Managing Risk & Volatility

We manage risk and volatility in two important ways -

First we develop an appropriate asset allocation strategy based on each client's unique risk tolerance. Obviously, one of the most rewarding investment opportunities has been the stock market - since it comes with a long term average return that is arguably above 10%. However, that very enticing return can take a long time to show up and for many investors the interim volatility is more than they can handle - both financially and emotionally. Therefore, we believe that in many cases (but not all) reducing the level of risk by including a component without downside volatility is critical. When appropriate, we favor fixed-indexed annuities for this part of our strategy.

Secondly we recognize that there are times when it is prudent to reduce exposure to all equity markets and we have developed a unique strategy which helps us to avoid overreacting to normal volatility without sacrificing our willingness to step aside when conditions truly turn negative.