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Content provided by Nate Wattier, CLS Client Services Manager

Spring is in the air.  After a bleak and cold Omaha winter it’s a relief to turn off the furnace and open the windows to get some fresh air flowing through the house.  It’s also nice to break out the gardening tools and clean up the landscaping , mow the brown grass to encourage new green shoots, and just enjoy being outside without having to wear multiple layers.

But, true to form for early April in Nebraska, a 75 degree day is not uncommonly followed by below freezing temperatures and an inch of snow.  So the windows get closed and the furnace is switched back on.  This kind of weather will persist for a few more weeks until warmer temps will finally take hold.  Until it does, it’s a daily task to keep the house at a comfortable temperature.

These ups and downs remind me of the markets and CLS’ Risk Budgeting methodology. It’s difficult to predict what the markets are going to do.  Sometimes it feels like a daily rollercoaster ride, just like early spring in Nebraska.  That’s where CLS steps in to add value and bring some un-emotional discipline to the table.  When the markets heat up or cool off, it’s CLS’ job to make sure our clients’ accounts stay at the “temperature” at which they are most comfortable.

 

 

A client’s risk budget is derived from the client’s specific answers to CLS’s Confidential Client Profile questionnaire, which establishes the client’s financial goals, ability to handle risk, and overall investment time horizon. The individual client risk budget is expressed as a percentage of the risk of a well-diversified equity portfolio.
0842-CLS-4/25/2014