Some funds offer to tame market’s chaos, but at a price + MORE Jan 21st

SACRAMENTO, Calif. – Gov. Jerry Brown on Thursday reiterated his call for fiscal caution, using his State of the State address to urge lawmakers to beef up California’s rainy day fund and pay for long-delayed infrastructure repairs rather than pursue expensive new programs.
As he did in his budget proposal earlier this month, Brown sought funding for health care and transportation initiatives he previously proposed rather than push for new social programs supported by many of his fellow Democrats. Republicans have opposed his funding plans for those initiatives.
“You are not going to hear me talk today about any new programs. Rather I am going to focus on how we pay for the commitments we have already made,” the governor said in his 14th State of the State address.
The 77-year-old governor warned that California’s economy could quickly be upended by seemingly unrelated world events.
“A slowdown in China or turmoil in Iraq or Syria, or virtually anywhere, can send the stock market reeling and put California jobs and state revenues in jeopardy,” he said in a speech devoid of his typical rhetorical Latin and biblical references…

When you’re in the Retirement Risk Zone, as I am, the last thing you want is to watch decades of savings go down the drain in a bear market. With most markets already down 20% around the world, you could argue the damage has already been done but there are a sufficient number of pessimists out there who warn the worst case could be down still further, for a peak-to-trough decline of as much as 50%, as occurred in 2007-2008.
Capital preservation is the name of the game when you’re near or at retirement. Recall that finance professor Moshe Milevsky’s definition of the Retirement Risk Zone is the five years before and five years following your projected retirement date. I’m nearing 63 and am semi-retired so take bear markets seriously. A bear market at this stage can seriously undermine one’s future plans.
With the caveat that timing the market is next to impossible, I can describe what I’m doing personally. Much of what follows I owe to my own financial advisor, who does not wish to be identified in this article…

NEW YORK, N.Y. – Freaked out by the stock market’s big swings?
Then the investment industry has something it built just for you: funds that hope to offer a steadier ride. That sounds especially comforting after this year’s jarring start for markets, in which drops of more than 1 per cent have become typical. But be careful, the funds carry their own risks.
These mutual funds and exchange-traded funds own stocks that could charitably be described as boring. Think utilities, telecoms and other companies whose profits — and thus stock prices — don’t fluctuate so much. The funds avoid jack-rabbit stocks that tend to have either really good or really bad days.
These funds advertise themselves by including terms like “low volatility” or something similar in their names, and fund companies have rolled out dozens of them in the last five years to meet strong demand. Older investors approaching retirement or already retired are particularly drawn to them. The ALPS Sector Low Volatility ETF, which trades under the symbol “SLOW,” began trading in July, for example…

The move is part of a slow shift by Wall Street to put boundaries on the demands made of its workers, especially younger ones

Short position highlights are provided by TSX Datalinx.