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[ PROTECTION ]
Cherry Reynard finds out whether
traditional strategies for protecting
against volatility will be of any use
in the current environment
The old
guard
A
fter a lengthy period of
low volatility, investors
have found themselves in
a different environment
over the past 12 months. As the global
economy slows, lower returns and
higher volatility may be the new
reality. How should investors react?
Not just for corrections
Any kind of volatility “insurance”
needs to balance cost and efficacy.
Buying insurance after the event is
pointless, while trying to time bouts
of volatility is nearly impossible. As
such, volatility protection needs to be
held through the cycle.
The first line of defence is usually
cash. James Calder, research director
FE TRUSTNET
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