Multi-strategy core portfolios are suitability based and use multiple strategies that include asset-class diversification, strategy diversification, and dynamic risk-management measures instead of the simple asset-class diversification employed by passive asset allocation. These can keep investors engaged in the market most of the time and help them avoid much of the damage of major downtowns. You don’t need to stop using a passive core. After all, it’s just one more strategy, and it does a good job with the “baby bears,” which occur with some frequency. But for a complete bear-market defense, the discussion presented here shows how an investor can add another defensive tool to prepare for the inevitable “grizzly bears” when they occur. By combining a static, passive allocation for “baby bears” and a tactical, dynamic risk-managed core for “grizzly bears,” an investor can build a portfolio that can better deal with market risk and opportunity in every market environment.
An examination of the practical options for portfolio construction across the spectrum of portfolio management—from a passive portfolio of equally weighted asset classes to a portfolio that holds and actively weights multiple dynamically risk-managed strategies.
As Jerry Wagner, president and founder of Flexible Plan Investments, often says, “Risk is always with us.” But when the next “super bear market” rears its ugly head, will the risk-management strategies your clients have in place be enough?
Learn more about the QFC Multi-Strategy Explore strategies and how they deliver three levels of risk management.
Learn more about QFC Multi-Strategy Core and how it delivers three levels of risk management.
Learn about our risk-managed strategy options and where they are available.