achieve investment goals with less volatility
DESCRIPTION
The trade-off between risk and return is one of the most important decisions that an investor has to make. As an example, following the sharp market decline in 2008, investors have become more aware of the need to better manage market risk. Recovering from an extreme decline in portfolio value takes time and requires a significant market gain to break even. For example, if you lost 50% in the market, you would require a market gain of 100% to recover while a lower decline of 20% requires far less of a recovery with 25% bringing you back to the breakeven point. A low volatility strategy is designed to produce less risk than the broad market. It allows investors to participate in positive market conditions and potentially shelters their investment from excessive market volatility.TRANSCRIPT
Lower volatility levels require lesser gains to recover
Achieve investment goals with less volatilityThe trade-off between risk and return is one of the most important decisions that an investor has to make.
As an example, following the sharp market decline in 2008, investors have become more aware of the need to better manage market risk. Recovering from an extreme decline in portfolio value takes time and requires a significant market gain to break even. For example, if you lost 50% in the market, you would require a market gain of 100% to recover while a lower decline of 20% requires far less of a recovery with 25% bringing you back to the breakeven point.
A low volatility strategy is designed to produce less risk than the broad market. It allows investors to participate in positive market conditions and potentially shelters their investment from excessive market volatility.
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$20,000
$40,000
$60,000
$80,000
$100,000
20% decline in value 50% decline in value
25% gainrequired tobreak even 100% gain
required tobreak even
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RICHARD SHEPPARD CFP
Senior Financial ConsultantInvestors Group Financial Services Inc.
Tel: (403) 226-5531 [email protected]