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Risk Mitigation

September 6, 2012

How did the job of an asset allocator move from seeking out undervalued asset classes and securities to one of seeking to mitigate risk?

-William Smead, chief executive officer, Smead Capital Management

How did the job of an asset allocator move from seeking out undervalued asset classes and securities to one of seeking to mitigate risk? Is risk mitigation a worthy goal or even possible without abandoning real return goals? When and why did wealth creation become wealth management? What opportunities exist today for those who seek wealth creation through intelligent risk taking?

In the last four years, we at Smead Capital Management have been fortunate to sit down with numerous top-notch institutional investors and financial advisors. We repeatedly hear about the approaches which are being used to mitigate risk. We believe that the asset allocation being practiced by the largest and most successful institutions is no longer dissimilar to that of the smallest financial advisory practice! This came about the same way all concentration develops in the investment business; it worked well for awhile and was spawned by the prior concentration.

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