At Insightful Ideas, Inc., we have been helping people use technology to make their business more profitable for more than 15 years. There are two ways to improve your bottom line, reduce costs or increase revenues. We can help you with both sides of that equation. To reduce your cost of doing business, we could help you use software to run your business more efficiently, but we will not do that. To increase your revenues we could help you use the internet to market your product or service to provide additional channels of income, but we won’t do that either.

So what will we do you might ask? Since we have already done the work, we will continue to maintain the information you need to market your products and services more effectively, in particular on the internet.

More importantly, we will continue to expand our investment asset allocation and option trading services.

Over the years, we have built systems to track and report on the performance of Investment Managers and Mutual Funds for Institutional Investors. From there we developed systems for choosing Investment Managers and Mutual Funds that would be used to create a recommended list for Institutional Investors and High Net Worth Investors. With all of this experience being used for the big players in the financial markets, we decided to make the benefits of this experience available to all investors willing to take advantage of it. That's where the Insightful Investing Newsletter got started.

Little did we know when we started running financial simulation models back in 1994 that in less than 10 years the financial markets would provide us with investment return extremes that regular spreadsheet models never considered. The key to these models was the use of investment return probability distributions. Since the long-term expected return of equities is near 10% and the standard deviation is near +/- 16%, one would expect that 96% of the time returns should fall between -22% and + 42%. While the S&P 500 came close to the top of that extreme in 1997, it also managed to dip slightly below the low end in 2002. Technology Mutual Fund returns managed to fall outside of both extremes.

The goal of these simulation models was to seek the asset allocation which produced the highest total return with the lowest likelihood of producing a negative return by simulating uncertainty about the future. Although this analysis was used to show how corporations would be better off having some of their spare cash invested in the stock market and a broad mix of bonds rather than all of it invested in money market funds and short-term bonds, there were lessons we learned that can be applied to the individual investor. Our investigation showed us what would happen to an investment portfolio over a 5 year period in the 1 in 50 chance that negative investment returns during part of that time period were worse than even the “Worst Case Scenario” of a typical analysis. What we found was an asset allocation properly balanced between stocks, bonds, and additional assets would produce better returns and significantly reduce the overall risk of a portfolio versus a the more conservative approach.

At the same time that this work was being done, we started to investigate ways to reduce with through the use of options. There are many ways to use options to accomplish your financial goals. For some people, options investing is a low risk way to invest in a stock, Exchange Traded Fund (ETF), index, futures contract, or hedge a long term position. For others, trading options provides a low risk way to take advantage of the short term fluctuations in stock and commodity futures markets. At first we began to spread the work with a web site on Stock Option Trading. Most recently we created the OptionsVest web site which is dedicated to educating investors on how to use low risk options trading for short-term and long-term profits, as well as options investing in order to protect your investment portfolio. Check out our Options Investing Blog to learn more about trading options. You are welcome to visit our web sites to see were we can make a contribution to your financial success.

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Phone: 404-840-6010