Recently I’ve been listening to various financial analysts talk about what the previous decades average returns mean for the next decade. Questions like: Where are we on valuations? What will earnings do? Where do the 2010’s as a decade rank in comparison to past decades with total returns (including dividends)?
As we edge closer to the Christmas and New Year’s holidays, we’ve seen markets rally and volatility subside. Looking at the VIX Index chart above, you’ll notice that implied volatility is trading at the bottom of its 2019 range.
Back in October we published an article illustrating how at the absolute market lows in 2009, investors continued selling out of equities and into record levels of money market funds.
This week they are back to take a deeper dive using some case studies and additional detail around holding large concentrated single stock positions.
Listen to the latest Podcast where Jay and Derek discuss Solutions to Concentrated Stock Risk
In the past week we are once again reminded of the risk inherent in holding un-hedged single concentrated stocks. We know historically non-diversified holdings of a single issue have more than double the expected volatility or standard deviation than the market indexes.