FMD Capital Management

Posts Tagged: conservative

The Ins and Outs Of Low Volatility ETFs

Written by David Fabian, August 31st, 2017

If there’s one thing investors love, it’s consistency and reliability.  Two attributes that deftly describe the trend of exchange-traded funds that track low volatility stocks.

This unique category of the ETF universe has rapidly expanded in recent years through a combination of persistent fund flows and sector momentum.  The factors that ultimately shape low volatility indexes have proven to offer attractive characteristics for conservative investors that want equity exposure without the downside risk of a typical broad-based benchmark. Read more

There Are Two Ways To Beat The Market

Written by David Fabian, July 29th, 2017

Active investors are continually looking for innovative ways to beat the market.  They want to believe that some perfect combination of fundamental or technical indicators will lead to the holy grail of outperformance (otherwise known as alpha).

In the broadest sense, there are two ways to beat the market: on the upside or on the downside.  You either take more risk or less than the benchmark. Read more

What To Do When You Miss The Move In An ETF

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

The Pain Trade Is Higher

Written by David Fabian, February 23rd, 2016

There is a saying on Wall Street that the markets try to deliver the maximum amount of punishment for the most investors possible. They call this phenomenon the “pain trade”.

In essence, the pain trade is when investors become so overly bullish about a specific theme or outcome that they overload one side of the boat. As the boat leans further to one side, the majority of participants become complacent as their thesis bears fruit. This leads to a heightened level of pain as the equilibrium shifts and the boat tips back to flat or in the opposite direction. The shifts usually happen in a very short period of time and with little warning, which makes them difficult to predict and re-position ahead of time. Read more

Why Trying To Avoid Every Dip Is A Fool’s Errand

Written by David Fabian, January 21st, 2016

The unprecedented volatility to start the year has brought out nearly every type of expert opinion on the best way to ride out the storm. I have heard arguments ranging from “stay the course” to “this is just the start of the crash”.

Let me be clear by saying that absolutely no one knows what is going to happen over the next three to six months. We could be another 20% lower, 20% higher, or virtually anywhere in between. Anything can happen and to have 100% conviction in just one outcome is the sign of someone who is completely unhinged from reality. Read more