Great white paper by State Street Global Advisors that highlights the limits of diversification and the importance of risk protection:    “Good downside protection can benefit portfolios in several ways. Studies, such as that by Bhansali and Davis (2010), have shown that downside protection strategies can boost total portfolio profitability since an effectively hedged portfolio allows for a more growth oriented asset allocation.”      We disagree that their approach for Targeted Volatility to manage the downside is a smart way to go,  as it will limit the potential return. A high volatile stock can actually generate higher return; it just needs to be managed properly .    Read the State Street report at:  https://www.ssga.com/investment-topics/risk-management/Equity-Market-Risk.pdf
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