Highlights

  • With bonds posting their worst quarterly return nearly 40 years and stocks still hitting new highs, some investors believe there is no alternative to stocks when it comes to making investment allocation decisions.
  • Despite low and rising interest rates, financial professionals should resist the idea that investors who find bonds unappealing have no choice but to face the vagaries of the equity market without protection.
  • Risk management strategies that combine equity market exposure with premiums from writing index options have the potential to reliably lower risk while enhancing risk-adjusted return.
  • Reducing risk while enhancing risk-adjusted return with index option strategies may be the alternative that investors need most.

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