Risk Management 02 (Aug 15 - Dec 25)

[winston]

5 Signs That Global Financial Markets Are Entering A Bear Market, And 11 Ways That You Can Get Prepared For The Chaos That Is Coming…

Source: THE ECONOMIC COLLAPSE BLOG

http://www.thetradingreport.com/2018/08 ... os-coming/

[winston]

Here’s How I’m Defending Profits in This Crazy Market

by Chris Johnson

1. Shorten holding periods
2. Establish hard stops on positions
3. Take winners off the table when they begin to weaken

Source: Money Morning

https://dailytradealert.com/2019/01/20/ ... zy-market/

[winston]

5 Ways to Prepare for Hard Times in 2019

by David Goodboy

1. Lighten The Load
2. Raise Cash
3. Consider LEAPS
4. Own Precious Metals
5. Try Covered Call Funds

Source: Street Authority

https://dailytradealert.com/2019/01/20/ ... in-2019-2/

[winston]

If the markets get crazy again, these could be the three best 'safe havens', a study shows

by Yun Li

U.S. Treasuries should be the best safe haven in times of market turmoil and economic uncertainty, according to HSBC.

The Japanese yen is in second place, and gold gets the bronze medal.

The bank ran 10 million simulations of various portfolio weightings to identify assets with the highest risk-return ratios and hit rates when equity volatility rises.

Source: CNBC

https://finance.yahoo.com/news/markets- ... 13288.html

[winston]

How 5 of America's Richest Families Lost It All

by Esther Trattner

No matter how much money you have, control your spending, budget and invest wisely.

Make informed investments — especially when taking real risks with your money.

The occasional "splurge" is OK if it falls within your budget, but what ever you do, don't squander your savings in pursuit of a lavish celebrity lifestyle.

Who hasn't heard that thing about not putting all of your eggs in one basket? If you have all of your savings wrapped up in a single investment, you put yourself at greater risk than having a well-diversified portfolio.

Remember: decisions you make today can have long-lasting financial outcomes.

Source: MoneyWise

https://finance.yahoo.com/news/5-americ ... 11807.html

[winston]

It Pays to Know Yourself

There are a few modes of risk reduction that are appropriate for all investors to take advantage of:

1. Use position sizing - we recommend not holding more than 5% of your portfolio in any one position.

2. Set trailing stops - we recommend 25%.

3. Diversify across sectors, market caps and geographies.

4. Thoroughly research companies.

5. Keep funds you need to pay expenses over the next three years in a certificate of deposit (CD) or money market account.

Beyond these simple steps, be aware of how the market affects your stress level.

Source: Wealthy Retirement

[winston]

Strong stock market may hide problems with your portfolio. Here are 5 tips to prepare

by Russ Wiles

1. Consider portfolio pruning
2. Streamline investment categories
3. Prepare for political turmoil
4. Look to cut costs

Source: USA TODAY

https://finance.yahoo.com/news/strong-s ... 22298.html

[winston]

Risk Management:-
a. Global Diversification
b. Asset Class Diversification
c. Diversity of Industry & Company Exposure
d. Currency Hedging
e. Tactical Asset Allocation
f . Inverse ETFs and Put Warrants

[winston]

Risk of Avoiding the Non-Risk

by Vishal Khandelwal

In 2014, an AirAsia flight crashed into Java Sea killing all 162 people onboard. Investigations revealed that it was caused by a pilot error because he performed a non-standard reset of the onboard flight control computers.

Why did he do that? Because he wanted to get rid of a non-critical warning light that was flashing on his panel.

The gap between what's risky and what feels risky is significant. The perception of risk is often misplaced in most people's head.

Nick Maggiulli writes -
…you can hold 100% bonds and experience little short term volatility (i.e. low risk right?), but you now risk not having enough principal in the future after your portfolio battles against the scourge of inflation for multiple decades…remember that you are always taking risks. The key is understanding what risks you are taking and when you are taking them.

Risk and the perception of risk are two different beasts. What doesn't seem to hurt in the short run lulls people into complacency and just when they feel the safest the storm of accumulated risk arrives with no advance notice and causes the blow-up.

Source: Seeking Alpha

[winston]

Avoid Ruin

by Vishal Khandelwal

You or me are not the market.

Earning the long-term returns of the market, of the past or the future, is not in our control.

Managing our risks and avoiding ruin, mostly is.

"Rationality is avoidance of systemic ruin," Nassim Taleb writes.

Trying to avoid the ruin the stock market system enforces upon people who disregard its workings is rational. Believing that you can beat the system at it, by playing the game mindlessly, isn't.

Peter Bernstein writes in his brilliant book Against the Gods -
Survival is the only road to riches. Let me say that again: Survival is the only road to riches.


Source: Seeking Alpha