PREVIOUS POSTS
Peace and HappinessPicking a Trustee, Family or Banker?
US Planning: Eight Steps To Protect Your Family
Estate Mistakes: Where Heath Ledger And Princess D...
Why Life Policies Will Help Preserve Wealth
Odd Haavik interview on CNBC Nov 6
Leading economies blamed for fiscal secrecy
Tax spat freezes Italian-Swiss talks
Odd Haavik interview on CNBC Oct 21
Singapore signs up to more information exchange
Wednesday, January 27, 2010
Are Hedge Funds Really Non-Correlated?
In this segment of Preserve Your Wealth I comment on the downgrade of Japan's debt by S&P as a warning sign that real economic reform is expected by global investors, but caution that 90% of Japan's debt is held in domestic, private hands and a dramatic impact of this downgrade is unlikely.I also make the point that when investors are looking for true, zero-correlated assets, they should look to life policies before hedge funds. True zero-correlation can only be found in assets with no positive or negative correlation to asset classes, whereas a hedge is typically structured to have negative correlation, i.e. to have an exact, inverse payoff-profile to the asset or risk we wish to hedge.
Zero correlation smooths returns and adds an element of certainty in an otherwise highly uncertain world.
posted by Charles Monat Associates at 2:18 PM
0 Comments:
« Home
Copyright © 2005 Charles Monat Limited. All rights reserved. Privacy
Policy & Terms of Use