Retirement Portfolio Resilience Perspective
Primary Pillar: Risk Pricing Discipline
Supporting Pillars: Retirement Portfolio Construction • Resilience Across Market Environments
This foundational educational paper explains how investors can evaluate and implement equity protection using transparent market pricing and publicly available exchange-traded instruments.
Viewed through today's Retirement Portfolio Resilience Framework, the enduring contribution of this publication is its commitment to making resilient portfolio construction understandable through first principles rather than proprietary claims. By explaining how protection is priced, how portfolio characteristics can be deliberately designed and how implementation decisions can be evaluated commercially, the paper reflects Gyrostat's long-standing philosophy that education should precede implementation. While the practical examples reflect the market conditions of 2016, the underlying principles of commercial capital allocation, portfolio architecture and reducing dependence on favourable market conditions remain central to the evolution of Retirement Portfolio Resilience.
This publication forms part of Gyrostat's foundational educational archive documenting the origins of the Retirement Portfolio Resilience Framework.
- Many investors seek income from dividends, but are concerned about capital losses. It is possible to protect your portfolio. This report will show you the current market costs.
- Investors can implement “do it yourself” equity protection for effective risk management. The ASX offers investor education at their web-site.
- We calculate the annualized cost for ‘blue chip’ higher yielding stocks based upon current market conditions, varying the duration of protection and capital at risk. Market conditions are constantly changing.
We have obtained live market prices with strike prices closest to 0%, 5% and 10% capital at risk. The analysis is based upon the cost after the receipt of dividends. We have calculated the level of implied volatility and then extrapolated the option price to enable a comparison across the stocks and the index. These have been converted to an annualized cost based on holding the option position to expiry.
The historical issue that always protecting your portfolio is expensive is addressed through the management of ASX options, made possible through advances in technology and deregulation.
Gyrostat’s key competitive advantage is the ability to always be fully invested with a risk-return profile at all times to participate in share price upside with minimal capital at risk, at the stock specific level.
