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Williem de Vlugt Benedicte Gravrand, Opalesque Geneva: In general, the longer the investment horizon, the better investors can deal with higher risk. But, the investment horizon becomes shorter for many investors if volatility and down markets continue, according to participants at the recent Opalesque Netherlands Roundtable. Also, comparing fund managers’ yearly returns can lead to shorter time horizons.
Wilrik Sinia, Partner at Mint Tower Capital Management, which manages a volatility and convertible arbitrage hedge fund, says most of his clients, who are high net worth individuals (HNWIs), have a very astute perception of risk and opportunities. "So when it comes to volatility and market risk, many of them are already prepared for it. They have the reserves. They know what they can handle, they move around in their trades, they are flexible and even tactical."
The recent market volatility and the current uncertainty are not at a level where investors start panicking, he adds. They may not be happy with returns or market conditions, but they’re not reacting like in 2008.
And volatility, which is different from risk and does not necessarily imply high a likelihood of losses, has stabilized of late. Implied equity volatility as measured by the CBOE’s Vix index, a barometer of investor sentiment, on Tuesday remained below 20 after settling on Monday beneath the key thresho...................... To view our full article Click here
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