When headlines about the market turn worrisome, many feel they must sell to mitigate losses. But doing so may cause clients to miss out on a rebound, as the worst and best days tend to surround each other. Educate clients on how acting impulsively and consequently missing top-performing days, can have a major impact on long-term financial goals.
Source: BlackRock; Bloomberg as of 12/31/2023. Stocks are represented by the S&P 500 Index, an unmanaged index that is generally considered representative of the U.S. stock market. Past performance is no guarantee of future results. It is not possible to invest directly in an index. Index performance is shown for illustrative purposes only.
Don’t let clients flee to cash and miss out on potential long-term growth. Instead, seek to reduce risk in portfolios, while staying closely aligned to a steady asset allocation.
| Objective | Fund Name | Ticker | ETF or mutual fund | |||
| Buffer ETFs | ||||||
|
Seek to reduce volatility in your equity sleeve |
iShares Large Cap Max Buffer Jun ETF > | MAXJ | ETF | |||
| iShares Large Cap Moderate Buffer ETF > | IVVM | ETF | ||||
| iShares Large Cap Deep Buffer ETF > | IVVB | ETF | ||||
| BuyWrite ETFs | ||||||
| Seek income to potentially buffer price volatility | iShares 20+ Yr Treasury Bond BuyWrite Strategy ETF > | TLTW | ETF | |||
| iShares S&P 500 BuyWrite ETF > | IVVW | ETF | ||||
| BlackRock Advantage Large Cap Income ETF > | BALI | ETF | ||||
| Alternative funds | ||||||
|
Seek differentiated returns with alternative strategies |
Global Equity Market Neutral > | BDMIX | Mutual fund | |||
| Tactical Opportunities > | PBAIX | Mutual fund | ||||
| Systematic Multi-Strategy > | BIMBX | Mutual fund | ||||
The funds listed in the table above have been chosen by BlackRock and iShares product strategists to help represent potential investor portfolio objectives. The scope of the funds under consideration are iShares ETF and mutual fund offerings. This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular and is subject to change.
Sometimes what poses the biggest risk to achieving your long-term goals is your emotions. This is especially common during large fluctuations in the market but can also happen during ordinary market cycles.
The further the market goes up, the easier it is to believe it’s going to go up forever, which can lead to buying near the top of the market. On the other hand, the lower the market falls, the more fearful you may become of losing more money, which can lead to selling near the bottom of the market.
Following this pattern is called “herding”. When the market is high, it’s because many other people have already bought in – which is why buying in would be considered “following the herd”. When the market is low, it’s because many other people have already sold.
As you might have guessed from the title of this piece, “following the herd” often backfires over the long-term.
As you can see in this chart, doing what everyone else is doing (represented by the orange bar) produced significantly smaller average returns than going against the herd, or even the market average itself. That’s why it’s really important to make your decisions based on your plan and convictions, not on market trends.
In the words of the great investor Warren Buffet, “Be fearful when others are greedy, and greedy when others are fearful.” But also remember, time in the market almost always trumps timing of the market.
Investing based on emotions can lead investors to buy high and sell low. Use our chart to help clients overcome their desire to make investment decisions based on emotions rather than convictions.
Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained visiting the iShares ETF and BlackRock Mutual Fund prospectus pages. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
Transactions in shares of ETFs may result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders.
An investment in fixed income funds is not equivalent to and involves risks not associated with an investment in cash.
The S&P 500® Index is an equity benchmark for US stock performance. It is a capitalization-weighted index covering 500 large US companies chosen by Standard & Poor’s for market size, liquidity, and industry group representation. The S&P 500® index is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and has been licensed for use by Aperio. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services, LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Aperio. No Aperio strategy or product is sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) or strategies, nor do they have any liability for any errors, omissions, or interruptions of any index.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Investors should consult their tax or legal advisor regarding such matters.
This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.
The BlackRock and iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, "BlackRock").
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