Individual Investment Process
 


Cash is a market position. We do not believe 100% long equity exposure is always appropriate. The problem with standard portfolio management approaches is twofold:

1. Given current volatility, a passive holding of 20 stocks provides inadequate diversification, is a cop out for bad stock pickers and an excuse for asset hoarding by fund managers.
2. Cross-market investment is little protection when all markets trend down together with close to 100% correlation. Yet protection against this scenario is the principle reason for the fund manager’s asset allocation ‘skills’.

Our approach is simple:

1. We find ideas that we like.
2. Then we create portfolios with suitable risk levels for the individual investor using Value At Risk, an institutional risk benchmark.

Finally, we work with the investor to determine the optimum amount of money to invest in each trade, again, to match the individual’s risk/reward preference. The principle here is that you cannot guarantee the outcome of your trade, but you can control the amount you invest in it.


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Henderson Rowe is a trade name of Raymond James Investment Services Limited (Raymond James) utilised under exclusive license. Raymond James is regulated by the Financial Services Authority and is a member of the London Stock Exchange.