Your Portfolio Is Not What You Think It is
Traditional diversification can leave portfolios exposed to unnecessary, and often hidden, risk. Portfolios that are negatively correlated to volatility are exposed to large coordinated loss events during market downturns.
What You Think You’re investing in:
- Managed Futures
- US Equities
- International Equities
- Real Estate
- Emerging Markets Equities
- Private Equity
- High Yield Credit
What you’re Actually investing in:
- Positive Correlation to Volatility
- Negative Correlation to Volatility
Conversely, being positively correlated to volatility can be the source of considerable profit during market declines or crises.
Make Time Work For You, Not Against You
Many investors hope that time will work for them, and not against them, but hope is not much of an investment strategy. If you are living off your investments, or hoping to, you must become a steward of time and risk. The alternatives are not appealing.
Recouping large losses requires even larger gains
- Years at 10% return & 0% Vol to get even
- Years at 10% return & 20% Vol to get even