A picture is worth a thousand words.
Can you guess what this one shows?
Here are a few takeaways:
1️⃣ Inconsistency – We all know market returns go up and down. We often talk about average returns, but clients don’t live averages — they live actual results.
2️⃣ Downside Risk – Over many 5-year periods, the S&P 500 has been negative more often than you might think. What happens if your client is retiring in five years and the market turns against them? Instead of lowering equity exposure and watering down returns, protect against losses with defined outcomes.
3️⃣ Underperformance – Clients lose confidence when results fall short of their goals. Managers, models, and strategies struggle when markets are inconsistent.
Defined Outcome SMAs help solve this problem by smoothing out market ups and downs — creating a steadier path toward client goals.
P.S. This chart was built using Python in a Jupyter Notebook. If you’d like to recreate it with other indices, tag me below and comment “Structured Note SMA.” I’ll share the code with you!
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