Risk Management
Many in the investment world define risk in complicated mathematical terms. Many advisors and financial publications throw around words such as standard deviations, beta, alpha, and Sharpe ratio. As the mortgage meltdown and financial crisis of 2008 showed, sometimes risk needs to be looked at differently.
When examining investments in individual stocks for clients we take a common sense approach. We look at three interrelated sources of risk: valuation risk, business risk, and balance sheet risk.