Flying Too Close to the Sun

Many have heard the ancient Greek myth of Icarus, the boy who was granted the gift of flight by his father who crafted wings out of wax and feathers in order for the duo to escape the labyrinth to which they were confined. Icarus’s father had only one warning for his son and that was…

Monte Carlo Simulations: A Journey Down Many Paths

In a previous blog post by Viewpoint Investment Partners, Volatility, A Skewed Reality, Amin Haji, Manager, Research & Analytics, explored the probability of specific wealth targets being achieved over a 20-year period when comparing investments with similar annual returns but differing volatilities. To perform his analysis, he leveraged a simple but powerful tool: Monte Carlo…

When Data Talks Out of Both Sides of Its Mouth

Imagine that you are a clinical physician recommending a promising new drug that has been shown to reduce the risk of heart attack in at-risk patients. At the end of the year, you ask one of your attending physicians to build an Excel sheet breaking down the efficacy of the drug in your patients. Your attending…

ESG’s Internal Scorecard

Environmental, social, and governance (ESG) metrics for publicly traded companies has become one of the fastest growing movements in the investment management industry. The expectation is that companies who implement strong ESG metrics will become more profitable and valuable over time by improving the interests of society, which should provide investors in these companies with…

The Game Has Changed

It’s likely safe to classify 2020 as a year that has defied expectations and predictions. Led by COVID-19, the real economy and financial markets have felt the wrath of the pandemic. Since March however, there has been a disconnect between the stock market and “main street,” as the real economy continues to sputter while equity…

Is the 60/40 Portfolio Dead?

Over the last decade, there have been many proclamations that the traditional 60/40 portfolio is dead, mainly due to the fact that bonds were supposedly overvalued and yields couldn’t go any lower. This article from Ben Carlson highlights that while a 60/40 portfolio has delivered outstanding returns as a result of falling real interest rates…

The Impacts of Risk Parity Strategies

Ray Dalio’s Bridgewater is the latest celebrity investment management firm to opine that in a low-interest rate environment government bonds not only offer little in the way of value for investors, but that their ability to provide risk reduction during financial stress will be impaired as well. As this article from Bloomberg reports, Bridgewater is…

How Strong Is Your Stomach?

The vast majority of the time, most investors are not terribly concerned with their risk tolerance. Typically, the CBOE Volatility Index (VIX), a measure of S&P 500 volatility, sits comfortably below 20 and financial markets exhibit a consistent upward trend. However, as 2020 can attest, markets don’t always behave this way. Earlier this year the…

Are Fractional Shares Just a Gimmick?

One area of finance that has been getting a lot of attention lately is the concept of “fractional shares” and their use in investment portfolios. In an effort to make investing cheaper and more available to the masses, certain brokerages are allowing clients to buy fractional shares so that investors aren’t burdened with having to…

Explaining the Disconnect Between the Economy and Stock Market

This week, the S&P 500 flirted with overtaking its high watermark from February of this year, leaving many scratching their head as to how, and why, the stock market has rebounded this quickly. Since the bottom in March, the S&P 500 has risen approximately 50 percent, taking only 175 days for the index to complete a…