Research Notes
“Peeky” Blinders
When individuals have uncertainty about a specific product or idea, they will often look to what their peer group is doing to help them decide. Social proof is a behavioural bias that can lead to decision making errors. By embracing a process-driven research flow to guard against behavioural biases and data peeking, Viewpoint can distinguish between true and false alpha.
Research Notes
Plot Twist: Your Bond Portfolio May Be Riskier Than You Think
Geek Level: Read Time: The Speed Read: Bonds are traditionally thought of as risk-free or safe-haven assets. However, fixed income investments have unique risks relating to their sensitivity to interest rate fluctuations. Sensitivity to interest rates movements means that bonds are not risk-free, especially if not held until maturity. Modified duration measures the sensitivity of […]
News & Insights
Stayin’ Alive
High-frequency trading firms were thrust into the public spotlight when Michael Lewis published his book Flash Boys in 2014. The arc of the book was that proprietary trading firms had invested heavily in technological infrastructure to increase the speed by which they received financial market trading and execution data. They would use this speed advantage to exploit […]
Research Notes
Rising From the Ashes
Geek Level: Read Time: The Speed Read: Diversification is the first line of defence for an investment portfolio. Utilizing a risk-parity engine for portfolio construction creates a portfolio that reduces the severity of drawdowns while increasing expected returns. Volatility scaling to tactically adjust the portfolio’s gross exposure acts as a stabilizing force in time of […]
News & Insights
How Commodities Can Give Your Portfolio a Fresh Start
Katy Milkman authored a book that was published in 2021 titled “How to Change – the Science of Getting from Where You Are to Where You Want to Be.” Milkman is a behavioural scientist and a professor at the Wharton School of the University of Pennsylvania and specializes in change management. In the book, Milkman […]
Research Notes
Rewiring Your Amygdala: The Practical Application of Trend in an Investment Portfolio
Geek Level: Read Time: When an individual contemplates whether they want to make an investment, generally the first thoughts revolve around return expectations. If I am willing to invest in a company, either through debt or equity, what is my expected return, and is the return enough for me to feel comfortable with the risk […]
News & Insights
The White Dragon Cometh
In Chinese mythology, the white dragon symbolizes death and rebirth. This analogy seems applicable for foreign investors in Chinese equity markets this year. The recent rout in Chinese equity markets has come as a shock to many market participants, especially considering the downdraft in risk is isolated (for now) to this geographical region. Source: Bloomberg […]