E1. Enter the New World of Return Stacking - Inaugural Episode!
In this episode, Corey Hoffstein from Newfound Research, and Rodrigo Gordillo and Adam Butler of Resolve Asset Management Global, discuss the concept of return stacking and its implications for investors. They delve into the challenges of beating the large cap U.S. equities market, the shift in conversations about return stacking from risk management to creating excess returns, and the potential of diversification in generating consistent positive excess returns.
Key Points
- Investors seeking to outperform benchmarks can consider stacking strategies that utilize macro inefficiencies rather than competing with other stock pickers in highly efficient markets like large-cap US equities.
- Return stacking can be used to create more resilient, all-weather portfolios by diversifying across various asset classes and strategies, including alternatives like managed futures and carry, to address different economic regimes and reduce dependency on stock and bond performance.
- The concept of glide path reimagined through return stacking reveals that diversification and moderate use of leverage can significantly increase the likelihood of not running out of money in retirement, depending on one's financial situation and years from expected death.
Topics Discussed
• The difficulties of beating the large cap U.S. equities market and the need for diversification
• The shift in conversations about return stacking from risk management to creating excess returns
• The potential of diversification in generating consistent positive excess returns
• The idea of dictum in the markets and the difference between behavioral time and statistical time
• The concept of risk parity and the importance of maintaining balance in portfolio risk
• The role of trend following in risk management and return stacking
• The potential of stacking strategies in enhancing portfolio returns
• The structural challenges in implementing return stacked strategies in portfolios
• The importance of diversification in ensuring investment success
This episode provides valuable insights into the concept of return stacking and its potential in enhancing portfolio returns. It is a must-listen for investors interested in diversification strategies and the future of investment management.
Chapters
| 0:00 | |
| 2:03 | |
| 6:36 | |
| 14:18 | |
| 18:30 | |
| 25:06 | |
| 29:20 | |
| 40:35 | |
| 49:05 | |
| 1:00:38 | |
| 1:06:44 | |
| 1:11:02 |
Transcript
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