Practical analysis for investment professionals

volatility


The Myth of Volatility Drag (Part 1)

Does volatility drag actually exist? Like so many myths, there is a kernel of truth. But the interpretation that volatility is an active force, “pulling” down returns and costing you money, is simply not correct.

The 10 Most Popular Webcasts of 2014

From geopolitics and the financial crisis, to individual asset classes and portfolio management techniques, these 10 videos and webcasts offer a wide range of insights to think about as we start the new year.

Best of 2014: Creative Destruction or “The Market’s Messy Way of Delivering Progress”

In the face of the volatility that largely defined the markets in 2014, it is our goal here at the Enterprising Investor to provide you with practical examinations of current issues in finance and investing. Below is a selection of analyses, advice, and, if nothing else, some simply interesting opinions that address the myriad changes markets have experienced this year.

Upside Volatility Is Rising, along with Fixed-Income Leverage

Investors who are primarily concerned about avoiding permanent losses would do well to analyze mounting fixed income leverage and remember the true meaning of risk.

Weekend Reads for Investors: Volatility and the “Yellen Put”

Up until last week’s wild ride for stocks, volatility had been largely absent from the market, but the cumulative effect of ongoing geopolitical chaos, spreading Ebola anxiety, and uninspiring economic data, combined with the rumored unwinding of some leveraged positions by hedge funds, at least temporarily jolted global equity markets. Complacency was quickly replaced with panic and we got a reminder of what happens when everyone heads for the exit at the same time.

Nobel Laureate Myron Scholes on the Black–Scholes Option Pricing Model

This is the first part of a two-part interview with Nobel Laureate Myron Scholes. In this installment, Scholes shared his perspectives on the Black-Scholes option pricing model, from the motivation and intuition of the original formula to the myriad of extensions.

Record Low Rates and Volatility Muddle Financial Models

Alarm bells have been ringing over the summer about remarkably low levels of volatility — a key input in many common investment models — across global markets.

Designing Portfolios: Seven Key Investment Principles to Help Keep Clients on Track

Client emotions can swing from fear to greed (and from hysteria to elation). Ron Florance, CFA, former deputy chief investment officer at Wells Fargo, outlines seven key principles that can help you convince clients to stay the course.

Generating Alpha Through Intermarket Analysis

Recent advances in intermarket analysis merit the attention of asset allocators, portfolio managers, and risk managers.

Low Yields, the Same Risks, and Rising Leverage

As interest rates keep falling and leverage starts rising, risks remain the same.



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