Why Targeted Risk?

We’re all aware of the axiom ‘there is no such thing as a free lunch’ when it comes to investing. In other words, investors are only compensated for the investment risk they are willing to accept.

So if investment risk is required in order to originate a return, why don’t investment managers address investors’ personal risk characteristics up front and more regularly when determining their investment needs? 

For one, most investment strategies today aren’t built to suit your particular risk appetite; rather they are standalone strategies for broader audiences. And two, generic personal risk assessments typically fail to quantify and project with reasonable accuracy your appetite for risk. We believe this subjective approach poses the greatest risk of all – failing to have your investments managed according to their true risk parameters. 

Quantitatively determining and investing in a strategy that matches your risk tolerance will help ensure that you are better able to cope with the volatility that will invariably occur throughout the various phases of the market cycle. This will allow you to focus on the long term prospects of your investments, rather than questioning the appropriateness of the strategy during periods of market volatility.

Our Target Risk Strategies are actively managed in an effort to reduce downside performance while enhancing the upside potential. This is achieved through active asset allocation and sector selection across the global investment universe while still maintaining the diversification required to stay within the Target Risk Strategy’s “Risk Score.” Asset Allocation does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.