FAQs

What is the key to successful investing?
Measuring and managing risk is the key to successful investing.  While risk in your portfolio may be unavoidable it is manageable.  There are two components in managing risk: 1.)  Risk is managed by the mix of assets in your portfolio and 2.) by systematically and periodically rebalancing your portfolio.

How would you define the perfect investment?
High returns coupled with low risk. The reality is that this kind of investment is next to impossible to find… However, the Modern Portfolio Theory (MPT) has come close.

Why is Rebalancing important?
Rebalancing is the action of periodically buying and selling assets in your portfolio to maintain your original desired target asset allocation.  This is an important step in controlling risk.  You will find that some of your investments may grow faster than others as the market fluctuates.  If the portfolio is not rebalanced, it may result in an undesirable exposure to risk.

What is Passive Management?
Passive Management is a system in which mutual fund managers invests in accordance with a predetermined strategy that doesn’t entail any forecasting, market timing or stock picking.

What is Active Management?
Active Management refers to mutual funds managers or stock brokers who attempt to “beat the market” or their relevant benchmarks, through a variety of techniques such as forecasting, market timing and stock picking.  Historically, no one has consistently “beat the market”.

What is the first step?
The first step is to be open to the possibility that there are gaps in your portfolio that might be destroying or altering your financial future.  Then have a Market Investment Analysis completed to identify your current mix of assets.  The Market Investment Analysis report also identifies hidden costs, asset overlap and the risk/return expectations of your portfolio.  It is important that you understand where your investment return is generated and where you are taking risk.  The only way you can know is to measure it in your investment portfolio.  If you don’t measure risk then you can’t manage it.