Theories of investment are complex and numerous, but the main logical axioms and perfectly consistent with the experience of practitioners.
The golden rules
We focus our management in the strictest respect of these "golden rules":
- Divide the total portfolio into sub-portfolios with different backgrounds whose aim is not to record losses.
- For each sub-portfolio, develop and choose a level of risk consistent with the horizon.
- Allocate risk to the greatest number of investment styles as possible.
- This allocation should be inversely proportional to the risk of each investment style.
- Make the allocation proportional to risk / return ratio expected for each style.
- Reduce the allocation for linked or correlated investment styles.