Preservation of Capital
It is important to produce attractive risk-adjusted returns for clients, but it is even more important to ensure that clients’ capital is preserved. The example below illustrates the importance of preserving capital:
Example:
Invest 1,000
- It takes a 100% return after a 50% loss just to break even!
- Therefore, avoid loss of capital at all costs!
That is why CCM emphasizes the importance of “preservation of capital” and incorporates it into its investment strategy.