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Strategies & Market Trends : Young and Older Folk Portfolio -- Ignore unavailable to you. Want to Upgrade?

To: jritz0 who wrote (11497)	11/19/2024 10:13:20 AM
From: SeeksQuality	1 Recommendation Recommended By jritz0 Read Replies (2) \| Respond to of 22047

I agree that JEPI and QDPL seem to be solid funds for what they do. (I have less confidence in JEPQ and SPYI, partly due to the structure and partly due to the very short history.) My expectation for QDPL is that it will deliver 88% the returns of SPY with 88% the volatility. My expectation for JEPI is that it will deliver 50% to 60% the returns of SPY with 60% to 70% the volatility. (It isn't structurally locked in the way that QDPL is, and thus the actual numbers depend on the quality of the execution as well as the behavior of the market.) JEPI is attractive for an individual looking for a low-volatility income investment, which makes it a great fit for retirement income. The LOW VOLATILITY piece is even more important than the yield, as volatility greatly increases the risk of depleting a portfolio. (That's why low-volatility stocks and bonds can also play a role.) As for T, VZ, KO, KMB, PG, PEP, and JNJ? If you look into the numbers, you'll see a mix of returns. T and VZ have been very weak, of course, but they've signaled that for years. We knew that their product was becoming commoditized, that they no longer had a performance edge (for most consumers) over the low cost alternatives. The rest (as a group) have returned about what you might expect over the last decade given their low volatility -- all much less volatile than JEPI. If you built a portfolio around these low-volatility stocks (and low-volatility utilities), then your returns will have lagged JEPI, but the portfolio should also be exceptionally stable. In my own portfolio I have 38% of the portfolio in stocks with a beta below 0.60, bringing my portfolio beta down from 0.94 to 0.70. I could do the same by increasing my bond allocation by 25%, but (as a whole) I believe my approach generates superior risk-adjusted returns. Possible that replacing my entire portfolio with JEPI might have been better over the last three years, but I'm not at all confident that their advantage will persist across multiple market environments.