Not exact matches
The minutes of the Fed's June meeting noted that «some participants suggested that increased
risk tolerance among investors might be contributing to elevated asset prices more broadly; a few participants expressed concern that subdued market
volatility, coupled with a
low equity premium, could lead to a build - up of
risks to financial stability.»
«
Volatility impacts our industry tremendously, because we are in such a high -
risk,
low - margin line of work,» says Palmisano.
«This is typical of a late cycle expansion which is another reason why multiples will be
lower as higher
volatility typically demands a higher equity
risk premium.
The
risk, however, is that this index could lose a significant portion of its value if
volatility stays
low.
Actual results, including with respect to our targets and prospects, could differ materially due to a number of factors, including the
risk that we may not obtain sufficient orders to achieve our targeted revenues; price competition in key markets; the
risk that we or our channel partners are not able to develop and expand customer bases and accurately anticipate demand from end customers, which can result in increased inventory and reduced orders as we experience wide fluctuations in supply and demand; the
risk that our commercial Lighting Products results will continue to suffer if new issues arise regarding issues related to product quality for this business; the
risk that we may experience production difficulties that preclude us from shipping sufficient quantities to meet customer orders or that result in higher production costs and
lower margins; our ability to
lower costs; the
risk that our results will suffer if we are unable to balance fluctuations in customer demand and capacity, including bringing on additional capacity on a timely basis to meet customer demand; the
risk that longer manufacturing lead times may cause customers to fulfill their orders with a competitor's products instead; the
risk that the economic and political uncertainty caused by the proposed tariffs by the United States on Chinese goods, and any corresponding Chinese tariffs in response, may negatively impact demand for our products; product mix;
risks associated with the ramp - up of production of our new products, and our entry into new business channels different from those in which we have historically operated; the
risk that customers do not maintain their favorable perception of our brand and products, resulting in
lower demand for our products; the
risk that our products fail to perform or fail to meet customer requirements or expectations, resulting in significant additional costs, including costs associated with warranty returns or the potential recall of our products; ongoing uncertainty in global economic conditions, infrastructure development or customer demand that could negatively affect product demand, collectability of receivables and other related matters as consumers and businesses may defer purchases or payments, or default on payments;
risks resulting from the concentration of our business among few customers, including the
risk that customers may reduce or cancel orders or fail to honor purchase commitments; the
risk that we are not able to enter into acceptable contractual arrangements with the significant customers of the acquired Infineon RF Power business or otherwise not fully realize anticipated benefits of the transaction; the
risk that retail customers may alter promotional pricing, increase promotion of a competitor's products over our products or reduce their inventory levels, all of which could negatively affect product demand; the
risk that our investments may experience periods of significant stock price
volatility causing us to recognize fair value losses on our investment; the
risk posed by managing an increasingly complex supply chain that has the ability to supply a sufficient quantity of raw materials, subsystems and finished products with the required specifications and quality; the
risk we may be required to record a significant charge to earnings if our goodwill or amortizable assets become impaired;
risks relating to confidential information theft or misuse, including through cyber-attacks or cyber intrusion; our ability to complete development and commercialization of products under development, such as our pipeline of Wolfspeed products, improved LED chips, LED components, and LED lighting products
risks related to our multi-year warranty periods for LED lighting products;
risks associated with acquisitions, divestitures, joint ventures or investments generally; the rapid development of new technology and competing products that may impair demand or render our products obsolete; the potential lack of customer acceptance for our products;
risks associated with ongoing litigation; and other factors discussed in our filings with the Securities and Exchange Commission (SEC), including our report on Form 10 - K for the fiscal year ended June 25, 2017, and subsequent reports filed with the SEC.
Because of the
low cost of Middleton's swaps, «I can let [payees] manage
risk and decrease
volatility at the micro-level.»
The industry got a jolt recently when the California Public Employees Retirement System announced it was
lowering its historic 7.5 percent expected rate of return in an effort to reduce
volatility in its portfolio caused by reaching for
risk.
Stock market
volatility can put your retirement at
risk, but the odds of your retirement account disappearing completely by the time you hit retirement are very
low.
By identifying
low -
risk entry points in leading individual stocks, we are able to use high
volatility to our advantage because we look for stocks engaged in a
volatility contraction, which are due for an inevitable range expansion within a few days.
The currency would then be fairly priced, the expected
volatility very
low and unbiased, and investors would require nothing more than the
risk - free cost of capital (assuming, of course, that expected inflation is positive).
They definitely have higher
volatility, but I still view them as
low -
risk.
When a clear market uptrend is in place and market
volatility is smooth and steady, a pullback to the 50 - day or 200 - day moving averages typically presents a
low -
risk buy entry point in a strong stock.
With market
volatility hitting multi-decade
lows, junk bond yields also at record
lows, the median price / revenue ratio of S&P 500 constituents at a record high well - beyond 2000 levels, and the most strenuously overvalued, overbought, overbullish syndromes we define, I'm increasingly concerned about the potential for an abrupt «air pocket» in the prices of risky assets that could attend even a modest upward shift in
risk premiums.
Second, financial logic embodied in the celebrated Modigliani Miller theorem and suggested by common sense holds that substantial reductions in leverage, if achieved, should be associated with reduced
volatility, reduced sensitivity to shocks and
lower risk premiums.
Not only is any tightening likely to be gentle and from an exceptionally
low base, but tighter monetary conditions are generally associated with more
volatility and downside
risk, not bear markets.
For the rest, a better approach may be seeking more modest returns with
lower volatility, via a focus on portfolio construction,
risk exposures and less traditional asset classes.
