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In Part 2 the stress test of Fed tapering QE is discussed as a way to cover for shortcomings of risk models. Incorporating plausible macro scenarios is necessary to make risk models relevant again. RiXtrema researchers, a legendary risk manager Barry Schachter and RiXtrema President Daniel Satchkov participate.

Daniel Satchkov

19 Sep 2013

Why Sharpe Ratio And Other Traditional Stats Can’t Prepare You For What’s Coming

Are you thinking about interest rate risk and how it might interact with equity risk? If you are using risk models, beware, they can be lying. We can improve the accuracy of the models by using portfolio stress testing, but we first must understand where their pitfalls lie. This post has a bit of a quant flavor to it, but the key point is very important for advisors as well. Traditional risk modeling and stress testing approaches are misleading when it comes to interest rate risk, they cannot help you prepare your clients for what’s coming.

Daniel Satchkov

18 Sep 2013

Fund Crash Ratings for Wellesley, Wellington and Thornburg Income

Know your funds. Detailed comparison of risk profiles of Vanguard Wellseley (VWINX), Vanguard Wellington (VWELX) and Thornburg Investment Income Builder (TIBIX) funds. Which one is more sensitive to inflation or a financial crisis? What about Fed Tapers QE scenario? The funds are put through series of stress tests and the impacts are compared. Position level modeling allows for sector grouping and contribution analysis.

Daniel Satchkov

17 Sep 2013

Managing Interest Rate Risk For Wealth Management Clients

Majority of the investors are waking up to the fact that fixed income portfolios are not necessarily safest given historically low interest rates and the macroeconomic outlook. The video offers a way for financial advisors to quantify interest rate risk of any portfolio using RiXtrema’s Portfolio Crash Testing tool. Once the risk is quantified, an advisor can suggest risk mitigating strategies to improve the overall risk profile of the portfolio and address clients concerns. This can help risk aware advisors gain new clients and add value for the existing client base.