Daily Spotlight: Min Vol: More than a Defensive Strategy

Summary

Rapidly rising inflation in 2022 knocked stocks into a bear market. While growth strategies suffered the most, value strategies also declined. Even bond prices were lower that year. Stocks have recovered, but gains mostly have been driven by a handful of high-tech companies. Inflation remains an issue. With all the uncertainty, is it time for investors to cash in their chips? Many market-watchers attuned to risk pay attention to the VIX Volatility Index. In 2022, as the bear roared, that index soared above 30, which is substantially higher than the normal risk environment, which is characterized by an average VIX reading of 20. Current VIX readings are in the 15 range, which is more characteristic of a bull market. As the market fluctuates, we note that investors exit equities at their own peril. That’s because long-term returns from stocks consistently have outpaced long-term returns from other asset classes. So what’s a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timel