Mutiny Investing Podcast 55. Mutiny Funds - The Defense Strategy
Oct 13, 2023
The hosts discuss the recently launched defense strategy and the concept of sequencing risk in investing. They explore offense and defense in investing, emphasizing the importance of diversification and defensive strategies. They also highlight the limitations of talking about hedge funds and alternatives. Overall, they stress the significance of a defensive approach to investing and introduce their new defense strategy.
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Sequencing Risk Transforms Outcomes
- Average returns hide sequencing risk; order of returns drastically changes outcomes for retirees and savers.
- Small differences in early returns can turn a $3M nest egg into ruin or abundant wealth over decades.
Modernize The Permanent Portfolio
- Replace cash and gold in a modern permanent portfolio with long volatility and commodity trend following for better real-world hedges.
- Long volatility handles liquidity crises while commodity trends provide inflationary protection across many markets.
Use Broad Commodity Trend Following
- Use a diversified basket of commodities rather than just gold to hedge inflation and growth shocks.
- Apply trend following to go long in inflationary uptrends and short in deflationary crashes for broader protection.