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Strategies & Market Trends : Young and Older Folk Portfolio

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To: Don01022 who wrote (176)	7/12/2021 6:34:56 PM
From: chowder	Read Replies (1) of 25541

I have seen where some folks have portfolios consisting of 100% CEF's. The downside is that during significant market corrections you can see 70% to 80% drawdowns in various CEF's and most people can't handle that type of volatility. The other negative is the leverage fund managers use. They help the asset on the upside, are a danger on the downside. They add even more volatility and contribute to those huge drawdowns. I would assume you'd need 25-30 CEF's to be properly diversified because you would need to include some that do better in down markets than most funds do. I would think that hedge would be necessary. There are funds that short the market or individual equities and a properly diversified CEF portfolio would probably need to include a few of those. Other than that, I'd need to give it more thought since I haven't considered doing that as of yet.

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