So what risk profile do you have? Are you cautious like us and always try to preserve capital and dampen volatility? If so then you are very careful and typically invest smaller amounts across a wide-range of securities and indices to maximize diversification and lower overall volatility*. On the other hand are you a gambler? If so then you are prepared to invest larger amounts in a fewer number of securities, and perhaps even consider short-selling. Or are you somewhere in between?
Most of the time your tolerance for risk will depend on how much you can lose at any one time without seriously damaging current liquidity or long-term stability. For example most of us can afford to lose €1000 (or its equivalent). But what about €10000? Or €100000? At some point such losses start to seriously threaten our financial security both now and in the future. Therefore and before executing any strategy it is imperative to determine how much you are willing to lose without risking serious harm to your financial health.
We are undoubtedly risk-averse. Therefore we believe in conservative investment strategies, which minimize volatility and large losses over time. We strongly believe and indeed intend to prove that periodic, objective, data-driven trading with our strategies and forecast data yields decent returns with less volatility over reasonable time spans of a few years – even in very difficult markets such as the CAC40 over the past two years. In coming blog entries, we intend to outline our investment strategies, which will provide insights into our methodologies and hopefully assist your own investment activities.
As always, if you have any questions or feedback, feel free to contact us anytime. In the meantime stay tuned for upcoming posts about our investment strategies and how our strategies can help you too.
*Note that risk is mathematically measured by volatility, which in turn is simply the standard-deviation of returns over time.