YINN

In this article I will walk you through the commonly used but wrong way to think about volatility decay.We'll then walk through an example of volatility decay with realistic numbers.Afterwards, we'll build a simple mathematical model to calculate volatility decay from first principles.We'll compare the model with back-test simulations done on portfoliovisualizer.com.

This article will cover four key macroeconomic themes for year-end 2020.These themes are the Treasury market, oil prices, US dollar foreign exchange rates, and China's economy.I believe these forces will determine the direction of the global stock markets.That is, higher Treasury yields, lower oil prices, stronger USD, and weakening of China's economy will push global stock indexes lower.

Timing rallies to predict short and unpredictable market behavior is mission impossible.Capturing China as an asset class is not about being opportunistic; it is not a trade.We believe that investing in China is not about if and when one should invest, but rather about managing your time horizons to allow for a strategic allocation to this asset class.

The reopening so far has exceeded expectations as Chinese consumers shift parts of their lives online and factories move towards greater capacity utilization.With the exception of the Energy sector, all of the Global Industry Classification Standard (GICS) sectors in China generated positive returns in Q2 2020.Longer-term tailwinds for the Chinese pharma industry accelerated during Q2, following the introduction of the revised Drug Registration Regulation on March 30, 2020.

The recent move to potentially delist Chinese companies from American exchanges has made for good headlines.But the risk to Chinese equities - particularly the non-state-owned segment of China or emerging markets, where China is about one-third of total weight - is minimal.The risk comes mainly from the expected growth potential of the global economy.