Managing Your Portfolio: Frequency Risk
James Picerno | Jun 13, 2013 08:06AM ET
Financial planner Carl Richards R ), across a broad set of asset classes, slicing and dicing markets by way of ETF proxies. I review market activity from a range of perspectives, such as moving averages and other risk metrics along with simple rolling returns. I don't do a lot of trading, but I do a lot of looking. It helps (quite a lot, in fact) to look at all the markets in context on a regular basis. Developing familiarity with the volatility, and how it evolves across markets and time, helps keep irrational fears in check and keep strategic context in focus.
This is less about speculating on what's going to happen tomorrow and more about staying fully informed about what's actually happened in the recent past in absolute and relative terms--across the full spectrum of market betas. We still can't predict the future very well, but we can do a better job of dissecting the past. It's risky to confuse these two aspects as one and the same, but it's also hazardous to assume that one has nothing to do with the other.
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