Displaying items by tag: volatility

Finding a successful stock market predictor is like finding a needle in a haystack, but JPMorgan says they have the indicator, and now is the time to buy in the stock market. The buying guide is when the CBOE Volatility Index grows by over half of its one-month moving average. This has a near bulletproof historical record, only falling during recessions in the last 30 years. Markets gained an average of 9% in the equities in the two quarters after the metric was triggered. Overall, JPMorgan is bullish about the near future in equities and believes there is a lot of runway ahead.

Finsum: Metrics like this can be an anomaly or indicative of something structural underneath, still a recession isn’t out of question with Fed taper tantrum possibilities.

Model portfolios allow the feel of tailored experience with the ability to hit wider audiences by addressing the specific risks, features or scenarios investors are concerned about. WisdomTree has been a leader in model portfolio development by providing options across diverse assets such as equity, fixed-income, strategic multi-asset, growth oriented, and dividend options. On top of this they build out scenario focused funds.Their fixed income funds are focusing on shorter duration quality bonds while dipping into alternative credit. They have also developed a variety of international funds that focus on developing countries in order to meet the needs of investors worried the U.S. equity market is too overvalued.

FINSUM: Model portfolios are giving advisors a strong option for targeted concerns that face their clients like volatility and inflation.

A new study by Alliance for Lifetime Income and CANNEX is shaking the foundation of the standard portfolio construction which uses 60/40 equity bond split to simultaneously grow and protect/provide income. Investors in hypothetical allocation, 20% of their portfolio into equities 14% into real estate and annuities made up the next largest category of 13% followed by CDs, bonds, and alternatives. This overwhelming support for annuities is interesting but even more intriguing iis that nearly 85% of investors were interested in a lifetime guaranteed income annuity or already own one. Advisors should hear their clients desires for annuities rather than push the traditional portfolio allocation. The increased interest in annuities is a growing trend for investors and will be a more prominent feature in the average portfolio.

FINSUM: The pandemic and the current financial landscape has upended what many investors thought of as a safe asset, and guaranteed income (even at a cost) is worth it for many.

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September saw the Vix creep to a 4-month high as the S&P 500 blew off 4.8% of its value. Most investors were hoping for a bounce-back month in October, chalking up September’s poor performance to a checkered history for the opening of autumn. However, they are likely to be remiss as volatility indexes are still climbing. The pullback in September was the largest since March of 2020, when the pandemic began.BofA said that while October is generally a well-performing month when it trails a struggling September, October can drag as well. Debt ceiling negotiations, oil price spikes, and Fed tapering are just a few of the onslaught of headlines which are giving the market fits.

FINSUM: While volatility has yet to hit the peaks of September it is already consistently above its 200-day moving average, which could be a sign of even more volatility to come.