Understanding The Law Of Losses
The bigger the loss, the greater the rate of return needed to get back to even.
For example, a 50% loss will require a 100% gain in order to get your account back to even.
A Look At Maximum Loss During Risk Events
With increased globalization, markets are more interconnected than ever and when unpredictable events [Black Swans] occur they can ravage the financial markets and client portfolios.
Black Swan: a highly improbable event with three principle characteristics; it is unpredictable; it carries a massive impact; and after the fact, we attempt to concoct an explanation that makes it appear less random and more predictable than it was.
- Nassim Nicholas Taleb, New York Times best-selling author
The Best Offense Is A Stellar Defense
By combining proprietary algorithms and advanced portfolio construction, we are able to deliver a highly-sophisticated form of diversification, with an emphasis on downside protection.
For example: By limiting 50% of the downside and capturing 80% of the gains, you'll experience 35% better performance.
*“Dot.com Bust” period is defined as 09/01/00-10/09/02; *“Financial Crisis” period is defined as 10/09/07-03/09/09. The research signals in the chart above are from actual long-term trend signals based upon relative strength and momentum indicators. GVCM utilizes the signals as guidance in determining a proprietary combination of technical, quantitative, and economic indicators to specific exchange traded funds and mutual funds selected for the various investment programs offered for our client accounts. Buys and Sells may have or may not have occurred on the exact dates shown and do not necessarily reflect transactions applied to every individual account. The chart is for illustrative purposes only and is limited to general information pertaining to GVCM’s investment programs.
All performance returns are HYPOTHETICAL in nature. The GVCM program results DO NOT represent actual trading using client assets but were achieved by means of retroactive application of a computer modelwith the benefit of hindsight to demonstrate how the combination would have performed in the historical period noted. The investment return and principal value of an investment may be lower or higher than the performance as shown; and an investor’s investment upon redemption may be more or less than their original cost.
Information contained in this material is intended solely for informational purposes only and is not an offer or solicitation to buy or sell any security, index, mutual fund or Exchange Traded Fund (ETF); nor to offer investment advice. GVCM does not guarantee the accuracy or completeness of this information, nor does GVCM assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only and is not a complete analysis of every material fact. All investment strategies involve the risk of financial loss. Past performance does not guarantee future results.