We consider that vulnerability to risk factors, not the actual choice of individual securities, is the primary cause of expected returns. Long term, assets that contain a higher risk element afford higher expected returns as reward to investors that accept greater risk.
Over the year’s financial research has shown that risk is best diminished by holding assets over a long period and by diversifying your portfolio with low-correlation assets. We effectively manage our client’s and our own portfolios in a way that pursues a path of minimalizing principal fluctuations within practical market expectations. We will stay within the boundaries of the stated goals and the chosen asset allocation.
Everything in life involves risk, and one’s wealth is no exception. Risk is part and parcel in the investment world and results can and do fluctuate more than initially expected. There may be occasions when negative short-term performances must be endured in order to reach longer-term goals.
It is also crucial to factor in the risk that inflation poses. Should a portfolio not be constructed to outrun inflation, it can reduce its power due to the inevitable eroding effects of inflation.