world over the past half-century. The company's founder, John Bogle, created the first index funds for ordinary investors in 1975, following the conviction that funds choosing individual stocks regularly fail to beat their benchmarks after fees, and that a pallet of diversified index funds, and later ETFs, that hold expenses to an absolute minimum, provide the best platform for achieving superior gains over the long-term. The top testament to the enduring validity of the Vanguard model: Over 80% of its ETFs and indexed mutual fund beat their peer-group averages over the past 10 years, measured by LSEG Lipper, largely courtesy of those super-tight expense ratios. The Vanguard model's won such overwhelming favor that it now manages 28% of the combined U.S. mutual fund and ETF universe, and it's gained 7 points in market share in the past decade. At $10 trillion in AUM, it ranks second only to BlackRock among all U.S. asset managers. Besides offering over 400 super-low-cost funds worldwide, Vanguard also provides investment advice as a firm, and through its army of financial advisers. A big part of the Vanguard formula: Periodically rebalancing from securities that get extremely pricey by historical standards into areas that are undervalued versus their norms. In our discussion, Davis provided a master class on how the dollars in profits you're getting for each $100 you're paying for a stock influences future returns, and why now is such a crucial time to shift from what's highly, even dangerously expensive into safe areas that look like screaming buys. Put simply, Davis argues that U.S. equities are a victim of their own success. For Davis, the fabulous ride in recent years virtually guarantees that future returns will prove extremely disappointing versus outsized, double-digit gains investors have gotten used to, and that the investment pros predict will persist. The reason is simple: U.S. stocks have simply gotten so costly that their forward progress is destined to radically slow. 'Our investment strategy group's projection is that U.S. equity market returns are going to be much more muted in the future,' Davis warns. 'Over the past ten years, the S&P returned an average of 12.4% annually. We're predicting the figure to drop to between 3.8% and 5.8% (midpoint of 4.8%) over the next decade.' The basic market math, he contends, points to that outcome. Davis notes that the official price-to-earnings multiple on the S&P now stands at an extremely lofty 29.3. And when Vanguard uses a preferred gauge based on Nobel Prize-winning economist Robert Shiller's Cyclically Adjusted Price-to-Earnings multiple, or CAPE––a measure that adjusts the PE by normalizing for spikes and valleys in earnings––it concludes that US stocks hover 49% over the top end of the group's fair value range. Davis also points out that corporate profits are now extremely high by historical levels, and hence won't grow nearly as fast from here as their jackrabbit pace of recent years. In other words, don't count on an EPS explosion to solve the valuation problem. In fact, this reporter notes that contrary to what we're constantly hearing about forthcoming double-digit increases in profits, the sprint has already slowed to a stroll. From Q4 of 2021 to Q1 of this year, S&P 500 EPS grew from $198 to $217, or 9.6% in over three years, a puny pace that doesn't even match inflation. Huge gains have knocked portfolios out of balance Davis explained how the longstanding bull market has wildly distorted the standard '60-40' portfolio. That classic construction of 60% stocks and 40% bonds has worked well in many periods, he notes. But today, folks who started at 60-40 a decade ago, and didn't rebalance into bonds as equity prices swelled year after year, are now banking far too heavily on those richly-valued U.S. equities. 'In the past 10 years, interest rates have mainly been very low, so bonds returned only around 2% a year, or 10% less than stocks,' declares Davis. 'So the stock portion kept compounding at a high rate and getting bigger, and the bond portion kept shrinking as a share of the total. As a result, what started as a 60-40 mix is now 80-20 in favor of stocks.' To make matters worse, says Davis, 'U.S. stocks outperformed international equities by 6 percentage points a year in the past decade. So 10 years ago, if you started with the standard split 70% U.S. and 30% foreign, you'd now be at 80% U.S. and 20% foreign.' Hence, sans rebalancing, an investor's overall share of U.S. stocks would have gone from 42% to around two-thirds, a gigantic leap. Those weightings, he says, are lopsided in the wrong direction, in two ways—by holding far too big a percentage of stocks and not enough bonds, and within the equity portion, not owning enough foreign shares. 