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.