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"Successful Investment Management Requires An |
Investing In An Unbalanced World The world is unbalanced. Imbalances are reflected in government budgets, global trade, household balance sheets, as well as policymaking and regulation. The result is likely to be a continuation of abnormally high levels of volatility, and therefore warranting a more active approach to risk management and asset allocation. As demonstrated over the past decade, traditional buy-and-hold strategies cannot be relied upon to generate acceptable risk-adjusted returns High correlation between asset classes requires more thoughtful and robust diversification. The antiquated methodology of simply spreading investments across traditional asset classes does not protect investors from the risk of excessive market volatility. As asset classes become increasingly correlated, downside risk also rises Successful investment management requires an in-depth understanding of concentrated and illiquid assets. Holdings such as land, real estate, timber, oil and family-owned businesses often constitute a significant amount of our client's net worth. For Bienville, it is important to comprehend the particular economic drivers of specific assets, as well as their correlation to other asset classes. Only by utilizing this holistic approach can the liquid portion of an investment portfolio be allocated optimally. Thoughts & Insights |