Wealth building

Clients hire us to preserve and grow their assets. Here is how we do it.

First and foremost, we focus on wealth preservation. The importance of this was once again reconfirmed with the recent steep decline in the financial markets. When economies and stock markets expand, many investors and their advisors lose sight of prudent risk management principles, and in the pursuit of performance, inadvertently expose their portfolios to unnecessary risk. The consequences of excessive risk exposure are often underestimated when markets are rising.

Loss and Recovery
A certain amount of movement in a portfolio is expected and accepted. But excessive exposure has a painful long-term impact on performance. A portfolio needs to generate a significant increase in order to recover from degrees of loss. For example, if a portfolio loses 10%, a gain of 11.1 percent is required to break even again. To illustrate this point, look
at the chart:


The numbers are even starker when viewed in dollar terms. For example, if a $100,000 investment declines by 50%, the result is a remaining balance of $50,000. When the market rebounds, a 50% gain increases the value of the portfolio to $75,000. A 100% gain would be required to return the portfolio to break-even status.

This is why wealth preservation is our top priority.