Assessing risk is at the center of finance, but many people don’t know where to begin. Today Zolio takes a look at interest rates, currencies, and inflation in the example of foreign bonds to show that a lot of the popular conventional wisdom about investment is absolutely backwards—but the right answer involves a lot of analysis and understanding, both of market conditions and of human nature itself.
Inflation is high and stocks are down—the dynamic has become a hand-in-glove kind of relationship in 2022, so much so that you couldn’t be blamed for assuming a direct correlation that stands the test of time. That, in reality, is not true. Some periods—like the early 1980s—were high inflation and great for stocks. So what’s different now? To answer that question, we need to dig into what’s behind the correlation today.
Dark pools have gotten a lot of really bad press, but they aren’t all bad. In fact, dark pools are an important component of equity markets—and they might not be what you think they are.
Another hedge fund has announced massive, higher than baseline losses in its returns for 2022—which should strike you as weird. Hedge funds are by definition supposed to be hedged—meaning lower performance in bull years and better performance in bear years. So why isn’t this happening—why are hedge funds down 40% when the market is down 20%? Where are their shorts, and why aren’t the shorts helping?
In a recent speech, Federal Reserve Chairman Jerome Powell caused a tumult in the markets with tons of snickering, complaining, and outright anger from talking heads and politicians, let alone your average retail investor. How did he do it—and why?
Arguably the most towering figure in the world of hedge funds, and arguably one of the most important people in the history of finance, passed away aged 90. A look on his life shows what makes success in financial markets, as well as what doesn’t.