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Market Risk Related News
 in chronological order

 See also: Market Risk Related Books, Market Risk Related Scholarly Papers, or Market Risk Home Page.

Table of Contents:
 

7 investment risks and how to deal with them
June 24, 2007
From rediff:
 The fact is that you cannot get rich without taking risks. Risks and rewards go hand in hand; and, typically, higher the risk you take, higher the returns you can expect. In fact, the first major Zurich Axiom on risk says: "Worry is not a sickness but a sign of health. If you are not worried, you are not risking enough". Then the minor axiom says: "Always play for meaningful stakes".

The secret, in other words, is to take calculated risks, not reckless risks.
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How do you measure market stability?
June 22, 2007
From The Economic Times:
 The stock market movements over the past few weeks can be best described as unpredictable. It goes a few impressive points up, only to slide back after a few days. The upward and downward fluctuations can create panic among investors. Returns on stocks become increasingly difficult to predict over the short term. It may be a reaction to global market conditions, high oil prices, world economy and soaring inflation. Volatile markets torment investors.
How do you measure market stability?

A measure of volatility gives ample information for an investor to base his decisions . The time to enter, buy or sell, are critical decisions that depend on market moods. Shrewd investors find volatile markets or crashes an ideal time for picking value stocks at bargain prices. Since these are purchased at discounted rates, it gives a sufficient cushion for the long-term investor. Though scouting for bargain stocks may appear a lucrative proposition , one must not grab a poorly-performing stock that is heading downwards.

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Asian markets not out of the woods yet
April 24, 2007
From AsianInvestor.net:
 ING’s survey of mass affluent investors across 13 markets in Asia shows sentiment is less positive, even if most of them believe the worst may be over in terms of the impact of the global slump on the region’s economies.

Investor sentiment in Asia has turned less optimistic in recent months, according to the results of the latest quarterly ING Investment Management region-wide survey.
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Testing the water during market volatility
April 24, 2007
From Easier Finance:
 Many people choose to invest their money in cash funds when the market goes through a period of uncertainty.

This low risk approach doesn't necessarily make for the best returns in the long term, but it provides an alternative option for clients who may be deterred by volatility in financial markets.
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Icap exploits market volatility
March 19, 2007
From Financial Times:
 Icap, the interdealer broker, forecast profits above the current consensus of £312m for the year to the end March. In 2006 its full-year pre-exceptionals profit before tax and amortisation was £252m.

Michael Spencer, chief executive, said the company had benefited from the high levels of volatility across a range of asset classes including foreign exchange, interest rates, equities and commodities.
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JGB futures edge up in 'crazy' market volatility
March 19, 2007
From Reuters:
 Japanese government bond futures pushed higher on Wednesday, shrugging off a rebound in stocks, as an ongoing unwinding of bad bets by hedge funds kept the market volatile and introduced widespread anomalies.

Overseas hedge funds said to be using "relative value" strategies and other players have been hit hard by losing positions involving buying long-term Japanese government bonds and taking positions in swaps betting that the long-term swap spread would widen.
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Tullett Prebon: Market volatility is a great thing
March 12, 2007
From Financial Times:
 At least one thriving sector loves the turbulence that has set into equity markets: inter-dealer broking.

In fact, volatile markets in the second half of last year helped the UK’s Tullett Prebon increase operating profits for the year by 14.8% to £131.8m, the FT reports Wednesday. Terry Smith, chief executive of the inter-dealer broker, on Tuesday said there were no signs of business slackening so far this year. As well as the busy markets, Tullett benefited from its £49m acquisition of Chapdelaine, a US broker specialising in corporate bonds and credit derivatives, early this year. It also recruited an extra 125 brokers, of which 100 had now joined.
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Investors not put off by stock market volatility
March 10, 2007
From Investment Markets:
 Research from Abbey Savings has established that more than 15 million Britons are still investing in equity markets while a further 6.6 million considering taking advantage of current lower market valuations and investing in the stock market.

