Tags: antidote | volatility | investor | market

The Antidote for Volatility?

The Antidote for Volatility?
(Iqoncept/Dreamstime)

By    |   Friday, 20 April 2018 09:13 AM

With so much surging volatility in late Q1 2018, there should be a greater need to understand what strategies are investors deploying to guard against downside risk.

With US tax cuts and fiscal stimulus helping to build up inflation and growth expectations; confidence was high in early Q1 2018. With global equities and bond yields increasing, investors were dancing in the streets.

However late Q1 2018 has spiked volatility with, among other things, the accumulation of US policy risks, including monetary tightening by the Fed. The hardline US Trade posture certainly is boiling commercial tension between the US and China, creating volatility.

The recent SEC Crypto subpoenas have sent investors scurrying in fear personifying volatility.

Cryptocurrencies don’t sell products, earn revenue or employ thousands of people. They generally don’t even return dividends. There’s no oversight. These market risks along with other markets seeing volatility spikes make for a perfect syndrome to be diagnosed with the “downside disease.”

Are there any remedies out there? Has anyone discovered an antidote? Does a cure even exist?

Either you eliminate, insure, transfer or accept risk. Investors are seemingly more likely to accept risk rather than put a hedging strategy in place to manage risk. Otherwise investors would be more vested into seeking viable solutions. Sure investors are using instruments to offset against adverse price changes or negative events, but what are these instruments?

Are they sufficient? Do they provide enough cover or have investors become desensitized to risk management. With the Dow being a volatility rollercoaster in Q1 2018, the market itself has become a volatility index. Hedge strategies such as Options, Derivatives, Forex, or otherwise are market reliant. So how is hedging volatility with volatile markets considered risk management? What about the principal protection market?

These are fixed income security notes that guarantee a minimum return equal to the investor's initial investment, the principal. Again the securities are market reliant, volatility vs. volatility.

Unfortunately the general rule for hedging strategies isn’t to make money but to protect from losses. Maybe that’s why investors are so desensitized. There should be higher expectation and more desire to make money with hedging strategies. Maybe there isn’t a viable option to do so, but what if you could protect from losses and make money? Is that a possibility in the marketplace?

The new buzzword everyone is floating around these days is “wealth storage.” One could easily surmise that it’s a clever marketing phrase to attract investor capital. Storage is defined as the action or method of storing something for future use. Storage assumes that it will always be available to you. The crypto funds use it all the time.

Likewise, investment funds use it too. You can even see this phraseology with certain blue-chip stocks like Microsoft. This is seemingly an effort to manufacture a feeling of safety and security for the investor. Quite the reverse, the best shelter against downside risk is a much improved upon risk management strategy not crafty marketing that deflects the concerns for volatility.

After weeks of delving through risk management firm after firm, I discovered one thing: they all generally offer the same boilerplate solutions to volatility. Hedge one volatile market against another. Charge unjustifiable fees and rely on market performance.

After carefully sifting through the weeds, there was a needle in the haystack. There is a boutique risk management firm that was hovering under the radar. Although they have been in business for more than 5 years with $8M in receivables in Q2 2018, they are obscure in the marketplace. They’ve been vetted by some of the brightest minds on Wall Street. They have an Opinion Letter from one of the largest law firms in the world.

As I inquired, I was intrigued by their solutions to volatility and downside risk so I wanted to learn more. Their firm was founded from working with a former professional athlete turned real estate developer. They attempted to assist him with his plans to develop a $400M NFL stadium years ago. They were unable to help him, but the Balance Sheet Enhancement Platform (“BSEP+TM”) was created.

The BSEP+TMis a proprietary business method algorithm that combines life insurance, annuities, and cash management to protect principal and produce a high performing dividend without reliance on the stock market. This is so contrary to industry practices.

BSEP Plus Collateral Group Corp. went from a small five figure revenue firm to a New York based firm expanding to South Florida projecting 8 figure revenues in 2018 in a span of 3 years.

Seems like someone has discovered an antidote to the volatility disease that is worth taking a closer look at.

Nadja Atwal was born in West Germany and studied political science and psychology before she decided to become a journalist and publicist. Her passion for America lead her to becoming both a top writer and publicist with global reach.

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NadjaAtwal
Seems like someone has discovered an antidote to the volatility disease that is worth taking a closer look at.
antidote, volatility, investor, market
813
2018-13-20
Friday, 20 April 2018 09:13 AM
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