Larry Kriesmer: How do you protect gains when markets crash?

Larry Kriesmer is a veteran advisor who grew up in Saudi Arabia, later watching his father lose nearly everything to a Ponzi scheme. We spoke about how those early experiences shaped his mission: to build investment strategies that protect families from devastating losses while still capturing long-term equity growth.

His turning point came during the tech crash, when panicked clients asked, “How much worse can it get?” and he realized he couldn’t answer honestly. That frustration led to developing a structural approach he calls synthequity—anchoring 80–90% of portfolios in Treasuries while using options on the S&P 500 to cap losses at a pre-set level. As he explains, “If 90% of the portfolio is in Treasuries, my loss limit is 10%.”

The method is simple in concept but powerful in practice: define the maximum downstroke, let investors choose their risk budget, and still participate in market upside. “It’s not the money we lose that crushes us—it’s the time we can’t get back,” Larry says. By keeping drawdowns survivable, he believes investors avoid the paralyzing fear that drives bad decisions like selling at the bottom and missing recoveries.

This conversation delivers a practical framework for anyone seeking to protect wealth without sacrificing growth: a disciplined, math-based system built from hard-earned lessons and personal loss.

Key takeaways

• Losses over 30% often take years to recover—limit exposure early.
• Anchoring 80–90% of a portfolio in Treasuries builds confidence.
• Options on the S&P 500 cap downside while keeping upside open.
• Define the maximum loss (“risk budget”) before investing, not after.
• Time lost in recovery matters more than temporary capital loss.
• Avoid “hope and prayer” diversification that fails during crises.