Bear Market Protection
Understanding how diversification into alternative assets or strategies affects a portfolio’s bottom line is critical to consistent financial growth.
The benefits of diversification are often overlooked in good times, but become painfully clear in bad times. As we saw in the recent bear market in US stocks, when things go bad, conventional portfolios can suffer greatly.
Alternative SP Trader investment vehicles can provide protection during bear markets in stocks and bonds due to their low correlation with these investments.
The benefits of an SP Trader Fund investment on an investor’s overall portfolio performance is illustrated in the figures and table on this page,comparing a traditional stock and bond portfolio to one containing a 25% allocation to SP Trader Fund (although 30% would be optimal).
The portfolio with a 25% allocation to SP Trader Fund shifts the distribution of returns significantly to the right and shows less frequent losing months with smaller losses.
The table below shows the average monthly loss is 0.78% smaller for the portfolio containing an SP Trader Fund investment, which represents average annualized bear market protection equal to 9.4%.
Furthermore, the frequency of losing months drops from 47% to only 23% and the average profit for all months is 3.9% higher on an annualized basis for the portfolio containing an SP Trader Fund investment.
TRADITIONAL PORTFOLIO
PORTFOLIO INCLUDING SP TRADER
THESE PERFORMANCE TABLES AND RESULTS ARE FROM ACTUAL RESULTS OF SP TRADER FUND’S TRADING FOR
THE PERIOD JAN ‘00- NOV ‘08