The hottest Asset Classes Substack posts right now

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Trading Catastrophe

Net Interest • 5 implied HN points • 21 Feb 25
💰 Finance Investing Insurance Risk management Capital Markets Asset Classes
  1. Hurricane Andrew changed how insurers think about risks. They realized they needed better coverage and to assess risk differently.
  2. Catastrophe bonds, or cat bonds, became popular after Hurricane Andrew. They allow investors to earn interest while helping insurers cover major losses.
  3. Today, cat bonds are expanding into retail markets, making them accessible to everyday investors. They have shown good returns, even as disasters become more frequent.

An Inflation Follow Up: The Disparate Effects on Companies

Musings on Markets • 659 implied HN points • 20 May 22
💰 Finance Investing Markets Economics Asset Classes Risk management
  1. Inflation affects companies differently, with some benefiting and others struggling. Investors are on the lookout for companies that can handle high inflation better.
  2. Companies with strong pricing power, low costs, and stable earnings tend to perform better during times of inflation. It's important for these companies to keep debts low and have short-term investment options.
  3. Historical trends show that small-cap and value stocks often outperform in high inflation periods. In 2022, stocks with solid cash flows and dividends have held their value better than riskier, money-losing companies.

Warden Q3 Letter

Warden Capital • 78 implied HN points • 17 Oct 23
💰 Finance Real Estate Markets Investing Economy Asset Classes
  1. The quarter felt stable until rates spiked, creating challenges in lending and investment sales markets.
  2. While interest rates have increased rapidly, recent inflation data has been promising, indicating a potential decrease in inflation.
  3. Real estate prices increase during high inflation periods, offsetting the impact of higher interest rates in the long run.

Data Update 3 for 2022: Inflation and its Ripple Effects!

Musings on Markets • 39 implied HN points • 27 Jan 22
💰 Finance Inflation Interest Rates Asset Classes Investment Strategies
  1. Inflation has been high for a while, affecting how investors view the market. People are worried it won't just go away and are trying to figure out its impact on stocks and bonds.
  2. How we measure inflation can change depending on what we look at. What's important is how the market expects inflation to behave in the future, rather than just focusing on what's already happened.
  3. Interest rates and inflation are closely linked. If inflation expectations rise, it can push interest rates up, and this also affects how different investments perform, particularly when inflation is unexpected.
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Evolution of Investors in the New Digital Age

Equal Ventures • 1 HN point • 05 Mar 24
💰 Finance Investment Venture Capital Market Analysis Asset Classes
  1. Investors in the new digital age need a deeper understanding of industry dynamics and business models beyond just technology.
  2. The evolving landscape requires investors to focus on financial efficiency and long-term profitability rather than just growth metrics.
  3. Successful venture investors must prioritize core investment skills like financial acumen to drive long-term returns.

Stocks (and bonds) for the long run: Part 3

Klement on Investing • 2 implied HN points • 28 Feb 24
💰 Finance Investing Stocks Bonds Portfolios Asset Classes
  1. Stocks are riskier in the long term than many investors believe, with fluctuating equity risk premiums influenced by economic drivers like interest rates and growth.
  2. Using longer historical data to predict equity risk premiums may not work, investors need to analyze the historical track record based on the current market regime.
  3. The correlation between stocks and bonds has varied over time, influenced by factors like inflation, interest rates, and economic growth, impacting the diversification benefits of stock/bond portfolios.

How to construct an investment portfolio in different inflation regimes

Global Markets Investor • 0 implied HN points • 01 Mar 24
💰 Finance Investing Inflation Asset Classes Economic Indicators
  1. Stocks perform best in falling and stable inflation; commodities and precious metals perform well in rising inflation.
  2. During periods of falling inflation, stocks are favored, followed by bonds and real estate. Commodities tend to be the worst performers.
  3. In stable inflation environments, stocks still play a significant role, while real estate, bonds, commodities, and precious metals are also included in the portfolio.

How to build an optimal portfolio?

Reminiscences Of A Young & Naïve Financier • 0 implied HN points • 21 Feb 23
💰 Finance Investing Portfolio Management Diversification Asset Classes Risk management
  1. Risk and return are interconnected in investing - higher risk typically means higher expected return.
  2. Diversification is key to building an optimal portfolio - uncorrelated assets help to reduce risk while maintaining returns.
  3. Asset classes like Gold, even with historically low returns, can play a vital role in a diversified portfolio due to their uncorrelated benefits.