Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Josh Brown: Absolute Returns LOL: (Volatility And Risk Are Not The Same)
Volatility may be risky if it causes the investor to sell at the worst possible time because he/she cannot bear the pain. If reducing volatility helps an investor stay the course through market ups and downs, than for that investor reducing volatility may well reduce risk.
On the other hand, couldn't agree more with his observation that owning a mix of stocks (or stock funds) and cash/bonds (or said funds) is a better approach than trusting some manager to get the timing and allocation correct. Along with this, he cites one of my major complaints: that a lot of these proclaimed lower volatility funds burn-up a lot of potential return through inordinately high fees.
The article is about funds-of-funds, but I'd expand that to include (alleged) market neutral and go-anywhere funds as well. Umm ..... seems we just discussed that in another thread and opinions were decidedly mixed.
Comments
Volatility may be risky if it causes the investor to sell at the worst possible time because he/she cannot bear the pain. If reducing volatility helps an investor stay the course through market ups and downs, than for that investor reducing volatility may well reduce risk.
On the other hand, couldn't agree more with his observation that owning a mix of stocks (or stock funds) and cash/bonds (or said funds) is a better approach than trusting some manager to get the timing and allocation correct. Along with this, he cites one of my major complaints: that a lot of these proclaimed lower volatility funds burn-up a lot of potential return through inordinately high fees.
The article is about funds-of-funds, but I'd expand that to include (alleged) market neutral and go-anywhere funds as well. Umm ..... seems we just discussed that in another thread and opinions were decidedly mixed.