Insights · Markets
In-depth analysis of market events and macro developments from the Viewpoint team.
Financial markets are always changing. This is not a new idea, but rather an accepted truth about their very nature. Being the sum-total of human consensus, markets capture and distill a great deal of information about a given entity into a single number: the price. As time has progressed and techno
“The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless yet be determined to make them otherwise.” – F. Scott Fitzgerald Readers of Viewpoint’s
I’ve been writing for some time about how the constraints that the Federal Reserve (Fed) is operating under make it such that it’s likely they will overreact to inflation, thus causing a recession. Despite the gravity of the ‘R’ word, the recession that is likely to materialize should be mild given
Factor investing has become commonplace in the world of investment management ever since Eugene Fama and Kenneth French published their three-factor asset pricing model three decades ago. Since then, a lot of dedicated work has gone into uncovering new factors and sources of excess return unexplaine
In the wake of an entertaining FIFA World Cup, many of us may be reeling in our recollections of the wide variety of memorable upsets that took place. Whether it be the Saudi Arabia team starting their tournament with a victory over eventual champions Argentina, or the Moroccan team knocking out Spa
As we reflect on 2022, most investors will agree that it was challenging year. However, we can also take a prospective view that the challenges of 2022 have provided a much healthier opportunity set for investors looking into 2023 and beyond. For equity investors, depending on the strategy, most div
A well-known adage is that risk and reward go hand in hand. To increase your potential upside, you must be willing to withstand increasing levels of uncertainty as to whether that upside will be achieved. The prospect of becoming a famous actor in Hollywood sounds enticing, until you realize that th
As central banks around the world continue to tighten monetary policy in an effort to tame inflation, the question on everyone’s mind is if monetary policy will be able to slay the inflationary dragon without plunging the economy into a recession. Rhetoric from the Federal Reserve (Fed) would sugges
Many families struggle with conversations about money. When this includes potentially large inheritances, it can be very difficult knowing when to begin these discussions with the next generation. Do they have the skills to manage large amounts of capital? How will you help them understand this is m
Machine learning and artificial intelligence have seen a precipitous rise in popularity and noteworthiness over the past few decades, and with increasing vigor over the past few years. It seems like everyone and their dog is doing machine learning to solve some sort of problem. This herculean rise i
Just over a year ago, we wrote about a behavioural bias called the “freak-out” effect where sharp market downturns cause investors to “panic sell.” The authors of the paper studying the freak-out effect found that of the investors who engaged in panic-selling behaviour, 30.9% of these investors neve
The concept of alpha is the bedrock of financial markets. Without getting into the nuances of the active versus passive debate, investment managers aim to provide alpha to investors for which they charge a fee for their services. At its core, alpha is generally defined as excess return relative to a