This week's Expanding Frontiers features a live conversation with financial author and advisor Dr. Adam Link, who challenges some of the biggest assumptions investors make about risk, retirement, and what "average" really means.

Together, we explore why average returns can be misleading, the hidden dangers of sequence of returns risk, passive versus active investing, dynamic portfolio management, alternative investments, and how AI is changing, but not replacing, the role of trusted financial advisors.

Whether you're an investor, advisor, or simply interested in making better financial decisions, you'll come away with practical insights and a fresh perspective on managing wealth with purpose.

In this episode:

• Why average isn't always good enough
• Purpose, protection, and performance
• Sequence of returns risk
• Passive vs. active investing
• Dynamic portfolio design
• Alternative investments
• AI and the future of financial advice

I'd love to hear what resonated with you after you listen.

In this episode we discuss various approaches to measuring investment risk and outline some of the pitfalls of using the traditional standard deviation of returns metric. We also examine a journal article which introduces a novel methodology for measuring portfolio tail risk by integrating multivariate extreme value theory with orthogonalized returns. The author, Miloš Božović, addresses the computational complexity of traditional risk models by using principal component analysis and GARCH filtering to transform correlated assets into independent series. These individual components are then analyzed using the generalized Pareto distribution to provide precise, closed-form estimates for Value at Risk and Expected Shortfall. Empirical testing on U.S. stock data and currency portfolios demonstrates that this approach identifies extreme market co-movements more accurately than standard parametric methods. Ultimately, the research offers a robust framework for financial institutions to manage risk during periods of significant market stress and volatility.

Sources

Kim, M., & Zhou, A. (2024). "The Measurement of Investment Risk." World Scholars Review. (Mentored by Dr. Gerard Dericks, Hawaii Pacific University.)

Božović, M. (2020). "Portfolio Tail Risk: A Multivariate Extreme Value Theory Approach." Entropy (Basel), 22(12), 1425. doi:10.3390/e22121425.

Episode Note

This episode draws on the sources listed above and incorporates AI-assisted research synthesis. All content has been reviewed and curated by the host. It is intended for educational purposes only and does not constitute investment or financial advice.

This episode synthesizes a legal analysis of a recent SEC roundtable regarding the "retailization" of private and alternative investments, and the ninth edition of a comprehensive Art & Finance Report produced by Deloitte Private. Together, these sources explore how alternative assets are becoming more accessible to a broader range of investors while highlighting the legal, regulatory, and practical challenges that accompany this shift. Topics include potential changes to the accredited investor definition, regulatory safeguards for private markets, the growing role of art within wealth management, legacy planning, art-secured lending, fractional ownership, and technology. Collectively, the sources suggest that expanding access to alternative investments will require a careful balance between innovation, investor protection, and professional oversight.

Sources

Art & Finance Report 2025 | Deloitte. Private (PDF)

SEC Holds Roundtable on the “Retailization” of Private/Alternative Investments: A Hint of the Agency's Direction | Global Financial Regulatory Insights (Webpage)

Episode Note

This episode draws on the sources listed above and incorporates AI-assisted research synthesis. All content has been reviewed and curated by the host. It is intended for educational purposes only and does not constitute investment or financial advice.