'If you look at the bond market today and the way yields have risen, we're projecting that you're going to pick up very similar returns in a mix of U.S. and foreign bonds as you'll get in U.S. equities, or also 4% to 5%. So the expectations are comparable, but you'll have much less volatility on the bond side,' avows Davis, adding, 'What's the big advantage to betting on risky stocks when you can get 4.3% on three-month Treasuries?' Hence, Davis makes a daring recommendation: Investors should reverse the classic blend and go with 60% bonds and 40% stocks. For the fixed income portion, he notes, Vanguard's Total World Bond ETF (BNDW) offers a blend of domestic and international fixed income, encompassing government bonds, corporates, agencies, mortgages, and asset backed securities. In addition, Vanguard projects that foreign shares over the next ten years will generate average returns of 7%, waxing the 5% or so for U.S. equities. Hence, Davis recommends that in the 40% dedicated to stocks, investors lean heavily to the international side by splitting the allocation evenly, or 20% and 20%, between stateside and international stocks. The Vanguard FTSE All World ex US ETF (VEU) would fit the slot reserved for the international allotment. In summary, Davis is advising a radical rebalancing for folks who let their U.S. stocks swallow a bigger and bigger part of their portfolios as bonds and international shares underperformed year after year. So here's are allocations he'd recommend for the decade ahead: 60% fixed income, 20% international equities, and—gulp—just 20% in U.S. stocks. Once again, that number compares to the around two-thirds you'd hold in U.S. equities if you'd started at 60-40 ten years ago and just let your gains on U.S. stocks rip without any rebalancing. I ran some numbers on the returns you'd garner in the two scenarios: First, if you don't rejigger and keep holding two-thirds of your portfolio in U.S. stocks, and second, if you do what Davis advocates and put 60% in bonds, and park more of the equity share abroad. In both cases, the projected future return is just over 5% yearly. No big difference in returns over the next decade. So why choose the Davis formula? The edge in making the big shift: The path will be much smoother, predictable, and less nerve-rattling that sticking with a huge over-weighting in U.S. stocks. Of course, Davis recommends rebalancing gradually, and funding as much of it as possible with fresh savings and reinvestment of dividends and high interest payments from fixed income assets. Davis is no fan of cryptocurrencies Davis isn't recommending crypto investing as a means of boosting your returns at a time when U.S. stocks won't come close to matching their past performance. 'I got into this business around the time of the era,' he told me. 'Anything with a behind it went to the moon. Some were actually really good businesses, however the majority were not. Good things can come out of crypto like blockchain, and that technology can reduce costs in the financial sector and improve speed, so we think there are some good fundamental components to it. But to us investing in Bitcoin is speculation.' For Davis, Bitcoin offers none of the advantages of traditional investments that generate interest payments, or earnings that feed capital gains and dividends. 'It's not investing in a cash flow generating business, it's not investing in bonds where you have a commitment to getting a coupon payment every six months, then principal at maturity,' he explains. 'It's basically looking to sell to someone willing to pay more than you did. And the whole idea that a limited supply of Bitcoin will drive up its value is questionable when you consider that there's an unlimited supply of new types of crypto that could be created. So I personally don't get it. Vanguard won't launch a Bitcoin fund. We just don't see it as a core part of an investment portfolio.' Davis grew up on an Army base near Nuremberg, Germany, the child of a father in an Airborne division and a German mother. As a kid, he mainly spoke German, including with his grandmother, and didn't live in the U.S. until age 7. 'When I go to Germany and speak the language, people can tell I've kept the Bavarian dialect,' he declares. He started at Penn State pursuing aeronautical engineering, but lack of skill in mechanical drawing forced him to switch—to a major in insurance. 'Penn State was one of the few schools that offered that unusual major,' he says. Davis went on to get an MBA at Wharton, and after a brief stint in a Merrill Lynch training program, got an offer from Vanguard that would require a move from Wall Street to the sleepy suburbs of Philly. Davis took the job in part because Vanguard was then a fast-growing shop, where he figured his chances of advancement would be better than at a huge bank or brokerage. He was especially attracted to Vanguard's highly unusual 'cooperative' model, where the funds––meaning the investors––are the shareholders. 'So because we have economies of scale where over time our revenues grow faster than expenses, we can rebate that money back to investors by lowering fees,' he says. Davis proudly notes that Vanguard has made 2,000 such reductions in its history, and especially that in February it announced the biggest decrease ever—a cut of $350 million across 68 mutual funds and ETFs in equities and fixed income. Vanguard's whole approach where the objective is to constantly lower fees is highly un-Wall Street. So is Davis's contrarian counsel to follow what the valuations and history tells us, to shift from stocks that are extremely expensive and whose prices can't grow to the sky, despite what the bulls are saying. It's a sobering, cautionary tale. But it's one that makes eminent sense. This story was originally featured on Sign in to access your portfolio
Forbes
22-07-2025
- Business
- Forbes
What Could Derail The Bull Market Rally?
