Four Things Affluent Investors Must Know About Risk Management

Sophisticated investors pay attention when someone brings up the topic of portfolio risk management. Affluent investors are often the most risk averse, perhaps because they have already accumulated enough money during their lifetime to achieve their financial planning objectives. Having reached their accumulation goals, they don’t want to lose their hard-earned gains because the financial…

Investing and Hindsight Bias

The current bull market has been steaming ahead since the market bottomed in March 2009. Consumers of investment advice have noted that passive, buy and hold strategies have outperformed most active strategies over this time period, giving some the false impression that ‘risk management,’ in the context of tactically changing portfolio asset allocation to defend…

How to Evaluate Return Targets

Every Pinnacle client signs an Investment Policy Statement that spells out the long-term targets for risk and reward for each Pinnacle strategy. Risk is presented in absolute terms as a fixed range of returns based on back-testing a five asset-class portfolio from 1972 to the present. The range of expected annual returns (risk or volatility)…

A New Way to Describe What We Do

I am often surprised at how the investment industry media finds ‘news’ in investment methods that Pinnacle has been employing for years. This weekend’s Wall Street Journal offered a wonderful example. In a Saturday article entitled, “Same Returns, Less Risk,” Ben Levisohn and Joe Light describe a new investment strategy where portfolio managers handle risk…