Commentary Archive

In addition to reviewing the factors driving the economy and markets in 2006, John P. Calamos, Sr. and Nick P. Calamos share their outlook for 2007 and how the investment management team is positioning our equity, global/international, convertible and high-yield strategies.

The Calamos Growth Fund has achieved a great deal of success, delivering long-term returns that have outpaced its benchmarks.

Investors look past short-term market concerns, recognizing economy's underlying strengths.

Does the current Fed tightening suggest an impending recession coupled with inflation? The combination of spiraling oil prices, a weak dollar, and the Fed's holding interest rates well below the economy's actual growth rate (in negative real rate territory) has many economic forecasters predicting inflation—and even stagflation which is considered the worst of both worlds: inflation without growth.

A signal of a stronger economy with ptoential to boost equity-sensitive securities.

Unless this is your first foray into investing, you have already heard the virtues of diversifying your portfolio by investing internationally.

The mainstream medias financial news outlets differ little from their traditional news counterparts: they focus on the extreme, preferring stark gloom or extreme exuberance over enlightened analysis.

The first quarter of 2005 was not kind to the convertible market: while multiple forces were responsible for pushing prices down, hedge fund selling caused the most dramatic valuation collapse.

In recent discussions with financial advisors and other clients, we've often heard questions about the high yield market, now that the economic cycle has more clearly turned from the recovery phase to a more stable-growth oriented one.

The markets ended down across the board in the first quarter of 2005, with negative returns extended not only across the major domestic asset classes but also overseas, where most major foreign markets were down for the quarter as well in U.S. dollar terms.

Throughout 2004, we remained constructive on the strength of the underlying economy and positioned our convertible portfolios to benefit from investors recognition of the recovery--an event that was seemingly postponed by election politics.

Although we continually review our investment decisions and portfolio positioning, the new year offers a fresh start to discuss with our clients the opportunities and challenges for the year ahead.

Over the course of the third quarter, we saw three different types of markets: in July, negativity triggered by oil prices and concerns over interest rates prevailed, in August, positive market sentiment struggled with opposing market views, and in September, the market finally seemed to recognize that the economic expansion still had legs.

Since we view the economy as the key driver of the market's direction, we spend a great deal of time assessing it, keeping in mind the cyclical nature of economic and market events.

The economic recovery gained support from productivity growth as the first quarter ended with improving employment numbers, a low inflation environment and a stronger global market.

In comparing our commentaries prior to the markets upturn with our current viewpoint, we see only one significant difference: our belief in positioning our portfolios for economic recovery has turned from an outlier opinion into the consensus.

Throughout our years of managing assets and creating wealth, weve come to observe that market and investor sentiment stirred by the press can often overstate both the positive and negatives, so we typically assume that things are rarely as dire or delightful as commentators pronounce.

The financial markets performance this past quarter remained consistent with our long stated view of a cyclical recovery, as it continues to react to positive factors.

Back in the doldrums of the bear market, we repeatedly stated that the downturn was cyclical, not secular, meaning that we believed the economy had not undergone a structural, systematic change, but instead was simply at a stagealbeit an unpleasant and prolonged onein the historic ebb and flow that is the essence of market economies.

At the onset of the Iraqi conflict, we noted that despite the market turmoil during the buildup and initial days of combat, the market was poised for meaningful recovery once it looks past the war news.

Any discussion of the financial markets during this past quarter cannot ignore the geopolitical debate that has raged on over the past few months.

Clearly, the first quarter was dominated by the geopolitical strife, the preparations for war, and its commencement.

During this period of market volatility and stress, we'd like to share the following discussion of CALAMOS' current views on the market, the economy, and our positioning.

With looming war questions, international discord, and a heightened security presence from Main Street to Wall Street, there are plenty of concerns that seem to be mounting.

While we can't predict the specific outcome of President Bush's recently announced stimulus package, we find the proposal and the coinciding debate itself to be constructive for the markets in 2003 and beyond.

There is little doubt that 2002s market, along with the prior two years, has been disastrous for many equity investors.

In light of the rally that began in October, one of the strongest one-month performances in many years, investors may be looking ahead to a market recovery.

With the drawn-out decline that continued unabated to the last days of the third quarter, one of the buzzwords on cables business channels was capitulation.