NEW YORK - JUNE 19: A view of the brass Wall Street bull statue stands at a lower Broadway park at ... More Bowling Green June 19, 2012 in New York City's financial district. (Photo by) As I concluded my last Forbes column (Wall Street's Tightrope: Why Smart Money Is Fleeing U.S. Assets), I noted , 'Short term, the setup is there for a relief rally. The market is deeply oversold, and sentiment is at extremes.' That tactical bounce off the April lows wasn't just robust—it shocked seasoned investors, myself included. The force and speed of the S&P 500's rally underscored just how swiftly risk sentiment can turn from caution to euphoria, and reminded us never to underestimate the animal spirits driving this market. From Strength to Vulnerability With equities at record highs and nominal growth boosted by legislation like the 'One Big Beautiful Bill' (OBBB), it's tempting to think the cycle can keep running. Fiscal spending, tax incentives, and reforms have all contributed to strong consumer and corporate results. But lurking beneath the surface is a structural risk that could upend equity valuations and market leadership: a renewed surge in the U.S. Treasury term premium. What Is the Term Premium? Term premium is the extra return investors demand for holding long-term government bonds rather than rolling short-term debt, compensating for uncertainty about inflation, fiscal policy, and future interest rates. Think of it as the market's way of saying, 'If you want me to tie up my money for a decade or more, pay me for the unknown risks.' Term Premium Chart: 1960s–2025 This chart shows estimates of the term premium for maturities of one to ten years, spanning from ... More 1961 to the present. Treasury term premium is estimated by current and former New York Fed economists Tobias Adrian, Richard Crump & Emanuel Moench. From the 1960s through the mid-1980s, the 10-year Treasury term premium was commonly 2–4%, reflecting the high inflation and policy uncertainty of the era. Between the mid-1980s and 2007, the premium receded to an average 1.5–2.5%. After the financial crisis, it plunged toward zero and occasionally negative. As of mid-2025, the premium has rebounded to about 0.75%—but history shows it can go much higher. How High Could Term Premium Go? If the term premium were simply to revert to its long-term average of 1.5%, or approach its pre-2008 mean near 2%, that would imply an upside risk of 75–125 basis points on 10-to-30-year Treasury yields from current levels. With deficits large and persistent, and the OBBB amplifying fiscal pressures, the conditions are in place for a further jump. This shift would not only raise discount rates across the capital markets but would also directly pressure valuations—especially for long-duration equities like those dominating the NASDAQ. Conclusion: Are Markets Prepared? Equity bulls have plenty to cheer, but they're paying up for the privilege: according to Ned Davis Research, the S&P 500 trades at 29x trailing GAAP earnings and the NASDAQ Composite now boasts a P/E of 48x. These demanding valuations leave broad markets—especially the NASDAQ—exposed to even a modest move higher in yields. If the term premium continues its ascent back toward historical norms, volatility could spike, and market leadership may abruptly reverse. With risks mounting, investors need to ask: are markets truly prepared for their most important cost of capital to spike higher?
