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Defined risk strategy
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Defined Risk Strategy is an supplement to asset allocation, diversification and the modern portfolio theory. A defined risk strategy caps downside stock investment risk and in many situations, the risk is typically eliminated over a one-year period. The definable risk is determined at the initiation of the investment. This type of approach allows investors to place more money in stock which historically provide a greater return. A Defined Risk Strategy maintains a disciplined stance at all times. It protects capital investments and delivers returns that match or exceed a comparable index. The profits generated from a defined risk strategy prove the value and necessity of downside protection. A Defined Risk Strategy limits or removes traditional risk factors from an investment. Traditional risks like stock selection, market timing, and market direction, impose little or no impact on the performance of the portfolio. A Defined Risk Strategy accepts and manages the risk an investor is willing to accept and gets rid of what they don't. The initial investment is always protected. A Defined Risk Strategy does not rely on market direction to succeed. See Also
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