Written by David Fabian, July 06th, 2017
Buying the dip in any stock or index can be a difficult task for an active investor. Not only do you have to worry about trade location, but also key factors such as initial position size and risk management parameters. There is a lot to take in and easily second guess yourself when looking to start a new position in the teeth of a correction. Read more
Written by David Fabian, February 07th, 2017
Ask a room full of experts what the most important part of a successful investment strategy is and you will likely get a range of candid responses. Most would gravitate towards answers like security selection, position size, time, or cost as their primary recommendations.
Those characteristics are certainly important and should not be overlooked. However, the data behind ETF asset flows and fund returns continues to signify a tremendous deficiency in net performance for individual investors. Much of this gap can be attributed to behavioral choices – i.e. buying high or selling low.
Written by David Fabian, July 28th, 2016
Risk management is a core tenet of our firm and one that we feel is often misunderstood when entering a new position. Many investors feel that the minimization of significant draw down starts after you already own something. A common method for this practice is setting a stop loss.
A static or trailing stop loss can help you define the amount of money you are willing to lose on any given trade. However, it doesn’t help you understand why you bought the position to begin with or what went wrong with your thesis if it is triggered. It’s simply a fail safe mechanism to stop the bleeding. Read more
Written by David Fabian, March 16th, 2016
Every correction in the stock or bond market unfolds in a different manner. While our natural inclination is to try and make comparisons to prior events or rationalize statistical probabilities for a turn, there is no easy way to know when an investable bottom has truly materialized.
From a valuation perspective, cheap can always get cheaper until it goes to zero. Similarly, from a technical perspective, lines of support can always be broken by new trends or forces that materialize in the midst of a decline. Read more
Written by David Fabian, December 13th, 2015
By now you have probably read everything about the death of high yield bonds, the investor lockup at Third Avenue, and the risk that these “junky” assets pose to exchange-traded funds. Believe me, the financial media is just getting started slicing and dicing this thing up. Everyone loves to sink their teeth into an investment that is tanking. It makes for great headlines and offers a curiously similar effect as gliding by an accident on the freeway. Despite our best intentions, we all slow down to take a peek. Read more