Investment Approaches in Volatile Markets

One of the most concerning developments is the growing divergence between professional and retail investors. Institutional investors have quietly reduced risk, shifting toward defensive sectors and fixed income, while retail traders continue chasing speculative trades. Sentiment surveys confirm this imbalance, showing extreme bullishness among small traders, especially in options markets. With these risks building under the surface, prudent investors should proactively protect their portfolios. No one can predict precisely when the market will correct, but the ingredients for a sharp downturn are clearly in place. Savvy investors should use this period of complacency to reduce risk exposure before the cycle turns. Here are six practical steps investors should consider: ▪️ Rebalancing portfolios to reduce overweight exposure to technology and speculative growth names. ▪️ Increasing cash allocations to provide flexibility during periods of volatility. ▪️ Rotating into more defensive sectors like healthcare, consumer staples, and utilities that tend to outperform during corrections. ▪️ Reducing exposure to leverage by avoiding margin debt and leveraged ETFs. ▪️ Using options prudently—not for gambling, but for protecting portfolios through longer-dated puts on broad market indexes. ▪️ Focusing on companies with strong balance sheets, stable earnings, and reasonable valuations. ▪️ The explosion of zero-day options trading is not a sign of a healthy market. It is a symptom of an unhealthy market increasingly driven by speculation rather than investment discipline. Retail traders have moved from investing to gambling, chasing fast profits while ignoring the mounting risks. Greed is rampant, leverage is extreme, and complacency is near record levels. Markets can remain irrational longer than expected, but history tells us these speculative periods always end in a painful correction. Bull markets do not die quietly; they end with euphoric retail excess followed by painful corrections. Investors who recognize the signs early will avoid the worst of the fallout and be positioned to capitalize when value opportunities return.

In the last six years, I've watched investors shift from seeing climate as a transition risk to confronting the reality in front of us: physical risk, hitting portfolios now. Chris Hall, editorial director of Sustainable Investor, captures this shift brilliantly in a new two-part piece, one of the clearest analyses I've read on where institutional investors are and where they need to go. $224bn in losses from natural disasters in 2025. Less than half are insured. And fewer than 1% of companies disclose capital expenditures for adaptation and resilience despite specific requirements under the CSRD and ISSB standards. Asset owners own the risk. What they don't have is decision-useful information: where the real exposures sit, what resilience actually costs, and who is genuinely prepared. And here’s the part that still gets missed. It’s not the flood that breaks a portfolio. It’s everything around it: no access, no power, no staff, no supply chain. Because this is no longer a one-off shock. It’s a cycle. Flood before Easter. Drought by June. Flood again in autumn. Then repeat. Global temperatures, energy imbalances and ocean heat absorption have set new records for 11 consecutive years (WMO). As UN Secretary-General António Guterres put it: “When history repeats itself 11 times, it is no longer a coincidence. It is a call to act.” This is locked into the calendar. The conversation has to move beyond measuring risk to building resilience. 👉 Adaptation Risks Push Asset Owners Beyond Traditional Boundaries Worth 10 minutes of your time. https://lnkd.in/eQ7aQ9cH #ClimateRisk #InstitutionalInvestors #Resilience #LongTermInvesting

How are Family Offices navigating global trade wars and geopolitical tensions? Family Offices globally are reshaping investment strategies in response to increased global trade tensions and geopolitical uncertainty. According to the UBS Global Family Office Report 2025, 70% of Family Offices rank global trade wars as their top investment risk, with major geopolitical conflicts (52%) and inflation (44%) also significant concerns. Over the next five years, geopolitical issues are projected to become even more critical. To manage these risks, Family Offices increasingly favor active management, selecting skilled managers to maintain stability during market volatility. About 40% prioritize active management, while 31% rely on hedge funds known for mitigating downside risks. Additionally, 27% are boosting their holdings in illiquid assets for market resilience. Precious metals have also regained popularity, now chosen by nearly 20% of Family Offices. Asset allocations have shifted notably toward developed market equities, currently averaging 29%, while developed market bonds have gained attention for their stable returns during uncertain periods. Interest in emerging markets like India and China remains cautious due to geopolitical unrest (56%) and political instability (55%). Additional concerns such as currency volatility and regulatory challenges further complicate investment decisions in these regions. Private market allocations are adjusting as well. Typically strong in private equity, Family Offices are moderately reducing their exposure from 21% to a projected 18% by 2025, driven by rising interest rates and slower exit opportunities. Regionally, investments continue to favor North America and Western Europe, while exposure to Asia-Pacific and Greater China is modestly declining, reflecting evolving perceptions of risk. Succession planning is another key area for Family Offices. While over half (53%) have formal plans, significant challenges remain in tax efficiency (64%) and preparing the next generation effectively (43%). These strategic adaptations offer broader considerations for investors of all types. How might Family Office strategies inform individual and institutional approaches to investing? Could these strategic changes reshape overall market dynamics? Most importantly, how will ongoing geopolitical developments shape future investment opportunities?

