4 Steps To Prepare Your Portfolio For The Coming Uncertainty

Published: December 6, 2016

Summary

 

Market volatility is at an historic low, but uncertainty is all around us.

 

The Minimum Variance Algorithm (MVA) presents an interesting way to build a lower-risk portfolio.

 

We discuss the steps to choose the best inputs to run this algorithm for creating an effective portfolio.

 

The resulting MVA portfolio has returned 10% annually over the past 10 years, based on the backtest.

 

"Never think that lack of variability is stability. Don't confuse lack of volatility with stability, ever."

- Nassim Nicholas Taleb

 

For many investors, a primary objective is to safeguard their investment from the market's volatility. The market may seem quiet (or at least favorable) at times, but that does not mean it's stable, as Taleb reminds us.


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