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.

ETFs Tested: COVID Free!

There has been a lot of talk over the past few years about how passive investing and the rise of exchange traded funds (ETFs) would be the next financial market bubble that would wreak havoc for investors. There hasn’t been a period of panic in financial markets similar to what occurred in 2008 to test the mettle of ETF products – that is, until the COVID-19 pandemic of 2020.

The Increased Liquidity of ETFs

In times of turbulence and uncertainty, liquidity is a prized possession in financial markets. One of the interesting features of the ETF vehicle is its ability to provide increased liquidity relative to the underlying positions they track. This article from David Nadig describes how when liquidity dries up in the bond market, ETFs are able…