Risk Management

The market can be a scary thought for many individuals. They’re afraid of a big drop and fear the opportunities to bounce back will be slim or non-existent. If you realize there is some degree of uncertainty but you’re unsure how to financially deal with that risk, Capstone Investment Financial Group can help.

Measuring Risk

managing risk with an umbrellaInvestments of all types come with some degree of risk. Whether in the form of high inflation, volatility in capital markets, recession, or bankruptcy, economic risks are a part of every financial decision you make. Since risk can never really be eliminated, the advisors at Capstone instead focus on measuring the appropriate amount of risk your investments should include.

To determine how much risk your portfolio should include, we use a measurement called maximum drawdown (MDD). This measures the largest single drop from peak to bottom in the value of a portfolio based on a certain strategy, which helps our financial advisors prepare portfolios based on potential risks that are assessed.

The goal with MDD is to keep the percentage as low as possible. If an investment has virtually no loss, the maximum drawdown would be zero. On the other hand, a maximum drawdown with a drop of 100% means the investment has lost every penny of its worth. The more accurately we can determine the MDD of a portfolio, the stronger portfolio we can build for you.

Risk management occurs in every area of the financial world. No matter how big or small of an account you may be looking to open, chances are somewhere along the way, your financial history has been evaluated to determine how much risk you pose to a lender.

Grow Your Portfolio with Ease

At Capstone, we measure and determine how much risk our investors can comfortable take on prior to building a portfolio. We believe that taking a leap, no matter how big or small, will always bring you closer to your end goal. Chances are, if you are coming to us for help with strengthening your portfolio to increase your financial situation, you too are comfortable with enduring some level of risk in order to get there.

With decades of combined experience, we are proud to work with you and your level of comfort to create a diversified portfolio with valuable investments that will continue to perform well as market trends come and go. But our work doesn’t stop there. We continue to find opportunities for growth and buy when investments are on sale to safeguard your portfolio as best we can so that no matter what your end goal may be, you are on your way to reaching it.

Our team of expert advisors are here to guide you every step of the way to help you analyze your needs and implement a plan to reduce potential risks to your financial future.

Reduce Risk with Diversification

One way that clients can reduce investment risks is to diversify their portfolios. Diversification occurs when you hold onto multiple investments instead of contributing all of your share to one particular stock or bond. Because the market can rise or fall on a moment’s notice, spreading your wealth into numerous investments can keep your maximum drawdown low. Owning a series of investments helps reduce the overall risk found in each of your investments, which keeps volatility low and minimizes the chance of a major financial crash in your portfolio.

To assess volatility and help you determine how much risk your portfolio can safely handle, we use precise technology to calculate how much risk you may be willing to handle, and whether or not particular opportunities are worth the risk in the long-run.

When we combine risk management with diversification, we are able to take advantage of how each investment will perform differently in the portfolio. Diversifying your portfolio allows us the opportunity to add return and decrease volatility simultaneously, helping your portfolio strengthen at a pace you are comfortable with.

Our goal as advisors is to build a diverse portfolio that generate high returns and accumulates value as it matures. In order to continue ascending towards a secure financial future, it’s important to refrain from becoming too guarded, as this can delay you from achieving your goals altogether. For most individuals, this is the largest risk you can possibly pose to yourself.

No matter how much or how little risk you’re comfortable including in your portfolio, our number one goal is to help you achieve your financial goals on time. By making smart and successful investments and taking occasional risks when the market is favorable, we can help grow your portfolio and get you on your way to reaching your goals. Connect with our financial advisors to learn why taking risks beyond what is needed may help you meet your financial goals quicker.

Our Services include Financial PlanningRetirement PlanningInvestment ManagementRisk Management & Wealth Management in and around Colorado Springs, CO.

Free Portfolio Risk Analysis

Print our Brochures

Print our Brochures