My Mission

Since 2010, I have been on a mission to find an investment strategy that offers maximum participation in rising markets while minimizing risk in falling markets.

If you are retired or near retirement, then you need to invest in stocks to grow your capital. The problem with investing in stocks is that they expose your portfolio to extreme downside risk. During the internet bubble of the early 2000’s stock related investments lost more than 50%. Again in 2008 during the financial crisis, stocks lost more than 50%.

The big question I became obsessed with in 2010, the year I retired as a partner of a large Commodity Trading Advisor after more than 35 years in the industry:

Is it possible to invest in stocks to capture the upside returns while avoiding the downside risk?

At first I turned to Liquid Alternatives (hedge fund strategies offered to individuals as a mutual fund). However, the more I researched these investment strategies, the more problems (RISK) I found. The biggest problem with Liquid Alternatives is that although they did offer some protection from downside risk in 2008, they have cost your portfolio a fortune since then. I knew there had to be a better way to protect a portfolio from downside risk.

I began researching an investment strategy known as “dynamic hedging”. A dynamic hedging strategy adjust the allocation to stocks based on risk. So as risk increases, you would allocate less to stocks and more to cash or short term US Treasury Bonds. My goal was to simplify the investment process so that individual investors could use the strategy in their brokerage account using mutual funds or exchange traded funds. I was surprised when my research proved that this investment strategy was not only effective at hedging downside portfolio risk but also outperformed most Liquid Alternative investment strategies by a wide margin.

If you are a do-it-yourself investor who wants to consider hedging downside risk in your portfolio, then the most important thing to consider is that all hedging strategies from liquid alternative, to options, to dynamic hedging will have a cost associated with them in terms of lost upside returns. The key to success is knowing exactly what this cost will be and minimizing this cost in order to maximize the upside capture of the potential returns. In January of 2016, I personally implemented dynamic hedging strategies across all my retirement portfolios and this website will track the performance of the strategies and offer you a chance to participate in the strategies as well.

My Story

I graduated with a degree in Computer Science in 1982 and went to work building my first back-testing platform for futures contracts. I started a Commodity Trading Advisor and managed 170 million dollars using multiple strategies across domestic futures contracts. In 2003, I became a partner of a large Commodity Trading Advisor where I helped manage more than 2 billion dollars. In 2010, I started researching hedging strategies designed for US equity ETFs. I currently use all the strategies offered on this website to manage my retirement accounts.