IGIB - A High-Return Risk-Mitigated Portfolio Approach

• Blindly holding a 50/50-stock/bond portfolio doesn’t work anymore. Volatility demands risk mitigation, and the 40-year bond rally has no more room to run. Forget what was normal before.
• Risk mitigation is a quantitative process; fear and greed instincts can be destructive. But no system is perfect, so portfolio design should cap exposures at a tolerable threshold.
• This article discusses a high-return, low-risk portfolio strategy. It’s a companion piece to 3 earlier blog posts covering the philosophy, model structure, and metrics of a robust risk-mitigation approach.
• The balanced portfolio, modeled with capped equity exposure, produced 42.4% compound annual growth since October 2019, the service inception date. YTD 2021 gains have been 14.4%.
• You might find that this approach shatters prior conceptions of leveraged ETFs, and the composition of yield holdings. It is low maintenance, but risk avoidance via low-frequency trades is necessary.

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