Blog Posts

US-China relations, and the capital war conflict within it, is and will be a big driver of markets going forward and is important to understand even for those with shorter-term trading orientations. The same things tend to happen over and over again for the same reasons historically. By studying what happened in other societies and […]

Market participants are always looking to maximize their reward relative to their risk. One of the best ways to have the big upside without having the unacceptable downside is through the efficient use of options and derivatives. In this article, we’ll go through building a balanced portfolio with options. Options can provide leveraged returns with […]

Portfolio construction and the concept of building a better portfolio beyond the way assets come pre-packaged to you is one of the most under-talked about areas in finance. As we write this to close out 2020, stock market indices in the US and many throughout the world are hitting new all-time highs. Traders are keen […]

Business cycle analysis often involves an aggregation of past experiences and then tying together the cause-effect relationships that drove those cycles. Traders are especially interested in business cycle analysis given how it drives trends in asset classes, sectors, and investment outcomes. For example, early-cycle tends to be favorable to cyclical stocks while late-cycle favors being […]

When we talk about the question of are stocks overvalued, we need to frame the idea in terms of multiples of a metric that underlies their values. The value of a business is fundamentally the amount of cash that you can earn from it discounted back to the present. Earnings is revenue minus expenses. Free […]

With short-term and long-term interest rates at zero in all of the main reserve currencies (USD, EUR, JPY), market participants will have to increasingly look for alternatives to bonds and cash. Cash and bonds are two of the main three asset classes in addition to stocks. But all developed economies are suffering from high debt […]

In previous articles, we’ve covered the concepts of balanced beta and how to build a balanced portfolio in more depth. We’ve also covered the concept of the volatility risk premium, commonly abbreviated VRP. In this article, we’re going to combine the two concepts, building a balanced portfolio with what we call VRP overlay. A balanced […]

‘Risk-adjusted returns’ is a common term used in trading and investing, even to the point of being a buzzword. It’s what every institutional investor strives for in order to add value to their clients. And what every individual trader wants to get more bang for their buck. Risk-adjusted returns normally refers to the idea of […]

Each election cycle, new policymakers are elected and re-elected. Occasionally, every 4-8 years we have a new President of the United States, who is the head of one-third of the US government. US elections are important across several dimensions and have impacts on asset prices. The president has the power to shape foreign policy, appoint […]

Yield curve control has gone from more of an abstraction to a policy that many of the world’s most influential central banks are currently using or considering using. In the US, yield curve control, often known as YCC, hasn’t been employed since World War II. Back then, the very high economic demands of WWII required […]