Risk Management During Volatile Times
One of the most important jobs a money manager has is in the area of risk management. When markets are going nowhere but up, it would appear to some that it’s okay to make risk management less of a priority and try to shoot for bigger gains. But this philosophy is flawed on many levels.
This week, Ray Lucia Jr., chairman and CEO of Lucia Capital Group, and Mark Scalzo, Chief Investment Officer for Validus Growth Investors, discuss the importance of active management in a portfolio during this current environment, and how having a bottom-up approach may be a much better way to assess risk. When it comes to stocks, what you don’t own can be just as important as what you do own.
Learn more about the process we use when managing a portfolio, and how we aim to identify specific risks when dealing with extra-volatile markets, in this week’s edition of Lucia Capital Group Weekly!
The information provided should not be considered specific tax, legal, or investment advice and is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed.
The views presented herein are those of Validus Growth Investors (“Validus”) as of May 2020 and are provided for informational purposes only. There is no guarantee that any historical trend illustrated herein will be repeated in the future, and there is no way to predict precisely when such a trend might begin. The information is based on the economic and market conditions as of this date. The information is not intended as a discussion of the merits of a particular offering and should not assume that any discussion or information provided herein serves as the receipt of, or as a substitute for personalized investment advice from Validus, Lucia Capital Group, or any other investment professional.
Different types of investments and/or investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or investment strategy (including the investments purchased and/or investment strategies devised by Lucia Capital Group (“LCG”), or Validus Growth Investors (“Validus”)) will be either suitable or profitable for a client's or prospective client's portfolio, thus, investments may result in a loss of principal.
You should always seek counsel of the appropriate advisor prior to making any investment decision. All investments are subject to risk including the loss of principal.
An investment may not be made directly in an index.
ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.
Before investing, carefully consider an exchange-traded and/or a mutual fund’s investment objectives, risks, charges, and expenses. To obtain a prospectus or summary prospectus, which contains this and other information, call your financial advisor. Read the prospectus carefully before investing.
"Alpha" is a term used in investing to describe a strategy's ability to beat the market, or it's "edge." Alpha is thus also often referred to as “excess return” or “abnormal rate of return,” which refers to the idea that markets are efficient, and so there is no way to systematically earn returns that exceed the broad market as a whole.
Raymond J. Lucia Jr. is chairman of Lucia Capital Group, a registered investment advisor and CEO of its affiliated broker-dealer, Lucia Securities, LLC (“LSL”), member FINRA/SIPC. Advisory services offered through LCG. Securities offered through LSL. Mark Scalzo is the Chief Investment Officer of Validus Growth Investors (“Validus”), a registered investment adviser. Validus provides model portfolio sub-advisory services to LCG. Mr. Scalzo is a securities principal and registered representative of LSL. Validus, LCG and LSL are all under common ownership. Registration with the SEC does not confer any certain level of expertise or training. PSN is not affiliated with Validus, LCG or any of LCG’s subsidiaries.