{"id":706,"date":"2017-04-23T17:49:08","date_gmt":"2017-04-23T17:49:08","guid":{"rendered":"http:\/\/138.68.1.151\/?page_id=706"},"modified":"2022-07-25T22:07:30","modified_gmt":"2022-07-25T22:07:30","slug":"active-management","status":"publish","type":"page","link":"https:\/\/pacificinvestmentresearch.com\/why-pacific\/active-management\/","title":{"rendered":"Active Risk Management"},"content":{"rendered":"

Passive investing<\/strong> strategies (investments that match market returns) are increasingly popular, but people forget what happens when cyclical markets experience significant downturns. \u00a0We saw this after the dot.com bubble and most recently in 2008.\u00a0 Investors watched the value of their accounts decline 25% or more in a matter of months.<\/p>\n

Markets generally go back up after big declines, but it could take several years just to recover from losses.\u00a0 The role of active<\/strong> risk management is to minimize the impact of those declines.<\/p>\n

Most advisors employ a “diversified buy and hold” approach to investing.\u00a0 While this works when the market is going up, these advisors are usually not prepared for the next down cycle.\u00a0 When the next bear market appears, and losses start increasing, many advisors simply tell their clients to \u201csit tight\u201d.\u00a0 Or, some advisors simply minimize client contact during these times.<\/p>\n

At Pacific, we believe you deserve more.\u00a0 We don\u2019t agree with this approach, especially for clients approaching retirement or already in retirement.\u00a0 Can you imagine suffering a big loss the year you are scheduled to retire?\u00a0 If you are in your 30\u2019s you have time to recover losses.\u00a0 If you are in your 60\u2019s or 70\u2019s you may not have the luxury of time.\u00a0\u00a0That’s why we offer our clients an alternate way of investing using active risk management.<\/p>\n

Better Results Require Effective Risk Management<\/h4>\n

As hands-on money managers, we focus on managing risk.\u00a0 While our goal is to capture returns during rising markets, we especially focus on limiting losses during declining markets. This active risk management<\/strong>\u00a0enables us to deliver more consistent returns during rising, falling, and flat markets.<\/p>\n

Our risk management tactics emphasize:<\/p>\n