This downside management toolkit keeps you informed of the latest market events; shares how we have been managing downside risk in our portfolios; and equips you with important truths to hold on to while markets bounce through turbulent times.
Insights for times of market uncertainty
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How we manage risk
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What is risk management?
When it comes to investing, risk management is the active mitigation of uncertainty that surrounds all investment opportunities. Investing is inherently risky. At Russell Investments, we do not seek to avoid risk, but rather work to ensure that the right risks are taken, with the highest likelihood of compensation. We work to ensure exposure to uncompensated risk is minimised.
How we manage risk
At Russell Investments, we help investors manage downside risk in 3 ways - diversify sources of returns, use a robust dynamic asset allocation process to guide tactical positioning and seek effective implementation capabilities. We have been anticipating a low return, high volatility environment for the last 2-3 years. Accordingly, we have been dynamically adjusting our portfolio positioning to manage downside risk.
Emerging markets: Tumbling, or just stumbling?
Emerging markets comprise a scatterplot of disparate economies, drawn from every quarter of the globe, and exhibiting an extremely diverse range of shapes, sizes, political regimes, trade composition and financial circumstances.
Can multi-asset funds protect you from market shocks?
Dynamically managed and with a focus on risk, multi-asset funds can help you mitigate the impact of market shocks. We believe the strategies in our multi-asset process help us steer a course through volatile times.
Multi-asset quarterly review
Andrew Sneddon, Managing Director – Multi-Asset Solutions, discusses Russell Investments’ performance in the latest quarter and how our investment outlook impacts our portfolio positioning.
Umbrellas for a rainy day: Why options can be better than cash to manage downside risks
Markets are now in the 9th year of the global bull run since the global financial crisis troughs in March 2009. As equity markets continue rising to increasingly extreme valuations, more and more investors are employing downside protection strategies to manage the risk of loss.
The search for returns: the low-return imperative
We believe the search for returns is not going to get any easier against a backdrop of high U.S. equity prices, narrow credit spreads and low bond yields. When expected future market returns are likely to be lower than the required rate of return, we believe an investor cannot afford to ignore any investment strategy that may offer incremental return, take on risks they do not expect to get paid for or disregard implementation efficiency.
Why downside protection may matter more than upside growth
The global macroeconomics and geopolitical outlook remains uncertain, suggesting that an environment of low rate, low growth, and high valuations may linger. Against this backdrop, preserving capital may be more important than seeking the growth of capital, because, in the investing world, losing less means requiring less to bounce back.
Downside protection: What, why, who, how and when?
Downside protection is an important aspect of risk management that should be considered for all portfolios. Downside protection strategies aim to reduce the frequency and/or magnitude of capital losses, resulting from significant asset market declines.
Where are we now? The cycle of market emotions
The key to successful investing is to buy low and sell high. But more often than not, investors do the exact opposite. The reason? Investors are human. For example, many panic and cash out when markets fall. Ironically, at these times, these investors fail to recognise they are actually at the point of maximum financial opportunity.
Markets bounce back after shocks
A look at share market performance 12-24 months after some of the sharpest declines of the past 40 years. The strong historical tendency of markets to rebound after market shocks provides some evidence against fear-induced dramatic alterations to asset allocations.
Investors facing volatile markets need skill, scale and discipline
Correctly timing when to get out of – and back into – the market is tricky. Get out right after a ‘worst’ day, and you might not get back in soon enough to catch a ‘best’ day. Such mistiming can have a significant impact on potential portfolio returns.
Standing at the crossroads: An investor’s choice of response after market turmoil
We compare the portfolio values of two investors for the last 10 years: one who switched to cash after the global financial crisis, the other staying invested in a diversified multi-asset portfolio.
7 things successful investors do in volatile times
In a world where we expect the 'low return/high volatility' theme to continue for some time, we will likely see another 'Great Wealth Transfer' from the impatient to the patient investor. The impatient will chase the highs and exit at the lows, while the patient will withstand the temptation to 'chase'.
MARKET WEEK IN REVIEW
Weekly market update on global investment news in a quick five-minute video format featuring some of our top investment professionals.
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Global Market Outlook
Russell Investments' comprehensive quarterly report setting out our strategists' views and analysis on global investment markets and economies.