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How to manage your investment portfolio risks



Being an avid downhill mountain biker and skier, I learned the benefits of defining and assessing risk the hard way rather quickly, but many ignore risk when investing or get their assessment wrong when trying to understand what it truly entails.

Risk is the possibility of something unpleasant or unwelcoming happening weighed against the reward being offered by certain activity. In the case of investing, it is the probability of locking in a permanent loss, while in adventure sports, it’s the chance of permanent injury.

It’s important for investors to realize that the greater the variability of your returns, the greater the chance of making a mistake because of emotions entering the decision-making process. Think of it this way: the steeper the mountain, the greater the speed involved, and the more turns and objects you need to handle, all of which creates a higher likelihood of crashing.

Measuring the standard deviation of your portfolio is a good initial indicator of how steep the risk curve is as well as the overall level of risk being taken onboard.

Ideally, you want a portfolio manager who will create what is called a positive asymmetrical return profile, which refers to a strategy that aims to provide higher potential returns than potential losses.

This essentially creates a favourable imbalance between profit and loss, or positive and negative returns. As a result, there is a safety net in the event of a crash that minimizes the chance of your portfolio undergoing an injury that prevents it from achieving its overall objective.

Last year was an excellent chance to evaluate your portfolio because if it fully tracked a passive benchmark during a negative event, such as high inflation and the corresponding rapid rise in interest rates, there was no such safety net and, therefore, little to no risk management being offered.

In such a case, you are simply better off owning the market passively and doing it yourself rather than paying fees to have someone steer your portfolio.

This is because stock market returns by default are asymmetric given they have what are called fat tails, meaning there can be huge gains or losses at both ends of a distribution curve. Fat-tail events are rare, at more than three standard deviations from the mean, but they can wreak havoc on a portfolio when they happen. Worse, you react by trying to time the market, thereby locking in those losses.

This is why it is important to employ tail-risk hedging within your investment portfolio. As risk managers, we deploy such strategies via structured notes that have embedded downside barriers, as well as tactical asset allocation.

For example, having long-dated U.S. Treasuries provided excellent downside protection during the March 2020 COVID-19 meltdown. More recently, we were able to provide flat performance last year in our balanced strategy, while most 60/40 portfolios fell by 10 to 15 per cent, by greatly reducing our duration exposure within both our bond and equity positions, as well as by adding a slice of inflation protection via a 10-to-15-per-cent weighting to energy.

Looking ahead, not surprisingly, those who fully participated in last year’s correction are now advising people to double down and take on extra-long duration to try to recoup those paper losses. This is a classic example of what we call loss aversion in our business. It could possibly work out, but it nonetheless adds more risk to your portfolio.

Making bets in an attempt to capture the right side of a low-probability, fat-tail event because you participated on the wrong side of a negative event is not something we’re interested in doing. We much prefer an approach that reduces the variability of your portfolio and maximizes the probability of achieving your target return independent of what everyone else is doing.

Or, as Benjamin Graham famously said: “The essence of investment management is the management of risks, not the management of returns.”

Martin Pelletier, CFA, is a senior portfolio manager at Wellington-Altus Private Counsel Inc, operating as TriVest Wealth Counsel, a private client and institutional investment firm specializing in discretionary risk-managed portfolios, investment audit/oversight and advanced tax, estate and wealth planning.



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'That One Deal Made Me A Millionaire': Former Airline Pilot Ryan Tseko Reveals His Investing Strategy That Anyone Can Follow – Yahoo Finance




For years, the wealthiest investors and institutions have enjoyed exclusive access to lucrative investment opportunities, leaving retail investors with limited choices.

Hedge funds like William Harnisch’s Peconic Partners and Michael Burry’s Scion Asset Management produced total returns of 191.5% and 159.79%, respectively, over the past three years. The minimum investment required to participate in funds like these often ranges from $500,000 to $1 million.

Retail investors, on the other hand, have typically been confined to index funds like the Fidelity 500 Index Fund or Vanguard 500 Index Fund Admiral, which track the S&P 500. While the 44% returns these funds have generated over the past three years are considered impressive by most standards, they pale in comparison to those investment funds reserved for the elite.


Former airline pilot Ryan Tseko, who is now executive vice president of Cardone Capital, understands firsthand the transformative power of gaining access to the same assets as the wealthiest investors.

From Airline Pilot To Real Estate Millionaire

Tseko fulfilled his childhood dream of becoming a commercial pilot when he was 21 years old, landing a job at United Airlines’ United Express and moving his way up to becoming lead captain at Jet Aviation flying the Gulfstream G550.

Tseko told Benzinga, “I loved being a pilot, but it’s not the high-paying job many people think it is. It didn’t take long for me to realize that it would be nearly impossible to build wealth just by saving and investing in the company’s 401(k) plan.”

Motivated to take control of his financial future, Tseko turned to real estate as a means of generating passive income and securing his financial freedom.

Working diligently alongside his career as a pilot, Tseko successfully built a small real estate portfolio using the income he earned. “I wanted to be doing bigger deals, but the single-family and one- to four-unit properties were all I could afford.”

Tseko soon discovered that scaling and managing the portfolio while maintaining a full-time job posed significant challenges. “I would just be getting back home from a long trip then have to go pick up rent checks and deal with maintenance issues,” he said.

Seeking inspiration, he began following renowned real estate investor Grant Cardone, whose investments aligned with his aspirations.

“I saw what Grant was doing, and knew I needed to invest in the same deals that he was,” Tseko said. With some persistence, he managed to land an opportunity to invest in a deal with Cardone.

