Posts Tagged ‘risk management’
Here’s What Netflix Is Signaling for the Rest of the Market
On Tuesday, Netflix reported earnings that disappointed the Street. As a result, the stock imploded, dropping by over 25%. Netflix shares have been part of the “club” – the mega-cap market leaders known as the FAANGMs (Facebook, Amazon, Apple, Netflix Google, and Microsoft). First, Facebook disappointed. Now it’s Netflix. The Generals are getting shot one…
Read MoreWhen Seasonal Patterns Fail, Take Notice
March’s epic bounce in the S&P 500 and NASDAQ offered promise – that is, until it didn’t. With all the noise, both the S&P 500 and NASDAQ are right back where they were a month ago, and heading towards the March lows. But why? Both indexes have given back nearly all of March’s gains and…
Read MoreStay Cautious, Investors
Sometimes it’s good to be long, sometimes it’s the time to be short… And other times, it’s time to go fishing. Let’s take a look at some key takeaways from today’s markets: Lack of follow-through evident beneath the surface Risk-off environment persists Defensive sectors gaining strength Last month’s equity market bounce was impressive at the…
Read MoreMarkets Don’t Go Up Forever
Trees don’t grow to the sky and markets don’t go up forever. Over the course of a lifetime, an investor is likely to experience both bullish and bearish cycles. As defined by Investopedia: “A bull market is a market that is on the rise and where the conditions of the economy are generally favorable. A…
Read MoreWhy Not Have Systems for Investing?
Systems exist everywhere. In nature, we find almost an infinite number of hierarchical, interconnecting ecosystems that play key roles by which energy is transported and transformed. In society, we find that systems can provide for organization and guidance for human interactions. Take for instance how we drive – we follow a precise system. Here in…
Read MoreStart Sharpe(ning) Your Investment Skills
Good portfolio management begins and ends with risk management. In last week’s ADAPT, we discussed the importance of understanding maximum drawdown, a key stat that can determine the likelihood that an investor can stick with an investment strategy through both good times and bad… And why it’s important to keep that number as low as…
Read MorePassive Investing May Be Harming You More Than Helping
It’s no secret that passive index funds and ETFs have been gathering the bulk of asset flows for several years. In 2021 alone, passive funds assets increased by 35.9% and reached $20.87 trillion (as of June 30). Blackrock, Vanguard, and State Street hold the bulk of these assets. Passive funds are, by definition, designed to…
Read MorePrices Are Not as Random as You Think…
In the popular investment book A Random Walk Down Wall Street by Burton Malkeil, the author argues that asset prices are purely random. As a result, investors should just “buy and hold.” This thought has led the investment industry (and many investors) to simply close their eyes and hope for the best. There are several…
Read MoreU.S. Stock Indices Tumble Amid Russian Aggression
“There are decades when nothing happens and there are weeks when decades happen.” –Vladimir Lenin As the world now knows, Russian president Vladimir Putin announced the start of a “military operation” in Ukraine, attacking several cities in the Eastern European country after months of amassing troops at its borders. This act of aggression will likely…
Read MoreHow to Earn More and Risk Less
There’s an important concept that when correctly implemented can almost assure your investing success. Get this wrong – and most investors do – and you could be doomed to financial ruin. Asymmetric investing is the concept of investing where the probability or outcome of a trade has more profit than loss (or the risk taken…
Read More