However, Abbey’s research shows a considerable number have been deterred by the recent market volatility with 11.9 million stating they would not invest in the stock market.
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Developing an appetite for risky business
March 5, 2007
From The Australian:
 WITHOUT question, market volatility has strongly increased over recent months.

The share market has been going through quite a few mood swings, margin calls have been occurring and credit liquidity has become a widespread problem in the global financial market.

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Today's Market Volatility
March 4, 2007
From Yahoo! Finance:
 Earlier today, Fed Chairman Ben Bernanke, Vice Chairman Donald Kohn and Governor Fred Mishkin all gave speeches. Bernanke prodded lenders to work more with borrowers; Kohn said the banking system faces more challenges, but should be alright; and Mishkin said economic risks remain to the downside, while inflationary pressures should 'wane.'

The speeches followed a lowered guidance from Intel (NasdaqGS: INTC - News) and cautious comments about Citigroup (NYSE: C - News) from a covering brokerage analyst. (Notably, those of you who paid attention to the negative revisions in earnings were already avoiding those two stocks.)
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Global equities: The benefits of volatility
February 27, 2007
From WhatInvestment.co.uk:
 The current market volatility seems to have created a lot of potential value for eagle-eyed stockpickers. Hugh Yarrow, co-manager of the Rathbone UK Equity Income fund, observes that ‘In the current environment, with growth and momentum still attracting premium ratings, we are focusing on finding those stocks trading at prices below their intrinsic value, often in areas currently out of favour with the market. Our value-oriented investment process remains intact and is centred on companies with strong balance sheets and high cash generation, which allow reinvestment in the business and rising dividend payments.’

He adds, ‘Despite sharing some of the market’s concerns regarding a slowing macroeconomic environment, indiscriminate sell-offs can often unearth interesting opportunities for the long-term investor. In fact, we have used market volatility to add to positions in key holdings where we perceived the market to have overreacted to corporate newsflow. These included Cable & Wireless, Tesco and Restaurant Group.’
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Handling Market Volatility
February 27, 2007
From BostonNOW:
 Conventional wisdom says that what goes up, must come down. But even if you view market volatility as a normal occurrence, it can be tough to handle when it's your money at stake. Though there's no foolproof way to handle the ups and downs of the stock market, the following common sense tips can help.

Don't put your eggs all in one basket
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Market volatility will remain elevated -- analyst
January 22, 2007
From Euro2Day:
 The Federal Reserve''s emergency 75 basis-point rate cut "isn''t a cure all" and equity market volatility will stay elevated, said Keith Lerner, an analyst at SunTrust Robinson Humphrey.

Lerner said while over the long-term fundamentals typically win out, emotion and fear can contribute to the market under- and over-shooting fair value in the short-term.
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Market Risk and Inflation Risk
January 18, 2007
From American Chronicle:
 People talk about the market and how it goes up or down, making it sound like a monolithic entity instead of what it really is a group of millions of individuals making daily decisions to buy or sell stock. No matter how modern our society and economic system, you can´t escape the laws of supply and demand. When masses of people want to buy a particular stock, it becomes in demand, and its price rises. That price rises higher if the supply is limited. Conversely, if no one´s interested in buying a stock, its price falls. Supply and demand is the nature of market risk. The price of the stock you purchase can rise and fall on the fickle whim of market demand. Millions of investors buying and selling each minute of every trading day affect the share price of your stock. This fact makes it impossible to judge which way your stock will move tomorrow or next week. This unpredictability and seeming irrationality is why stocks aren´t appropriate for short-term financial growth.

