Investment success over the long term truly begins with a real understanding of risk – a concept which too often is associated with volatility instead of with actual loss. When operating with an investment vision that extends over 5 to 10 years, investors will see their portfolio values rise and fall across market cycles, fluctuations likely to cause consternation from time to time. In the end, however, diligent selection and patience are likely to keep value in the portfolio.
This focus allows us to define risk, not in terms of volatility, but as true loss of capital. Changes in the market’s value do not result in real losses unless investors are selling off their holdings; we aim to perform better by staying attuned to true risk and quieting the noise of volatility.
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