Investment Q&A

Q: How can I trade the VIX?...

Q: In a non-registered US account, I wish to purchase anything Now that .. 1. Pays no dividends or interest. 2. Keeps up with real inflation ( US inflation is greatly understated ) 3. Would survive a 50 market crash largely unscathed. Already have 10% precious metals …… thanks - JP

Q: Hi,

Which sector you think is worth taking a position in at this point in time as a non correlated asset, IF and WHEN a correction takes place. Not about market timing for I know you don't believe in it! But more as part of portfolio tune up.

Gold/Metals/Utilities/Pvt equities/any other sector that interests you?

Q: Dear Peter et al:

This is a big picture, non-personal question of a "fictional" account of a million dollars :)

From your answers to various subscribers over a period of years, I know that you have always said the portfolio construction is based on individual's personal needs and wants. Agreed!
Hence this general question!

If one wants to have 20% of the portfolio in NON correlated, steady as she goes kind of stocks or bonds, what should one buy?
I see that even though the stocks and bonds are not correlated, in 2022 they both were severely punished. Gold hasn't gone anywhere. Energy was down now but has gone waay up!

Even the ardent fans of Technical Analysis seem to be "confused" about non performance of their Intermarket Analysis approach. (John Murphy)

So, the question is how can one construct a portfolio with non correlated assets and come up with an asymmetrical barbell portfolio (Nessim Taleb?)
I have been looking at Utilities, Financials, Emerging markets, bonds, Gold........nothing seem to be appealing!

Any words of wisdom?
Many thanks in advance.

Mano.

Q: Hi 5i,

Can you explain how the “VIX” is related to the “VXX” ETF? I would have thought they should trade in tandem but they don’t even come close on some days (Example: Jan 3/23 VIX up $1.23 VXX down 8 cents).

Thanks
John

Q: Hi, My questions is about the best way to hedge the current market and economy. I have a large portion of my money in the stock market, and I feel things are becoming over extended. I've thought about putting some money in the VIX, however I'm not sure if that's the best way to play a downturn. I'd appreciate if you could give me your opinion on the best way to hedge, in case of a heavy downturn in the market/economy. Thanks a lot.

Q: Markets at Record Highs . Corrections happen. Is it wise to hold a portion of your portfolio 10 % in investments like HUV or VXX that go up when the market falls. These react with the VIX moving up. RAK

Q: Is there a security, EFT, or some other option available in Canada to trade volatility? If not, what is available in the US market?
Thank you.

Q: I'm trying to understand the risk/reward on VXX. I know it's an ETN trying to mimic the VIX through futures. Where VXX/VIX are right now and based on history I see downside risk in 2021 of something like 20% and upside of more than 100%. The chances are good that we have a normal correction sometime in the next year. Am I missing something?

Q: Hi Folks
I read in Bloomberg "investors are pricing in expectations of higher volatility around the elections ... In the stock market, investors have been purchasing volatility protection extending beyond November."
Can you please guide me what that volatility protection purchasing would actually be ? Is volatility protection only for investors who don't want to stomach the turbulence, or is there a broader interest in it? Many thanks for sharing your market wisdom.

Q: Hello,
recently I was listening to an interview of a portfolio manager of Artemis Capital. He was discussing portfolio construction and allocations to different types of investment classes.
His firm did research over an extended period of time and they devised an allocation model which performed the best over the time frame. The main point of the interview was diversification which would be in line with what 5i keeps saying time and time again when reading replies to member questions.
Having said all that, there is one point they made which I did not follow to well and would like your view on. They indicated that they would allocate a portion of a portfolio to volatility. Anyway, I did not understand and would like to know what they meant by this. They were talking about options so is it basically using puts and calls?
If you can expand on what would constitute investing in volatility and perhaps give a few examples i would appreciate it to help my understanding of this concept.
Thanks,
Dan

Q: What are the VIX products available in Canada and how do they differ.
Which would you prefer?
Thanks for your valuable service.

Q: What is the difference between VIX and VXX? Which one tells the true volatility and is better to track.

Once you get the chart settings you would email me.

Thanks for your great service.

Q: When someone puts on a hedge overlay to protect profits on
portfolio what exactly is one doing. Should your clients be doing it
and is it easy to do.Can u give an example
tnx u.

Q: What is the best way to go long on Volatility? What are your thoughts on this?

Q: Hi,
I read an article on how a hedge fund made money during the coronavirus sell off. (https://www.wsj.com/articles/how-to-hedge-a-coronavirus-11583321400). Can you give a small primer on how this is done..or typical hedging strategies. Thanks. Shyam

Q: In finance or investing media there is often reference to portfolio insurance. I did not know such a thing even existed. The discussion often makes a passing reference to “... buy the VIX.... “ If this is correct, how would one do that? If insurance--- I assume that means mitigating risk--- is unrelated to VIX , is portfolio insurance even buy-able (OTHER than by use of options)? If options are the only way to mitigate risk, do you know some reliable sources one can go to? If I am going to pull my hair out worrying about “toppy markets” (a favorite phrase of some market commentators) I would like to be able honestly to claim I did make best efforts before the said hair-pulling.

Q: I'm trying to buy some volatility very similar to VIX index...If you look at VXX vs VIX there is no correlational..VXX goes straight down YTD ($40 to$15)while VIX bounces around...I need a direct corelation in terms of percentage moves...is there something out there?

Q: I would like to purchase some protection against market volatility but am unsure of the best way to do this. VXX and HUV are a play on the futures but if I am correct there is a time/price decay involved in the price as well. Is there another way to to protect against market volatility other than holding cash? Thanks

Kenn

Q: Given past seasonal weakness trends in the markets, do you think taking a 20 percent position in gold and the vxx from now to Sept/Oct is a good idea? Thanks.