Investing Your Portfolio
Beating the Status Quo
When designing wealth protection strategies, we find that many of our clients have changed their view of market risk since 2008. During the market crash, the use of traditional asset allocation was proven ineffective in light of an overall market decline. Nearly all sectors of the market plummeted—everything from bonds to domestic to international stocks and commodities was down. The only safe haven was cash and short-term Treasuries.
We find general investor concern that the current market recovery since March 2009 is not sustainable, and that coming inflation will drive interest rates up. Yet many investment advisors have not adjusted their financial recommendations since the market hit bottom in March 2009.
On the equity side, many investment advisors continue chasing market yields and select investments around asset allocation strategies. Reducing risk through the use of asset allocation has evolved during the past fifty years. The intent is to find sufficient diversity in non-correlating assets to offset negative performance in other investments.
On the bond side, interest rates are currently at all time lows. The mainstream bond investment strategy is to shorten maturities or adjust credit qualities so that bond values will not decrease so dramatically as interest rates rise. Investors face either lower yields or increasing credit risk. And many are opting to sit on the sidelines with their life savings in Treasuries, CDs or cash, earning 1% or less.
SS+D Financial has a better alternative. To protect client investments against the risk of another overall market decline, SS+D is increasingly recommending the use of long-term options.
The use of long-term options on broad market indexes provides our clients with added protection against loss of principal while maintaining the opportunity for them to participate in market gains.
Whether SS+D Financial is managing a traditional asset allocation investment or employing our “Protected Portfolio” strategy, we will:
- work closely with each client to design an appropriate allocation strategy that is adjusted to risk tolerance; and
- monitor the chosen investments and annually compare investment results to the goals in your financial plan.
To learn more about how SS+D Financial is beating the status quo, call Ed Wiley at (937) 220-4915.