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Visual Insight Series Archive

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  • Going Up?  Where to Find Returns If Rates Begin to Rise

    Going Up?  Where to Find Returns If Rates Begin to Rise

    With corporate bond and U.S. Treasury rates near 100-year lows after a 30-year steady decline, investors everywhere are pondering the consequences if interest rates begin to rise.  Credit expansion helped fuel much of the economic growth of recent decades, and many investors recognize they have come to rely on investments…

  • When Bonds Fall: How Risky Are Bonds if Interest Rates Rise?

    When Bonds Fall: How Risky Are Bonds if Interest Rates Rise?

    Thirty-one years ago the yield on corporate Aaa bonds reached its 100-year peak of 15.5%. That date was in September, 1981, and rates for corporate bonds and U.S. Treasuries have fallen ever since, with both rates resting near 100-year lows today. This trend can’t last forever of course, and today…

  • Diversification Revisited: What Changed During this Recovery?

    Diversification Revisited: What Changed During this Recovery?

    The financial recovery since early 2009 has been a most welcome reprieve from the lowest depths of the Global Financial Collapse (GFC). To better understand this recovery, we peeked beneath this rising tide to examine the behavior of investible assets and to ask a few critical questions. Were assets more,…

  • Finding Diversification: The Geometry of Time and Correlation

    Finding Diversification: The Geometry of Time and Correlation

    When someone says ‘time is on their side,’ they’re saying time is working in their favor, and almost always from a long-term perspective. The examples in investing are numerous: exponential growth through compounded interest, the wealth creating benefits of early savings for retirement, or the long-term merits of low volatility…

  • Pension Shortfall: Solving for the Missing 2%

    Pension Shortfall: Solving for the Missing 2%

    Pension plan sponsors face significant challenges. Retirement obligations continue to increase, and the two major equity market set-backs in 2000 and 2008 have produced widening funding gaps. So what does the future hold? Will their plans be able to reliably achieve their stated return objectives? Unfortunately for plans relying solely…

  • Diversification: Often Discussed, but Frequently Misunderstood

    Diversification: Often Discussed, but Frequently Misunderstood

    Diversification remains the cornerstone of modern portfolio theory.  Yet, during the financial crisis many “diversifying” investments readily followed the direction of the equity markets as they collapsed in 2008 and 2009.  This lesson forced investors to revisit their longest-standing beliefs about asset allocation, leading many to suspect that their allocation…

  • Tail Risk: About 5x Worse Than You May Think

    Tail Risk: About 5x Worse Than You May Think

    After enduring the (40%) global equity market collapse of 2008, investors large and small are eager to reexamine the perils posed by equity market “tail risk” events.  For our analysis into this topic, we examined 50-years of historical S&P 500 Index data and compared the actual tail risk frequency and…

  • Managed Futures: A New View

    Managed Futures: A New View

    Managed futures is one of the oldest and most established alternative investments, yet many investors are unfamiliar with the strategy’s performance traits.  A fresh look at the strategy’s past performance in the chart below reveals its tendency toward controlled downside risk, with an asymmetric tendency toward upside performance.  This paper…