Posts tagged as risk

06 Feb 2009

Why diversification failed to control investment risk

Diversification has failed to protect investors in this bear market in the way they were told to expect. In this article on the company website No Monkey Business explains how the investment management industry (whether focused on traditional ‘balanced management’, new ‘multi-asset class’ or ‘absolute-return’ investing) has failed to develop robust processes for quantifying and controlling client’s risks because it was relying instead on unrealistic benefits from diversification.

read more Commentary by Stuart Fowler
04 Feb 2009

Diversification is not enough

The diversification of individual risks, which increases expected risk-adjusted returns, is like apple pie, motherhood and the flag. It is so ingrained in the minds of managers and their clients that this aspect of portfolio theory has remained unchallenged during a period of exceptional creativity in the investment industry.

read more Insights by Stuart Fowler
16 Nov 2008

Is Clare being realistic about equity risk?

Ask No Monkey Business clients what they most value about our approach and they mostly answer ‘more certainty’. On the surface this is odd as one thing singling us out, which stems directly from how we model real equity returns, is that we tell people just how uncertain are their wealth outcomes when partly relying on the systematic risk inherent in equities.

read more Commentary by Stuart Fowler
09 Nov 2008

Clare College bet makes sense

Published in FT, 9th November 2008 (Article by Stuart Fowler)

read more News by Stuart Fowler
30 Sep 2008

‘This sucker could go down’: making sense of systemic risk

This Bushism was apparently referring to the risk to the economy rather than the American banking system but the two are intimately related via the supply of credit and money. As people here start to question whether our banking system could also go down, I thought it may be helpful to set out a plain-English, logical explanation of the different types of risk to cash holdings and how they can be managed or avoided, in normal times (as a permanent aspect of capital stewardship) and in a time of crisis.

read more Commentary by Stuart Fowler
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