“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.

Plot Twist: Your Bond Portfolio May Be Riskier Than You Think

Government bonds are often referred to as risk-free or safe-haven assets, and, in the right context, this is a correct label as they are low volatility investments that represent money lent to a sovereign nation with almost no risk of default. However, in the first half of 2022, a diversified portfolio of global government bonds returned -13.3% in CAD terms. So, how do we reconcile an outcome like this with the near-risk-free or safe-haven aspect of the asset class?

Rising From the Ashes

In early 2020, very few people understood the gravity of the situation occurring in China and the devastating impact that the global pandemic would have. This new disease, and the subsequent efforts to contain it, impacted the entire world. It has changed the way we work, changed the way we interacted, and changed the way many of us thought about disease and healthcare.

Rewiring Your Amygdala: The Practical Application of Trend in an Investment Portfolio

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 of supplying capital to that company?

Death to the 60/40! Long Live the 60/40!

The traditional 60/40 balanced portfolio is no stranger to coming under fire. Many pundits have decreed the death of the balanced portfolio, arguing that a low yield environment will prove insurmountable and bonds will no longer be able to provide necessary diversification for investor portfolios. This proclamation has yet to be proven correct, and in the investment management industry, being too early is the same thing as being wrong. That being said, is this time different?

Know When to Hold’em, Know When to Fold’em


In the second installment of this blog series on risk parity, we are going to dive into how dynamically adjusting the leverage applied to the strategy can result in increased stability of the portfolio’s return profile. Actively adjusting the amount of leverage applied to the portfolio is how the strategy scales the size of its bets based on changes in market risk.

One Size Doesn’t Fit All: Assessing Suitability in the Context of Uncertainty


This installment in our volatility series will aim to provide a framework that helps to quantify an investor’s ability and willingness to take risk based on constraints and the importance of reaching wealth targets. Additionally, I will finally add varying returns into the analysis to illustrate the impact of the risk and return trade-off. Through simple examples and simulations, I will show that understanding an investor’s total financial picture and applying a probabilistic framework for risk management can help achieve desired outcomes in the face of uncertainty.

Vitamin D: Harvesting the Diversification Premium Through Prudent Leverage


In our latest Insight piece, we explore the parallels between the poker table and the world of investing by studying the nuances of risk and uncertainty. Authors Scott Smith (Managing Partner) and Ben Reeves (Manager, Data Science & Engineering) demonstrate how utilizing a Risk Parity strategy can help investors embrace uncertainty and derive more stable investment outcomes.

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


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.

Volatility, A Skewed Reality


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.