Annual rebalancing adds few % over LONG periods of time over buy & forget approach for uncorrelated classes.
Buy & Hold:
Based on modern portfolio theory, based on risk profile of investor create a diversified buy and hold portfolio. Yearly rebalance.
Pros: Easy, diversified
Cons: In bad market can be really bad!
Several portfolios: Coffeehouse, IFA, Permanent portfolio......
Active management:
Be willing to go in full cash if needed. Use stop orders with any purchase.
Momentum strategy:
Buy last years hot hands & sell laggers, sell when momentum is lost.
Pros: works for some outperformance in good markets
cons: very volatile, trading costs could eat away
Sell options:
Sell covered call options, sell puts instead of buying
Buy protective options:
Always have insurance!
Small cap value:
USA, International, Emerging markets: Better returns but more volatility
Portfolio Rebalancing strategies:
* fixed time based
* look for overbought & undersold conditions & then rebalance
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