Risk is a Four Letter Word - How Much Are You Exposed To?

TORONTO - Sept. 12, 2013 - PRLog -- Often, when new clients join us, we find that their existing portfolio exposes them to significantly more risk than they tell us they are comfortable with, based on their risk tolerance.

Why does this happen? There are a number of reasons. A growing body of evidence suggests that the sorts of people most likely to go into the lucrative financial service sales roles have personalities that are poorly suited to judging risk. Read more>> http://www.sprunginvestment.com/susan-cain-quiet In an effort to improve returns, many advisors put their clients into securities such as long-dated corporate bonds, preferred shares, and so-called ‘high income’ funds.

These attempts to manage returns unfortunately expose clients to higher risk. When the US Federal Reserve signalled earlier this summer that it might begin to pull back on its quantitative easing programmes, interest rates jumped and fixed-income securities experienced sharp declines.

At Sprung Investment Management, our portfolio management approach is based on managing risk. We define risk as: "Your funds not being available when you, the client, needs them."

What clients really care about is having their funds available to meet their lifestyle requirements. However, in order to mitigate this risk, we do look at, and measure, many of the more traditional types of risk that can affect the outcome. These include opportunity risk, benchmark risk, asset mix risk, exogenous or systematic risk. Read more>> http://www.sprunginvestment.com/free-portfolio-review-offer/

Risk is a word much bandied about by industry professionals without trying to enunciate the meaning of the term to clients. Yet, an understanding of the various types of risk and the impact that it can have on meeting your objectives is fundamental to constructing a portfolio.

Michael Sprung CFA founded Sprung Investment Management to meet the personalized needs of private clients, not-for-profit organizations, endowments, foundations and small institutions. As President, he is responsible for the firm's overall direction and investment portfolio decisions. Michael brings more than 30 years experience in the Canadian investment industry and has managed equity and balanced portfolios as large as several billion dollars. Michael can be seen as a commentator on BNN-TV and is a frequent contributor to the Canadian Financial Press. Learn more>> http://www.sprunginvestment.com/about-us/