Buffered & Floor All Weather Models
Preparing Your Investment And Retirement Income Portfolio For Uncertain Times
Different client needs call for different investment and retirement income strategies.
The Green Pastures Buffered & Floor All Weather Models were especially designed for pre-retirees and retirees who prioritize wealth preservation and risk management over maximizing gains.
These models seek to:
(1) significantly lower portfolio downside volatility,
(2) reduce losses, and
(3) limit exposure to potential Sequence Of Returns Risk which can be a retirement killer.
The specific sequence of investment returns matters much more significantly than the average return during the early years of retirement when you begin taking retirement income withdrawals from your portfolio.
Investment losses, coupled with retirement income withdrawals, can rapidly deplete your investment and retirement income portfolio and lifestyle.
The Buffered & Floor All Weather Models can be put to use as:
(1) stand-alone investment and retirement income portfolios,
(2) complements to our Retirement Income Solutions, or as
(3) complements to your investment and retirement income portfolio held elsewhere.
Investment Goal
The goal the Buffered & Floor All Weather Models is to help you achieve your long-term goals based investment and retirement income plan with more consistent risk management and significantly lower downside volatility relative to major U.S. equity market indices during bear markets.
Significantly lower downside volatility translates to a lower stress level - and a lower stress level translates to more Peace Of Mind.
Investment Strategy
We manage client investments within the Buffered & Floor All Weather Models similar to how we manage client investments within the All Weather Models. However, we replace a portion of the equity asset allocation with Buffered And Floor ETFs ("BFE").
BFEs, a.k.a. Defined Outcome ETFs or Managed Outcome ETFs, are exchange traded funds that:
(1) can serve as an equity allocation replacement to help de-risk some of the equity allocation of your investment and retirement income portfolio,
(2) provide you with downside protection from loss up to a target amount (a "Buffer") or provide you with downside protection from loss after a target threshold (a "Floor"), and
(3) offer you growth potential during up markets.
BFEs have become extremely popular due to pre-retiree and retiree investors’ concerns about stock market volatility, bear markets (when an investment falls 20% or more from a near-term high) and Sequence Of Returns Risk (read about Sequence of Returns Risk under the Retirement Income tab).
BFE Examples
Following are two detailed examples that illustrate how BFEs with target buffers, floors, caps and participation work. *BFE prices, yields, rates and availability are subject to change at any time.
Implementing BFEs In The Green Pastures Buffered And Floor All Weather Models
Following is a hypothetical illustration of how we implement BFEs into the equity allocation of our Buffered And Floor All Weather Models to:
(1) significantly lower portfolio downside volatility,
(2) reduce losses, and
(3) limit exposure to potential Sequence Of Returns Risk which can be a retirement killer.
