Most investors use a classic portfolio structure called the 60/40 mix. The 60/40 mix is a traditional form of portfolio management that allocates 60% of an investor’s portfolio to equities and 40% to fixed income securities. The theory behind the 60/40 mix is that it provides a degree of stability for the portfolio by including a mix of both equity and fixed income investing.
While the 60/40 mix may provide some stability, it isn’t ideal in the current market environment. Interest rates have been at historically low levels for an extended period of time, which is making it difficult for fixed-income assets to provide good returns. Additionally, equities have been on a roller coaster ride of late, leaving many investors feeling anxious.
The good news is that there is a better way to invest. It’s called Dynamic Portfolio Trading (DPT). DPT is an investment strategy that uses quantitative analysis, risk management and sophisticated algorithms to create a dynamic portfolio that adjusts to changing market conditions. This strategy has the potential to help investors generate better returns with less volatility.
Unlike the 60/40 mix, DPT can allocate assets to different asset classes and sectors, depending on the current market conditions. This flexibility enables investors to capture returns from sector-specific investments. DPT also allows investors to trade with higher frequency and lower holding periods than the 60/40 mix.
The most important benefit of DPT is that it helps investors remain nimble and responsive to changing market conditions. In volatile markets, DPT can quickly and easily reallocate investments to capitalize on market opportunities. This allows investors the chance to benefit from both bull and bear markets.
DPT can be intimidating to those who haven’t used it before, but with the help of online trading rooms, this strategy is becoming more accessible. Trading rooms provide investors with access to experienced traders and algorithmic models to help guide investment decisions.
Ultimately, the 60/40 mix may have been a reliable way to invest in the past, but it is no longer suitable for the current market environment. Investors who want to stay ahead of the curve should consider using a Dynamic Portfolio Trading strategy. With the help of an online trading room, DPT can be a powerful tool to help investors generate higher returns with less volatility.