WisdomTree Blog

How to Diversify a 60/40 Allocation with Dynamic Equities

If there is one thing to be learned from this year’s drawdowns in U.S. equities, it’s that traditional 60/40 portfolios do a comparatively poor job of limiting portfolio losses in the short run. Bradley Krom highlights how investors can combine a dynamic long/short equity strategy with a dynamic bearish strategy to achieve comparable returns with less risk to traditional portfolios.

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Interplay of Correlations, Volatility & Positioning in Current Markets

Many experienced investors understand that lack of variability doesn’t necessarily equate to stability. So far this year, VIX has averaged close to 17.5, including a massive 100% spike in February. Call it a reversal to normal standards or something else, but we believe higher VIX is likely here to stay for some time.

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An Alternative Approach to Lower-Volatility Indexing Strategies

With anxieties over market valuations and the “quantitative tightening” program under way by the Federal Reserve, it can be useful to evaluate strategies that have a goal of reducing volatility in the marketplace.

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Not All Alternative Strategies Are Created Equal
Josh Brown recently wrote a piece, “How to Raise 20 Billion Dollarz,” that takes on alternative investments, documenting the rise and fall of an alternative strategy that crushed it during the 2008–2009 down market but has been a real dog during the straight-up market we’ve experienced ever since. Jeremy Schwartz makes the case for two WisdomTree alternative strategies that have a different approach.
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How Does a Dynamic Portfolio Stack Up vs. 60/40?

Over the last several years, we’ve seen an increased interest in strategies that can serve as alternatives to a standard equity and bond portfolio. While these strategies can be used in isolation, we’ve found that creating a portfolio of alternative assets can provide a compelling range of risk and return profiles.

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Why Should I Sell Put Options in a Low-Volatility Environment?
Since the cost of protection—option premiums—tends to decline during periods of low volatility, one question often comes up: Is now the right time to be collecting premiums by selling puts, when volatility is so low? Sticking to the basics of investing can help answer this question and provide investors with the risk mitigation they look for.
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