Investments · Risk & return
Sheet A-104 · Payoff Shape
§ 01 · Downside Protection
You can’t predict the fall.You can still be protected.
Every investment gives you two things at once. What you can make, and what you can lose. Normally they move together. Reach for more upside, and you take on more risk. Everybody knows that trade. Most advice only asks how much of it you want.
There's another move, and it's rarely seen. Instead of accepting that trade as it comes, you set the terms. A set amount of any loss is absorbed for you. In exchange, you give up part of the gain. Same market, same holding period, different result. It's held as a contract with a set term, usually several years.
Beat 01
One way needs you to be right. The other doesn't.
One way to come out ahead is to place a bet. Pick the direction. Pick the winner. Pick the moment. When you're right, it pays. When you're wrong, you own the loss. That way of winning needs the future to cooperate, and nobody controls the future.
Beat 02
Change the shape of the outcome instead.
You give up part of the gain. In exchange, the first part of a market drop is taken off the table, measured on the day the term ends. Beyond that, the rest is yours. The result no longer swings the full distance either way. None of that depends on you being right about the market. It's structure.
Beat 03
There's no single setting. You pick it.
Think of it as a dial. Turn it toward more protection and you keep less of the gain. Turn it the other way and you keep more of the gain, while taking on more risk. In some cases, a dollar of market gain can come back to you as more than a dollar. Where you set the dial is the decision.
Beat 04
The order matters. Not just the average.
Two portfolios can average the same return and still leave you in a very different place. When the losses happen matters. A big loss early does damage the later gains never fully repair. Averages hide that.
That's what shape means. How much of the gain you keep, and how far the loss can run. You just watched all three.
Every one of these shapes costs you something. More protection on the downside means less of the upside. Less protection means more of the upside and less cushion under you. You're choosing the setting, not escaping the trade.
Which point on the spectrum fits is a decision about your situation. You don't have to predict the next downturn to be protected from it. That's the case for shaping the return rather than forecasting the market. Structure can narrow the range of outcomes you're exposed to.
One underlying move, a spectrum of shapes.
- Deep protection. More of any loss absorbed for you, in exchange for a more modest share of the upside.
- Balanced. A middle band of protection with a proportional share of the upside.
- Shallow protection, enhanced upside. A smaller cushion under you, and in exchange more than a dollar back for every dollar the index rises.
Hypothetical and for illustration only. Not a projection, an offer, or a recommendation. The protection applies on one date, the day the term ends, not every day in between, and the exact terms are set by the contract. Outcomes vary and are not guaranteed.
Sheet A-201 · Specification
§ 02 · The Analysis
You’ll finally know.What your portfolio costs you.
A portfolio costs you in three ways. Tax on what it earns, fees to hold it, and the return you give up because of where things sit. Two of those show up somewhere. The third one never does.
It's a written deliverable, not a sales call. We read every account as one portfolio, through both an investment lens and a tax lens, and we put all three costs in writing. It's a paid piece of work, and it stands on its own. Some people take it and act on it themselves. If you want us to do the work, we manage the portfolio from there, and the structural work that goes with it is part of managing the money.
Schedule · What you leave with
- 01What you actually own. Every account read as one portfolio instead of a drawer of statements. What you hold, where you hold it, and what it costs you to hold it there.
- 02Where each dollar should sit. Asset geography, account by account, against where it sits today.
- 03Where the two collide. The places your investments and your tax situation work against each other, and where after-tax return is being left on the table.
- 04What we'd change. Specific recommendations, ranked in order, with enough detail that you could act on them without us.
The first step is a 30-minute call to see whether the analysis fits your situation.
Sheet A-900 · Stamp Block
§ 03 · The Principals
The people who do the work.One for investments. One for tax.
Shaun Eck
Managing Partner · Co-FounderCame from Merrill Lynch and a family office. Runs the investment side.
Jordan Frenkel, CPA, MBA
Managing Partner · Co-FounderCame from PwC, hedge funds and Guggenheim Partners. Runs the tax side.
Sheet A-100 · Index
Next step
Next Step
Book a 30-minute call.
We'll figure out whether working together is the right next step for your situation. No sales pitch, no follow-up sequence. Thirty minutes with Shaun and Jordan.