Asymmetric Investment Returns is a blog authored by Mike Shell since 2006, covering topics about asymmetric investing and trading for asymmetric risk/reward in pursuit of asymmetry.
The VIX futures curve continues to send a clear message: volatility remains elevated, and the market still expects it to fade—but not just yet.
To compound capital efficiently over time, downside risk must be actively mitigated. The key to long-term wealth creation isn’t just capturing upside—it’s protecting capital through asymmetric risk/reward positioning and strict portfolio risk exposure limits.
The market’s internal breadth collapse has intensified. While we are not yet seeing clear signals of reversal, the structure beneath the surface is setting up the conditions where asymmetric opportunity may form.
The stock market indexes are in bear market territory, with the S&P 500 down ~18% and Nasdaq ~21% from their highs two months ago. Here we share a recap of our tactical trading observations since the market peak to get a sense of how we mitigated the carnage.
Our focus is on the direction, momentum, and volatility of trends, not headlines and tariff predictions.
On April 3, 2025, the S&P 500 fell 4.8%, but the VIX only hit 30—well below the historical average. This volatility underreaction may signal underpriced risk and create asymmetric trading opportunities through long volatility setups.