Why Risk-Adjusted Performance?

Concentrating on risk-adjusted performance prudently maximizes long-term wealth. Risk-adjusted performance means that you are striving to achieve the highest total return for the amount of risk that you are taking on - we believe this is a realistic and reasonable goal. Often, market participants focus on upside potential and the total return expected, without regard to the risk of loss of principal and the downside protection given up. We believe limited focus is unprofessional, irresponsible, and unrealistic. Not focusing on the risk aspect of investing is, in effect, a denial of its existence. Denying the existence of risk proves foolhardy over the long run and is often a recipe for disaster.

What is risk?
Risk is the chance that some unfavorable and unexpected event will occur.