Lose Less with Dynamic Risk Hedging

How we do it

When we first started kicking around the idea of revolutionizing the industry, we’re not gonna lie: we got kind of nervous. But the more we brought in industry talent, and the more we began to sort out all the minuscule details (and there a ton of those), the more confident we became in our ability to develop a tool that would allow even the smallest investor to gleefully play in the big boy’s market.

After doing more than just a little research into the average American’s approach to investing, we began to see a pattern. People consistently believe that to make any money in the stock market, you basically have to hit the jackpot—the super-lucky investment at the ground-level of companies such as Apple or Google. Fact is, the rich have been getting richer on the hundreds of everyday companies that continue to grow and thrive on a daily basis; companies that you most likely have never even heard of. Utilizing this knowledge, we’ve designed a proprietary tool that we just can’t seem to get enough of.

Algorithmic Virtual Advisor (AVA)

Limiting loss (during even the most “down” of down years) is the best way to build wealth over time. Knowing this, we built an entire investment approach reflecting the need to avoid risk. Your Altruistic AVA constantly monitors current market conditions and makes the automatic adjustment to your portfolio so you don’t have to. That’s what we call a “managed” account. Built into our program is the understanding of what is a normal fluctuation and what alerts as true risk to your assets. We work to manage those risks effectively. Here’s how it all works:

Dynamic Risk Hedging (DRH)

We know, it sounds all too much like the industry jargon and lingo that turned you off from learning more about investment strategies in the first place. But hear us out. DRH is our revolutionary five-step, algorithm-based portfolio management process that uses low-cost commission-free ETFs and diversifies your account across different sectors. Where other “robo” advisors may pick ETFs based on cost and diversification alone, we select and manage portfolios by allocating risk across different “budgets,” typically categorized by size, momentum, volatility, quality, and value. So, like our competitors, we focus on cost and diversification, but additionally, we manage risk by using cash, short, and correlation hedging when needed. We also rebalance when market conditions warrant it, rather than your annual account opening anniversary. This approach seeks to minimize the risk that naturally goes hand-in-hand with investing.

Exchange Traded Funds (ETFs)

Allowing you to play with as little as just one share purchase, the benefits of ETFs are multiple. Investors typically enjoy low expense ratios, no short-term redemption fees, no investment minimums, and lower taxes on gains. These funds allow broad diversification across multiple asset classes and typically cost less than a mutual fund in the same space.

With Altruistic Investing, you never pay a commission to use our ETF models. We execute simple and effective trading when market risk warrants it.

A Hybrid Investment Strategy

Active or passive? Both! First things first: YOU control the amount of risk you want in your portfolio. Your investment profile is determined by how you answer a risk questionnaire. If you, at any time, want more or less risk or your investment objectives change, you can adjust your portfolio by resubmitting the risk questionnaire (see FAQ). We then implement a hybrid active/passive strategy for you based on your tolerance for risk. We understand the benefit of low-cost, passive index funds and utilize some of them in our strategies, but we also add value through Dynamic Risk Hedging (DRH) and by selecting other ETFs that seek to manage risk more than an index fund.

Eliminating guesswork, hesitancy, and even irrational hope, our algorithm-based virtual advisor (AVA) seeks to minimize risk and protect investments much more than any fallible human could. Always assessing, the AVA doesn’t wait for you to make the decision to sell or buy.

Almost immediately, when those opportunities present themselves or when high risk is recognized, adjustments are made to ensure that your portfolio is protected and risk is minimized. It’s complicated, nerdy-type stuff, but it’s wonderfully cutting-edge and it works.

To learn more about our “hybrid” active/passive strategy click here.