In April 2001, a news program reported that in 2000, a fellow with $80,000 in the bank decided to take his money and invest it in the stock market. Because he was getting married in 2001, he wanted his money to grow faster and higher so that he could afford a nice wedding and a down payment on the couple´s future home. What happened? His money shrank to $11,000, and he had to change his plans. Sometimes, market risk begets romantic risk. Losing money is only one headache you face when you lose money this way; the idea of postponing a joyful event, such as a wedding or a home purchase, just adds to the pain. The gent in the preceding story could have easily minimized his losses with some knowledge and discipline.
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How to play the financials in times of volatility
January 14, 2007
From The National Post:
 Given the ongoing equity market volatility, particularly with financial stocks, NYSE-listed Aon Corp, Assurant Inc., Willis Group Holdings Ltd., StanCorp Financial Group Inc. and National Financial Partners Corp. offer a solid alternative for those who want to invest in the sector, according to Citigroup’s Keith Walsh. In a recent note to clients, the analyst highlighted these buy-rated names as his “best ideas” for 2008.

“Their fundamentals are strengthening and they have little or no balance sheet risk,” he said, noting catalysts like revenue growth, margin expansion and strong capital management.
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Ability to track market risk has shrunk forever: Moody's
January 7, 2007
From The Economic Times:
 The complexity of the global financial system and the imbalance of information available to market participants means the ability to track risk has declined "probably forever", Moody's Investors Service said on Monday.

"It is extremely unlikely that in today's markets we will ever know on a timely basis where every risk lies," analysts at the ratings agency, led by chief international economist Pierre Cailleteau, wrote in a report.
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2008 Could See Volatility of 2007
January 2, 2007
From The Associated Press:
 The start of a new year often brings jokes about crystal balls, but with the arrival of 2008, many investors are ruefully saying they don't need fortunetelling gimmicks — they know that the problems that made 2007 painful and turbulent aren't going away with a change in the calendar.

The concerns about slowing economies, a weakening U.S. consumer and further tightness in the credit markets are likely to dog investors at least early on in 2008, observers say. While it is impossible to say with any certainty what will happen, few expect that the bumpy ride investors unwittingly began in mid-2007 will soon end.
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Investors reintroduced to volatility
January 1, 2007
From The Chicago Tribune:
 It wasn't just a topsy-turvy year in the U.S. stock market; it was also a backward year.

Stocks closed lower Monday to put to rest the worst year-end performance for stocks in 33 years. The last time stocks fell in November and December was 1974.
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Financial Advisers Warn of Volatility
December 26, 2006
From The Wall Street Journal Online:
 Financial firms are telling clients and advisers to be flexible going into 2008 because of the likelihood of continued market volatility. "It's not that there'll be no growth, but growth will be so slow that it will be pretty painful," said Michael Jones, chief investment officer for Wachovia Securities LLC.

The wealth management units at Morgan Stanley and UBS AG, as well as Wachovia Securities, which is part of the capital management group at Wachovia Corp., are taking a defensive approach going into 2008, moving client assets into consumer staples and large-cap stocks.

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Uganda: Where Risk is a Good Thing for Investors
December 23, 2006
From AllAfrica.com:
 Investment risk is a complex subject. Experts sometimes use elaborate models to measure units of risk, but the vast majority of retail investors and pension fund members are not nearly as scientific.

They are concerned about the risks associated with certain types of investment and how to control risk.

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Choppy waters?
December 18, 2006
From MarketWatch:
 Monday was yet another day in which the Dow Jones Industrial Average rose or fell by more than one hundred points.

In fact, Monday's loss was closer to 200 points: The Dow Jones Industrial Average lost 172.65 points. Of the 11 trading sessions so far this month, six have experienced a triple-digit gain or loss. And of the 21 days in November when the stock market was open, 12 witnessed a daily change this large.

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Volatility: Finally Getting Respect
December 17, 2006
From Barron's Online:
 SINCE DERIVATIVE PRICES REFLECT the probabilities of potential outcomes, Striking Price commemorates the end of 2007 with a prediction for 2008.

After so much sturm und drang in the global markets in 2007, investors increasingly will view volatility as an asset that can be traded, just like stocks and bonds.

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