So, what sets Stone Bridge apart?
To start with, we have a process-driven investment approach where we look to limit downside risk in portfolios rather than trying to create outsized market returns. It is our intent that our portfolios participate in less of the upside when markets are good. This is a feature which we are willing to accept, because it is also our intent that our portfolios participate in less of the downside when times are bad. While there is no guarantee we will achieve these results, we believe that reducing volatility is beneficial to clients over the long run.
We pursue this approach in several ways. The first is global diversification, which is accomplished by investing in multiple asset classes—global stocks, global bonds, commodities, etc. Most of you know this concept from the proverb “don’t put all your eggs in one basket.”
The second is active management: employing managers whose strategies focus on reducing exposure to expected volatility. Many of these active managers use various hedging techniques to accomplish their goals.
The third is responsiveness to global macroeconomic developments. This is accomplished by making tactical adjustments in response to global events.
While we cannot guarantee the outcome, we believe these steps help create the foundation for stability in our clients’ portfolios.
Our risk-management theme resonates throughout our investment strategies and solutions and is a product of the past investment experiences of both David and Erik from the mid to late 1990’s. Although they were separated by two continents and were managing different asset classes (fixed income and emerging market equities, respectively) the same valuable investment lessons were being learned. The world was interconnected and people–individuals and institutions, alike–did not enjoy downside volatility.