Managing the Risks

Growing your portfolio requires an appropriate level of risk. Take on too little and it becomes difficult to keep up with inflation. Take on too much and your losses can be magnified more than your gains.

There's no free lunch in the financial markets. Any trading strategy that claims to give you something for nothing is doomed to fail at some point. It doesn’t matter if it’s sophisticated or simple. As soon as it becomes too popular, it will be undermined by its own success. The very nature of financial markets is to disappoint the majority. That’s why the price goes down when a majority wants to sell.

We don’t try to eliminate risk from your portfolio, nor do we attempt to generate returns that far exceed the expected returns for a given allocation of asset classes. We shun market timing, complex derivative bets, leverage, market-neutral strategies, and short-selling. In our opinion, none of these techniques offer any long-term advantage over a stable blend of stocks and bonds. There’s far more opportunity in fund selection, which is where we focus our efforts.

Past performance of mutual funds is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold.