How can investors prepare for the next market crash?

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  • 02 mins 49 secs
After a record bull run for some stock markets we discuss how best investors might mitigate the risks of a potential crash.

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Schroders

Tel: +44 207 658 6000

1 London Wall Place, London, EC2V 7QA

E-mail: [email protected]

www.schroders.co.uk/adviser

- Automatically Generated -

Hi, my name's anne connel and i'm the head of portfolio solutions over the next few minutes, i'd like to make a strategic case for risk managed equities by the summer of two thousand eighteen. The equity bull market is the longest in living memory. Unfortunately, history tells us that when bull turns to bear equity, investors can end up nursing material losses. So just as investors can't see the future, drivers buy insurance to protect against crashes if the market is the road, how much does insurance cost ? The graph shows that the price of insurance against losses of greater than ten percent is costly variable and just when you need it the most in two thousand eight and nine it's most expensive one technique available is to invest in equity with an automatic braking mechanism. This slows down that sharp bends and re accelerates is the road straightens out. The benefit is that this smooths out the journey, makes the cost of production marks more certain and much cheaper. Another way is to buy insurance is before you pay for it by selling the right to participate in equity gains beyond a certain point, this reduces risk, but also creates a maximum speed limit, reducing investors participation in larger equity gains the benefits of rhys managed equity. He can also be felt a portfolio level whether introduction can lead to better outcomes. In this example, an investor who wants to reduce risk and holds bonds and equities could do this by allocating to bonds. This reduces risk but also lowers historic returns. However, if we address managed equities, investors can manage risk of los on dh, keep almost all their returns. Schroeder's has a dedicated business to equity risk management, which has resulted in a constant market presence. This is enable us build propriety processes to achieve better pricing and therefore better outcomes. Our experience means that we have the execution skills of an investment bank combined with the fiduciary duty of an asset manager in summary bear markets could result in losses for investors. Equity risk management can help manage this risk and generate better portfolio outcomes. So the good news is that when it comes to managing a pretty risk, schroeder's can help.

 

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