Long Volatility: The Critical Piece Missing in Portfolios (w/ Danielle DiMartino-Booth & Chris Cole)

Perhaps the most arcane component of Chris Cole’s 100-year portfolio is the allocation to long volatility. While on the surface it seems complicated, the CIO of Artemis Capital Management explains why his broad definition of volatility allocation strategies simplifies the complex counter-trend asset class for asset allocators. He reveals how different short volatility strategies have their place tactically, but not systematically. According to Cole, the strategies that are popular today and have performed well since the 80, but over the long term, they have nearly unilaterally resulted in the complete destruction of the back-tested portfolio’s capital. He discusses how unpredictable political, economic, and regulatory risks have impaired those strategies entirely. Then he illustrates why instead of chasing yield, ideal portfolios for pensions and the savvy investor should boldly size counter-trend assets in the “Dragon Portfolio” to prepare for secular change saying, “It’s not about being afraid, it’s about being prepared.”

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Long Volatility: The Critical Piece Missing in Portfolios (w/ Danielle DiMartino-Booth & Chris Cole)
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