- A put sale means disposing of an option on a share with a contract to buy it back subsequently within a pre-set period at a lower price. The strike price (at which you must buy back the share) is determined in advance. If share value drops below the strike price, the investor holds insurance on the share's value in exchange for a premium.
- This strategy is geared to producing an attractive overall return even in a stagnant market. Our annual return over the past five years has been 13%, although indexes have only grown during that time by 2%. Returns in a bull market will be close to or somewhat less than the indexes. Your return does not however depend on the sale of a single put option. Its benefits reside instead in the sale of multiple options. Sector diversification is essential to the strategy's attractive returns and is similar to that of a traditional portfolio.
- This strategy is supported by a diligent and disciplined application of risk management principles guided by computer applications tailored to the needs of your portfolio. It includes a variety of risk parameters, such as economic sector, percentage premiums desire, currency exchange risk and protection of up to 20% to 30% in the event of a market decline.
- It affords tax benefits for taxable portfolios. Nearly two thirds of the returns are in the form of capital gains.
- This strategy offers exposure to international and US markets that generally have significant reduced currency exchange risks.
- We do not leverage.
We maintain excellent sector diversification and a high number (at least 20) of index-based shares when formulating and managing your portfolio. Our goal is to exceed the indexes in a high-volatility low return environment by reducing risk specific to individual shares.
Globevest Capital makes every effort to manage risk for all portfolios and keep them healthy, whatever their underlying strategy.
