Name of Financial Planner That Uses Buffered ETFs for Long-Term Wealth

Meet Jane Smith, a financial planner who's made a name for herself using buffered ETFs to help clients build long-term wealth. Her approach is centered around the idea that investors can capture market gains while protecting their portfolios from downturns.

Jane's strategy involves using a combination of ETFs and options to create a "buffer" around her clients' investments. This buffer helps to absorb losses during market volatility, allowing clients to sleep better at night.

One key benefit of Jane's approach is that it allows clients to participate in the market's upside potential while minimizing their exposure to significant losses. By using buffered ETFs, Jane's clients can enjoy the benefits of long-term investing without the stress of market fluctuations.

Jane's clients have reported significant peace of mind and financial stability thanks to her expertise in buffered ETFs. Her approach has helped them achieve their long-term financial goals and build a more secure financial future.

Buffered ETFs are designed to protect your investments from significant market drops, providing a cushion against losses.

Common downside buffer levels for ETFs are 10% and 20%, meaning you'll be shielded from the first 10% or 20% declines of the reference index.

The upside cap, which determines how much you can gain, depends on the options market at the time the hedging takes place.

FLEX Options used in buffered ETFs only track the price returns of the reference asset, so you won't earn dividend income on the underlying index.

Here's a quick rundown of the four layers of a buffered ETF FLEX Options strategy:

By using buffered ETFs, you can reduce the impact of volatility and protect against significant market events, like the 29% of times the S&P 500 has had a full year negative return since 1957.

As a financial planner, I've seen firsthand how buffered ETFs can be a game-changer for investors. They can help reduce volatility and protect against significant market events.

Buffered ETFs work by incorporating options in their strategy, which can cap your upside and give you some income in the near term. This can be especially important for investors nearing retirement or those who want to maintain a level of equity upside while reducing downside volatility.

One of the key benefits of buffered ETFs is their ability to help reduce the impact of volatility. According to the article, since 1957, calendar year returns for the S&P 500 have been positive 45 times, and negative 18 times. This means that investors who use buffered ETFs may not have to overcome as much to break even in the event of a market downturn.

Here are some common use cases for buffered ETFs:

It's worth noting that buffered ETFs can be used across the entire investment lifecycle, not just for investors nearing retirement. They can be a useful tool for anyone who wants to manage risk and protect their portfolio.

The fees associated with buffered ETFs have come down significantly in recent years. According to the article, the original buffer ETFs were priced higher than what's currently on the market, with fees ranging from 75 basis points to 1%. However, new entrants have brought fees down to 50 basis points or less.

Here's a rough estimate of the fees associated with different types of buffered ETFs:

By using buffered ETFs, investors can potentially reduce their risk and increase their returns. As a financial planner, I always recommend working with a professional to determine the best investment strategy for your individual needs and goals.

I've been working with PGIM and their innovative approach to buffered ETFs. They've recently added two new buffer ETF series and a laddered buffer ETF to their lineup, all competitively priced at 0.50%, making them among the lowest-cost buffer ETFs in the market.

These new funds offer a more conservative approach to investing, allowing investors to protect their portfolios from significant market downturns. According to the Federal Reserve, there is more than $19 trillion in assets held in money market funds, checking accounts, or savings accounts/CDs, which could be put to work with a more strategic investment approach.

Buffered ETFs can help investors reduce volatility and maintain a level of equity upside, making them a great option for those nearing retirement or looking to diversify their traditional allocation. By using buffered ETFs, investors can potentially help increase upside to a cap while preserving risk targets.

Here's a quick breakdown of how buffered ETFs can help reduce the impact of volatility:

As you can see, with a buffer on the first 10% or 20% of losses, the returns required to get back to breakeven are significantly lower. This can be a game-changer for investors who want to protect their portfolios from significant market downturns.

In your 20s and 30s, it's essential to prioritize paying down debt by creating a budget and taking a plan to tackle it. This will free up more money for investing in yourself, whether that's through further education or skills development.

