Adding Alternative Investments for Portfolio Stability During Market Sell-offs

The Challenge of Modern Market Volatility

• ⚡ Markets are experiencing some of the fastest sell-offs in recent history, amplified by high-frequency trading and reduced human presence on Wall Street.
• ⚠️ Elevated volatility has increased interest in portfolio protection strategies.

The Limitations of a Two-Legged Stool Portfolio

• 📊 Traditional portfolios often rely on a "two-legged stool" of stocks and bonds.
• 📉 Over the past few years, stocks and bonds have moved in tandem, failing to provide the expected diversification and stability.
• ⚠️ This correlation makes the traditional approach "dangerous" and "risky" in turbulent market environments.

Introducing Alternatives for Greater Stability

• 🧩 Adding a third leg of alternative investments can provide greater portfolio stability.
• 💡 Simplify's strategy lineup is designed to weather storms by focusing on diversifiers with low or even anti-correlation to stocks and bonds.

Liquid Alternatives and Dynamic Strategies

• 💧 The focus is on liquid alternatives available in ETF vehicles, avoiding locked-up capital and high fees.
• 📈 These include dynamic strategies that can go long and short, such as commodity strategies and managed futures.
• ✅ These liquid alternatives have shown strong positive returns during equity market sell-offs, outperforming the S&P 500 year-to-date.

Broader Diversification Opportunities

• 🌍 Other sources of diversification include addressing broader dislocations, such as those arising from monetary policy or currencies.
• 💱 The ability to take long-short positions in currencies is highlighted as another attractive source of portfolio diversification.