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Many investors need to make long-term asset class forecasts for planning and portfolio construction purposes. We examine the empirical performance of two different approaches to forecasting future ten-year equity returns: a regression methodology using CAPE and a more traditional “building block” approach. The regression approach produces estimates that are poor predictors of subsequent actual returns. The “building block” approach (BBA) outperforms the regression methodology (in terms of root mean squared error) with the repricing component helping to capture periods of poor equity returns. A high CAPE value is not necessarily cause for alarm and changes in asset allocation. If an investor plans to use a methodology that over time will prove more accurate, then the historical record is more supportive of the BBA approach, with or without a repricing component based on current P/E.

Some investors have been surprised by the duration of the current stock market rally and, until just recently, the very low level of equity market volatility (e.g., VIX). However, many are concerned about the possibility of market volatility spikes. We investigate asset class performance before, during, and after volatility events. Specifically, how do stocks and bonds perform during such events? Is asset class performance leading into an event different than after the event? We first define two types of volatility events: “spikes” and “post peaks”. A volatility spike event is a significant sudden increase in volatility, and we measure asset class performance while “the dust is flying.” In contrast, a volatility post peak event is a period of high volatility that is followed by volatility returning to its pre-peak level, and we measure asset class performance “after the dust has settled.” While both types of events are of interest to investors, some investors may act at the onset of a volatility event (i.e., a spike), whereas others may wait until market volatility has calmed down (i.e., after the peak). We examine 26 volatility spike events, and 25 post peak events, across a 68-year span, in a variety of market environments. History shows that while spike events produce large negative returns for equities and credit bonds (with positive returns for Treasuries), markets recover relatively quickly, approximately by the seventh month following the spike month. For post peak events, we focus attention on asset class performance after the dust has settled, not around the peak volatility event itself. The increase in volatility and accompanying equity and credit market declines may be unnerving to some investment committees. These investors may wish to wait until the “dust settles” – either out of caution or time needed for deliberation – before re-examining their investment strategy. History shows that once the dust has settled, equity and credit markets tend to perform well, often better than before the volatility event. The evidence from both types of volatility events suggests that the damage from volatility events is transitory and is likely to be repaired after a reasonable period. These results provide support for investment committees who intend to “stay the course,” and possibly re-balance with increased allocations to risky assets.

Chronic aspiration of gastric fluid potentially plays a central role in the pathogenesis of obliterative bronchiolitis, which is often associated with chronic pulmonary allograft failure. It remains unknown whether pharmaceutical-induced increases in gastric pH might effectively prevent any putative pulmonary injury associated with chronic aspiration.To test the hypothesis that neutralization of gastric fluid would affect the development of aspiration-associated obliterative bronchiolitis, an established rat lung transplant model (WKY-to-F344) was utilized. Pulmonary allograft recipients were subjected to eight weekly aspirations of gastric fluid at pH 2.5 (low-pH), gastric fluid at pH 7.4 (neutralized-pH), or saline as a control.Histologic analysis revealed that the fraction of airways affected with lesions consistent with obliterative bronchiolitis was 0.55 ± 0.08 (mean ± SEM) in rats receiving aspiration with low-pH gastric fluid, 0.49 ± 0.07 in animals receiving neutralized-pH gastric fluid, and 0.07 ± 0.05 in rats receiving normal saline only. The difference between groups receiving gastric fluid, regardless of pH, was significantly different from the saline control (P 0.0001), whereas the difference between the groups receiving low-pH gastric fluid and neutralized-pH gastric fluid was not significant (P = 0.75).Effective management of gastroesophageal reflux disease in lung transplant recipients should probably include more than neutralization of gastric fluid.

Background & Aims Reshape Duo is a saline-filled dual, integrated intragastric balloon (IGB) approved by the Food and Drug Administration for weight loss in patients with obesity. In a prospective, randomized trial, obese patients who received the balloon had significantly greater percent excess weight loss (%EWL) compared with patients treated with diet and exercise alone. However, there are limited data on the real-world efficacy of the Reshape balloon. Methods We performed a retrospective study of data collected from 2 academic centers and 5 private practices in which all patients paid for the IGB and follow-up visits out of pocket. The IGB was removed after 6 months. We collected data (demographic, medical, and laboratory) from 202 adults (mean age 47.8 ± 10.8 years; 83% female) with a baseline mean body mass index of 36.8 + 8.4 kg/m2 who had IGB insertion for weight loss therapy, along with counselling on lifestyle modifications focused on diet and exercise. Primary outcomes were percent total body weight loss (%TBWL) and %EWL at 1, 3, 6, 9, and 12 months after the procedure. Results Mean %TBWL at 1, 3, 6, 9 and 12 months was 4.8 ± 2.4%, 8.8 ± 4.3%, 11.4 ± 6.7%, 13.3 ± 7.8%, and 14.7 ± 11.8%, respectively. Data were available from 101 patients at 6 months and 12 patients at 12 months; 60.4% of patients achieved more than 10% TBWL and 55.4% had more than 25% EWL. Seventeen patients (8.4%) had esophageal tears during balloon insertion, with no intervention required. Thirteen patients (6.4%) had their IGB removed before the end of the 6-month treatment period. Nausea, vomiting, and abdominal pain were the most common adverse effects, occurring in 149 (73.8%), 99 (49%), and 51 (25.2%) patients. In one patient, the IGB migrated distally leading to small intestinal obstruction requiring surgical removal. Conclusion In a retrospective analysis of real-world patients who received the Reshape Duo IGB, we found it to be a safe and efficacious endoscopic method for producing weight loss, with most patients achieving greater than 10% TBWL at 6 months.