We’ve just enriched TradeKing Advisors with an exciting new service, Risk Assist®. This optional feature aims to protect client principal investments during steep declines in the market by reducing exposure to equity-based portfolios*. Risk Assist® helps address the “what-if” question that holds some investors back in today’s more volatile markets. We’re the first and only online advisory service offering this much-needed feature to our clients.
If you’re close to reaching a near-term goal like sending your kid off to college, or you’re a brand-new investor getting comfortable with volatility, or if you’re just extra-cautious, Risk Assist may be a good addition to your portfolio.
Here’s how it works. This rules-based system analyzes portfolio holdings daily to watch for signals indicating steep market declines in the offing. It’s triggered by three possible factors:
- Portfolio performance. If a portfolio experiences sudden negative performance as a result of market volatility, that increases the odds that Risk Assist will activate.
- Volatility Forecasts. Using multiple methods to forecast volatility for the broader market and the specific portfolio, Risk Assist may kick into action as those forecasts predict greater volatility on the horizon.
- Max Drawdown Calibration. Max drawdown per portfolio impacts the speed and magnitude of Risk Assist’s response. “Max drawdown” refers to measuring the largest percentage loss of a portfolio from any peak to subsequent bottom, during a specified period.
Should the stock market take a turn for the worse, Risk Assist shifts your portfolio allocation from investments that are sensitive to downward market conditions (like equities) to investments that are less sensitive to market corrections – for instance, fixed-income products.
When the market is back on track, Risk Assist gradually restores your portfolio to its original allocation. You’ll be alerted whenever Risk Assist activates or deactivates on your TradeKing Advisors portfolio in real-time.
If you’ve been meaning to check out TradeKing Advisors, now’s a great time for that. Why not get a jump on your New Year’s resolutions and take our questionnaire to get started?