Volatility Trading

Trading During Volatile Times is Also Where Profits are Made

Volatility in the trading world refers to the movement of  stock prices from their original prices. During uncertain times  we will see more volatility as government intervention and unforeseen circumstances have leveled off as much as can be expected, leaving uncertainty for the Do It Yourself investor. Seasoned advisors are also exiting as they do not want to learn the new ways to invest in these changing times.

As registered investment advisors with decades of experience and decades more to go, we can help your assets grow during volatility. On a daily basis we focus on opportunities that suddenly present themselves. We move fast to capture as much alpha as we can. Particularly during volatility it is not the environment to be trading on your own.

Trading during volatile times is both where money is lost and made. Despite what you’ve experienced, there is a methodology to make money in volatility. In fact, the more volatility we experience, the higher returns we can expect.  Utilizing the efficient frontier is a really important concept. Investing along the efficient frontier literally means only taking on as much risk as is necessary for the goals you seek.

Profits Happen in Volatility

They say Investing isn’t about beating others at their game, it’s about controlling yourself at your own game – Benjamin Graham-

The implied volatility feels different when you experience it not in your favor; this demonstrates how volatility can work against you. But the best days in the market have also been followed closely by the worst. Therefore it is the latter that reflects the trader’s reason for moving forward given said estimates of future volatility.

The best days in the market have been followed by the worst days. It is important to stay invested and not liquidate in a down market to cash (unless of course you have to). 

Financial Planning is Your Edge in Volatility

Reliability and stability are important components of a successful career. Because you are committed to your investment for the long – term, it’s important to think of your financial planning team in this way too. In other words, you need a team who are going to be with you dependably through the good times and hopefully only few bad times of life.

When it comes to investing, a huge number of beginners make the same mistake. They say they know better but when they see their investments down they change their objective and don’t leave enough time to properly re-allocate. Big brokerages want you to think that the less trading you do the better but this is definitely not the case. While it is more work, volatility trading requires more trades not less. We must exit before certain holdings fall. We short and we cover our shorts before they go against us. It is in these fast-moving moments during the trading day that profits are made.

Asset allocation as an Edge

The proper asset allocation model is essential to secure your wealth on your terms. A successful investment strategy may grant you access to over ten asset classes, which helps you to effectively accomplish your financial goals and objectives respectively.

Asset allocation refers to balanced, aggressive, conservative, or a level in between. Each client has an individual appetite for volatility and taken together with his or her family or business’ timeline, fiduciary advisors like Boracchia Wiviott Wealth Partners make educated choices daily for our clients’ best life.

Diversification is a benefit of asset allocation. In current times, some classes of assets are stronger or weaker than the rest. For instance, there is an inverse relationship between bonds and stocks prices. If the price of the stock falls, the bond prices will rise. Let us understand its importance a little more!

Diversification is having assets that are up when others are down and not being over or under exposed to the assets we are investing in. Working with the proper financial planner optimizes our asset allocation because within each class we then know how much of each holding to buy.

For example, Gold is an asset. When its price is rising, it’s dependent upon your level of risk what the proper amount is as well as what class to gain exposure in such as commodities or growth stocks.

The current trading climate requires a more active approach to Volatility!

An investment strategy in your early years is usually more aggressive than in your later years. On the contrary, an investment approach in your later years is going to be more aligned with preservation of capital. Given the inflation rate climate of 9%, retirees and conservative investors are in a tough spot. Leaving $1,000,000 in a cash account for example results in a $90,000 erosion of your purchasing power. These days you almost have to invest and take on a bit more risk that expected, but no advisor should have you invest outside your actual risk tolerance. (We just want you as if you are our client to make educated decisions.)

Sticking to your proper asset allocation strategy is all about building and saving for your financial future in a more discipline, non-emotional and strategic manner.

Boracchia Wiviott Wealth Partners utilizes asset allocation strategies i.e. tactical or dynamic asset allocation depending on various market factors. In tactical asset allocation, Boracchia Wiviott Wealth Partners will tell you to buy or sell the holdings and in dynamic we have more of a long term strategy. A mix of these are the right choice for investors to appreciate long term wealth most efficiently.

We at Boracchia Wiviott Wealth Partners are your leading registered investment advisors for objective subscription based stock market and financial planning advice; our strong background in real estate and insurance compliments your plans in a way no other team can. 

With our unique and innovative team we will invest for the most return given the risk in currency, bonds, commodities, medical, technology, web 3.0, and more important sectors.

Your Partners in Financial Life

We are glad to be able to provide you with financial freedom and accessibility in the stock market for your most successful future.

Join us today and see why many clients continue to work with our team for their best life.