As professional investment advisers, our duty is to help you cope with uncertainty.  We do this by controlling risk. 

A successful investment program does not necessarily require genius.  Simple, straightforward steps can be used to control risks and achieve more consistent returns.  Here are a few "risk controlling" tools utilized by the Roscoe Financial Advisory Company:

Diversification 
The prices of most individual securities tend not to move closely together.  As the price of one increases, the price of another may move up less or decrease.  Consequently, by investing in several securities -- that is, by diversifying-- portfolio fluctuation can be reduced.

Laddering
Laddering is a conservative technique whereby you stagger your fixed income investments across different maturities along the yield curve.  Should interest rates fall, you'll receive lower yields as you replace your bonds.  But a portion of your bonds will still be earning the higher rates.  Conversely, if interest rates rise, you'll have a chance to move some of your money into higher yielding issues.

Balancing
Investors can protect themselves from the self-defeating tendency to buy high and sell low by deciding how much of their money they want to put into stocks and bonds, and then maintain the balance within certain parameters.  If stocks have a good year but bonds don't, the portfolio might be "rebalance" by making new investments in bonds (or, if need be, by selling the appreciated stocks and putting the proceeds into bonds).  If bonds do well the following year while stocks do poorly, making new investments in stocks at hopefully more attractive valuation restores balance. 

Dollar Cost Averaging
Perhaps the hardest investment decisions confront investors that need to invest large sums of money.  How can they know if it's the right time to buy stocks? They can't know for sure.  What they can do is control their risks through dollar-cost averaging.  This is particularly useful at times when valuation measurements are perceived as being high or overvalued.  This strategy entails investing a set amount at regular intervals.  Because the amount invested remains constant, more shares are purchased when prices are low; fewer when prices are high.

Pure Investment Vehicles
Those of us who subscribe to the notion that investment allocation is important want to be confident that our investments are in fact invested as advertised.  Someone who invests in a core equity mutual fund would expect that most of the money invested in that fund would in fact be invested in stocks.  Admittedly, most fund charters are broad enough to allow the manager to do just about anything. The investment vehicles utilized by Roscoe Financial are pure asset class vehicles.  

Cut Expenses One sure-fire way to improve investment returns is to utilize lower expense investment vehicles.  However, keeping costs down is getting harder and harder to do.  Investment  expenses have soared in recent years.  Investments utilized by Roscoe Financial are bucking this trend.

Strategic Asset Allocation  The danger in timing the market is the risk of being out of the market at the wrong time.  Periods of strong market appreciation are unpredictable and can be short lasting.  This means only a few wrong decisions can significantly affect performance.  The market timer must not only know when to get out, but when to get back into the market.  As tempting as market timing seems, investment goals will be best achieved by sticking with a strategically allocated portfolio designed according to your time horizon, risk preferences and investment objectives.