Research confirms that high portfolio complexity impacts negatively mid and long-term expected returns. This is because high complexity is a formidable source of fragility, hence vulnerability. In a turbulent economy highly vulnerable portfolios and financial products are more exposed and more volatile. Therefore, a new portfolio design strategy based on complexity has recently been developed.…
In the past few weeks stock markets have been plummeting. There is talk of a perfect storm. On May 18-th our blog hinted the possibility of a generalized market collapse in virtue of low levels of the Global Financial Resilience Index (GFRI) and its downward trend. With falling oil prices, a troubled banking system, low inflation…
In the current economic situation, of falling stock markets, plummeting oil prices and sustained turbulence, the global investor must know which regions/countries offer better long-term sustainable investment opportunities. In addition to having one of highest resilience ratings in the Euro Area (Italy – 73.1%, versus 70.5% of Germany for example), Italy is the 3rd…
Why do most theorems in maths start by saying “let f(x) be a continuous differentiable function…”? Why do so many theorems in statistics assume a normal distribution? Why is it that in mechanics we tend to speak of small-amplitude oscillations around a position of equilibrium? Why is it that we neglect anything that has “epsilon…
