Category Archives: Risk Management
The CBOE volatility index® VIX® is an instantaneous measure of expected fluctuations in S&P 500 in the next 30-days. This is an instrument for short-term traders. Passive investors should use different measures of risk. I offer an example.
Although there are many rules about trading, I can offer only one in this article because after nearly 25 years in the markets, I have seen many popular rules violated one after the other. My rule is: try to get … Continue reading
The low volatility phenomenon in the equity markets is the result of explosive growth in passive investing after a prolonged and continuing central bank manipulation of prices in conjunction with a decline in retail trader population. It is hard for … Continue reading
Book authors, bloggers and even some pundits insist that market timing is easy because it has worked in the past. But the fact is that profits depend on future market behavior. This is what some market timers are afraid of.
Unless one is fully invested in a single stock or ETF, portfolio returns depend on allocation. In the case of trading, returns depend in addition on risk parameters. Although this sounds trivial, some economists and bloggers do not seem to understand … Continue reading