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The illiquidity premium has nothing to do with holding period. Rather, it exists in areas where capital is less abundant. Lately, however, there’s no shortage of cash flowing into private investments as retail and institutional investors alike have upped their deployment into venture capital and private equity. Fortunately, it’s not too late to find opportunities, as long as investors’ remain judicious and follow a disciplined process.
Read MoreIn normal down markets, it’s usually easy to see why diversification matters. But in the current environment, shaped by rapidly rising interest rates, we’re seeing both stocks and bonds underperform. No matter how many historical precedents argue against the inclination, it’s easy to want to uproot one’s current portfolio. Read more to understand why that’s generally not a good idea.
Read MoreWhy has the market’s reaction to the Fed’s plan to reduce its current bond buying program been so different than the “taper tantrum” of 2013? It’s odd to recall that following the Financial Crisis many viewed the Fed’s balance sheet as too large. Oh, if they could see it now! The power of hindsight may have tempered investors’ concerns, but don’t get complacent.
Read MoreOn March 10, 2020, we wrote a post (“Preparation Beats Reaction”) that highlighted how our All-Weather risk parity portfolio fared after one the largest single-day losses in equity markets since 2008. At the time, we could never have predicted the year we were about to endure. But if 2020 taught us anything it was that preparation still beats reaction.
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