Portfolio Protection Calculator measures downside risks and estimates the cost of downside protection, based on market conditions, for a range of asset allocations and popular model portfolios.
- Protection Level. A higher Protection Level protects more portfolio value, and almost always costs more, all other things being equal, than a lower Protection Level which allows for greater losses. ‘90% Protection’ means that 90% of the portfolio value is protected—in other words, losses are limited to 10% of the total portfolio value and Protection will pay out for any losses in excess of 10%. The higher the Protection Level, the more likely there will be a Protection payout.
- Protection Period. A longer Protection Period protects portfolio value for a longer time, and almost always costs more, all other things being equal, than a shorter Protection Period. The longer the Protection Period, the more likely there will be a Protection payout. Protection can also be renewed (also known as “rolled”) for continuous protection whether each Protection Period is shorter or longer.
(See Adaptive Risk Weather for a broad gauge of whether downside protection is more or less affordable based n market conditions.)