“Managing market risk is the primary objective of investment management.” -Charles D. Ellis
When speaking of risk in the financial markets, the most widely accepted measure of market risk is standard deviation. The “bell curve” above shows “normal distribution.” In the financial markets one is likely to see normal distribution of returns in the longer term, this means the long-term investor may find this statistical measure useful in giving him or her an idea of what to expect in terms of volatility risk (the up and down movement of a particular market or market segment). But in the short-term results occur randomly and may be significantly skewed in one direction or the other.
Risk management is central to Third Sigma's investment discipline; we use diversification, market sector selection, manager selection, and thoughtful rebalancing to achieve the client’s goals. We strive to maximize returns for the amount of risk taken. Third Sigma brings institutional level management to all of its client’s portfolios. Careful diversification, attention to costs, and risk management are built into Third Sigma’s philosophy. Third Sigma provides its services on a fee-only basis. Third Sigma accepts no direct or indirect compensation from third parties.