Active or Passive? Find Out With This Barometer

In the world of investment management, the hotly debated topic of active versus passive is ubiquitous. Managers that have built careers selecting individual securities with the hope of beating passively-managed, and often lower-cost, index funds have been coming under fire as more and more data becomes available showing just how difficult this task really is….

Part 3 – Going the Distance: How to Conquer the Challenges Imposed by Liquidity Requirements

BLOG SERIES: UNDERSTANDING RISK

In the third installment of our deep dive on volatility, Amin Haji, Manager of Investment Research and Analytics, discusses how portfolio constraints can affect your ability to take risk, focusing on time horizon and liquidity constraints. Using succinct examples, Amin explores whether or not liquidity needs have an effect on how impactful volatility is to your long-term wealth, and how simply having a longer time horizon may not in fact lower your ability to take risk, as conventional investing wisdom would have you believe.

Know Thyself

The current whipsaw action of markets has resulted in a wide spectrum of forecasts ranging from a V-shaped recovery to the erosion of economies resulting in a prolonged recession. With forecasts abound, famed investor, Howard Marks, tackled this topic in his most recent memo. Mr. Marks notes one shock event is enough to throw forecasts…

The Intricacies of Commodity ETFs

The collapse of oil prices in mid-April garnered quite a bit of media attention given that oil traded (and settled) in negative territory on April 20th. One of the main catalysts for this historic day was the fact that storage in Cushing, Oklahoma – where physical delivery of oil takes place – was scarce. To…

Part 2 – Volatility, A Skewed Reality

BLOG SERIES: UNDERSTANDING VOLATILITY

Volatility drag – or how volatility exacerbates the divergence between arithmetic returns and geometric returns – is something that is often debated by investment managers and investors alike. A common argument is that while higher volatility increases your downside, it can also increase your potential upside and therefore it may be rational to be risk-seeking to some extent. Another argument is that with a long enough time horizon, investors don’t actually need to worry about volatility, because they can tolerate the ups and downs of the market.

Preparation vs. Prediction

After a precipitous decline from February 19th to March 23rd, equity markets have rebounded significantly. Simultaneously, oil prices and volatility have experienced extreme fluctuations, central banks are implementing waves of stimulus, and governments are considering the relaxation of social distancing restrictions. This leaves many investors, including the famed and veteran varieties, unsure on a path…