Displaying items by tag: volatility

With most stocks falling yesterday, the Cboe Volatility Index (VIX), also known as Wall Street’s fear gauge, jumped 15.5% to close the day at 23.80. This was the index’s highest closing level in almost three weeks. This resulted in volatility-related ETFs seeing large jumps in performance. For instance, the ProShares VIX Short-Term Futures ETF (VIXY) rose 6.5% on the day, while the leveraged ProShares Ultra VIX Short-Term Futures ETF (UVXY) jumped 9.7%. The VIX had previously been on a downturn since the market bottomed in June, but with anxiety beginning to hit investors once again, volatility is returning. The jump in the VIX can be attributed to investors anticipating another round of interest hikes in September. Plus, last Thursday’s month-end options expirations likely contributed to a resurgence in volatility. 

Finsum: Month-end option expirations and concerns over additional rate hikes drove the VIX higher yesterday, resulting in strong returns for volatility ETFs.

Stocks had one of their worst days in months as the market fell off 2% and sent volatility measures such as the VIX spiking. Wallstreet’s ‘fear gauge’ was up nearly 4% as a result. This all happens as the dollar is reaching very strong levels and almost parodies the euro. While that might be great for those on a summer vacation in the Mediterranean, it's bad news for investors, because it reflects a more fed tightening, rising treasury rates, and inflation. Investors are concerned about rising volatility once again after it felt like it was behind them. With healthy job numbers and inflation trying to turn a corner, things looked bright and the market felt it, but the reality of a one-off good inflation report is setting in.

Finsum: Advisors need strategies for resilience vs inflation and excess volatility because its persistence seems strong.

Sure tech investors have had their share of ups and downs, but they have been largely insulated from the market’s bigger losses but things could change. The underlying trends in the technology sector are looking as bad as they have in a long time. There is severe weakness in consumer-oriented hardware products. Moreover, as supply chains relax these prices could fall further. Additionally, sub-sectors such as enterprise tech spending are starting to deteriorate. The weakening demand is beginning to show at the company level as earnings season shows signs of weakness in technology. While there have been outliers such as Cisco, the market might not be ready for widespread tech deterioration.

Finsum: The other huge problem is rising interest rates and rampant inflation which lower the value of future earnings and make growth stocks less attractive.

Volatility can be a maddening beast. Sure, you can hope all well be relatively calm on the western front this month, and The Federal Reserve, the European Central Bank and the Bank of Japan won’t break bread until next month, pointed out marctomarket.com.

Meantime, the volatility of the S&P, the VIX, hovers at three month lows while the equivalent in the Treasury market’s off drastically from an early July peak.

A cocktail of burgeoning prices and moderating economies are giving investors a run for their money, the site continued.

Some economists insist the U.S. is sitting in a recession, hearty U.S. growth in jobs and with an unemployment rate at 3.6%, cyclical lows, aside. The market, in all its adamance, figures that prior to year’s end, the target of the Fed funds – currently 2.50% -- will bounce an additional 100 bp.

Inflation and the Fed’s policy are hanging is as some of the primary drivers of market and investor sentiment Advisors and investors upon which should train their focus in the year’s second half, Wisdom Tree believes, according to finance.yahoo.com, in an article was published originally on ETFTrends.com.

While model portfolios, of course, help pare down some of the labor inherent to the analysis of all investment positions, some advisors, nevertheless, outsource some – or all – of the investment management responsibilities by tapping third part model portfolios, according to flexshares.com.

Unlike funds, among other traditional investment vehicles, external solutions like third party portfolios provide financial advisors leeway over a gambit of aspects of managing a portfolio. They include  underlying holdings, asset allocation, rebalancing frequency, and trading.

“Advisors are typically seeking a holistic, cost-efficient, outcome-oriented solution from a trusted brand. Our models seek to provide a robust framework to navigate global markets and offer a straightforward means to help advisors build scale, enhance client service and satisfy regulatory expectations,” according to Melinda Mecca, director of Investment Solutions, Northern Trust Asset Management.

Also referred to by some RIA in the industry as the separately managed account, they’re used by investment advisors for accounts with higher AUM or asset under management, according to  synertree.io.

Now, trade and asset allocation decisions are beyond the wheelhouse of an RIA, but should have the chops to know the product without in extensive insight into each security within the model portfolio, the site continued.