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Active Management is Not Dead

We believe the time is now to add active risk management to your portfolios!

Last week’s market volatility on news of the Coronavirus spreading worldwide and beginning to hit closer to home illuminates the need for active risk management. With the roaring 10-plus year bull market, many wondered what it would take for a market correction to come. Worldwide hysteria driven by news of a possible pandemic produced the “Coronacrash” for the markets. The three major indexes — The Dow Jones Industrial Average, S&P 500 and Nasdaq Composited all fell more than 10% last week — their biggest decline since October 2008 (Imbert, CNBC). And while last weeks’ market turbulence handed investors a decline sharp enough to feel, JPMorgan, Citi and Goldman Sachs all warn, there hasn’t been enough pain for the markets and investors should expect a more prolonged downturn. With further downside looming in the future, we feel it’s time to think about capital risk protection through active managers.

As a money manager that focuses on protecting capital from catastrophic losses, our primary goal is having a process that moves to cash when risk rises—and moves consistently — not some of the time, not maybe. Nearly 30 years ago, we built our risk-managed process to actively seek opportunity to capture upside when markets are favorable, but reduce loss when markets hand investors devastating negative returns.

Our active strategies implement this time-tested process to protect clients from market volatility just like we’re experiencing now. As of February 28, 2020, WBI’s models raised cash allocations to between 55% and 95% (depending on the portfolio strategy). When coupled with fixed income positions, the combined cash and bond holdings range from 94% to 99%, again depending on portfolio strategy. We feel we are well positioned for the uncertainty that remains. Active management is not dead. In fact, we think it might be a favorable move for investors.


Past performance does not guarantee future results. This is not an offer to buy or sell any security. No security or strategy, including those referred to directly or indirectly, is suitable for all accounts or profitable all of the time and there is always the possibility of loss. You should not assume that any discussion or information provided here serves as a substitute for personalized investment advice from WBI or any other investment professional. If you have questions regarding the applicability of specific issues discussed to your individual situation, please consult with WBI or your chosen professional advisor. This information is compiled from sources believed to be reliable, accuracy cannot be guaranteed. Information contained in this Presentation may constitute “forward-looking statements,” identified by terminology such as “should,” “expect,” or “continue,” or the negatives thereof or other variations thereon. Due to various risks and uncertainties, actual events, results [or the actual performance of the Adviser’s investments] may differ materially from those reflected or contemplated in such forward-looking statements. WBI’s advisory operations, services, and fees are in the Form ADV, available upon request.

All investing involves risk, including loss of principal. While WBI seeks to manage and monitor risk, there is no way to remove risk. There is no guarantee objectives will be achieved.

You are not permitted to publish, transmit, or otherwise reproduce this information, in whole or in part, in any format to any third party without the express written consent of WBI Investments, Inc.


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Unless otherwise indicated all performance is sourced from Bloomberg.


The views presented are those of the authors and webinar or podcast hosts/participants, and should not be construed as investment advice. The authors, podcast participants, webinar hosts, or clients of WBI Investments, LLC (WBI) may own stock discussed in these insights. WBl is an investment adviser in New Jersey. WBl is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. WBl only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of WBI's current written disclosure brochure filed with the SEC which discusses among other things, WBI's business practices, services and fees, is available through the SEC's website at: This site contains links to third-party websites. WBl does not endorse, approve, certify, or control these websites and does not assume responsibility for the accuracy, completeness, or timeliness of the information located there. Your access to and use of such websites is governed by the terms of use and privacy policies of those sites, and shall be at your own risk. WBI disclaims responsibility for the privacy policies and customer information practices of third-party internet websites.

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