Geoff Considine

Stock Portfolio to Weather a Volatility Shock

I ran across this article by Morningstar:

biz.yahoo.com/ms/07051...

This article is about investing when you don't expect the broader market to do as well as it has in the past---but it never mentions that you can build an equity portfolio that is not too coupled to the broader market--as I discuss above. A select portfolio of equities can be designed that, while impacted by the equity risk premium, does not do poorly simply because the broad U.S. economy and / or U.S. market indices do poorly.

Low-Beta Portfolio Strategies: Devising A Low Risk Game Plan For the Current Market

Here's a great argument for the low Beta / low R^2 portfolio from Ben Bernanke:

biz.yahoo.com/ap/07011...

Low-Beta Portfolio Strategies: Devising A Low Risk Game Plan For the Current Market

Also, here is an article about the phenomenon that some stocks and sectors seem to get more correlated when they have negative returns:

www2.gsb.columbia.edu/...

The authors suggest an additional interesting idea: that this correlation, which increases total portfolio downside is the risk that investors take when they try to use momentum investing strategies. This is an interesting idea.

Low-Beta Portfolio Strategies: Devising A Low Risk Game Plan For the Current Market

By the way, I noticed that Berkshire Hathaway has recently dramatically upped their holdings in JNJ. I recently wrote an article about Berkshire's equity holdings and noted that they very effectively exploited low correlation assets:

financial.seekingalpha...

This weekend, I read this article from SA that noted that BRK has just increased holdings in JNJ--it was not in the topc twenty when I wrote that article but it is now the 8th largest equity holding:

biz.yahoo.com/seekinga...

Hmm. Interesting.