Because no two investors are alike, Terrapin offers clients a range of Model Portfolios to choose from. Each Model Portfolio is designed to offer an optimized asset allocation based on varying levels of risk. Each Model Portfolio has an allocation to the Market Neutral Option Strategy, and each Model Portfolio employs covered call option selling on the equity portion of the portfolio.
Investment Objectives and Risk
Each client completes the Risk Tolerance Questionnaire and is assigned a numerical score. This score reflects a blended picture of the investor’s time horizon, risk tolerance, and investment knowledge, thus dictating the correct model portfolio for the individual client.
We recommend each client consider which of the following Model Portfolios is appropriate for them.
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Conservative – Stable Value and Capital Preservation
This portfolio is managed to achieve a targeted reasonable return at a minimal risk of loss. It is more likely to be a distributing portfolio than an accumulating portfolio, but may be necessary for accumulators who face major job changes or other risks.
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Income – Low Risk and Maximum Distribution
This portfolio is managed with income in mind. Risk of loss is limited, while the major goal is to provide maximum distribution.
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Balanced – Moderate Risk and Moderate Growth
This portfolio is managed to achieve growth at reasonable risk of loss. It could be the accumulating portfolio or one making modest distributions. It is best for people whose life circumstances make them somewhat cautious but desire moderate returns.
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Growth – High Risk and Focus on Growth
This portfolio is managed to achieve long term growth with substantial risk of loss. This is an accumulating portfolio that focuses on long term growth. Normally in this portfolio all dividends and option income is reinvested.
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Aggressive – Long Term Maximum Growth
This portfolio is managed to achieve maximum growth. It often has new money being added regularly. It is designed to have an above average return but can face declines resulting in losses greater than its expected annual return.