(10-07-2013, 02:51 PM)smallcaps Wrote: [ -> ]Maybe not so straightforward. High volatility might result in very low price and give chance for management to delist at low price.
Yes, anything can happen. Such as Corporate Raider or Corporate Robber may appears too.
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1) Why are you afraid of the volatility?
Mitigating risk is simple. Buy when price is low relative to value. Low price = low risk = high return and vice versa.
2) 70% equities. 30% cash. No bonds.
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Funds Managers are not only measured by the returns only. The standard deviation and sharpe ratio are important benchmarks as well.
The SAA gives a good estimation of the expected returns and volatility of the fund. TAA would involve buying assets with low prices relative to valuation and increase the expected returns.