Institutional tricks of the trade can also benefit retail investors

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Institutional investors benefit from portfolio selection and protection techniques, but these have not yet been adapted for the retail market, in part because retail investors have lower risk appetites

Some of the best kept secrets of city life have traditionally been restricted to institutional investors. Techniques to improve portfolio selection and protection have long been the preserve of sizeable investors. But the requirement to protect a portfolio against the vagaries of market volatility is also a key marketing technique for the wider retail audience. The retail investment industry has evolved to attract deposit-based investors to equity-based investments, with the carrot of potentially higher medium- to long-term returns. However, in practice, the same investors do not lose thei...