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Being Poised And Ready To Profit From Unexpected Downturns

Apr. 09, 2021 5:34 PM ET1 Comment


  • Exploring why and how an investment advisory firm positions itself exclusively as an active, defensive, equity manager focused on stock market declines.
  • Your portfolio construction efforts may be strengthened by an equity strategy that adapts to the daily narrative of the market and is built to seek profits directly from market declines.
  • The potential need for a purposeful pairing of diametrically opposed investment strategies to address client fear of loss and allow them the ability to capture long-term compounding effects.

Falling financial chart. Crisis and recession concept. 3D Rendering
Photo by Igor Kutyaev/iStock via Getty Images

[It may be an awkward concept to grasp, but just focusing on an investment strategy or strategies to make money from positive upward market movements over time may not be enough. Even if you

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Institute for Innovation Development (IID) is an educational and business development catalyst for growth-oriented financial advisors and progressive financial services executives who are determined to grow their firms in a business environment of accelerating business and cultural change. Run as a social enterprise, the Institute will be dedicated to help make business innovation best practices a vital cornerstone for members’ ongoing growth, competitive differentiation, and client/community engagement strategies. Three current IID initiatives are: 1. Integrating business innovation mindsets, processes and tools into financial services practices through the formation of Advisor Practice Management 3.0 professional development. 2. Applying business innovation as a powerful and differentiating advisor marketing/branding approach and community engagement strategy. 3. Creating a FinTech radar program to increase communication and access between the financial advisor and early stage FinTech communities. Bill Hortz, Founder and Dean, of the Institute and Institute Founding Innovator members (comprised of top cross-industry innovation experts, innovative fintech companies, and progressive minded financial advisors and industry thought leaders) will be contributing articles and hopefully sparking ideas and discourse on much needed, next-generation advisor business models and industry development. We will seek to uncover proven business innovation best practices; learn from innovative business creators; explore innovation mindsets; hear about new approaches, services and technologies; and ultimately discover how to apply these insights to a financial advisor's business. For more details about the Institute, investigate here: https://innovationdevelopment.org/annual-membership

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

I wrote this article myself and I am not receiving compensation to write this article but I do have a business relationship with 3D Capital Management that recently became an Institute member. The Institute is a business innovation platform and educational effort with financial services firms to openly share their unique perspectives and activities to build awareness and stimulate open thought leadership discussions on new or evolving industry approaches and thinking.

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Comments (1)

Mrnomad profile picture
As an individual, looking at "off the shelf tools like moving averages, stochastics, valuations, PE ratios, earnings per share, etc.," is ridiculous. I can't possibly compete with the whiz kids at GS.

"Stock market declines are inevitable, and you must endure them." Absolutely true, and I patiently wait for them when VOL is heightened and option premium spikes. Selloffs are humbling experiences. For a brief moment in time, everyone is equal, wondering when the bleeding will end, but the wary are loading up on put spreads because as surely as the sun will rise tomorrow, the line will once again point to the upper right.

Herein you disclose your strategy. "... the "global-relay race" that begins in Asia, as the first markets to open, then spreads to Europe, and ends in the US as the last markets to open. Understanding how global markets influence each other and provide clues to the price activity in the S&P 500, gives 3D Capital our edge."

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