Category: ETF Strategist
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Asymmetric Nature of Losses and Loss Aversion
Loss Aversion: “In prospect theory, loss aversion refers to the tendency for people to strongly prefer avoiding losses than acquiring gains. Some studies suggest that losses are as much as twice as psychologically powerful as… Read More
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A Tale of Two Conditions for U.S. and International Stocks: Before and After 2008
In recent conversations with investment advisors, I notice their sentiment has shifted from “cautious and concerned” about world equity markets to “why have they underperformed”. Prior to 2013, most investors and investment advisors were concerned… Read More
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Absolute Return: an investment objective and strategy
Absolute Return in its basic definition is the return that an asset achieves over a certain period of time. This measure looks at the appreciation or depreciation (expressed as a dollar amount or a percentage).… Read More
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Absolute Return as an Investment Strategy
In “Absolute Return: The Basic Definition”, I explained an absolute return is the return that an asset achieves over a certain period of time. To me, absolute return is also an investment objective. In “Absolute Return… Read More
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Absolute Return as an Investment Objective
In Absolute Return: The Basic Definition, I explained an absolute return is the return that an asset achieves over a certain period of time. To me, absolute return is also an investment objective. Absolute Return as… Read More
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Asymmetric Sector Exposure in Stock Indexes
When you look at the table below and see the sector exposure percents, what do you observe? Do these allocations make sense? That is the sector exposure of the S&P 500 stock index: I used… Read More
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Trends, Countertrends, in the U.S. Dollar, Gold, Currencies
Trend is a direction that something is moving, developing, evolving, or changing. A trend is a directional drift, one way or another. When I speak of price trends, the directional drift of a price trend… Read More
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Diversification Alone is No Longer Sufficient to Temper Risk…
That was the lesson you learned the last time stocks became overvalued and the stock market entered into a bear market. In a Kiplinger article by Fred W. Frailey interviewed Mohamed El-Erian, the PIMCO’s boss,… Read More
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Sectors Showing Some Divergence…
So far, U.S. sector directional price trends are showing some divergence in 2015. Rather than all things rising, such divergence may give hints to new return drivers unfolding as well as opportunity for directional trend… Read More
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This is When MPT and VaR Get Asset Allocation and Risk Measurement Wrong
I was talking to an investment analyst at an investment advisory firm about my ASYMMETRY® Global Tactical and he asked me what the standard deviation was for the portfolio. I thought I would share with… Read More