Portfolio Risk Monitoring & Optimization

Constant Portfolio Protection Made Easy

Want to feel your portfolio is protected as the market goes up & down?
The SmartStops Portfolio Risk Monitoring feature enables investors to easily monitor a portfolio of stocks and ETFs so their risk exposure can be constantly analyzed for improved downside protection.  Our system watches over your portfolio in real time to keep you updated daily giving you peace of mind.  Now you will know when to sell, hedge or rotate your investments saving you money and generating higher returns.

Risk does not remain constant through time.  As Howard Marks, author of The Most Important Thing, wrote:

Howard MarksGreat investing requires both generating returns and controlling risk. And recognizing risk is an absolute prerequisite for controlling it.”

It’s important to recognize that principles of diversification and allocation are no longer sufficient in today’s globalized markets. Correlations have become ineffective.  New methods to monitor risk were needed which is why SmartStops was created.  Learn more about Why We’re Better then other methods available.

 

What does the Daily SmartStops Risk Monitoring Report provide?

Each day, after the market closes, SmartStops will email to you your Portfolio Risk Report.

This information can also be seen online under the Portfolio tab after you login. It will show:

Current Risk State

Current Risk State of your stock or ETF for symbols you have stored in your portfolio (or imported via our sync with broker feature).

 = Elevated Risk State
= Return-to-Normal Risk State

Risk states reflect the current risk exposure of the stock or etf. How we determine this risk exposure is based on proprietary methods built from 40 years of actual stock market experience and used by institutions. Our goal is to make an intelligent, constantly adjusting equity risk premium accessible to all investors, traders and all professionals. Learn More about the Smart(R) optimization engine behind SmartStops.

Aggressive & Conservative Signals
You can choose to follow either SmartStops Aggressive or Conservative signal families and risk alerts. Or both. Learn more about their differences.

Optimized "Normal" Value
An optimized Normal risk state trigger price point  reflects at what level SmartStops considers the stock or etf has returned to its “normal” risk state profile.  A real-time alert will be sent when triggered.  If you’ve sold your entire position already, now may be time to consider re-entering the position if the stock or etf has the same foundational or momentum outlook you desire.  You should always due your full due diligence first before deciding the symbol is still a good investment.

Real-time Risk Alerts
Any symbols that had alerts triggered that day will be flagged. Note, you also get instant real-time risk alerts for any triggers (to your email and/or phone (if you download our mobile app).

Early Warning Flag
  This icon indicates a symbol is approaching its SmartStops trigger. This allows you to reevaluate that position before a price drop may move it into an Elevated Risk State.
Optimized Smart Trailing Stops
An optimized stop loss price point, Smart Trailing Stop (or Elevated Risk State trigger value) for the next day’s market, for both Aggressive or Conservative approaches. You can deploy these stop loss price points as stop limit orders by  proactively by entering them directly on your broker’s platform. OR – if you have a supported broker for our BrokerLink feature, you can automatically send these stop loss order types easily from the SmartStops platform to your broker.

Portfolio and Symbol Performance
Overall Portfolio Risk data and percentages over 1, 3 and 5 year periods.  Rather then just re-balancing your portfolio yearly or quarterly, learn how to leverage proper risk analysis so you can continue to mitigate your risk and earn higher returns.  You can also select any symbol in your portfolio and see the individual performance for the stock or etf.

 

SmartStops covers over 5000 stock or ETF symbols* on USA exchanges (except for OTC or penny stocks).  If a symbol is not covered but meets our qualifying criteria , just contact us and we will add it within 24-48 hours.

For coverage of international symbols, please contact us.

If you are a broker or financial website that would like to incorporate SmartStops™ in your own portfolio management tool, please contact us.

What Steps should I consider taking if I see my symbol at Risk?

Selling, hedging, holding pat or buying more can all be legitimate results of a thoughtful analysis of your position.  The key is – Review your position.  When risk levels change, the important thing is to make a timely and informed decision.

 Sell the position and go to cash

Investors often become emotionally attached to their positions.  They fall in love with their winners, and they hesitate to sell their losers in hopes of making it back to even.  Don’t fall into this trap.  Learn to let go of your losers.

Remember, selling is only the first step to reinvesting.  Taking a loss is easier when you think of it as a swap—in which you replace a loser with a new investment in a similar (but not identical) asset—rather than a sale.  That makes taking action easier, as you don’t have to face what may have been some bad timing when you purchased.

And if you’ve got profits – take them!  Even if you sell just a portion of the position.  Though there are many studies showing the “disposition effect” and that investors sell their winners too soon, statistics also show that the average downturn or correction can be 20% and the drop in price for a market leader, 72% (source: IBD). So if your winner has now taken a turn down , as the saying goes –

“You can’t go broke by taking a profit.” 

 Maximize your return per day in the market for where your money is invested.

Hedge your position

Instead of selling your long position, you might consider using options to hedge your position.  Buying an out of the money put on your long position is like purchasing downside insurance.  There is a cost, but it the storm hits, it will be worth it.  SmartStops risk states help investors optimize when to put protection on and when to take it off.  You can learn more about options from your broker.

Employ Sector Rotation

One popular and effective risk management method is sector rotation, or moving from higher risk overbought sectors to lower risk underbought ones.  The trick is to know, when to make the move as well as the sector your position is in.  The SmartStops Market Risk Barometer can help.  This risk tool provides a history of risk ratio levels for various market sectors including basic materials, consumer goods, consumer services, energy, financials, healthcare, industrials, technology, telecommunication and utilities.  Learn More about our Market Risk Barometer.

Rebalance your portfolio

Is it time to rebalance your portfolio by reducing your exposure to some of your recent winners that have grown to represent too large a percentage of your portfolio?  The SmartStops Market Risk Barometer and Stock Risk State reporting can help you pick sectors and equities that are exhibiting favorable risk states.  Start your search for new positions by analyzing the risk they represent.  Then ensure you are purchasing the right number of shares to reflect the risk using our How Much to Buy Calculator.

Keep in mind that portfolio diversification has come under fire in recent years, as the 2008 market crash showed just what can happen when every sector is hit by the same negative factors . Investing guru’s like Warren Buffet and Howard Marks condemn diversification. So don’t be afraid to also investigate a more concentrated portfolio approach.  Especially now that you have SmartStops available to help protect those positions.  Learn how.

Make smarter decisions to increase profits, cut losses

Successful investing requires the ability to make timely and well-informed decisions. The right decision at the right time can make a substantial difference in your profits.

Let SmartStops show you the way to stress-free investing.

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