84% of institutional investors expect their sustainable allocations to grow in the next 2 years 🌍 Sustainable investing is gaining strength. Investors are responding to more consistent performance data and clearer evidence of financial value. The new Sustainable Signals survey shows that 84% plan to increase the share of sustainable assets in their portfolios. Asset owners show the strongest change, supported by a more established track record. Climate risk is now a major driver of investment decisions. More than 75% expect physical climate impacts to affect asset prices within 5 years. This is directing capital toward data and analytics, water infrastructure, and grid upgrades. Energy efficiency and renewable energy remain the top 2 themes. Climate adaptation has moved into the top 3 for the first time, showing a broader focus on preparing assets for climate related disruptions. Investors also highlight practical challenges. Limited data, regulatory uncertainty, and political volatility continue to shape how they allocate capital. Still, more than 80% see sustainability as an essential tool for managing portfolio risk. Together, these trends point to a more structured approach to sustainable investing. One that links financial performance with exposure to climate and policy risks. How quickly do you see adaptation becoming a standard expectation in mainstream investment strategies? #sustainability #sustainable #esg #investment

There is a hyper consensus venture environment right now, with an acceleration of investors piling into the same themes and companies. So far in 2025, two thirds of VC deals have been AI. There are unprecedented mega rounds at the early stage: I'm seeing $10m to $20m rounds into idea stage companies (typically repeat pedigreed founders in the Bay Area). Where does that leave pre-seed/seed specialist funds? How do we drive returns in this environment? ➡️ Option 1: Pay the high prices the mega funds are paying. Be the follow on check and look to sell secondary one or two rounds later. But it's a high risk strategy to play without ball control, especially if there is an AI wobble. ➡️ Option 2: Look ultra early. See a deal or trend before others - which could mean meeting founders pre-idea or pre-company stage - to catch them before YC or the mega funds. This could mean building a proprietary sourcing pipeline through universities, a scout program, or an in-house incubator. ➡️ Option 3: Look where others aren't looking. This could mean overlooked regions, sectors or founders. If you're backing non-consensus early stage companies, there will be more follow on risk. For these founders, there should be a way to get to profitability after one or two rounds to limit dependence on VC. If the metrics take off, venture funding will be there. If growth is more steady, the company could self fund or seek other funding routes to reach a meaningful outcome. What other strategies are you seeing for early stage specialist funds right now? What do you think will work? Curious to hear from LPs, VCs and founders. 🙏

What’s forcing Family Offices to rethink where and how they invest in real estate? In recent months, we’ve seen a marked shift from traditional, “safe” asset classes into sectors once considered secondary. Industrial remains strong, especially with nearshoring boosting demand for logistics and warehousing across the US Mexico border. But what’s capturing Family Office attention even more are sectors that combine resiliency with real world utility: medical office, cold storage, and workforce housing. These aren’t just buzzwords. In fact, according to the Family Office Real Estate Institute’s latest analysis, allocations are moving sharply away from single family homes, hospitality, and even assisted living. Instead, capital is rotating into areas that align with long term wealth preservation: durable income, lower volatility, and assets that perform through economic cycles. We’re also seeing the emergence of more direct investing strategies. Family Offices are bypassing funds and going deal by deal, often preferring club deals or co investment structures with aligned operators. Besides control, Family Offices want to be closer to the asset, to better manage risk, to reap the full benefits of depreciation and tax efficiency. One clear example: A $250M West Coast SFO recently exited its allocation to retail REITs and redeployed into four off market medical office properties in secondary cities at cap rates nearly 200 basis points higher than what they were getting in core markets. The rationale? Recession resilience, essential services, and better yield. At the same time, Family Offices are continuing to prefer long holds. Over 50 percent look at 10 plus year timelines. The contradiction is that many of the most attractive investment strategies, value add, opportunistic, and development that typically come with 3-5 year cycles. The workaround? Stabilize, refinance, and hold. But that takes the right partner. And patience. Real estate remains a cornerstone for generational wealth, but it appears the playbook is changing. Family Offices are doubling down on asset classes with staying power, shifting into more hands on structures, and aligning capital with long term vision rather than market timing. So their challenge now is not whether to invest, but how to find opportunities that match the Family Offices goals, risk profile, and values. Those waiting for the perfect market are already behind. From my experience, the families who win are the ones who play the long game with the right partners, the right assets, and a plan that looks 20 years out, not just two.

