We believe that one of the most important aspects of risk management centers around the concepts of diversification of assets and individual risk tolerance. It has been proven that the asset allocation decision is most influential in determining investment returns. Diversification between asset classes and one's risk tolerance should help determine the asset allocation decision.
As we all know, the more one diversifies assets among different investment classes and strategies, the less likely that investor will experience either large gains or losses in his or her overall net worth. This is due to the fact that under-performing asset returns will be offset by positive returns from another asset class.
Unfortunately, many investors believe they are adequately diversified, yet upon examination the correlation among their asset classes is found to be very high. For instance, one may think that they are well diversified by owning a combination of low cap stocks, high caps, international, etc., yet they all are closely correlated to the broad market to a large degree. We offer an equity separately managed products which has a low correlation to most standard portfolios: a Long/Short Managed account.
During the selection process the investor needs to fully analyze his or her own risk tolerance. Age, financial wealth, liquidity, taxes, and other unique circumstances are just several factors that affect the investor's risk tolerance.
Lang Asset Management offers several investment products that should fit into most investor's risk profile. The range is from low to higher risk investments. Of course, the investor with a low risk tolerance may choose an investment vehicle that provides a high degree of certainty and safety of income. An investor with a higher risk tolerance may possibly choose several investment vehicles that provide a higher return but with higher risks.
Lang's Cash Equivalent Alternative and Fixed Income products provide the conservative investor with two alternatives that are high in quality and low risk. The Smart Money Managed Accounts product provides a hedged investment for the client with a higher risk tolerance. Finally, the Balanced product may be considered an appropriate investment for one who may be desirous of spreading risk over several of these products. In addition, an investor with Lang may move from one investment type to another without penalty, charges, and no lock-up period.
We would enjoy speaking with you about your risk profile and investment needs.
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