What Is Tail Risk and Are You Taking Too Much Of It?
When should you protect against rare, but extreme events? When should you self-insure? Under what circumstance should you sell tail risk protection to others?
Topics covered include:
How tail events differ from tail risk
Why volatility is not the best measure of risk for individuals
What does it cost to protect against large stock market losses
Why younger investors can take more risk due to their human capital
How does the profit wheel options strategy work
How the catastrophic power outage in Texas exemplifies tail risk
Why individuals need to build more reserves because the economic system is too efficient and vulnerable to breakdowns
Thanks to SmartAsset and Babbel for sponsoring the episode. Use code DAVID for Babbel to get three months free.
