VCM Multi-Trigger Overlay Strategies | Virtue Capital Management

www.vcmmultitrigger.com | 866.907.4275

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THE VCM MULTI-TRIGGER OVERLAY STRATEGY

OVERVIEW

In 2020 the S&P 500 index experienced the fastest 30% sell-off ever, exceeding the pace of declines during the 2008 Crisis and even the Great Depression. It took the S&P 500 only 22 trading days to fall 30% from its record high on Feb. 19, making it the fastest drop of this magnitude in history, according to data from Bank of America Securities. The second, third and fourth fastest 30% declines all occurred back during the Great Depression era, 1929 through 1934 respectively.

2020 also marked the fastest market recovery in history. On August 18th the S&P 500 index recorded a record close making it the quickest recovery from bear-market territory in its history, according to Dow Jones Market Data.

During this historical decline and recovery were your clients invested in strategies designed to help automatically mitigate large market losses without having to contact you about making a change in your investments? During a major market correction, many investors don’t sell their equity investments soon enough, thereby suffering losses. And as the market recovers, they often times wait too long to re-invest back into the market. and miss out on opportunities for gains.

Most of us have insurance to provide protection for our cars, our homes, our health, our lives and other valuables, the goal of insurance is to reduce the risk of large losses. Most investors are unaware they can attempt to invest in a way to try to limit market volatility and large losses.

Virtue Capital Management (VCM) labels this investment approach as “Tactical Investing”. While there are numerous ways to implement a tactical investment approach, the basic objective is to participate as much as possible in market appreciation during bull markets while attempting to mitigate the impact of major losses during prolonged bear markets.

Many tactical strategies employ the use of stock options to attempt this objective while other tactical strategies utilize a more technical equity risk-on/risk-off approach. VCM has many different tactical strategies available to investors including options and technical solutions to choose from.

INTRODUCING THE VCM MULTI-TRIGGER OVERLAY STRATEGY

The VCM Multi-Trigger Overlay is mathematical approach which employs a proprietary multi-facet methodology too tactical attempt to mitigate downside risk. The strategy employs three algorithmic technical indicators or “triggers” that independently dictate either an equity risk-on posture (invested in equities) or equity risk-off posture (invest in bonds). These three triggers are the VCM Stop Loss, VCM Tactical Overlay and VCM Market Trend Indicator.

The VCM Multi-Trigger Overlay is a mathematical approach which employs a proprietary multi-facet methodology to tactically attempt to mitigate downside risk. The strategy employs three algorithmic technical indicators or “triggers” that independently dictate either a equity risk-on posture (invested in equities) or equity risk-off posture (invested in bonds). These three triggers are the VCM Stop Loss, VCM Tactical Overlay and VCM Market Trend Indicator.

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Investment advisory services offered through Virtue Capital Management, LLC (VCM), a registered investment advisor. For a complete description of investment risks, fees and services, review the Virtue Capital Management firm brochure (ADV Part 2A) which is available from your Investment Advisor Representative or by contacting Virtue Capital Management. Strategies do not take into account your particular investment objectives, financial situation or risk tolerance and may not be suitable for all investors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe. It is not available for direct investment. Technical trading models are mathematically driven based upon historical data and trends of domestic and foreign market trading activity, including various industry and sector trading statistics within such markets. Technical trading models, through mathematical algorithms, attempt to identify when markets are likely to increase or decrease and identify appropriate entry and exit points. The primary risk of technical trading models is that historical trends and past performance cannot predict future trends, and there is no assurance that the mathematical algorithms employed are designed properly, updated with new data, and can accurately predict future market, industry, and sector performance. Please be advised that investing involves risk and that no particular investment strategy can guarantee against losses. In particular, stop loss/buy orders do not guarantee securities will be sold/bought at a particular price. Stop loss/buy orders are generally converted to market orders at the specified price and may be executed at a lower/ higher price due to liquidity and current demand for the security. In addition, stop loss/buy orders may increase trading cost which could lower the portfolio’s rate of return. The cash position may be more or less than 3% in the future which would have an impact on returns. All market timing strategies that are employed are designed to be reactive indicators. Investors should fully understand the strategy's underlying investments before investing in the VCM Multi-Trigger Overlay models.