Swan Global Investments’ Post

With geopolitical tensions impacting markets, Head of Asset Allocation, Damien Hennessy, highlights the importance of vigilant risk management strategies to navigate uncertainties and safeguard investment portfolios in an evolving global landscape. #EconomicOutlook #GeopoliticalRisks #InvestmentStrategy

Always trying to give the best advice with Charles Payne on Fox Business Network Making Money. We still see a strong theme of ongoing rotation out of Big Tech, particularly the "Magnificent 7" stocks, and into defensive and lower valued sectors such as Banks, Materials, Real Estate, Industrials, and Small Caps.   Consider investing outside the US for less valuation risk. Europe has relatively less risk as it unwinds monetary and fiscal stimulation. The US economy is likely to face the aftereffects of fiscal stimulus and potential over-investment in AI capex. Also, the unemployment rate has been rising in the US while Euro area has remained stable. While broad economics are not typically immediate drivers of stock performance, add in the relative value of European stocks and you have a solid tailwind for Euro equities. Focus on Euro stable growth industrial and banking sectors: Banks, Chemicals, Transports #stocks #riskreward #riskoff

The latest Risk Barometer

📉 Is Beta Really the True Measure of Risk? 📈 In the world of finance, Beta is often touted as a go-to measure for assessing the risk of an investment. Derived from stock returns, Beta aims to quantify the volatility of an asset relative to the market. But is it truly a reliable gauge of risk? 🤔 🔍 Let's delve deeper: 1) Beta is backward-looking: It is based on historical data, assuming that past performance can predict future volatility. However, markets are dynamic, and past trends may not accurately forecast future behavior. 2) Market movements: Beta measures how an asset's returns move in relation to the market. But it doesn't account for other types of risk, such as liquidity risk, credit risk, or operational risk, which can significantly impact an investment's performance. 3) Higher returns, higher Beta: Often, assets with higher returns tend to have higher Beta. This raises the question: Are we confusing high returns with high risk? A high Beta doesn't necessarily indicate an inherently risky asset but rather one that is more responsive to market movements. 4) Diversification and non-systematic risk: Beta focuses on systematic risk (market risk) and overlooks non-systematic risk (company-specific risk), which can be mitigated through diversification. Relying solely on Beta may give an incomplete picture of an investment's risk profile. As we continue to refine our understanding of risk, it's crucial to look beyond Beta and consider a multifaceted approach to risk assessment. Integrating other metrics and qualitative factors can provide a more comprehensive view of an investment's risk and return potential. What are your thoughts on Beta as a measure of risk? How do you assess risk in your investments? Let's discuss! 💬 #Finance #Investment #RiskManagement #Beta #MarketRisk #InvestmentStrategy #FinanceThoughts #IIMshillong #CFA #FRM

My latest WealthManagement.com article explores tail risk and examines the Federal Reserve's path to a soft landing, inflation and the potential to avoid a recession. #federalreserve #risk #evidencedriven

Momentum investing capitalizes on positive price trends, aiming to ride upward momentum while shedding securities showing negative trends. Key points include: Price Trends: Focuses on past price performance, expecting trends to continue. Relative Strength: Measures a security's performance against peers or the market. Short-Term Focus: Typically involves short holding periods, aiming for quick gains. Risk Management: Essential due to potential for sharp reversals; stop-loss orders help limit losses. Market Timing: Requires skill in identifying trends early and exiting before momentum fades. Diversification: Crucial for risk management, spreading investments across multiple securities. Psychological Factors: Investor sentiment, FOMO, and herding behavior can influence momentum. Success in momentum investing demands discipline, active monitoring, and adaptability to market shifts. Investors should conduct thorough research and consider consulting financial advisors. #MomentumInvesting #PriceTrends #RelativeStrength #RiskManagement #MarketTiming #Diversification #InvestmentStrategy #FinancialMarkets #StockMarket #TradingPsychology

In a climate of uncertain economic forecasts and market pricing dissonance, the overlooked potential for higher US yields is gaining traction. Amidst expectations of rate cuts, new data and geopolitical factors signal a different story. It's time to rethink risk management in the Global FX and Interest Rate markets. https://lnkd.in/dsedSK7d

TRENDING (Full post in the link below): 7 Key #Tactics for #Overcoming Market Volatility Key Strategies for Managing Market ⁤VolatilityNavigating the uncertain waters of market volatility requires a composed and strategic ⁤approach. One effective tactic is diversification. By spreading⁣ investments across various asset classes, industries, and geographic regions, you can mitigate risk significantly. This approach ensures that a downturn in ⁤one sector doesn’t spell disaster for your entire portfolio. ⁢Additionally, consider incorporating quality assets into your portfolio, such as blue-chip stocks or investment-grade bonds, which often provide stability during ⁤turbulent times. Another crucial strategy is to ⁣maintain a long-term perspective. Short-term market fluctuations can be alarming, but investing with a long-term horizon in mind can help ⁢smooth out these ⁢bumps. It’s ⁤also imperative to have a solid emergency fund in place. This financial buffer⁤ can prevent the need to sell investments at ⁢a ⁣loss during a market downturn. Remember, staying patient and not making hasty⁢ decisions based on short-term market movements can be your ally in overcoming market volatility. StrategyBenefits DiversificationReduces ⁤risk Investing ⁣in Quality AssetsProvides ⁣stability Long-term #financialmarkets #investmenttips #KeyStrategies #marketvolatility #riskmanagement

Ryan Brandham, CFA, head of global capital markets, North America at Validus Risk Management: “Today’s US Consumer Price Index figure exceeded expectations. This data suggests that the final stretch in combating inflation might pose more challenges than anticipated by the market. This will bolster the US dollar and prop up US yields in Tuesday's trading session as the market revises its near-term rate cut projections. Pushing back market expectations for US rate cuts has been a prominent theme of 2024, and this data will reinforce that theme.” https://lnkd.in/eXZ67k4y

Curious!! Does higher risk really lead to higher returns? Are you curious if higher risk truly means higher returns? The classic investing mantra "higher risk equals higher returns" sounds appealing, but is it always true? While riskier assets, like stocks or cryptocurrencies, can offer higher returns, they also come with greater volatility and potential for losses. Simply taking on more risk doesn’t guarantee you’ll earn more—it means you're accepting the chance of significant swings, both up and down. Smart investors balance risk and reward by assessing their risk tolerance and diversifying their portfolios. It’s not just about chasing the highest returns, but about understanding the risks involved and strategically managing them. Higher returns can indeed come from higher risks, but success depends on knowing when and how to take those risks. #TPQ #AbetGlobal #RiskVsReward #InvestSmart