In asset management, more data doesn't automatically lead to better investment decisions. Often, it simply creates more noise. However, we believe that when fundamental analysts partner with data specialists supported by AI capabilities, useful signals can be extracted from the ever-expanding universe of alternative data. In this article, Vinit Agrawal and Jason Nogueira detail how our research analysts and Investment Data Insights team work closely to: ● Determine the questions that matter most for a given company ● Identify where alternative data might reveal a gap between business fundamentals and market expectations ● Evaluate potential data sources, including their biases and blind spots, and monitor effectiveness over time They also highlight a compelling case study from Industrials Analyst Lee Sandquist, who paired fieldwork findings with alternative data to test and refine his thesis on interconnection companies underpinning AI infrastructure. Read more from Vinit and Jason as they explore how alternative data, when harnessed by the right people and processes, can help strengthen research in pursuit of a durable investment edge: https://trowe.com/4fAjYys

@ OpenSky Ventures we take a different approach to early-stage investing and a little under two years in with over half our portfolio companies having raised follow on funding - it’s working. Here’s our strategy: Most funds pick a few companies and go all in on them due to the power law of returns. However, at the pre-seed stage, it’s almost impossible to know which startups will break out. So we take more shots on goal. The two biggest mistakes I see in pre-seed investing: Over-indexing on a few companies too early. Reserving too much capital for follow-on bets before the company has truly proven itself. Our focus? 1 - Cast a wider net. We’re aiming to invest in 40-50 companies across the lifespan of the fund. More investments mean more chances to find the next breakout, especially when you’re investing this early. 2 - Diversify the risk. Instead of doubling down too soon, we spread our bets horizontally. This allows us to support more founders and see more opportunities as they grow. These things might seem contradictory—but they’re not if you look at the bigger picture. It’s about backing a variety of innovative founders and giving them the chance to take off. Given how challenging the current startup environment is - what’s your take on early-stage investing now?

"Market mein paise wahi banata hai jo sunta zyada hai aur bolta kam!" Investing is not just about picking stocks, it’s about understanding the deeper signals behind market movements. The best investors listen more than they act, making decisions based on data rather than emotions. 📊 March 2020 saw the Nifty 50 crash to 7,500 levels. Panic selling was at its peak, but smart investors observed institutional buying in fundamentally strong companies like HDFC Bank, Infosys & Reliance. Those who listened to market signals instead of reacting emotionally have now seen the index cross 22,000! 🚀 📌 How to truly listen to the market? 🔹 Earnings Calls & Reports: Investors like Rakesh Jhunjhunwala identified Titan at an early stage by analyzing its financials & vision. Studying quarterly results, management commentary & industry trends can help investors spot potential multi-baggers. 🔹 Macro Trends Matter: The stock market doesn’t move in isolation. Key factors like RBI’s interest rate decisions, inflation trends & global crude oil prices influence stock valuations. A rising inflation rate often impacts FMCG margins, while lower interest rates benefit housing & auto sectors. 🔹 Ignore Market Noise: Blindly following social media stock tips can lead to losses. A data-driven approach—analyzing P/E ratios, debt levels & future growth projections separates successful investors from impulsive traders. For instance, Reliance Industries' expansion into digital & retail was evident from its annual reports long before the stock surged The market constantly sends signals, but only those who analyze data, trends & financials truly profit. Before hitting the buy or sell button, take a moment to listen because patience & knowledge build wealth, not impulsive decisions. #stockmarket #investing #investment 

