Defining Risk, and Seeking Consistent Returns
Swan Investment Philosophy
We believe that investment gains are only relevant if large losses are avoided. What is the point of large returns if most of it is lost in the next bear market?
The market’s unpredictability makes market timing and stock picking difficult tasks to accomplish, so we believe reducing downside risk is crucial to creating wealth.
|It is difficult to consistently and successfully execute market-timing strategies||→||Remain invested in the stock market at all times|
|It is difficult to select stocks that will consistently outperform the market||→||Invest in index-based ETFs|
|Pursuing returns in a variety of market conditions is critical to long-term success||→||Seek to generate market-neutral income by buying and selling puts and calls|
|The key to long-term wealth creation is to minimize downside risk||→||Always hedge by buying puts to protect clients during large market downturns|
|It is important to control risk in every phase of a market cycle||→||Follow a rules-based approach to remove emotions from the process|
About Swan Global Management
Randy Swan began Swan in 1997 to provide investment management services that were not available to many investors. Early in his financial career, Randy saw that options were a way to address investment risk directly, and the solution that followed was the proprietary Swan Defined Risk Strategy. The DRS has provided historical risk-adjusted returns that outperformed its S&P 500 benchmark through a combination of techniques that seek to protect investments from large losses and to generate market-neutral income.
The Defined Risk Strategy is a potential answer to many of the most pressing challenges that investors and advisors struggle with:
- Seeking investment return in a low-yield world
- Minimizing volatility
- Timing and sequence of returns challenge
- Retirement income challenge
- Bear market protection
- Tax efficiency
Swan Global Management is headquartered in Puerto Rico with affiliated offices in Durango, Colorado and Tampa, Florida. We feel our locations away from traditional financial hubs better allow for independent thinking, giving us the ability to design and build investment approaches in modern, original ways.