Meet Up: Low Bond Yields Reflect Economic Trends and Are Here to Stay
For more than two decades, forecasters and many market participants have been over-estimating future bond yields. Much of this over-estimation may be based on "the Golden Rule," or the idea that in the long-run bond yields equal growth plus inflation. This presentation looks to establish a new heuristic for investors, giving them a simple, intuitive way to relate bond yields to prevailing trends in growth and inflation It also lays out the theoretical basis for this model as well as evidence of being empirically robust. The model is similar to Shiller's CAPE, in that it uses 10-year trailing growth and inflation to smooth out the effects of the business cycle. It was also recently featured in the Journal of Investment Management (Vol. 17, No. 2)
Managing Director & Senior Investment Strategist
Investment Strategy & Risk
Liberty Mutual Investment
Tom Shevlin is a Managing Director working on Asset Allocation and Investment Strategy with Liberty Mutual Investments. He is involved in building a more advanced Asset Allocation process, engages in cutting edge modeling and research, and is a thought leader on risk management. He recently published "A Model of Bond Value," which provides a measure of intrinsic value for Treasury yields that is analogue to the Shiller PE. Mr. Shevlin joined Liberty in November of 2014.
Prior to Liberty Mutual, Tom spent 10 years in McKinsey & Company's Internal Wealth Management Group, MIO Partners. While there he served as Head of Risk and Head of Financial Market Research and Portfolio Manager for Multi-Asset Strategies and FX. He developed a highly sophisticated approach to trading complex FX derivatives and was a highly successful prop trader in the space. He also helped developed many of the strategies that led to the group's successful mitigation of risks during the global financial crisis and contributed to the firm's stellar track record, which exceeded Yale's returns on a 10-year basis with about half the volatility. Tom built out MIO's Top-Down Macro Asset Allocation Process, Risk Management framework, and FX Overlay Program largely from scratch.
Prior to McKinsey, Tom was an Economist and Diplomat for the United States Department of the Treasury for 7 years, where he was actively involved in devising strategies to help resolve financial market crisis and provided much of the quantitative modeling for many of Treasury's highest priorities. Prior to that he was an Economist for the Bureau of Labor Statistics.
Tom has a Masters of Economics from the Pennsylvania State University and a BA in Economics and Spanish from SUNY Geneseo. He is also a CFA charter holder and a Certification in Financial Risk Management (FRM).
Please note, attendees are asked to bring their own lunches.
There is no charge for Members for this event, however registration is required in advance.
*The Auditorium is located on the Ground Floor and can be accessed by entering the building on 100 Federal Street side. The auditorium will be on your right before security and you will not need to go through security by accessing the building from the 100 Federal Street side.
Putnam Investments Auditorium
100 Federal Street
Ground Floor - Enter Through Federal Street Side
Boston, MA 02110
Description:Registration is complimentary for members.