No Easy—or Cheap—Remedy for Volatility
By BEVERLY GOODMAN | MORE ARTICLES BY AUTHOR
Lots of new funds promise to remove uncomfortable price changes from your portfolio, but most are unproven and could be bad for your financial health.
The only thing more alarming than this year’s market volatility has been some of the unsolicited advice given to investors who don’t even understand the problem.
Several mainstream publications and television pundits have casually —and clearly without the benefit of much research—recommended that investors wary of market volatility try an array of expensive and unproven products. Among them: inversely correlated funds, which aim to provide the opposite return of a benchmark like the Standard & Poor’s 500 Index volatility funds, which use a variety of options strategies to profit from volatility; and long/short and market-neutral funds, which (sometimes) attempt to limit losses due to volatility.
via Curing Stock Portfolio Volatility Isn’t As Easy As Advertised – Barrons.com.