Part 1 – Volatility, What a Drag

BLOG SERIES: UNDERSTANDING RISK

Over the past couple of months, investors of all types have likely been caught off guard by global events that caused massive swings in the market value of their portfolio holdings. Unfortunately, some have realized that their investments were far too risky and have lost more than they could tolerate. The old gambler’s adage of not risking more than you are willing to lose holds true for investors as well – but how do we know how much is really at risk?

Why “Resulting” is Dangerous in Both Poker and Investment Management

During times of crisis, we often read sensationalist reports about tail risk strategies that result in astronomical returns. However, these strategies aren’t meant to be a standalone solution, but rather a small part of a diversified portfolio. Tail risk hedging is a type of insurance and, as with any type of insurance, it’s important to…

Confusion Amid the Rally

Beyond COVID-19 updates, current headlines are littered with reference to underwhelming economic data, such as spiking unemployment and suffering corporate profitability. During this period, equity markets have seen one of their best stretches of historical performance, which is leaving many investors puzzled. A recent article in the L.A. Times speaks to this phenomenon and attempts…

O Canada! Why We Diversify

The COVID-19 global pandemic is a historic event that has galvanized intergenerational cohorts in the fight against a common enemy. I will not attempt to wax-poetic about the implications this will have on our way of life for when we inevitability get through to the other side of this epidemic, as there are much more qualified experts that can offer better educated opinions on the matter then I can. What I will attempt to do is explore a way to reframe the implications of this health crisis for investors that are dealing with both emotional and financial stress as a result of the pandemic.

Why You Should Hold Bonds

The most recent pullback in equity prices due to uncertainty around COVID-19 has resulted in another leg lower for bond yields as investors clambered to gain exposure to the safety of fixed income products. The steady march lower in yields is once again prompting market participants to question how much lower yields can go, and…

ETFs Tested: COVID Free!

There has been a lot of talk over the past few years about how passive investing and the rise of exchange traded funds (ETFs) would be the next financial market bubble that would wreak havoc for investors. There hasn’t been a period of panic in financial markets similar to what occurred in 2008 to test the mettle of ETF products – that is, until the COVID-19 pandemic of 2020.