Risk Management

The perception of risk

In investing, there has always been much discussion about risk and ways to minimize or reduce it. The idea that mutual funds and other diversification methods reduce risk while still generating competitive returns has been conditioned into investors' minds.

While diversification is indeed a tool to cover more bases with less money and hold fewer eggs in one basket, the one basic fault in this thinking is that risk is not a number to be measured. Risk is an impression or concept, and the more you try to reduce risk, the more you limit potential returns.

Careful analysis

Instead of reacting to the concept of risk, the real focus should be on carefully studying the companies being invested in, understanding market volatility, and incorporating those factors into the stock selection process. Many portfolio managers try to mitigate risk by over-diversification and looking backward at volatility. All too often, this approach results in less than impressive returns.

At Cabanor International, accounting for volatility means we have to take a different approach and make superior decisions. We’re questioning in our analysis of the global economy, imaginative in the way we identify opportunities, systematic in our research, and deliberate in our allocations. We focus our attention on the things we understand and look past traditional opinions. As attentive and dynamic managers of all client portfolios, we consider each transaction carefully.

A different attitude to risk

In summary, Cabanor International has a different attitude toward risk and an outlook that is uncommon in portfolio management. We utilize our knowledge, ingenuity, and resourcefulness to develop and build one client portfolio at a time.