Downside Protection Strategies
Managing Downside Volatility
You’ve done an excellent job preparing for retirement, but as you approach the distribution phase of your investing cycle, you have greater concerns about market volatility and the impact losses can have on your long-term income needs.
Managing downside volatility, and incorporating this thinking into a distribution plan, is a major goal of our advanced risk-engineered investment platform. The right downside protection strategies can help protect you against significant losses. That’s important in order to preserve the power of your portfolio and allow maximum participation in future gains.
Mitigating loss is just as important as gains in the successful growth of a long-term portfolio. For example, after a 50% drawdown, a portfolio needs a 100% return just to recover the loss.
After the hard lessons of past mini-crashes and bear markets, including the 1998 Currency Crisis, 2000 Bursting of the Dot-Com Bubble, 2001 September 11 Attacks, 2008 Global Financial Crisis, 2010 European Sovereign Debt Crisis, Fall 2011 Meltdown, 2015 Chinese Stock Market Crash, 2018 4th Quarter Massacre and now the 2020 Coronavirus Crash, you are probably looking to find better ways of limiting the risks that you face.
Source: Catalyst Funds - for illustrative purposes only, not be construed as actual, backtested, or anticipated returns for LodeStar Advisory Group, LLC.
If you can limit losses during a significant market decline, saving some "dry powder" you can then re-allocate that cash into equities after the decline to capture rising return premiums.
Our advanced risk-engineered investment platform is the result of our commitment to offering investment solutions that allow you to benefit from investing in the equities market while reducing the inherent risks.
Downside protection strategies may be beneficial for all investors who wish to preserve and accumulate capital.