On this week’s episode of Tape Talk, Quint and Daniel interview Paul Lountzis of Lountzis Asset Management and listen to his insights about risk in the investment markets here.
As we dive into where markets are today we discuss the tremendous liquidity that has been provided by central banks around the world. While this has helped stabilize much of the world economies it has also forced investors to take on undue risk as they search for yield. Since the Federal Reserve here in the US still doesn’t seem ready to hike rates further any time soon investors may get a little too complacent in these risky assets by the time future rate hikes come.
Time Horizons Matter
Investing has major distinctions from trading. Investors often are required to have patience and perseverance while waiting for their thesis to unfold. Paul Lountzis talks about how this manifests at his firm and what it means as he looks to take on new investors, pointing them to the fact that they need to have a time horizon measured in years and not months for the funds they invest.
Passive Isn’t Bad, But It’s Not Everything
Quint and Paul talk through the popular trend of passive investing and agree that it can be a powerful tool for those trying to build their wealth. On the other hand, for those focused on capital preservation and limiting downside volatility, there may also be instances that management has its place in their portfolio.