Retirement Portfolio Resilience Perspective
Primary Pillar: Risk Pricing Discipline
Supporting Pillars: Retirement Portfolio Construction • Resilience Across Market Environments
This article examines a range of investment risk management approaches and explains how different portfolio construction techniques seek to improve outcomes across changing market conditions.
Viewed through today's Retirement Portfolio Resilience Framework, the enduring principle is that resilient retirement portfolios are achieved through deliberate portfolio design rather than reliance on market prediction. The article compares alternative approaches to managing investment risk and reflects Gyrostat's long-standing philosophy that embedded downside protection and disciplined risk management can complement long-term growth assets by helping address sequencing risk and reduce dependence on favourable market conditions.
This article forms part of a broader body of research, educational articles and practical insights organised through the Retirement Portfolio Resilience Framework.
Equity income in retirement – investment risk management approaches
There are a variety of investment risk management approaches with the objective to meet the equity income needs of retirees and defend against losses in declining markets.
Typically, the investment generates dividends from a diversified portfolio of Australian shares with an investment risk management overlay that aims to reduce the volatility of returns, in particular defending against losses in declining markets.
A brief summary of the approaches is in the attached report.
The Gyrostat objective is to generate stable and rising returns with regular income through all stages of the investment cycle.
Our approach is to have protection always in place to maximise returns for a ‘hard’ defined risk parameter.
To minimise costs:
- Our proprietary software systems identify options series with the greatest profit potential for a defined cost, exploiting differing levels of implied volatility in the options market.
- “Active management” by buying or selling options with market movements.
Gyrostat buys and holds ASX ‘Blue chip’ shares with lowest cost protection always in place with upside.
