Market Equity Protection Agreements ® (MEPAs) are a financially engineered response to the needs of those wanting to protect their portfolio against inevitable declines while fully participating in any appreciation in value in the market. In rising markets, stocks, mutual funds and MEPAs all offer unlimited upside potential. In declining markets, which historically have occurred approximately once every three-to-four years, a significant part of an investment portfolio may be lost with stocks and mutual funds. The years 2000-02 are an all-too-recent reminder of the impact a decline can have.
Boulder, CO (PRWEB) April 5, 2006 -- Is the stock mutual fund about to go the way of the 8-track player?
One company believes so. Against the backdrop of continued uncertainty in the financial markets, aiqresearch.com in Boulder, Colorado is introducing a new hybrid financial product designed to settle the fears of many risk-conscious investors.
Its Market Equity Protection Agreements ® (MEPAs) are a financially engineered response to the needs of those wanting to protect their portfolio against inevitable declines while fully participating in any appreciation in value in the market.
Dr. D.M. Wong, the company’s Director of Heuristic Development stated “The management of risk has been repeatedly proven to be more important to investment portfolio returns than the methodologies utilized to pursue rewards. There is little doubt that over time, MEPAs will replace mutual funds as the preferred choice for those wishing to participate in the upside appreciation in stocks while removing the uncertainties associated with unexpected price shocks and bear markets.”
In rising markets, stocks, mutual funds and MEPAs all offer unlimited upside potential. In declining markets, which historically have occurred approximately once every three-to-four years, a significant part of an investment portfolio may be lost with stocks and mutual funds. The years 2000-02 are an all-too-recent reminder of the impact a decline can have.
Warren Buffett councils: “The first rule of investment is don't lose. And the second rule of investment is don't forget the first rule. And that's all the rules there are." This seeming simple statement is pivotal to investing success because when losses occur, it takes a much higher return to get back to where you were before the loss was incurred. For example, if you lose 20% in the market, you have to earn 25% just to get back to breakeven. Lose 30% and you need a gain of 43%; lose half your stake and you’ll have to double the remainder just to get back to the starting point.
With a plan utilizing MEPAs, all investment principal remains intact, even in the event of the most severe market crash. To illustrate, from 2000-2005, the overall market as measured by the widely followed S&P 500 Index, fell in value by 15%. In that same period, a plan utilizing MEPAs garnered almost 42% in appreciation.
Dr. Wong added “It’s an ideal time to purchase a MEPA; the market is richly valued based on many diverse yardsticks. We are quite gratified that in our first 60 days of marketing, we are protecting over $27 million in investment portfolio assets. This is a ringing endorsement from the public.”
aiqresearch.com is a financial research and consulting firm in Boulder, Colorado which utilizes artificial intelligence technologies to assist its banking, mutual fund and high net worth clients in formulating investment strategies.
For information: http://www.aiqresearch.com or
Contact: V. Timothy Ovloff, Director of Research and Development
Phone: 303.447.6890
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