During times of crisis, we often read sensationalist reports about tail risk strategies that result in astronomical returns. However, these strategies aren’t meant to be a standalone solution, but rather a small part of a diversified portfolio. Tail risk hedging is a type of insurance and, as with any type of insurance, it’s important to…
Tag: decision-based process
Human Irrationality and Investment
As the battle between passive and active investing rages on and evidence continues to pile up to support the use of indexing strategies over picking stocks, investors continue to trade excessively in hopes of beating the market. Even worse, some pay exorbitant fees to managers that continually underperform. So, why do people continue to invest…
What We Can Learn from Poker About Investment Management
Investing and poker have a lot in common. Both involve a balance of known and unknown information, and both involve updating probabilities when new information is presented. One might suggest investing is slightly trickier than poker given that the “rules” of the game can adapt over time, but at a high level both share a…