Our Strategy

 

Today’s retirees face several challenges, and many are having difficulty with reaching their full income replacement during a decade of historically lowest interest rates. While the fixed income allocation of their portfolio may help to dampen volatility, it is not adding much to the bottom line (return).

Q3 Capital Management Approach: Our goal is to generate weekly and monthly income by collecting dividends, income and writing covered calls. Combined, this can help provide a supplemental income to the portfolio, with the goal of meeting income needs of the retiree.

Furthermore, given the current environment of lower fixed-income yields, many investors feel compelled to take more risk in their stock holdings to meet their rate of return (ROR) expectations and planning assumptions. This can cause “Investor conflict” that manifests with two opposite fears: the fear of losing money during volatile markets and the fear of missing out when the market rallies.

Q3 Capital Management Approach:  Construction of a portfolio that has low market correlation, lower overall beta, at a cost to manage that is competitively priced, with the following characteristics:

  • Measurably lower correlation to the market with a low portfolio beta to verify.
  • Shares are traded with adequate volume and liquidity.
  • Low cost to invest in each position.

Additionally, each position must have:

  • Options traded on CBOE to write covered calls.
  • Diversification of holdings, sectors…to reduce headline risk.
  • Dividend/interest payout… with a competitive yield.

Portfolios with lower market correlation while collecting dividends, interest and covered call premiums can help provide current income and less volatility while incorporating the long-term goals of each investor.

We manage this process for our clients in an independent environment with a fixed fee that we believe is fair, and with costs that are transparent.

 

 

Talk to your financial advisor before making any investing decisions