The power of compounding is profound and well understood. What is less understood is the power of managing your downside. Too often we focus on the upside potential without due attention to the downside characteristics of investments. In this white paper we examine the power of reducing the downside even when the upside may also be limited. Specifically we focus on a strategy we call 80:60, a strategy that only participates in 80% of an up month’s return and only 60% of a down month’s return. Losing less to win doesn’t sound very exciting but as we will show it can be very powerful. It has many similarities with a sporting team that has a great defence or back line. Preventing the opposing team scoring can increase your chances of winning.
This website is intended for persons resident in Australia. State Street Global Advisors, Australia Services Limited ABN 16 108 671 441, AFSL Number 274900 ("SSGA, ASL") is the product issuer. State Street Global Advisors, Australia, Limited (AFSL Number 238276, ABN 42 003 914 225) (“SSGA Australia”) is the Investment Manager. The material on this website is general information only and does not take into account your individual objectives, financial situation or needs. You should read and consider the Product Disclosure Statement (PDS) for the relevant product carefully before making an investment decision and consult your financial adviser. You can access our PDS online or by calling us. The offer made in our PDS is available to persons receiving the PDS within Australia and applications from outside Australia will not be accepted. Past performance is not a reliable indicator of future performance. Investing entails risks and there can be no assurance that State Street Global Advisors will achieve profits or avoid incurring losses.
Investing involves risk including the risk of loss of principal. This material should not be considered a solicitation to apply for interests in the Funds and investors should obtain independent financial and other professional advice before making investment decisions. There is no representation or warranty as to the currency or accuracy of, nor liability for, decisions based on such information. Performance quoted represents past performance, which is not a reliable indicator of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.