Tag - option overlay strategy

Advice to the Advisors

Warren Buffett Lesson on Risk and Volatility | Sheaff Brock Institutional Group

The Lesson Many of Your Clients Were Never Taught

“That lesson has not customarily been taught in business schools,” Warren Buffett observes, referring to the concept that “Volatility is far from synonymous with risk.” In a 2015 letter to shareholders, the Berkshire Hathaway CEO wrote about the difference between risk and volatility. Many investors, he observes, “conflate these concepts, costing themselves money.” Of course, the fact that stock prices will always be far more volatile than cash-equivalents must play a part in any advisor-client discussions of portfolio design. But, [...]

Advice to the Advisors

Option Overlays Timely and Timeless | Sheaff Brock Institutional Group

Option Overlay Strategies—Timely, Yet Timeless

One over-arching theme in any financial-advisor-to-client messaging is the power of time, with the goal being to select investment tactics which are timely, yet which belong in portfolios based on timeless wisdom. In that context, option overlay strategies, Sheaff Brock posits, become a particularly relevant topic. There’s nothing new about option overlays. In fact, as Institutional Investor explains, the majority of U.S. pension plans have adopted overlay techniques as part of their investment tactics. And, while in investment vocabulary, the term “overlay” can have [...]