The email I get from readers indicates there's a keen interest in achieving returns that roughly equal the market but that take less risk and have an increased yield. The interest in this concept seems heightened now that the market has gone almost straight up for several months.

I believe there is a lot of value in exploring how to structure portfolios to create a desired effect. This can go a long way toward learning more about how capital markets work, which in turn can lead to better returns or, more specifically, better risk-adjusted returns.

Let me explain "risk-adjusted returns." Say the market goes up 10% in a year, and a given portfolio goes up only 8.5% in that same year -- but does so by taking on only half of the risk of the market. So that portfolio's result, while not market-beating at first blush, is actually a very good result.

After the big market run we've enjoyed lately, it makes sense to be concerned that there is a high probability the market could correct or trade sideways. In this column, I'll explore how to make a couple of changes to an existing portfolio in an effort to reduce volatility and correlation to the market without making a big bet, in case the market defies history and keeps going up at the same rate.

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