The Short Version:

First step: you set the dollar value for a “downside floor” (which represents the maximum amount of money you are willing to lose over your chosen horizon).

There is no second step – we’ll watch your account and automatically allocate between your chosen strategy (e.g. S&P 500® Equal Factor Weight) and a combination of US Treasury Bonds to try and maximize upside without dropping below your floor.

Intuitively, the way this works is that as you get closer to your downside floor, we’ll move more of your money into a bond portfolio matched to your investment horizon. The goal is always to maximize the chances of reaching your upside target while always staying above your floor.

As an added bonus, if you set an upside target, and we see that you’ve hit it, we’ll move you into Treasury Bonds so you can lock in those gains.

Finally, remember that you can change your downside floor and upside target at any time, as often as you like, at no additional cost.

The Longer Version:

Set your goals, let our computer algorithms do the rest

“Adaptive Risk Control” is Optimal’s interactive control panel that allows you to set a “downside floor” account level and “upside target” account level over a desired time horizon. Our proprietary Goal Optimizing Outcome Shaping Engine (that we lovingly refer to as GOOSE™) uses this information to compute how much of a “cushion” you have compared to your downside floor. This “cushion” is used to estimate your risk budget which is then used to calculate a mix of stocks and bonds that maximizing the chance of hitting your upside target account level without going below your downside floor account level.

There’s some intensely nerdy stuff at work, which you can read about here and here, if that sort of thing is your thing.

Fully autonomous investing

Think of it as a self-driving car for your investments, but you are always the one in control!

Optimal’s control panel gives you one-click access to sophisticated, diversified portfolios holding hundreds of stocks, combined with some of the most intuitive and sophisticated risk controls available to any investor. This means that you retain complete control and flexibility over where and how to invest your money and choose the level of risk that is suitable to you.

While you or your advisor can review and update your risk levels as often as you want to, you don’t need to update the settings unless your tolerance for risk changes. Adaptive Risk Control dynamically adjusts your allocation based on changes in your account value, ensuring your portfolio is always aligned with your investment goals.

Update as much and as often as you need

Because you can continuously adjust your targets and transfer money in or out of your investment account for no additional charge, you maintain an unparalleled level of flexibility. There are no transaction fees or commissions when you change your settings, even if the change triggers hundreds or even thousands of trades!

Adaptive Risk Control also lets you modify your targets and horizons and assess the resulting change outcomes and your likelihood of achieving your updated investment goals. The tool performs a statistical process called a Monte Carlo simulation, which you can read more about here.

Achieve Financial peace of mind knowing that your account is always working towards your goals

Of course, investing is inherently uncertain, and no investments are without any risk. That said, you can precisely target your upside target and downside floor with our intuitive control panel and automated rebalancing, providing greater financial peace of mind.