Portfolio Insulated From a Bumpy Ride

In January I outlined a portfolio that could help insulate against a bumpy U.S. stock market -- and it seems to have held up fairly well so far.

The goal was just to build a diversified portfolio out of a few holdings with the hope it would have less volatility in both directions.

The portfolio includes:

PowerShares BuyWrite Portfolio(PBP Quote) 30%

WisdomTree Asia Pacific Ex-Japan High Yielding Equity Fund(DNH Quote) 20%

iShares S&P Global Infrastructure Index Fund(IGF Quote) 5%

iPath DJ AIG Agriculture Total Return Sub Index ETN(JJA Quote) 5%

Nakoma Absolute Return Fund(NARFX Quote) 10%

Rydex Managed Futures Fund(RYMFX Quote) 5%

iShares Lehman TIPS Fund(TIP Quote) 15%

SPDR Lehman International Treasury Bond(BWX Quote) 10%

Since that last article, the U.S. stock market has endured a lot of news and big moves in both directions, providing a good test for the concept. Many people want low maintenance without a lot of volatility, but the risk of that sort of portfolio is that it caters too far in the direction of low volatility and ends up lagging a bull cycle by a large amount. ...