IVOL - Avoiding Portfolio Whiplash When The Market Whipsaws

• We implemented investment process refinements to adapt to increased debt, slower growth and the expectation of government stimulus and intervention at the first sign of economic difficulty.
• In certain cases, shortening the investment time horizon in periods of extreme volatility can lead to improved results in our “all-weather” portfolio approach.
• We own equities in businesses that can do well in challenging economic environments. We have recently added utilities and REITs. We still own inflation-hedged exposure in TIP and IVOL.
• We hold “safe-haven” assets like long-dated US Treasury bonds for when everyone scrambles for dollars and gold for when central banks retire excess debt via even more extreme quantitative easing.
• Finally, we hold a significant cash position as a source of stability and optionality, intending to put it to work as investor sentiment points to continued risk taking.

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