One of the greatest challenges for investors today is constructing low-risk portfolios that provide the best returns using low-cost funds or exchange-traded funds (ETFs). Doing so requires advisors to define risk as the potential for retirees to fail to achieve their financial goals, instead of as volatility, as it is traditionally measured. I will show how to construct a low-cost portfolio that minimizes this definition of risk while generating a reasonable real return.

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Fears of market overvaluation lead many advisors to seek to protect against downside movements while retaining as much upside potential as possible. Recent research from Boston-based money manager Grantham Mayo van Otterloo (GMO) illustrates a low-cost way to accomplish this: decreasing equity exposure and concentrating that allocation in high-beta securities.

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See full article at AdvisorPerspectives.com... Howard Marks, founder and chairman of Oaktree Capital Management, wrote in a recent memo that the biggest danger to investors is their willingness to buy risky assets that are likely to provide low returns. Market conditions may not fully reflect current risk; option prices, for example, are very low. Some firms – notably PIMCO – recommend investors buy put options to protect their portfolios. I propose an alternative strategy that will be resilient to the potential shocks of increased volatility and higher interest rates, without incurring the cost of options.
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With the new year upon us, pundits are issuing their forecasts of market returns for 2013 and beyond. But returns don’t occur in a vacuum – meeting clients’ goals requires an asset allocation that appropriately balances return and risk. So what follows are my predictions for risk across major asset classes, based on a theoretically sound approach that has proven to be reliable in the past.

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Dividend-focused strategies have won the allegiance of many prominent investors, including Rob Arnott, Bill Gross and Jeremy Siegel. Others claim value-based strategies offer superior risk-adjusted returns. Both sides can claim a partial victory in this debate, but I will show that, when understood properly, dividend strategies offer a crucial edge – one that many investors will find attractive.

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They’re not the sexiest property on the Monopoly board, but in today’s market, there’s plenty of evidence mounting that utilities are a great source of income. Gluskin Sheff’s David Rosenberg made the case for utilities in his September 6 commentary. Taking a contrarian view, Rosenberg acknowledged that utilities are universally disliked by Wall Street analysts and have performed poorly relative to other sectors this year. But utilities offer a 4.2% yield – nearly twice that of the market....they deserve a substantial...
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Investors, especially those in the de-accumulation phase of their retirement, count on high income and low volatility. Achieving the best possible tradeoff between yield and risk is a major challenge for advisors. Over the last two years, I’ve shown how to construct a low-risk portfolio – the ultimate income portfolio (UIP) – that yields over 9.0%. Let’s look back at how those portfolios performed and the components of this year’s UIP.
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Yield-starved investors have ventured into exotic – and often risky – assets, including hedge funds, non-traded REITs and private placements. But an asset class that has been around since 1893 offers a compelling combination of low risk and high income. A carefully selected portfolio of closed-end funds (CEFs) will yield 8% with less volatility than the S&P 500.

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Assets are flowing into dividend-stock funds, as income-seeking investors look for alternatives to the low yields in the fixed-income markets. But many experts are warning that those investors are setting themselves up for significant losses. Using an objective methodology that assesses tradeoff between yield and risk, we can determine those funds that investors should prefer – and a few they should avoid.

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