By Mark Barnicutt on January 1, 2010
In our years of experience overseeing the management of client wealth, we’ve learned that successful investment management is more about managing risks than it is about managing returns. The rationale for this is simple: An investor who experiences a 50% loss on their portfolio will require a 100% return just to get back to even!
Although there are many risks associated with investing, one of the greatest risks that is often overlooked by Advisors and their clients, is excessive concentration in a single investment manager. Further, in many instances, these investment managers have not been properly due diligenced prior to investing with them.
In recent years, there have been an abundance of academic articles written about the merits of a multiple investment manager approach. This is not the purpose of an article that we recently wrote. Instead, our objective is to share:
1. Our practical experiences in what happens to Advisors and clients when they become overexposed to a single money manager who experiences prolonged periods of investment performance challenges
2. HighView’s beliefs about the use of investment managers in client portfolios
3. HighView’s Investment Manager search criteria
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