Stock market volatility will make a comeback in 2012

Manager: Focal Point Management

Model: Volatility and Tactical Opportunity

March saw upward price action in the broad financial markets, along with a continued decrease in volatility.  

Our volatility and tactical opportunity-based portfolio was positioned to benefit from this period of lower volatility, and we benefited from positions primarily in VelocityShares Daily Inverse VIX Short Term ETN (XIV), an ETF which generally goes up when volatility declines, as our signals indicated continued declines in market volatility during the month.

So far, 2012 has been a period marked by low volatility; at some point in time, this will change, and our model will be more active in trading spikes and oscillations in volatility.

For now, however, the model remains positioned to benefit from reduced volatility and will remain so until conditions change.