TFA believes that risk management strategies should be part of every investor’s portfolio. It is for this reason that elements designed to preserve capital during bear market cycles are built into everything we do.
If given a choice, we believe few investors would intentionally remain fully invested during nasty bear market periods. Ask yourself: Do you really want to just sit there the next time the stock market declines -20%, -30%, -40% or more? Instead, why not try to “lose less” during severely negative environments?
TFA strives to keep portfolios in sync with the primary trends of markets.
The TFA Approach
The goal is to participate in bull market gains while striving to preserve capital during bear market phases.
Yet, it is important to understand that we won't get every move right. We won't dodge every "correction" during bull market trends. We won’t sell at the top and buy at the bottom. No, our goal is to capture a healthy portion of the upside during bull market cycles and to lose less during negative cycles.
What to Expect
As with any investing strategy, it is important to have the proper expectation. So, let’s talk about what a risk managed approach can and can’t do.
Risk Managed Strategies CAN:
- Reduce exposure to market risk during severely negative environments
- Strive to “lose the least amount possible” during bear market cycles
- Stay in sync with the really big, really important moves
Risk Managed Strategies CANNOT:
- Sell at the top and buy at the bottom of market cycles (this is a fool's errand)
- Protect against ALL losses during negative markets
- Avoid all/every bear market declines
- Protect against losses during normal market “corrections”
Our belief is that with the proper expectations, risk managed funds can add value to a portfolio - especially during negative market environments.
