How Commodities Can Give Your Portfolio a Fresh Start

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?

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?

The White Dragon Cometh

In Chinese mythology, the white dragon symbolizes death and rebirth. This analogy seems applicable for foreign investors in Chinese equity markets this year. The recent rout in Chinese equity markets has come as a shock to many market participants, especially considering the downdraft in risk is isolated (for now) to this geographical region. Source: Bloomberg…

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…

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.

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…

Order Matters

Many investors, especially those with longer time horizons, tend to overlook the impact that volatility can have on their portfolio. However, the path of returns is not a factor to be ignored and a recent piece by Amy Arnott helps illustrate this point through several examples. She highlights the impact of positive returns early in…

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.