Posts Tagged ‘ Asset Allocation ’

11) I was surprised to read that there is not a perfect market in interest rate swaps.  They are so vanilla, but counterparty risk interferes. 12) There is always a skunk at the party, and who better than Baruch to dis bonds?  I half agree with him.  Half, because the momentum can’t be ignored...
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Illiquidity is an underrated risk.  Most financial company failures are due to illiquidity, which usually takes the form of too many illiquid assets and liquid liabilities.  Adding to the difficulty is that it is generally difficult to price illiquid assets, because they don’t trade often. So where do we see failures due to illiquidity?...
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If you’re a BP investor who thought twice about catching the falling knife of the firm’s post-Gulf spill shares this summer — well, spare a thought for Norway....
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Advisor Perspectives posted a lengthy interview with economics professor Zvi Bodie from Boston University. He has co-authored text books and has made interesting comments about asset allocation over the years. The current interview has several useful t...
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I’ve read a number of articles on hedging tail risk of late.  Most of them were pretty good; I just want to add in my thoughts. For those who haven’t read the articles, tail risk is when even safe investments get hit hard.  Those market outcomes are rare but severe, so some people look...
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Pardon the infrequency of posting.  I have been having internet issues. 1) A response to those commenting on my piece A Stylized View of the Global Economy: when I say stylized, is does not mean that every nation fits the paradigm, only that most do.  My view is that the debt overages will have to...
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Cam Hui from the Humble Student Of The Markets blog had a post recapping David Rosenberg's proposed asset allocation. The allocation as written by Rosenberg;The name of the game is to focus attention on strategies that:* Delivers income (including divi...
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Credit Writedowns hosted a guest post by Frederick Sheehan titled Should Investors Boycott The Stock Market? Candidly the article didn't really focus on that question but it is interesting nonetheless. More interesting perhaps could be to wonder if inv...
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We thought we had left the topic of time diversification behind in our post:  Lifecycle investing on steroids.  The experience of the past decade should have driven home the point that a leveraged approach to retirement investing flies in the face of the many behavioral issues individuals deal with in their investing.  However developments...
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The more entities manage for total return, the more unstable the financial system becomes.The shorter the performance horizon, the more volatile the market becomes, and the more index-like managers become.  This is not a contradiction, because volatile markets initially force out those would bring stability, until things are dramatically out of whack. I was at...
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