The Relationship Between Stocks and Bonds

2min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

The strategy, I guess, relies or some of them rely on the fact that stocks and bonds are not perfectly correlated. So what would happen in a world? I guess what could break this strategy is what I'm wondering. It would have to have a 60% or 6% drawdown in a single day for you to basically blow up. You really need like a sudden one day, the market opens down a huge amount,. 50% bonds open down 30, 40, 50% simultaneously for that type of strategy to actually blow up.

Rebecca Hotsko chats with Corey Hoffstein, and together they discuss the concept of return stacking, its mechanics, leverage determination, fund selection, and a whole lot more!

Corey Hoffstein is the co-founder and Chief Investment Officer at Newfound Research, which is a quantitative investment and research firm managing strategies that implement Return Stacking concepts.

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro.

06:08 - The different types of funds that are available to investors to implement return stacking.

06:19 - What return stacking is and how this strategy works?

10:36 - The different ways this strategy can be implemented and the portfolio solutions it provides.

22:31 - How to decide how much leverage to take, and how much return stacking strategies should make up of the total portfolio allocation?

40:03 - The factors that contributed to the poor performance of certain return stacking ETFs since 2021.

42:55 - The common mistakes investors make when implementing this strategy.

46:01- What factors impact the effectiveness of this strategy?

52:49 - How to mitigate risk when this strategy breaks down?

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Check out: Newfound Research.
Related Episode: Listen to MI260: Top Stock Picks 2023 w/ Logan Kane, or watch the video.

NEW TO THE SHOW?

Check out our Millennial Investing Starter Packs.
Browse through all our episodes (complete with transcripts) here.
Try Kyle’s favorite tool for picking stock winners and managing our portfolios: TIP Finance.
Enjoy exclusive perks from our favorite Apps and Services.
Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets.
Learn how to better start, manage, and grow your business with the best business podcasts.