Doomsday Scenario The Risk of Municipal, State or Federal Collapse

personal finance

In the last post, I stepped you through a couple of fairly basic strategies for hedging your portfolio against the risk of discrete corporate bankruptcy. While posing a significant financial risk to your investment, corporate bankruptcy is generally considered to be a fairly minor … [Read more...]

Doomsday Scenario The Risk of Corporate Bankruptcy

personal finance

Corporate bankruptcy is a major underlying risk associated with every single security in an investor’s portfolio. However, it is only really the fixed-income holders that take it seriously. While this is likely due to the way in which bonds and preferred shares have fewer other risks … [Read more...]

Doomsday Scenario The Risk of Economic Evaporation

personal finance

During the Mortgage Crisis, the Federal Reserve had to issue more than $700B worth of ‘stimulus’ funds towards saving the economy from economic ruin. Ignoring the ongoing debate about how effectively those funds were actually applied, I raise this example to illustrate how it is that … [Read more...]

Doomsday Scenarios Systemic Risk of Investing

personal finance

Systemic risk has a bad reputation in the marketplace. As an investor, it represents all of the aspects of your portfolio that are beyond your control (ie. Cannot be hedged or diversified out of existence), and therefore represents the risk of your portfolio. However, I find that … [Read more...]

Doomsday Scenario The Risk of Brokerage Bankruptcy

personal finance

It’s 6 o’clock, do you know where your advisor, fund manager, clearing agent, or broker are? If you’re answer is "in line for EI", then you may well be experiencing one of the most frustrating investment risks imaginable, the bankruptcy of a brokerage house. While this risk was … [Read more...]