If a client so chooses, we attempt to reduce the volatility of a diversified, socially responsible portfolio with an options strategy similar to a “covered call” on the stock holdings.
This strategy strives to insulate a portfolio, rather than speculate.
Our approach is generally considered rather conservative, more conservative than just owning stock mutual funds outright.
Data from numerous studies demonstrates how, over time, this type of hedged portfolio has not only reduced volatility, but also often improved overall performance as compared to a benchmark such as the S&P 500. On our resource page, we list the studies done by Ibbotson Associates, Callan Associates, CISDM (Center for International Securities and Derivatives Markets), Goldman Sachs, and others. Of course, past performance is no guarantee of future results.
We are happy to explain in greater detail how we use options.
