CorePlus Approach

 

 

 

 

 

 

At Aspera, we have a common sense view of risk.

  • Risk is paying too much for a security.
  • Risk is not thoroughly understanding the securities you own.
  • Risk is not exploiting all available asset classes.
  • Risk is ill-conceived over-diversification.
  • Risk is buying and holding regardless of valuation and fundamentals.
  • Risk is not knowing when to sell.
  • Risk is not sticking to your investment discipline.
  • Risk is following the herd, chasing yield, and chasing performance.
  • Risk is not taking advantage of more sophisticated portfolio strategies.

 

We take risk management very seriously, but we have a very different view of risk than most investment managers. At the security level, most advisors equate risk with volatility. In other words, the more volatile the price of a security, the riskier that security is. At the portfolio level, they view risk as a diversification issue - spread your portfolio across enough asset classes and securities and you'll reduce your risk.

Given our focus on fundamentals and valuation, short-term security price fluctuations have no bearing on our view of security risk. In fact, we view volatility opportunistically. It allows us to add or reduce positions at attractive levels. At the portfolio level, we believe that over-diversification is a recipe for mediocrity which primarily serves to protect the advisor at the expense of responsible portfolio growth and wealth preservation.

We believe that our approach to risk management results in superior risk-adjusted returns. We manage risk by strictly controlling security, market, and asset class exposures. In addition, we only invest in attractively valued securities and asset classes. We do not add securities to a portfolio solely to increase diversification. If we are unable to find an adequate number of attractive opportunities, we keep excess funds safe and liquid and await better opportunities. In addition, we employ hedging strategies as appropriate to better manage risk.