March 23 2021
Since 2000, the U.S. financial market has experienced several major volatility events, including the bursting of the Internet bubble in 2000, the Global Financial Crisis of 2008 and 2009, Europe’s sovereign debt crisis of 2010 that roiled global markets, and the COVID-19 Pandemic that began in 2020. An observant investor would likely conclude that the stock market experiences corrections every handful of years. Indeed, the general consensus among informed investors is that every five years or so forms a market cycle. During that period, a bull market is born, and dies, and is born again.
While each correction and advance is usually different, they all typically have this in common: volatility shocks often surprise and harm many investors. In totality, the successive corrections and crises have helped deepen awareness that volatility is something that investors can let happen, or something that they can do something about.
As the chart below indicates, volatility is generally a permanent part of the stock market. Since December 1920, the stock market, as represented by the Dow Jones Industrial Average, has advanced in a volatile fashion. Yes, stock prices rise over time, but usually amidst waves of volatility
At Options Solutions, our mission is using conservative options strategies to help better shape investment performance in rising and falling markets. Sophisticated institutional investors have used such strategies for decades, but the strategies have not been widely available to many others, including family offices and high-net-worth investors.
We think that part of the reason that these strategies have often remained the purview of the most sophisticated institutional investors is because it takes experience and dedicated focus to use options with investment portfolios.
However, blending actively managed options overlay strategies atop a passive equity portfolio, investors can take control of their portfolios and stocks in ways that are often surprising to those people not skilled in the disciplines of puts and calls.
At Options Solutions, our focus is on thinking and analyzing risk and return with the goal of more effectively managing investments with the enunciated goal of adding return without adding risk.
Options Solutions has assembled an expert team with experience designing and managing customized options strategies in real-time through many market cycles.
We look forward to serving you.