Blog Posts

Liability-Driven Investing (LDI) is an approach primarily used by pension funds, endowments, and insurance companies. Its goal it to match assets with future liabilities, such that obligations to beneficiaries can be met as they come due. LDI strategies have gained prominence in recent decades as pension funds grapple with funding shortfalls and returns that aren’t […]

Volatility-based betting strategies are more sophisticated approaches to trading that adjust position sizes based on the underlying volatility of assets or return streams. These methods try to optimize risk-adjusted returns by either sizing based on risk levels or dynamically changing exposure as market conditions change. Traders who use these strategies recognize that volatility isn’t just […]

Day trading is commonly considered a high-risk, high-reward strategy that involves buying and selling financial instruments within a single trading day. Mutual funds, conversely, are investment vehicles that pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities.   Key Takeaways – Can You Day Trade Mutual Funds? Mutual […]

Mutual funds are a type of investment that allows you to pool your money with other investors and then have a professional manager invest the money for you. A mutual fund investment manager will choose stocks, bonds, and other securities that they believe will perform well, and the mutual fund will then be bought and […]

Correlation measures how two assets move in relation to each other. A negative correlation means that as one asset’s value increases, the other tends to decrease. This relationship is key for portfolio diversification. Investors seek negatively correlated assets or returns stream to balance their portfolios and manage risk. Not all negative correlations are equal; the […]

The 3-5-7 Rule is a risk management strategy designed to protect traders from catastrophic losses while helping efficiently capture gains. It’s a straightforward guideline that can be applied to various trading styles and markets.   Key Takeaways – 3-5-7 Rule in Trading Risk Management Limit risk to 3% per trade and 5% total across all […]

September has historically shown to be the weakest month for equities, with data stretching back over a century. The S&P 500, a broad market index, has averaged a decline of 1% in September since 1928, making it the only month with a negative average return. This pattern, often referred to as the “September Effect,” has […]

What other jobs and professions are similar to trading? Those into trading tend to also be potentially interested in careers or professions that involve high levels of unpredictability, decision-making under uncertainty, and risk management, such as analysts and strategists across various industries. Markets are system are characterized by their sensitivity to initial conditions and the […]

Shadow banking refers to financial intermediaries that: conduct maturity, credit, and liquidity transformation, and do so without explicit access to central bank liquidity or public sector credit guarantees. These entities operate outside the traditional banking system but perform bank-like functions. The shadow banking system includes a diverse range of financial institutions such as: finance companies […]

Prime brokers have an important function in the financial ecosystem, particularly for institutional traders, investors, and hedge funds.  Despite their name, their primary function is heavily geared toward lending rather than traditional brokerage services.  They serve as a critical link between large traders/investors and the broader financial markets, offering a suite of services that extend […]