Institutional Investor (October 13)
“Volatility is back in financial markets after an extended absence—and you had better get used to it.” To be more precise, this is a return to normal levels of volatility after a period of excessive lows. “To accentuate the positive, elevated volatility will create some excellent buying opportunities.”
Institutional Investor (September 30)
A volatile third quarter has come to the close. “With the final stretch for 2015 about to begin, portfolio managers must now take stock of the carnage and decide whether market dynamics have permanently shifted in response to changing macro forces, or if long-term trends are set to extend beyond this recent volatility.”
Wall Street Journal (August 7)
In China, the Government is estimated to have spent more than 10% of GDP ($1.3 trillion) “since the market panic started in late June,” producing only questionable results. “The failed bailout reinforces the expectation that Beijing will attempt to manage the financial markets in the future. This moral hazard means the volatility will continue, along with the costs of future bailouts. The first lesson of investing, buyer beware, has yet to be learned in China.”
Tags: Bailouts, Beijing, China, Financial markets, GDP, Government, Moral hazard, Panic, Volatility
Financial Times (February 9)
“Markets predict that the Fed will raise rates only to 1.6 per cent by the end of 2017; the Federal Open Market Committee’s average forecast is 3.5 per cent. Such a divergence raises the risk of volatility and poses a communications challenge for the Fed.”
Tags: Fed, Forecast, Markets, Risk, Volatility
The Economist (May 24)
“Obituaries of the Great Moderation may have been premature.” Following the financial crisis, volatility has again returned to low levels characteristic of the Great Moderation. “The big question is whether the return of the Great Moderation has also prompted a return of the sort of risk-taking that produced the crisis. There are troubling signs.”
Institutional Investor (March 19)
Volatility divides. Too much and it can be catastrophic. Too little and returns shrivel.” Increasingly investors are moving beyond hedging volatility to “trading volatility itself.” While specialists have been doing this for some time, trading volatility has “become more mainstream” since 2008 and the “go-to tool” many investors use to trade volatility is now “the VIX itself.”
Tags: Catastrophic, Hedging, Investors, Mainstream, Returns, Trading, VIX, Volatility
Financial Times (September 2)
Expectations of tapering by the Federal Reserve have “increased market volatility. And, as in past episodes of Fed tightening, emerging markets are at the centre of the turmoil…. No matter how gradual the tapering of QE, abrupt adjustments will occur. It is in the nature of financial markets to overreact and overshoot.”
Tags: Adjustments, Emerging markets, Expectations, Fed, Financial markets, Overreact, Quantitative easing, Tapering, Tightening, Volatility
Institutional Investor (August Issue)
Over the past decade, Brazil produced stellar returns. Internal strife and the looming tapering by the Federal Reserve are now, however, disrupting the long favorable investment environment. “Brazilian investors have not faced such uncertainty for many years. The country attracted investment because it appeared to be one of the most dynamic and politically stable emerging markets. The return of volatility will tax the ingenuity of Brazil’s money managers.”
Tags: Brazil, Dynamic, Emerging markets, Fed, Investment, Money manager, Returns, Stable, Tapering, Uncertainty, Volatility
Wall Street Journal (April 3, 2013)
“Japan’s quadrillion-yen market for government bonds is grappling with something it usually doesn’t face: volatility. Price gyrations are rising as bond investors try to assess how Prime Minister Shinzo Abe’s fresh attack on deflation will play out in a market accustomed to a steady decline in consumer prices and a cautious, predictable central bank.”
Tags: Abe, BOJ, Bond market, Consumer prices, Deflation, Investors, Japan, JGBs, Volatility
