SFPS | Tactical
The Tactical SF Portfolio Strategies seek to react to short-term changes in market environments, striving to protect on the downside while continuing to participate on the upside. It is an approach that is grounded in Nobel Prize-winning modern portfolio theory and behavioral economics.
"Most significant market corrections have been preceded by an increase in market volatility."Nicolas Papageorgiou, Ph. D, "A Constant-Volatility Framework for Managing Tail Risk"
Calm markets tend to be conducive to positive equity returns while turbulent markets, on average, are associated with negative equity market returns. The Tactical strategies, utilizing an innovative, volatility-based, risk management methodology can be effective at exiting markets before large losses materialize. And conversely, it provides investors the opportunity to be aggressively invested during stable and potentially profitable periods.
A SYSTEMATIC investment process. Our innovative, risk-management methodology is designed to distinguish between normal and potentially profitable volatility, and abnormal and potentially unprofitable volatility. It is an approach that is grounded in Nobel Prize-winning modern portfolio theory and behavioral economics. These strategies are designed to react to short-term changes in market environments, striving to protect on the downside while continuing to participate on the upside.
Based on OBSERVED market behavior...
Our Tactical strategies, utilizing our innovative, volatility-based, risk-management methodology can be effective at exiting markets before large losses materialize while providing investors the opportunity to be aggressively invested during stable and potentially profitable periods.
Utilizing risk management through PROCESS, not securities...
It begins with annual assessments and allocation adjustments to ensure a disciplined approach. For Tactical strategies, there is both real-time monitoring and multiple, daily risk measurements for the asset classes and sectors.
We offer four Tactical strategies providing risk-managed exposure to the U.S. and global markets. Let’s discuss one specific strategy - The US Tactical Large-Cap Ten-Sector. It allocates among the ten sectors of the S&P 500 Index based on the strategy’s view of the risk and return benefits of each sector. When our strategy identifies instability within a sector, it will sell that sector and allocate the proceeds to cash with the goal of protecting investment principal against large losses.
A conventional approach, relies on correlations and volatilities being stable across holdings, employs a constant allocation to low-return, fixed-income holdings and tends to work least, when needed most. The SF Portfolio Strategies | Tactical expects varying correlations and volatilities across holdings, makes temporary allocations to low-return, fixed-income holdings, relies on a risk management process and aims to work the most, when needed.
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All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Summit Financial Advisors, LLC, (the “Firm”) a Registered Investment Adviser, offers global, risk-managed, multi-asset class, and index-focused portfolio strategies to individual advisory clients. Please visit our website www.summit-advisors.com for more information and to review the firm’s Form ADV Part 2A. All investments carry a certain risk, and there is no assurance that an investment will provide positive performance over any period. An investor may experience loss of principal. Investment decisions should always be made based on the investor’s special financial needs and objectives, goals, time horizon, and risk tolerance. The asset classes and/or investment strategies described may not be suitable for all investors and investors should consult with an investment adviser to determine the appropriate investment strategy. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
Exchange-traded funds (ETFs) are subject to risks similar to those of stocks, such as market, interest rate, foreign exchange, and liquidity risks. An investor in ETFs may bear indirect fees and expenses charged by the ETFs in addition to their direct fees and expenses, and is subject to the risk of loss of principal. ETF sponsors may suspend trading in ETFs and may not honor redemption requests. ETFs may trade at a discount or premium to their net asset value and are subject to the market fluctuations of their underlying investments. When considering investing in an ETF, you should consult your financial advisor and accountant on how investing in the fund will affect your taxes.
Before investing in an ETF, you should read both its summary prospectus and its full prospectus, which provide detailed information on the ETF’s investment objective, principal investment strategies, risks, costs, and historical performance (if any). The SEC’s EDGAR system, as well as Internet search engines, can help you locate a specific ETF prospectus. You can also and prospectuses on the websites of the financial firms that sponsor a particular ETF, as well as through your broker.
Past performance is no guarantee of future results of any ETF.
Information obtained from third-party sources is believed to be reliable but is not guaranteed. The Firm makes no representation regarding the accuracy or completeness of information provided herein. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice.
The S&P 500 Index is a commonly recognized, market-capitalization-weighted index of 500 widely-held companies, designed to measure the performance of US large-cap stocks. The Russell 3000 Index is a free float-adjusted, market-capitalization-weighted index which measures the performance of the largest 3,000 US companies representing approximately 98% of the investable US equity market. The MSCI All Country World Index [ACWI] is designed to measure the performance of the global equity market and is a free oat-adjusted, market- capitalization-weighted index composed of large- and mid-cap stocks of companies located in developed and emerging countries throughout the world. The MSCI ACWI ex-USA Index is designed to measure the performance of the global equity market excluding the US component and is a free float-adjusted, market-capitalization-weighted index composed of large- and mid-cap stocks of companies located in developed and emerging-market countries. The Bloomberg Barclays US Aggregate Bond Index [BBG Barc Agg] provides a broad-based measure of the fixed-rate US investment-grade debt market. The Bloomberg Barclays Global Aggregate Bond Index [BBG Barc Global Agg] measures global investment-grade, fixed-rate debt from both developed and emerging-markets. The J.P. Morgan Global Aggregate Bond Index (JPM GABI) provides a broad-based measure of the global fixed-rate, investment-grade debt markets. The JPM GABI is a US dollar denominated, investment-grade index with asset classes from developed and emerging markets. Cash refers to overnight Fed funds.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Summit Financial Advisors, LLC, a Registered Investment Advisor and separate entity from LPL Financial.