Prioritize risk management

Adrian Banner doesn’t use a fundamental investing approach. He’s CEO and CIO of INTECH Investment Management. His firm is a sub advisor for the Renaissance U.S. Equity fund.

Read: Lessons in value investing

Rather than seeking to obtain alpha and focusing on individual stocks, he prioritizes disciplined risk control. That’s because doing so helps “limit the magnitude and duration of underperformance.”

Read:

• From asset to risk allocation
• How to choose a fund manager

However, Banner says you can’t always predict how markets will move. To help clients, advisors need to keep emotions in check, as well track the correlation between the securities they choose.

For more on correlation, read:

Too close for comfort

U.S. and Canadian financial industries aren’t correlated

How to diversify

The anti-benchmark

For more on managing clients’ emotions, read:

Help clients set realistic expectations

Help clients understand trade-offs

Canadians are emotional investors

Do your clients make these mistakes?