With equity returns likely to moderate and
volatility set to rise, investors face a difficult choice: Accept
lower returns, or take on greater
risk.
Several studies [1][2] have shown that
low volatility portfolios have exposure to rising interest rate
risk.
When
volatility is average, options prices will typically be a little
lower than during a bearish market and that might cause options that are farther out of the money to be priced so
low that the
risks involved outweigh the profit potential.
Asset valuations have risen across the board, market
volatility has stayed very
low and many perceived
risks have not materialized.
We live with considerable uncertainty about the sustainability of the pattern of relatively
low risk premia and reduction in the cost of insurance against future macroeconomic and financial
volatility.
Volatility and correlations have been relatively
low, but that creates some challenges in finding the right blend of
risk assets and stable diversification.
This very
low market
volatility can lead investors to take on more
risk, and in a period of still relatively
low interest rates, to «reach for yield» — that is, buy riskier assets than one would otherwise, in order to achieve a desired profit or savings goal.
This minimizes FX exposure thereby
lowering the
volatility and counter-party
risk of trades.
This absolutely could go sidewise: Zillow is already being hammered in the stock market — investors aren't generally fans of high - margin companies entering
low - margin businesses, with huge amounts of
volatility risk to boot.
Advisor: Neil George Focus:
Low -
risk growth & income
Volatility Level:
Low Trading Frequency: 1 - 2 stocks each month Price: $ 99.95 for one year Service Features: click here
We see the
low -
volatility regime sticking for longer, but see potential for episodic spikes amid rising
risks.
Before the end of April, when the market started its gut - wrenching descent, «the combination of return generation and
risk diversification was part of a broader virtuous circle for fixed income, which also included significant inflows to the asset class and direct support from central banks,» El - Erian writes at the start of his viewpoint, noting that in addition to delivering solid returns with
lower volatility relative to stocks, the inclusion of fixed income in diversified asset allocations also helped to reduce overall portfolio
risk.
In my view, such a return would have been both satisfactory and reasonable, given the very
low volatility and
risk profile of the Fund during the year just ended.
The MOVE index suggested that US Treasury
volatility was expected to be very
low, while the flat swaption skew for the 10 - year Treasury note denoted a
low demand to hedge higher interest rate
risks, even on the eve of the inception of the Fed's balance sheet normalization (Graph 9, right - hand panel).
None of the factors consistently generated positive performance during recent market crashes However, almost any factor exposure would have increased the
risk - return ratio of an equity - centric portfolio
Low Volatility and Mean - Reversion would have been most beneficial, Momentum least INTRODUCTION A
Investors typically own short - term bond funds as a
low -
risk vehicle to preserve their principal, so losses in this segment tend to be more upsetting than a downturn in investments such as stock funds where
volatility can be expected.
We have a saying that «when the CBOE
Volatility Index1 (VIX Index) is
low it's time to go» — the VIX is often referred to as the fear index or fear gauge, and when it's at
low levels, we think it could be a prudent time to move a little more out of
risk assets.
Low volatility does mask
risks unique to fixed income markets, in our view.
While shortening duration can help mitigate interest rate
risk, another approach to consider is one that balances exposure to the very front end of the curve with exposure to intermediate maturities for additional yield potential and
lower volatility, given that rates are likely to rise slowly and stay historically
low for the foreseeable future.
SUMMARY Some factors show structural sector exposure while others rotate sectors frequently Sector concentrations explain factor performance and may represent concentration
risks Value is currently long Financials,
Low Volatility is short Health Care, and Growth is short Energy INTRODUCTION Despite
Risk - parity funds demonstrate the threat posed by the deterioration of credit markets in an era dominated by
low -
volatility - pegged algorithms.
Interest rate
risk is worth considering since
volatility is heightened at
lower yield levels.
Yet, more than $ 2 trillion remains in the hands of financial - engineering strategies pegged to
low volatility, including
volatility - control funds,
risk parity,
risk premia, and long - equity - trend following.
With the French election ending in the defeat of Le Pen, one more
risk factor has been removed from the table and
low volatility has returned.
Despite these developments, it is possible that the recent
low level of realised
volatility may have led markets to become a little complacent and hence the
low implied
volatility may not reflect future
risks in these markets.
Dividend stocks offer consistent cash flow and potentially less
volatility for investors with a
lower risk tolerance.
However, further regional policy divergence, slow emerging markets growth and global liquidity
risks are likely to keep market
volatility higher, meaning effectively navigating a
low - return world will remain a challenge.
Emerging markets involve heightened
risks related to the same factors as well as increased
volatility and
lower trading volume.
* Municipal bonds can also help insulate your portfolio against market
volatility, and tend to have
lower default
risk than corporate bonds.
We see central banks nearing the limits of extraordinary monetary easing,
low returns across most asset classes as well as higher equity and bond
volatility amid looming political
risks and Federal Reserve (Fed) tightening.
The Oakmark Equity and Income Fund invests in medium - and
lower - quality debt securities that have higher yield potential but present greater investment and credit
risk than higher - quality securities, which may result in greater share price
volatility.
Our US strategists have also noted the
risk of a 10 % drawdown in 2014 following a large and
low volatility rally in 2013 that may create a more attractive entry point later this year.
On the one hand, declining bond market activity and the persistence of
low -
risk arbitrage opportunities imply liquidity is impaired, while, on the other,
low volatility and high demand for risky assets suggest that liquidity is alive and well.
NOTE: High - yield bonds are subject to additional
risks, such as increased
risk of default and greater
volatility, because of the
lower credit quality of the issues.