KNO - First Principles In The Face Of Uncertainty
2025-04-15 04:58:00 ET
Summary
- At the start of last week, the VIX Index of stock market volatility, a key indicator of investors’ uncertainty, hit levels unseen outside of the Global Financial Crisis and the Covid-19 pandemic.
- Past episodes of economic fallout and market volatility were caused by the build-up of financial excesses or structural economic problems, or by massive and irreversible exogenous shocks. The current volatility is due to policy decisions that appear loosely anchored and liable to change rapidly.
- Market volatility and significant drawdowns should not cause investors to abandon consistent investment strategy. Challenging conditions like these remind us to refocus on the first principles of long-term multi-asset investing.
By Jeff Blazek, CFA, & Erik L. Knutzen, CFA, CAIA
The current situation is unusually difficult to model, and that reinforces the first principles of investment: know your objectives, diversify and rebalance. ...
First Principles In The Face Of Uncertainty