Risk-Averse Portfolio for Income

Quote from Soon2Bgreat:

If you vol weight it you'll have large FI exposure, not good if rates go up.
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When you say "vol" you mean volatility, correct?

But you first said you suggest it be done by vol-weighting, but you now you wisely point out the risk of vol weighting. So I am confused ...or am I missing something?
 
Quote from Soon2Bgreat:

No, you got it, there's always a trade off one way or the other.:)
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OK. Understood. What do you think of just a simple equal weighting.
 
You need to add some optionality/convexity to a passive portfolio construction if you want to beat the S&P; whether it be some ratio overwriting, simple CC or some sort of leveraged-ETF arbitrage. Beta or vola-weighting is pointless as you'll be constantly tinkering and who says it will beat? By definition it will fail (to beat) over the long-term.
 
Quote from atticus:

You need to add some optionality/convexity to a passive portfolio construction if you want to beat the S&P; whether it be some ratio overwriting, simple CC or some sort of leveraged-ETF arbitrage. Beta is pointless as you'll be constantly tinkering and who says it will beat?
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I see your point about optionality/convexity. However, does that not expose you to greater risk?

Also the aim here is not to beat the S&P, but to achieve a return in the range of -5 to 10%.
 
Quote from CPTrader:

I see your point about optionality/convexity. However, does that not expose you to greater risk?

Also the aim here is not to beat the S&P, but to achieve a return in the range of -5 to 10%.
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Not passively w/o some sort of correlation arb.
 
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