Investment Management: Avoid the Left Tail
This week’s Random Gleanings has Chris and Jesse talking Tails… the left and right tails of a bell curve.
When planning for a future financial goal (ie. Retirement), so much of the plan is built on the assumption of average outcomes. As such, the maintenance or improvement upon the average is important in achieving the goal. With enough time average outcomes work themselves out, but when time is more limited the avoidance of “Left Tails” goes a long way in upholding the average, or at least shortening the length of time it will take to get back to average when good times return.
The fellas get into what Left Tails are and why the current environment feels precarious for such a risk. Additionally, they discuss one strategist’s exercise for challenging current opinions, and why the case for Right Tail outcomes in the next 12 months has many challenges.
#Retirement #RiskManagement #Stocks #FED #fedreserve #spx #ndx