Published Tue, 23 Jul 2019 06:45:00 -0400 on Seeking Alpha
My readers know that I am a big fan of low-volatility strategies. They may not always capture 100% of a raging bull market, but they also avoid drastic losses when equity markets swoon. In the long-run, you may be surprised that many low-vol strategies have similar if not better returns than their respective traditional strategies, but with much less volatility. The secret is in avoiding losses.
Think about this, if your portfolio loses 10% in any given period, it needs to generate 11% to get back to break even. While if your portfolio only declines 5%, it only needs to recover 5.26% to get back to break even. In other words, avoid big losses and you don't need big returns to generate a profit.
With markets beginning to show some liveliness, we believe it's a good time to start thinking about how to protect against a major market decline. One such way is the Invesco S&P Low Vol ETF (SPLV), which invests in the 100 least volatile stocks in the S&P 500 over the previous year and rebalanced quarterly. But SPLV only pays a 2% dividend.
On the other hand, the Invesco S&P 500 High Dividend Low Volatility Portfolio ETF (SPHD) pays a 4% dividend yield and exhibits lower volatility than the S&P 500 as well.
Invesco S&P 500 High Dividend Low Volatility Portfolio ETF SPHD tracks the performance of the S&P 500 Low Volatility High Dividend Index, which measures the performance of the 50 least volatile, high-yielding stocks in the... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|VANGUARD DIVIDEND APPRECIATION ETF||120.84||0.0||0.00||0.00||1.58|
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