Yahoo
11-07-2025
- Business
- Yahoo
AI Unicorn EvenUp Opens New San Francisco Headquarters to Catalyze Growth and Innovation in Personal Injury Law
SAN FRANCISCO, July 11, 2025--(BUSINESS WIRE)--EvenUp, the highest-funded AI technology company serving personal injury law firms, has officially opened its new headquarters at 353 Sacramento Street in the heart of San Francisco's Financial District. The 10,300-square-foot office, brokered by CBRE, marks a major milestone for the company as it continues rapid expansion and deepens its investment in downtown San Francisco's revitalization. Last night, the grand opening celebration welcomed staff, media, and city officials for a ribbon-cutting and reception highlighting the company's commitment to creating high-impact jobs and building a hybrid innovation hub for legal technology. EvenUp's newly promoted Chief Technology Officer Kallol Das led the planning of the new headquarters with a focus on recruiting top-tier tech talent. "Our new San Francisco HQ is a launchpad for breakthrough innovation," said Das. "Top data scientists will collaborate here to build next-gen AI tools that will transform personal injury law. We intend to attract top talent with our new state-of-the-art facility, which applies advanced machine learning to solve real-world challenges." CEO and co-founder Rami Karabibar emphasized the company's vision for building a thriving hybrid work culture: "EvenUp is proud to be one of the fastest-growing startups in San Francisco and to be building a true hybrid work hub for innovation. Our hybrid work model isn't about policies, it's about people—giving high-performing teams the resources and environment they need to thrive in the office or working remotely." The city of San Francisco sees EvenUp's expansion as a strong signal of downtown momentum. "EvenUp's expansion reinforces San Francisco's position as a hub for cutting-edge companies building the future of work," said Anne Taupier, Executive Director of the San Francisco Office of Economic and Workforce Development. "We're thrilled to see more innovators bringing their workers back to downtown where they can take full advantage of San Francisco's top-tier arts, culture, entertainment, culinary scene, and nightlife—all of the opportunities that make life in this city so rich." The new headquarters reflects a period of sustained growth for EvenUp. The company has increased its employee base by nearly 50% over the past year and now employs more than 500 people. It serves over 1,500 personal injury law firms nationwide with specialized AI products that help attorneys streamline casework, draft documents, and uncover hidden value in every case. EvenUp's impact goes beyond technology. It was founded with a mission to close the justice gap, particularly for individuals who lack the resources to challenge insurance companies. "In the face of a catastrophic accident, my family's struggle for justice and fair compensation revealed the flaws in traditional systems," said Raymond Mieszaniec, COO and co-founder of EvenUp. "By harnessing the potential of technology, we can create a future where the pursuit of justice is not marred by financial pressure or the representation you have." The company's hybrid model encourages in-person collaboration across engineering, product, marketing, finance, and operations teams, with employees spending at least three days per week in hub offices. Additional perks include free lunch and relocation support. EvenUp's culture is rooted in long-term thinking and continuous improvement. One of its core values, 1% Better Every Day, reflects the company's commitment to high performance, constant learning, and delivering lasting impact. The new headquarters brings that vision to life, offering a space for EvenUp's growing team to build, iterate, and lead the next era of legal innovation. EvenUp is actively hiring across multiple departments, including machine learning, AI software engineering, sales, and marketing. To explore open roles, visit: About EvenUp EvenUp is on a mission to close the justice gap through technology and AI, empowering personal injury lawyers and victims to get the justice they deserve. EvenUp applies machine learning and its system of AI models known as Piai™, to reduce manual effort and maximize case outcomes across the personal injury value chain. The Claims Intelligence Platform™ provides rich business insights, AI workflow automation, and best-in-class document creation for injury law firms. EvenUp is the trusted partner of personal injury law firms. Backed by top VCs, including Bessemer Venture Partners, Bain Capital Ventures (BCV), Lightspeed, SignalFire, NFX, DCM, and more, EvenUp's customers range from top trial attorneys to America's largest personal injury firms. EvenUp was founded in late 2019 and is headquartered in San Francisco. Learn more at View source version on Contacts Media Contact: Christy Burke, Burke & Company PR, 917-623-5096, cburke@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Grazia USA
08-07-2025
- Entertainment
- Grazia USA
Justin Bieber Shares A Candid Instagram Post About Hailey Bieber Amid Spilt Rumours
Justin Bieber and Hailey Bieber were seen leaving the iPic Theatre in the Financial District on February 05, 2025, in New York City. (Photo by Aeon/GC Images) The rumours surrounding Justin Bieber and Hailey Bieber's marriage are nothing new. With public outbursts and Instagram slip-ups from Justin and a recent ringless outing by Hailey, reports of hardship remain rampant. Amid the speculation, Justin has taken to Instagram once more, this time to share the love. 'My forever n always 💕💕💕💕💕💕💕💕💕💕💕💕💕💕💕,' he captioned a post featuring several shots of the couple hugging. Justin and Hailey Bieber / Image: This comes only a few weeks after a report detailing Hailey's recent concerns and frustrations surrounding Justin and his contentious presence online, including a resurfaced clip from 2020 where he points the camera to his wife and says, 'If you weren't so hot, I would've gotten rid of you a long time ago.' Sources have stated that the Rhode mogul 'feels pretty drained right now.' Further sources iterated that despite these frustrations, and feeling '[she] is the one keeping their family together', the chances of a split are slim, due to their religious beliefs and faith in their perseverance. 'They believe they are soulmates and meant for each other,' the report stated. Justin Bieber and Hailey Bieber attend the 64th Annual GRAMMY Awards at MGM Grand Garden Arena on April 03, 2022 in Las Vegas, Nevada. (Photo byfor The Recording Academy) If Justin's post is anything to go by, then this may indeed be the case, with the two remaining publicly united. In May of this year, Hailey also addressed the speculation, calling out those with doubts. 'You would think after having a child, people would maybe move on… but no,' she mused. 'So, I guess these bitches are going to be mad.' The two are almost seven years into their marriage and renewed their vows in May 2024, over a year ago now. Hailey gave birth to their son Jack Blues Bieber in August of the same year. It seems through it all, they're determined to remain strong.
