Artwork for podcast Top Traders Unplugged
TTU117: Strategic Risk Management ft. Cam Harvey & Rob Carver
10th December 2021 • Top Traders Unplugged • Niels Kaastrup-Larsen
00:00:00 01:17:53

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"When the market turns and goes negative, strategies like Trend Following tend to do really well. They provide that hedge. So it’s completely inappropriate to compare Trend Following to a long equity portfolio, because Trend Following has different properties - it has hedging properties." - Cam Harvey

How should you protect your portfolio against large losses, but without giving up its upside potential? To answer this question, and many more, I invited back professor of finance at Duke University, Campbell Harvey to the show. I also thought it would be fitting if Rob Carver, could also join us, considering Rob and Cam used to work together at Man AHL. Enjoy the show as we discuss how to navigate a crisis in the markets, and what to expect in terms of the global outlook for investing.

Thank you for listening and please welcome to the show, our guest, Campbell Harvey.

In This Episode, You’ll Learn:

  • How to manage a portfolio through a crisis
  • The motivation behind writing his new book
  • Various methods of portfolio protection
  • Diversification within Trend Following systems
  • Volatility targeting and why it can be a powerful tool
“When you have a portfolio of different assets, the noise cancels out, you reduce the volatility, and that’s good for you.” - Cam Harvey
  • The journey of volatility going from a measure to an input
  • Drawdowns as an important metric to monitor
  • Timing portfolio rebalances effectively
  • The 60 / 40 portfolio, diversification, and inflation

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And you can get a free copy of my latest book “The Many Flavors of Trend Following” here.

Learn more about the Trend Barometer here.

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“People don’t truly understand diversification, because it’s not just about reducing volatility, it’s also about reducing some of the tail-risks. So when I think about a diversified portfolio, I want to reduce the noise, and reduce the variance, but I also want to reduce the skew.” - Cam Harvey