We believe traditional markets are rational most of the time but from time-to-time markets are irrational – Therefore you need strategies that work in both environments
Convergent Strategies
- Markets trade through various cycles and, during rational periods, markets tend to exhibit lower volatility with prices being driven by fundamentals and value.
- Convergent strategies are positioned to seek to capture returns in these environments
Divergent Strategies
- Markets from time to time exhibit irrational periods where volatility spikes and markets trade under stress conditions with fear and greed driving prices, as opposed to fundamental information.
- During these times traditional portfolios often exhibit large left-hand tail resulting in potentially large losses.
- It is during these periods that Divergent strategies are needed.
*The information above is for illustrative purposes only. Past performance does not guarantee or indicate future results.