Forbes
28-06-2025
- Business
- Forbes
Crypto IPO: 3 Things You Need To Know About The IPO Season
The Wall Street sign in the Financial District of Lower Manhattan in New York City. Circle's successful IPO has sent a signal. A strong one. The crypto world is heating up again, but this time, it's happening on Wall Street. Crypto companies are making a comeback after a long period of regulatory uncertainty. Circle, the stablecoin issuer, has initiated a global sensation in capital markets. Understandably so. Circle's recent debut on the New York Stock Exchange as CRCL was impressive, to say the least. CRCL's share price skyrocketed nearly 600% from its IPO price of $31 to a high of $215 during the day. With a market cap of $45 billion, Circle has quickly become the representative of a new trend, giving rise to a crypto IPO season. Was it a flashy debut? Yes, and for all good reasons. Circle's IPO, the biggest in recent history, marks a major milestone in the industry's journey toward mainstream acceptance. USDC, Circle's flagship stablecoin, is backed by over $32 billion in reserves and is already a core component of onchain finance, serving as a payment medium that dominates the whole crypto ecosystem. But there are three key things you need to know about this year's IPO season to understand this phenomenon. 1. It's Only The Beginning Of Crypto IPOs Just days after Circle's IPO, Gemini, the crypto exchange founded by Tyler and Cameron Winklevoss, confidentially filed paperwork for its own IPO in the U.S. At the same time, all eyes moved onto Kraken, which is reportedly preparing to go public sometime in early 2026. Another company making moves is BitGo, a regulated U.S. crypto custodian. Back in February, reports suggested it was aiming for an IPO as early as 2025. A few other names also stand out as potential IPO contenders: These companies span the entire spectrum, from custody and analytics to wallets and infrastructure. What they have in common is a fresh appetite for public capital and growing investor interest, especially institutional one. As one analyst put it, 'After watching Circle's stock take off, any crypto firm with a clear business model is now looking at the IPO route seriously.' 2. The IPO Process Although the range of companies participating in the IPO summer is wide, crypto exchanges are leading the charge in pursuing US stock market listings. Think Gemini, Kraken, Bullish Global, FalconX, and Bithumb. These types of businesses are particularly well-positioned for public listing due to their strong cash flows, large customer bases, and stable business models that appeal to traditional investors. There are different ways companies can go about executing public offerings. Traditional IPOs remain the gold standard, particularly for mature companies with strong compliance records and established business operations. However, this process is very complex and time-consuming, making it most suitable for larger platforms with proven business models and solid profitability. That's why for smaller cryptocurrency companies seeking a faster path to public markets, reverse mergers have become a popular alternative. Companies, such as TRON, have successfully leveraged this approach by acquiring existing public companies to quickly gain access to the stock market, bypassing the lengthy traditional IPO process. Meanwhile, some companies are opting for direct listings. This is shown by Kraken's approach, which achieved a $16.2 billion valuation. They were able to create market liquidity for their shares without the need to raise new capital, making it ideal for firms that don't necessarily require additional funding but instead want to provide exit opportunities for existing shareholders. 3. High Crypto IPO Expectations Circle has definitely set a high bar. Its stock soared, boosting confidence across the crypto sector. But Circle isn't your typical crypto company. Their stablecoin, USDC, is a go-to onchain payment solution. In addition, its business model—earning yield on reserve assets—is easy for traditional finance folks to understand. Retail and institutional demand are growing, and with a government no longer hostile, investors see 2025 as the year when crypto companies leverage the IPO playbook. The dramatic shift in institutional adoption is particularly compelling. As of January 2025, 86% of institutional investors reported having exposure to digital assets or planned to make digital asset allocations later in the year. Additionally, recent success stories have proven that crypto companies can achieve substantial valuations in public markets. Circle's roughly $1.1 billion public listing formed the largest crypto IPO in recent history, sparking high expectations among industry experts that more digital asset companies will soon follow suit. However, only time will tell if this crypto IPO summer turns into an IPO supercycle, but Coinbase being the best performing S&P500 stock in June is definitely a promising sign.
