Larry Kriesmer: How Do You Protect Gains When Markets Crash?

In the high-stakes world of investing, few moments test resolve like a market plunge. Imagine building a nest egg over years, only to watch it evaporate in weeks—leaving not just financial scars, but emotional ones that linger. This isn't a hypothetical; it's the reality Larry Kriesmer, co-founder of Measured Risk Portfolios and creator of the Synthequity ETF (ticker: SNTH), confronted early in his career. Kriesmer shares a deeply personal origin story: his father's retirement dreams shattered by a Ponzi scheme, forcing a return to work and eroding a once-confident man's spirit. "It literally killed him," Kriesmer recalls, highlighting how financial loss can redefine lives.

For young professionals juggling side hustles, mid-career switchers eyeing financial independence, or first-generation entrepreneurs from global backgrounds—like Kriesmer, raised in the Middle East—such tales resonate. They underscore a universal truth: Protecting gains during a market crash isn't just about money; it's about safeguarding time, confidence, and future possibilities. Kriesmer's Synthequity strategy offers a blueprint: full upside participation in bull markets with predefined downside limits. Drawing from over 20 years of refining this approach, he reveals how to invest without the dread of "unrepairable" losses.

The Emotional Toll of Market Downturns

Market crashes don't discriminate—they hit hard whether you're a tech-savvy millennial in Silicon Valley or a family business owner in rural America. Kriesmer's early days as an advisor during the 2000 tech bubble exposed this raw vulnerability. Clients, gripped by fear, demanded exits just as portfolios bled. "When clients were calling during that time period and asking, 'How much worse do you think it's going to be, Larry?' this was a miserable experience for me because I couldn't answer that question honestly," he admits.

This mirrors broader investor psychology. A 2023 Vanguard study on behavioral finance found that 70% of retail investors sell low during downturns, locking in losses and missing rebounds.

 Rhetorical question: Have you ever second-guessed a sell-off, only to watch the market rally without you? Kriesmer did, and it fueled his mission. Traditional diversification—spreading bets across stocks and bonds—falters in crises when correlations spike. Assets meant to zig when others zag suddenly all tumble together, as seen in 2008's financial meltdown or 2020's COVID swoon.

For underrepresented investors, like those from immigrant families navigating U.S. markets for the first time, this uncertainty amplifies. Kriesmer, whose parents met in Saudi Arabia, knows the stakes: One misstep can derail generational wealth-building. His father's Ponzi loss wasn't just dollars lost; it was dreams deferred, self-doubt sown. Reflect on this in your own journey: What "modest" 20-30% dip might push you out of equities forever?

Why Traditional Portfolios Fail in Crises

Diversification sounds foolproof—buy low, sell high, balance the ride. But Kriesmer calls it "backward-looking," relying on historical data that crumbles under stress. "We look backwards to try and figure out what we might do going forward," he explains. In normalized times, it works: Harvest winners, bolster losers. Yet crises rewrite the rules.

Consider the math: A $1 million portfolio doubled to $2 million over a decade feels triumphant—until a 50% crash resets it to square one. Recovery? You'd need 100% gains just to break even, often taking years. As Kriesmer notes, "It's not so much the capital that you've lost, it's the time." This asymmetry crushes compounding, the engine of long-term wealth.

High-intent searches like "safeguard investments bear market" spike during volatility, per Google Trends data, revealing widespread anxiety.  Enter Synthequity: A "synthetic equity" approach that mimics S&P 500 upside while capping downside. It's not timing the market—no guru crystal ball required. Instead, it's structural defense, ideal for risk-managed investing.

How Synthequity Redefines Risk-Managed Investing

At its core, Synthequity flips the script on portfolio construction. Forget diluting returns across 10 mediocre holdings for "average" performance. Kriesmer targets the S&P 500's "800-pound gorilla"—a self-healing index where winners replace laggards, delivering superior long-term growth.

The magic? Allocate 80-90% to low-risk Treasuries for stability, then concentrate the rest (10-20%) in S&P 500 call options. Your max loss? Limited to that "risk budget"—say, 10% annually, offset by Treasury yields. Upside? Uncapped, capturing full market rallies.

Kriesmer's 2x4 metaphor nails it: Walking a board on the floor is effortless; hoisting it between ladders invites disaster. "If we can synthetically create something that's down on the ground... that's what I'm trying to achieve," he says. For a first-generation entrepreneur, this means betting big on growth without betting the farm—linear risk-reward where higher tolerance yields higher potential.

Launched as an ETF in March 2025, SNTH has amassed $70 million by September, per Morningstar reports. Gross-of-fee returns have tracked the S&P 500 over the past decade with 85% in safe assets. It's open to all via platforms like Schwab or Fidelity—no gatekeepers.

Proof in the Crises: From 2008 to Today

Synthequity wasn't theory—it was battle-tested. Born from 2004 equity-index annuities, Kriesmer tweaked the model: Embrace small "first-dollar" losses (5-15%) for outsized upside, ditching zero-downside caps that erode gains.

Proof of concept hit in 2006 with pilot clients. Then 2008 struck. While unprotected portfolios cratered, Synthequity-held ones limited damage, preserving capital for recovery. "For the clients that we did have it in, it worked beautifully because it was math, it was based on the structure," Kriesmer reflects.

Fast-forward: Through COVID volatility and beyond, the strategy's GIPS-compliant track record shines. For mid-career switchers eyeing retirement, this means no more "hang on for dear life" investing. Challenge yourself: Audit your portfolio—does it have a defined loss limit?

Resources for deeper dives: "The Intelligent Investor" by Benjamin Graham (timeless on margin of safety) or FINRA's guide to bear markets.

FAQ: Common Queries on Protecting Gains During Market Crash

• What if I'm new to options-based strategies?

Start small—SNTH democratizes access. Kriesmer advises: Define your risk tolerance first.

• Can Synthequity beat the S&P in bull markets?

Yes, with leverage from options, but expect volatility within limits. Historical data shows parity or better net of fees.

• How does this fit diverse portfolios?

Scalable for global investors; Treasuries provide universal ballast.

Key Takeaways and Your Next Step

Protecting gains during a market crash boils down to structure over speculation: Cap losses, unleash upside, reclaim time. Kriesmer's journey—from Middle Eastern roots to NYSE bell-ringing—proves resilience pays. As he puts it, "We'll never get the time back."

Action prompt: Review your holdings today. Willing to risk 10% for S&P-like returns? Trade SNTH or consult a fiduciary advisor. For more, tune into the full episode.