TISATAAFL
by Andrew Hardy, CFA
Not that there aren’t enough acronyms flying around the investment world already, but today I will reference a lesser known one – only to debunk it. TANSTAAFL: “there ain’t no such thing as a free lunch”. The etymology is uncertain, but the principle is intuitive; there aren’t many things in life that come for free without some form of cost, be it direct or indirect, explicit or implicit. However, there is one (and only one) in finance – diversification. Most famously highlighted by Harry Markowitz, Nobel Laureate and pioneer of investment theory, this has underpinned several decades of progress towards building more sophisticated, more resilient approaches to portfolio management.
Market Snapshot
- Global reported cases of Covid-19 passes 10 million with over 500k deaths.
- IMF revise outlook on global economy: now forecast a -4.9% contraction vs -3.0% previously.
- Brent crude fell -2.8% ending the week at $41.0 a barrel
- Gold rose 1.6% ending the week at $1771.3 an ounce