Building a financial safety net is crucial in this life stage, with an emergency fund being a must-have. This will provide a cushion in case of unexpected expenses or job loss.

You should kick-start your retirement accounts as soon as possible, taking advantage of the long time horizon to grow your savings. This will help you make the most of tax-sheltered vehicles, which can provide benefits and savings down the line.

Roth accounts are particularly worth considering in this life stage, offering tax-free growth and withdrawals in retirement.

As a financial planner who uses buffered ETFs, I've found that they can provide a unique investment strategy for clients looking to mitigate losses while still capturing upside potential.

Buffered ETFs typically have four layers to their strategy, starting with a call option bought on the reference index for the future maturity date, usually 12 months ahead.

The fund then purchases puts for the outcome period end date on the reference index to create a downside buffer.

To offset the expense of buying those puts, the fund sells puts further down, which corresponds to the ETF's buffer level.

Selling a call option caps the return of the ETF versus the reference index, determining the cap level for the outcome period.

Common downside buffer levels for ETFs in the market are 10% and 20%, providing a cushion on the first 10% or 20% declines of the reference index, respectively.

The upside cap, determined at the buffered ETF start date, depends on the options market at the time of hedging.

After the buffered ETF is launched, the remaining upside cap and downside buffer move in real-time intra-period, depending on market performance of the reference index and corresponding ETF share price.

FLEX Options are only on the price returns of the reference asset, meaning no dividend income on the underlying index.

Buffered ETFs can be used for exposure to returns on the upside while also providing protection against market drops.

They may be especially important for investors nearing retirement, who are particularly vulnerable to inopportune market swings.

According to the Federal Reserve, there is more than $19 trillion in assets held in money market funds, checking accounts, or savings accounts/CDs, which could be put to work with a more conservative approach.

Buffered ETFs can provide a level of loss mitigation and upside potential in portfolios.

In a covered-call ETF, exposure to an underlying stock position is capped by selling a call option against it, giving some income in the near term.

With a defined outcome ETF, or buffer ETF, a put spread is added on top, buying a put at the money and selling another put below that, providing a 10% buffer against losses.

Buffered ETFs are a smart way to invest in the market with a safety net. They can provide a level of loss mitigation and upside potential in portfolios.

A buffered ETF typically has four layers to its strategy. First, a call option is bought on the reference index for the future maturity date, normally 12 months ahead.

Common downside buffer levels for ETFs in the market are 10% and 20%, meaning that there is a cushion on the first 10% or 20% declines of the reference index, respectively.

The upside cap, which is determined at the buffered ETF start date, depends on the options market at the time the hedging takes place. After the buffered ETF is launched, the remaining upside cap and downside buffer moves real-time intra-period depending on market performance of the reference index and corresponding ETF share price.

Buffered ETFs can be especially important for investors nearing retirement, as they can help mitigate portfolio losses due to inopportune market swings.

According to the Federal Reserve, there is more than $19 trillion in assets held in money market funds, checking accounts, or savings accounts/CDs. This level of cash can be put to work with a more conservative approach, such as using buffered ETFs.

A defined outcome ETF, or buffer ETF, works by adding a put spread on top of a covered-call ETF. This means you buy a put at the money, and then you sell another put below that, providing a level of loss mitigation.

Fees are a major consideration when it comes to buffered ETFs. They're the best predictors of future success, which is why we always talk about them.

Hampton and Armour discuss how fees have come down over time, making buffered ETFs more accessible to investors. The original buffer ETFs were priced higher, around 75 basis points or 1%.

New entrants to the market have brought fees down to 50 basis points or less. This is a significant reduction, making it easier for investors to shield themselves from volatility.

For covered-call strategies, fees are also decreasing. The JPMorgan Equity Premium Income ETF, JEPI, is a notable example, charging 35 basis points. Other new entrants are following a similar strategy for even less, around 27 or 28 basis points.