• managing risk

    In the world of investments, risk is inseparable from performance and, rather than being desirable or undesirable, is simply necessary.


“Being exposed to the water’s whims demands concentration, skill and courage.”

Mike Borland
Mike BorlandDirector: FIRSTGLOBAL GROUP, Surfski and canoe marathon paddler

Understanding risk is one of the most important roles of the investment manager.

Risks must be measured and managed in making investment decisions. A common definition for investment risk is deviation from an expected outcome. This can be expressed in absolute terms or relative to something like a market benchmark. To achieve higher returns in the long run you have to accept more short-term volatility. How much volatility depends on an investor’s risk tolerance – an expression of the capacity to assume volatility based on specific financial circumstances and the propensity to do so, taking into account his/her psychological comfort with uncertainty and the possibility of incurring short-term losses.

At FIRSTGLOBAL we continuously take account of risk and measure it as far as possible. We believe that different investors have different levels of risk managing risk tolerances and mostly need guidance on what level assumed is in their best interest.

To this end, we employ risk profiling methods to determine each client’s personal attitude towards and understanding of risk.

Risk is managed in a number of ways including:

  • The use of qualified and experienced advisers and portfolio managers;
  • The implementation of proper quantitative and qualitative analytical techniques;
  • Diversification between asset classes, sectors and securities;
  • Management of exposures;
  • Ongoing monitoring of managers and their activities;
  • Detailed reporting; and
  • Compliance (internal and external auditing by independent auditing and legal professionals).