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Walls, brakes, and risk: we can learn from the market turmoil, or we can make things worse.(WALL STREET CRISIS III)(Essay)
THE U.S. stock market boomed throughout the mid-1980s. One contributing factor was a major technical innovation of that time called "portfolio insurance." This was basically a trading technique by which an investment bank would buy a basket of stocks and simultaneously "short" another, closely related basket of stocks. ("Shorting," or "selling short," amounts to betting that the price of a given security will decline. One technique involves borrowing shares for a specified time and immediately selling them, with the intention of buying them back at a lower price when the loan comes due.) If you did this just right, you could make money whether the stocks you bought went ...
- The Spooky Echoes of '87; A famed Wall Street strategist says he's haunted by...
- Magazine article from: Newsweek International Biggs, Barton July 16, 2007 700+ words
...sophisticated strategy. Portfolio insurance meant that a decline...Friday, Oct. 16, as portfolio insurance kicked in, it dropped...dangerous similarity to portfolio insurance is that if a price decline begins to gather momentum...
- 12030300 Portfolio insurance.(5: Citations)(Recommended readings)
- Magazine article from: Foundations and Trends in Finance Lim, Terence Lo, Andrew W. Merton, Robert C. Scholes, Myron S. September 1, 2005 700+ words
...A General Equilibrium-Model of Portfolio Insurance", Review of Financial Studies...1985, "On the Optimality of Portfolio Insurance", Journal of Finance, 40:1341...1988, "A Stop Loss Approach to Portfolio Insurance", Journal of Portfolio Management...
- THE HIGH COST OF PORTFOLIO INSURANCE
- Newspaper article from: The Boston Globe Jane Fitz Simon, Globe Staff December 22, 1987 700+ words
...behind the Crash of '87, portfolio insurance will be high on their...by Hayne E. Leland, portfolio insurance at its peak in August...Management, believed portfolio insurance had two fatal flaws...
- Supershares a Market Savior? / Tough Obstacle Confronts Replacement for...
- Newspaper article from: The Journal Record Floyd Norris / Marketplace December 8, 1988 700+ words
Portfolio insurance was a phenomenon of the mid-1980...minimum. Then came Oct. 19, 1987, and portfolio insurance lost its luster. Selling by those seeking to implement portfolio insurance played a major role in the crash...
- Portfolio insurance offers protection against risk. (column)
- Magazine article from: Healthcare Financial Management Deluccia, David J. February 1, 1990 700+ words
Portfolio insurance offers protection against risk...Financial managers can use portfolio insurance as a way of insuring all or...rising). Two major types of portfolio insurance are fixed income futures contracts...
- Insight fund to offer constant proportion portfolio insurance.
- Magazine article from: Investment Adviser February 5, 2007 700+ words
...life bond wrapper with an element of constant proportion portfolio insurance from 6 February. Nick Breton, head of strategic marketing...niche providers like ourselves." Constant proportion portfolio insurance is a relatively new feature being introduced to progressive...
- Rough with the smooth: CPPI has been hailed as the successor to with-profits...
- Magazine article from: Money Marketing Lovatt, Neil May 27, 2004 700+ words
...alternative "default" investment strategy. Necessity being the mother of invention, portfolio insurance (or constant protection portfolio insurance) is being hyped by many marketing departments as the heir apparent to the mantle of with...
- The Benefits of Segregated Portfolio Insurance.
- News wire article from: Mondaq Business Briefing Jennings, Conor February 27, 2004 700+ words
...insurance parent, which is used to self-insure the risks of the parent and associated companies. A segregated portfolio insurance company can be independently owned and capitalised, providing the insurance facility through legally separate...
Source: HighBeam Research, Walls, brakes, and risk: we can learn from the market turmoil, or we...