𝗜 𝗹𝗼𝘀𝘁 𝗺𝘆 𝗳𝗶𝗿𝘀𝘁 𝘁𝗵𝗿𝗲𝗲 𝗠𝗲𝗱𝗧𝗲𝗰𝗵 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀. 𝗜𝘁 𝘄𝗮𝘀𝗻’𝘁 𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁’𝘀 𝗳𝗮𝘂𝗹𝘁—𝗶𝘁 𝘄𝗮𝘀 𝗺𝗶𝗻𝗲. I went in with the best intentions. Each of these companies had the potential to make a real, almost disruptive, impact on healthcare outcomes. That seemed enough. It shouldn’t have been. 𝗪𝗵𝗮𝘁 𝗜 𝗺𝗶𝘀𝘀𝗲𝗱 𝘄𝗲𝗿𝗲 𝘁𝗵𝗲 𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗶𝗮𝗹𝘀, 𝘁𝗵𝗲 𝗴𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲, 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁 𝗱𝘆𝗻𝗮𝗺𝗶𝗰𝘀. In one case, I wasn’t fully confident in the founder but invested anyway because I believed in what the company was building. That was perhaps my biggest mistake of the three. 𝗧𝗵𝗼𝘀𝗲 𝗲𝗮𝗿𝗹𝘆 𝗳𝗮𝗶𝗹𝘂𝗿𝗲𝘀 𝘀𝗵𝗮𝗽𝗲𝗱 𝗵𝗼𝘄 𝗜 𝗲𝘃𝗮𝗹𝘂𝗮𝘁𝗲 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀 𝘁𝗼𝗱𝗮𝘆. 𝗛𝗲𝗿𝗲 𝗶𝘀 𝘁𝗵𝗲 𝗳𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸 I now bring to every conversation: 𝟭. 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝘁𝗵𝗲 𝗮𝘀𝘀𝗲𝘁 𝗰𝗹𝗮𝘀𝘀 𝗳𝗶𝗿𝘀𝘁. Early-stage investing carries a high mortality rate by design. If you invest in ten companies, six or seven will shut down. Go in knowing that, not discovering it after the fact. 𝟮. 𝗔𝘀𝘀𝗲𝘀𝘀 𝘁𝗵𝗲 𝗳𝗼𝘂𝗻𝗱𝗲𝗿 𝗯𝗲𝗳𝗼𝗿𝗲 𝘁𝗵𝗲 𝗶𝗱𝗲𝗮. The idea can evolve. The founder is the constant. Back someone you believe in, not just something you believe in. Invest time in understanding who you are backing, not just their pitch, but their thinking, their values and how they handle pressure. 𝟯. 𝗞𝗻𝗼𝘄 𝘆𝗼𝘂𝗿 𝗴𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲 𝗽𝗿𝗲𝗳𝗲𝗿𝗲𝗻𝗰𝗲. Are you comfortable with a promoter-driven organisation or a board-driven one? Be clear about which suits you before you commit. 𝟰. 𝗘𝘃𝗮𝗹𝘂𝗮𝘁𝗲 𝘁𝗵𝗲 𝗽𝗮𝘁𝗵 𝘁𝗼 𝗺𝗮𝗿𝗸𝗲𝘁. How long will it take for the product or service to reach the market? What are the regulatory, commercial and operational hurdles? Impact without a viable path to market is just a good idea without consequence. 𝟱. 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹𝘀 Don’t ignore the business commercials. Confirm whether the business can generate returns. Understand if the model is scalable and sustainable. 𝗚𝘂𝘁 𝗶𝗻𝘀𝘁𝗶𝗻𝗰𝘁 𝘀𝘁𝗶𝗹𝗹 𝗵𝗮𝘀 𝗮 𝗽𝗹𝗮𝗰𝗲 𝗶𝗻 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗱𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀. But it works best when it is backed by the right questions asked early enough. We had the opportunity of working with the graduating class of Harvard Business School, Pooja Joshi, Claire Bilden, Anurag Baid, Joseph Ginter and Jonathan Young, who worked with family offices, to co-build an investment framework. I’ve shared the scorecards from the same for evaluating a company before investing. 📌 𝗜𝗳 𝘆𝗼𝘂 𝘄𝗮𝗻𝘁 𝗮 𝗰𝗼𝗽𝘆 𝗼𝗳 𝘁𝗵𝗲 𝗱𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻 𝗯𝗮𝗻𝗸: 𝟭. 𝗙𝗼𝗹𝗹𝗼𝘄 𝗗𝗿 𝗦𝗮𝗻𝗷𝗮𝘆 𝗔𝗿𝗼𝗿𝗮 𝟮. 𝗦𝗮𝘃𝗲 𝘁𝗵𝗲 𝗽𝗼𝘀𝘁. 𝟯. 𝗥𝗲𝗽𝗼𝘀𝘁 𝘁𝗼 𝘆𝗼𝘂𝗿 𝗻𝗲𝘁𝘄𝗼𝗿𝗸 𝟰. 𝗗𝗠 𝗗𝗿 𝗦𝗮𝗻𝗷𝗮𝘆 𝗔𝗿𝗼𝗿𝗮