Defining Risk, and Seeking Consistent Returns

Swan Glob­al Man­age­ment offers alter­na­tive asset man­age­ment.
An inno­v­a­tive invest­ment approach, the Defined Risk Strat­e­gy has been pur­su­ing the growth and pro­tec­tion of investors’ wealth since 1997.
We devised our Defined Risk Strat­e­gy (DRS) to offer our clients a defense against mar­ket risk to max­i­mize the oppor­tu­ni­ties for con­sis­tent long-term returns. The DRS is engi­neered to safe­guard against large mar­ket down­turns and to pro­vide steady returns over a full mar­ket cycle. We strive for this goal through a rules-based, active­ly man­aged hedged equi­ty invest­ment process.

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.

We Believe…

Therefore, We…
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
Tra­di­tion­al asset allo­ca­tion focus­es on bal­anc­ing risk, but this does not effec­tive­ly reduce risk. Defin­ing and reduc­ing invest­ment risk, not just bal­anc­ing it, are essen­tial steps to pro­tect wealth and, more impor­tant­ly, to gen­er­ate wealth in a more con­sis­tent and more pre­dictable way.

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.