Investment Advice

Risk Management

A rising tide lifts all boats. “Only when the tide goes out do you discover who has been swimming naked”.
– Warren Buffett

We help our clients grow assets they cannot afford to lose, carefully investing their money as though it were our own.

Winning by Not Losing

Avoid permanent losses. These are destruction of capital caused by a permanent drop of market value of an investment. This scenario occurs most often when investing in unproven companies, penny stocks, overvalued securities or even from a stock tip from an unreliable source.

Capitalize on temporal losses. These are opportunities to be taken advantage of. Renown companies with strong balance sheets and healthy cash flows can sometimes trade at valuations below their fair value. Often times, these temporary lows are either driven by general investor fears or economic downturns. With a long term perspective, these events create opportunities to buy quality securities at bargain prices.

Diversification, not “Diworsification”

One of the core tenants for risk mitigation is to diversify a portfolio. However, with the desire to diversify comes the risk of including too much, leading to diworsification instead. For instance, adding too many companies in the same industry will result in a lower expected return compared to picking the best ones. In addition, doing so does very little to protect the investor from a downturn in the entire industry, as the share prices of all of those companies will likely decrease at such a time.

The key to efficient diversification involves the concept of correlation. This is the measures to which two assets move in the same direction at any given time. To maximize the benefits of diversification, it is crucial that a portfolio is composed of assets with little correlation to one another. In other words, the different components of the portfolio tend not to move in the same direction at the same time, which reduces the overall volatility.

We help our clients capitalize on the differences between permanent and temporal losses. To do so requires disciplined execution and maintaining a diversified allocation that will provide the liquidity to buy depressed assets when the opportunity presents itself.

Fees and Transparency

Our transparency means clients will always know what they pay for and why.

We understand the impact of fees on a portfolio and the importance of getting your money’s worth. With this in mind, our focus is always to ensure that value of advice always exceeds cost.