Bitcoin… you either love it or hate it. You hate it because it keeps going higher. And you don’t know why. You love it also because it keeps going higher. And you either think you know why or you don’t really give a damn why.

It Is A Crazy World Today

Bitcoin took the world by storm in 2017 with its astounding 20-fold surge from around $900 to near $20,000. If you invested $100,000 during this period, you could have walked away with $2 million in your pocket. All that in just a year. Mighty impressive. But it shook the world again when it plunged more…

As investors, our ultimate goal is to make money or returns. Of course, the more the merrier. No one would ever complain about bagging more than they expected. It can even earn you some bragging rights. In fact, you will find no lack of news blasting results of funds or individuals who make phenomenal profits. Risk, on the other hand, is the neglected and silent sibling. You will hardly find any news mentioning someone using a dramatically lower risk. Well, that is unless they deem the returns newsworthy as well.

Now, a 50% return is as good as anyone else’s…

Risk parity, an investment strategy made popular by Ray Dalio, has come a long way. To those that are not familiar with technical terms, perhaps the name “All Weather” rings a bell. That is the name of the fund Ray Dalio ran using risk parity principles. They are related but not exactly the same thing. To put it simply, Risk Parity is the strategy, and “All Weather” is the target outcome. But to be fair, many other strategies share the same objective. So “All Weather” is not something exclusive to Risk Parity. …

Here is the million-dollar question: When should we let go of an investment strategy?

Believe it or not, it is a lot easier to put strategies to work. Letting go of an investment strategy, however, is a much more daunting task. You might be wondering what is so difficult about it? If it is not working, just take it out. Isn’t that just common sense? Yes, the reasoning is sound. But the challenge is how do you know if the strategy is no longer functional?

The Painful Dilemma — To Let Go Or Not

When I started out investing, people talked only about stocks. Today, it is about funds. And there are all kinds of funds. Active mutual funds, passive funds, exchange-traded funds, hedge funds, private funds… In fact, we have more funds than securities today.

In case you have no idea what a fund is, they are entities that pooled money from different people to invest. And they are managed by investment management companies. For example, Franklin Templeton, Fidelity, Schroders, Black Rock, BridgeWater Associates so on, and so forth. As with all services provided in this world, nothing comes for free. So you…

Time flies … it is almost 3 months since my business partner and I ventured into the e-learning space. It has always been one of our mission to promote quant investing to as many people as we can. We talked about this for years but never got started then due to other commitments. Eventually, we took the plunge. There are no surprises here. We teach quantitative investment stuff. Well, that is what we do for a living as former portfolio managers and private practitioners.

Being new and unknown in the education scene, there are tons of pain and sweat. We…

Sector rotation is an age-old strategy, probably older than any man alive today. But for a long time, it remains an institutional level strategy. Without sufficient resources, retail investors have little means to implement it. That is until the emergence of Exchange Traded Funds (ETFs). This innovation changed the landscape of investing and brought retail investors closer to the professionals. Well, in terms of access, at least …

What Are The Sectors?

The stock market can be broadly segregated into different business sectors. Each sector specializes in a designated area. For this purpose, the fund industry widely adopts the Global Industry Classification Standard (GICS)

There are many jargons in the fund industry. One of the most common you might come across is Sharpe Ratio. While it sounds complicated, it is actually a simple concept. To put it plainly, it is a productivity measure on investment performance. If you like a deeper look at it, I wrote about it in my earlier posts:

  1. Risk-Adjusted Returns — Looking Beyond The Dollars
  2. Sharpe Ratio — Bigger Isn’t Necessarily Better

But for those who wanted a shorter and more laid-back appreciation, here it is in video format. In this short video, we present a layman view of what Sharpe Ratio is.

Enjoy the clip.

Originally published at on July 17, 2020.

An All-Weather Portfolio is one that is capable of navigating harsh market conditions. It rides on the concept of risk parity — a method that allocates capital according to risk. Prior to this, I have written several articles on this topic.

  1. Common Sense in Diversification
  2. Your Asset Selection Matters
  3. Is It Game Over?

For this particular post, I made a short video clip to explain in layman terms the idea behind an All-Weather portfolio. In this clip, we show you why we adopt such an approach, how it works, and why it works.

Ok, now go grab a cup of coffee and happy watching.

Originally published at on July 13, 2020.

If you read news and articles regularly on the markets, you must have come across the term: Volatility Targeting. But how much do you know about it? During the first quarter of 2020, at the height of the COVID-19 pandemic, you heard of volatility targeting hedge funds deleveraging. What happens is that these funds usually took up debts to increase and finance their positions. And when a volatile market hits, they reduce their debts and size down the positions to lower the risk. In a severe market crisis, it can trigger a chain process where these funds start to deleverage…

Eng Guan Lim

Finance | Investments | Writing | Blog

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