His low -
volatility portfolios consist of the 30 % of stocks with the lowest standard deviations of monthly total returns during the preceding 36 months, reformed monthly.
His low -
volatility portfolios consist of the 30 % of stocks with the lowest standard deviations of monthly total returns during the preceding 36 months, reformed monthly.
Not exact matches
The end result of this is that
portfolios consisting of more cash - generating dividend stocks tend to have far less
volatility and suffer gentler falls than their counterparts.
When we compare the 8 ETF
portfolio to a 50/50
portfolio consisting of 50 % SPY and 50 % AGG, we see that the Permanent 8
portfolio significantly outpaced a 50/50
portfolio since 2008 with about the same
volatility:
Building a
portfolio consisting of low - risk assets is achieved primarily by using one of two principal low -
volatility strategies.
After all, if
portfolios consisting of low -
volatility stocks perform so well over the long term, doesn't this mean that the low -
volatility stocks must themselves generally perform well?
Folio's Conservative
portfolio consists of 30 large - company stocks with below - average
volatility.
When we compare the 8 ETF
portfolio to a 50/50
portfolio consisting of 50 % SPY and 50 % AGG, we see that the Permanent 8
portfolio significantly outpaced a 50/50
portfolio since 2008 with about the same
volatility:
If your
portfolio consists entirely of an S&P 500 index fund, and you're selling shares each day to fund living expenses, the
volatility you'd be concerned with is the daily
volatility of the S&P 500.
When backtesting a
portfolio consisting of BND, DBC, VEU, VNQ, and VTI and buying the top 1 ETF at the beginning of each month based a combination of 3 month returns, 20 day returns, and 20 day
volatility (each weighted 40 % / 30 % / 30 % and lower
volatility receives a higher weighting), the results are below.
But their message is clear: diverse
portfolios consisting of several non-correlated asset classes deliver more consistent returns with less
volatility.
«The US yieldco
portfolio consisting of yieldcos that rely heavily on their sponsor parents for asset «drop - down» and more aggressive use of leverage are characterised by higher
volatility,» the report said.