Continued from Part II
Managing risky (volatile) investments with noncorrelated risk (volatility)
In a June 2010 Pensions and Investments magazine article, Gundlach outlined, in part, his unique approach to noncorrelated portfolio management:
"Fortunately, a conjunction of phenomena in different bond sectors has created a unique opportunity: portfolios can be structured to deliver high cash flows within an envelope hedged against the antipodal risks of inflation as well as deflation. In the process, I believe investment professionals with the requisite skills can integrate hedges against interest-rate volatility and credit deterioration into the same portfolio," he said, providing a glimpse of what might be considered a "king" making noncorrelated portfolio management approach. "In today's yield-starved landscape, investors can earn high single-digit returns without recourse...
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