Curing Portfolio Motion Sickness

Last week’s volatility was big, but it wasn’t rare. Since 1980, the average year has had 64 days with market moves that exceed 1%. Halfway through this year, there had only been 10. So, keep that seatbelt fastened, there may be more volatility to come, but it’s also the way of the world. Importantly, there are strategies available that seek to weather the storm.

Stay Invested in a Downturn

The selloffs that took place on August 5 were classic knee-jerk reactions that snowballed throughout the market. Selling begets more selling. Potentially, the most important thing to do in a downturn is… nothing. Don’t sell. Stay invested.

Staying invested in a downturn is a generally sound policy because most of the market’s worst days over the past 20 years were followed by just as many of its best days. Over the last five years, the Invesco QQQ Trust (QQQ) has had 35 sessions that have lost at least 3%. Yet over those same five years, QQQ is up 135%. Volatility happens.

It takes a lot of luck and know-how to time the market and no one gets it right every time. So rather than worry about any of it — the peaks, the valleys, the why, the hows — explore a quarterly hedge ETF. Better yet, explore a fund that offers principal protection in a downturn, can reduce portfolio volatility, and may even potentially make you money.

For Bulls and Bears, Add QBUL and QBER

TrueShares has developed two hedge ETFs that can be used individually or in tandem to navigate both bull (QBUL) and bear (QBER) market conditions with consistency. When blended into an existing portfolio, QBUL/QBER offer investors a unique method of amplifying capital appreciation potential without disrupting risk tolerances.

Both Funds offer the potential for growth with lower volatility and reduced downside risk, targeting positive total return during high-volatility environments. They each seek to achieve their goals by combining significant principal protection in the form of treasury bills with modest equity exposure via call or put options.

^{The illustrations above are displayed to illustrate the concepts of the strategies and do not show historical performance nor should be used as a basis for future performance.}

Your Next Steps

In the midst of the meltdown, the Your Money columnist for the New York Times advised readers to “Go fly a kite or wander among beautiful buildings and check in with the market again tomorrow.”

Explore adding QBUL/QBER to your portfolio and leaving the volatility to us.

Interested in learning more? Schedule a meeting with us today for an overview with our portfolio management team. The kites can wait. 

Schedule a Meeting

^{Before investing, carefully consider the TrueShares ETFs investment objectives, risks, charges, and expenses. Specific information about TrueShares is contained in the prospectus and a summary prospectus, copies of which may be obtained by visiting www.www.true-shares.com. Read the prospectus carefully before you invest.}  

^{TrueShares Quarterly Bull Hedge ETF (QBUL) Fund Objective: total return with substantial protection of principal.}  

^{TrueShares Quarterly Bear Hedge ETF (QBER) Fund Objective: substantial protection of principal with total return.}  

^{The Funds may not achieve their objectives and/or you could lose money on your investment in the Funds. The Funds are recently organized with no operating history for prospective investors to base their investment decision which may increase risks. Some of the Fund’s key risks, include but are not limited to the following risks. Please see the Fund’s prospectus for further information on these and other risk considerations.}

^{ETF Risks. As an ETF, the Fund is exposed to the additional risks, including: (1) concentration risk associated with Authorized Participants, market makers, and liquidity providers; (2) costs risks associated with the frequent buying or selling of Fund shares; (3) market prices may differ than the Fund’s net asset value; and (4) liquidity risk due to a potential lack of trading volume.}

^{The TrueShares Quarterly Bull Hedge ETF and TrueShares Quarterly Bear ETF are also subject to the following risks:}  

• ^{Options Risk. Buying and selling (writing) options are speculative activities and entail greater investment risks. As the buyer of a call option, the Funds risk losing the entire premium invested in the option if the Funds do not exercise the option. Derivatives Risk.}  
• ^{Derivatives may be more sensitive to changes in economic or market conditions than other types of investments.}  
• ^{Active Management Risk. The adviser’s judgments about an investment may prove to be incorrect or fail to have the intended results, which could adversely impact the Fund’s performance. QBUL - The adviser’s tail risk strategy may not fully protect the Fund from declines in the market and will not allow the Fund to fully participate in market upside. When the adviser selects out-of-the money call options, the Fund will not participate in equity market gains until they exceed the strike price of the call option. Lower interest rates or higher call option prices will tend to increase the cost of mitigating the risk posed by a decline in U.S. large capitalization equity markets. QBER - The adviser’s tail risk strategy is not designed for upside participation in the markets and will underperform in rising equity markets relative to traditional long-only equity strategies. While the adviser’s strategy is designed to benefit from meaningful declines in the domestic large cap equity market, the Fund will not fully benefit from any given downswing in the market. When the adviser selects out-of-the money put options, the Fund will not participate in equity market declines until they exceed the strike price of the put option. Lower interest rates or higher put option prices will tend to increase the cost of attempting to benefit from meaningful declines in the U.S. large capitalization equity markets.}  
• ^{Equity Market Risk. Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change based on various and unpredictable factors including but not limited to expectations regarding government, economic, monetary and fiscal policies; inflation and interest rates; economic expansion or contraction; and global or regional political, economic and banking crises.}  
• ^{Fixed Income Securities Risk. When the Fund invests in fixed income securities, the value of your investment in the Fund will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities owned by the Fund. In general, the market price of fixed income securities with longer maturities will increase or decrease more in response to changes in interest rates than shorter-term securities}

^{Call Option: an option to buy assets at an agreed price on or before a particular date.}

^{Put Option: an option to sell assets at an agreed price on or before a particular date.}

^{Paralel Distributors LLC, Member FINRA.  Paralel is not affiliated with TrueMark Investment}

^{Control number: TRUE30}

^{Sponsored by:}

^{TrueShares ETFs and Cboe}

Author Bio:  

Michael Loukas serves as Principal and Chief Executive Officer of TrueMark Investments. Michael brings over 20 years of industry experience to TrueMark. Previously, he served as President and CEO of USA Mutuals, where he was directly responsible for executing the company’s strategic vision. Michael received a Bachelor of Arts in Government & International Politics with a minor in Economics from Bowdoin College.