Tag Archives: equity markets

Oct 24, 2019

The Road Less Traveled

It is a truth universally acknowledged that liquidity is critical to market health; typically when liquidity falls, volatility rises.  The Financial Times recently cited claims that the increased use of passive investment vehicles had caused trading volumes in individual S&P 500 constituents to decline.  Should we be alarmed? In reality, the notion that single-stock traders…

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Oct 11, 2018

Breaking Down Volatility

“Data! Data! Data!” he cried impatiently. “I can’t make bricks without clay.” – Sherlock Holmes (in “The Adventure of the Copper Beeches”) Despite yesterday’s hand wringing loss for equity markets— the S&P 500 dropped 3.3%—the index is still up 5.8% year to date 2018. Nevertheless, losing in one day a third of what the equity market…

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Nov 16, 2016

Back to Normal…Almost

It’s been a roller coaster week in the aftermath of the startling conclusion to the U.S. Presidential election on November 8, 2016.   As recently as a week before the election, equity markets were quite calm, although volatility levels recognized the possibility of a surprise Trump victory.  When that victory occurred, U.S. futures declined significantly before…

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Sep 12, 2016

Dividend Volatility and Correlations

Equity markets are notoriously volatile, at least when compared to fixed income. Dividend payments, by contrast, while not fixed like many bond coupons, offer  market participants a much less volatile and more fixed income-like risk and return profile.  For the 25 years from 1990 to 2015, the annual variation in S&P 500® dividend points has…

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