B-Portfolio
The Balanced Portfolio, or B-Portfolio, provides investors the opportunity to invest in the equity markets, but with less exposure though the addition of a selection of fixed income instruments to the portfolio. For an investor who can bear the risks of the equity markets, but at the same time wants to keep a conservative mentality with fixed income instruments, the Balanced Portfolio provides an ideal opportunity.
The Balanced Portfolio provides returns from a combination of stocks (common and preferred), bonds and the use of cash, cash equivalents or option premium income within prudent risk parameters. The Balanced Portfolio seeks to achieve long-term capital appreciation, but with less exposure to the equity markets.
Generally, the B-Portfolio will be composed of approximately 50% to 75% equities and 25% to 50% fixed income investments, based on each investor's unique investment temperament and objectives, as well as current market conditions. Clients have the option of directing an investment ratio based purely on their own temperament and objectives. Both portions of the Balanced Portfolio (equity and fixed income) are managed using the same methods as their respective separate portfolios.
In addition to covered calls, Vision Advisors may, from time to time, purchase out-of-the-money put options to further add to the level of downside protection. The ratio of purchased put options may be less than the number of long shares of stock owned in the account. Please recognize that employing puts to help protect the stocks in an account is likely to temper total returns (due to the premium paid to purchase the put options), but does provide downside protection against declines in the underlying stocks.