Accepting Risk

Decisions with clients’ informed consent

At WDS, we take a more fundamental approach to the unpredictable nature and mood of markets. True investment risk is the permanent loss of buying power in our clients' original capital. A permanent loss of capital can arise from three sources:

• Fundamental risk: problems with the company or the industry in which it operates; erodes future earnings power with permanent decline to the intrinsic value of the business.
• Valuation risk: original purchase price paid for security is too high.
• Market risk: potential for an investor to experience losses from the fluctuations in securities prices by selling at the wrong time.

Concentrating on the first two aspects of risk, we remain vigilant in evaluating securities and sensitive to their current pricing. With your guidance and cooperation, we try to avoid the last one. Sensible investing is about taking desirable and suitable risk in your portfolio.