Get Back to Basics in Uncertain Times
Are you feeling as uneasy as I am? China’s growth is slowing, Brexit is looming, and winds of war in the Middle East have sent oil prices on a roller coaster. Closer to home, the yield curve is inverting, corporate debt is mushrooming, and just last week Wall Street and the Fed were caught napping when overnight repo rates suddenly quadrupled. So, if you’re a treasury professional responsible for managing your institution’s cash, now may be a good time to take an up close and personal look at your portfolio. It’s not too soon to start plotting your investment strategy for the coming year and beyond.
And when you do, be sure to read this month’s Capital Advisors Group research report, A 360-Degree Overview of Proactive Cash Management. This update to one of our popular white papers takes you back to the basics of sound cash management and investment practices. Starting with two seemingly simple but sage bits of advice—”Know Thyself” and “Know the Market”—the report goes on to give an in-depth tour of today’s cash-management landscape.
Among other things, the report provides a concise explanation of the once in a generation transition of prime money market funds that started in 2016, when post-financial crisis reforms motivated a trillion dollar plus migration of money-fund cash into alternate investment vehicles. It provides detailed advice on how to start assessing, choosing and monitoring those alternative investments, based on the interdependencies of duration, liquidity, and credit quality. And it discusses how both top-down and bottom-up analysis will help limit downside risk while still earning adequate cash portfolio returns.
Institutional cash investors who started their careers less than a decade ago have never had to manage their portfolios through an economic downturn. And even for those of us with much longer experience, memories of 2008 and 2009 are starting to get a little distant. With all the uncertainties crowding today’s economic horizon, it’s a near sure bet that we’ll all be navigating some tricky currents over the next several years. Our white paper can give you valuable insight into how those currents will flow. Be sure to download it today.