Juggling with Knives: Smart Investing in the Coming Age of Volatility

Juggling with Knives: Smart Investing in the Coming Age of Volatility

Language: English

Pages: 384

ISBN: 1610394801

Format: PDF / Kindle (mobi) / ePub

Stunning volatility is the new “fact of life” that defines our age. Financial markets fall off cliffs one day, but then stage a recovery the next, only to do it all over again. The switch back and forth is emotionally draining, making us susceptible to irrational responses that can turn manageable problems into huge personal crises. But while there is danger in volatility, there is also the opportunity to profitably juggle the knives that volatility throws your way—with less risk than you might think.

The first step toward profiting from volatility is to understand why these radical ups and downs are taking place now. Jim Jubak’s deep and broad-ranging analysis looks into not only the financial but also the economic, market, and social trends, showing how they reinforce each other, including:

• the consequences of global central banks operating as cash machines,
• a financial system that will not be reformed,
• China as the world’s largest game of three-card monte,
• the aging of populations around the world and the resulting war between the young and old,
• and the large bill we will have for the consequences of environmental externalities such as climate change and energy uncertainty.

Jubak analyzes these and other trends, providing practical insights and specific investing strategies that show investors how to respect—but not be scared of—market volatility, and how to make smarter investment decisions to profit from and hedge against it.














isn’t sufficient. As well as looking at the volatility landscape for each separate asset class, we also need to look at the way all these volatility landscapes fit together into a complex system of volatility and recognize that the way they fit together changes over time too. An increase in the volatility of those changes in the way the system fits together—and rapid shifts in the way those changes work to affect each other in the system—is a major characteristic of this Age of Volatility. In

greed, Global Financial Crisis of 2008–2009 and, 97–98 Gross, Bill, 50, 88, 258 benchmarking of, 52 on declining interest rates, 54–55 on New Normal, 48–49 on Paranormal, 51–52 Treasury market and, 55 See also New Normal Guangdong International Trust and Investment, 120 Hadoop, 238 HAGL JSC, 303 Haixin Steel, 124–125 Hayek, Friedrich, 59 HDFC Bank, 268 health care spending diabetes and, 110 growth in, 313 US aging population and, 107–108 high-quality debt shortage, 209–216

flows from the world’s central banks—and from retail investors through mechanisms such as ETFs—had overwhelmed distinctions among developing economies. Countries that had developed sound fiscal policies, countries that had maintained a tight watch on inflation and current account balances, countries that had let the markets set exchange and interest rates so that pressure didn’t build up in the system for sudden changes, and countries that had done none of the above—they all experienced the same

recovery from that slump shows that the Great American Moving Van is picking up fewer households than it did before the global financial crisis. You’d expect that any trend that had more homeowners in United States thinking about their houses as if they were options on seven- to ten-year Treasury bonds would drive the notoriously high moving rate for US householders even higher. If, after all, you’re tracking buy-versus-rent strategies as a way to figure out when to buy and sell in the price and

gas (LNG). From 2014 to 2016 that effort is projected to increase the LNG workforce from 62,000 to 103,000. Even before the first exports have left the new LNG export facility, scheduled for late 2015, there are fears that this boom might also be within sight of a peak. Recent projections say that if the Department of Energy approves all the export licenses submitted, it would add up to 25 percent of all US natural gas production. That seems unlikely to happen, although I don’t expect that

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