“As soon as Grant said I could invest with him, I called my real estate broker and told him to sell the whole portfolio. I ended up with about $400,000 after taxes and put it all into Grant’s deal. About 36 months later he sold the property and cut me a check for $1.1 million. That one deal made me a millionaire.”

Witnessing firsthand the life-changing impact of investing in the right opportunities, Tseko teamed up with Cardone to help make these assets available to other people in similar situations.

The timing couldn’t have been better. The Jumpstart Our Business Startups (JOBS) Act of 2017 had recently passed, making it possible for Cardone Capital to accept investments from non-accredited investors through Regulation A+ offerings.

“People deserve to be able to invest in these assets,” Tseko said. “All of us start out as non-accredited investors. The thing that gets us to become accredited is typically the investments we make with our money. To me, it seemed completely backward. These large institutional-quality real estate deals have only been available to the ultra-high net worth and institutions.”

Cardone Capital has deployed more than $130 million raised through its Regulation A+ offerings into multiple class A properties.

Follow Ryan Tseko on Instagram for more on real estate and aviation.

Read next:

Don’t miss real-time alerts on your stocks – join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.

This article ‘That One Deal Made Me A Millionaire’: Former Airline Pilot Ryan Tseko Reveals His Investing Strategy That Anyone Can Follow originally appeared on


© 2023 Benzinga does not provide investment advice. All rights reserved.

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The family office for Mark Zuckerberg and Jack Dorsey backs French rival to Microsoft Excel – CNBC




In this article

The logo of the spreadsheet software Microsoft Excel is shown on the display of a smartphone.
Thomas Trutschel | Photothek | Getty Images

French business planning software startup Pigment has raised $88 million in a funding round led by ICONIQ, the private investment fund that manages the money of tech billionaires such as Mark Zuckerberg and Jack Dorsey.

Pigment is best known for its business planning and forecasting platform that’s designed to be more user-friendly than Microsoft’s spreadsheet software Excel.


The company, co-founded and helmed by dual CEOs Eleonore Crespo and Romain Niccoli, told CNBC it planned to use the funding to expand its reach in the U.S. and artificial intelligence.

Venture capital firms Felix Capital, Meritech, IVP, and FirstMark also participated in the funding round.

Pigment counts the likes of Klarna, Miro and Tommy Hilfiger owner PVH as its customers.

The company’s tools are mainly used by finance teams to plan and make financial and business decisions. As well as Microsoft, Pigment also views enterprise software tools from giants like Google, SAP and Oracle as rivals.

Crespo said that, in 2022, Pigment grew its revenues by 600% and its total user base increased tenfold — and insisted it was well positioned to compete with behemoth incumbent Microsoft.

“We not only have users in the finance team but outside of finance, and that’s super interesting for investors to hear that we are not a finance platform but a business database that can serve any business leader out there from HR to sales to marketing, to R&D [research and development],” she said.

“We are here to sell [to] any business leader. And not only that, but they have heard from their portfolio companies that we managed to serve the most forward-looking companies out there.”

Pigment also plans to use the latest influx of money to invest in the development of AI products.

It introduced a new service called Pigment AI last month, on the heels of heightened buzz surrounding AI and products like ChatGPT, which lets clients query data, identify patterns and automate analysis and reporting.

Crespo said there are no plans to increase headcount substantially and Pigment was instead looking to grow in a more sustainable way, given the pressure from investors on businesses to achieve profitability in favor of breakneck growth.

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Saudi Arabia’s Public Investment Fund just reshaped pro golf. It’s not stopping there



Saudi Arabia’s mountain of cash has upended the world of professional golf. But that is only a small sliver of the money it is sinking into a number of prominent businesses elsewhere around the globe as the kingdom moves to diversify away from a dependence on oil income – and as the petro-kingdom tries to achieve its political goals.

The Saudi Public Investment Fund is a government-controlled fund that has $650 billion in assets under management, according to its most recent filing. It is aiming to top $1 trillion within a few years. A state-owned investment fund like the PIF is not unique. It is ranked only the seventh-largest in the world, according to the Sovereign Wealth Fund Institute.

While some of those are pension funds for a country’s citizens or public employees, others, like the PIF, operate the way a private sector investment firm might, trying to make money through a diversified portfolio of investments.

But what makes Saudi Arabia’s fund different from those private investment firms is that since the country faces widespread condemnation for its human rights record, its investments in sports and other entertainment companies can be seen as an attempt to polish that tarnished reputation.


The PIF’s creation of LIV Golf a year ago, reportedly at a cost of $2 billion, attracted many of the sport’s top players away from the US-based PGA Tour and Europe-based DP World Tour by offering big dollar prize money. It led to a year-long legal battle that banned LIV golfers from the established tours and brought some unwanted attention to Saudi’s human rights record. Critics of LIV Golf accused the Saudis of backing the new tour as a form of “sportswashing” its reputation.

But the legal battles, acrimony and competition for the best golfers between LIV and the PGA and DP World Tour suddenly ended Tuesday with the announcement that the three would form a combined for-profit company. The PIF plans to make undisclosed additional investments into the entity.

Soccer, video games and other investments

The chairman of the new golf series will be the chairman of state-owned petroleum company Saudi Aramco, Yasir Al-Rumayyan, who also controls English soccer team Newcastle United and is himself a governor of the PIF.

The Saudis have also been throwing big dollars at some of the world’s best known soccer players, wooing legends such as Cristiano Ronaldo and Karim Benzema to play in Saudi Pro League.

The investment in sports is not a vanity play, according to Al-Rumayyan.

“It all makes financial sense to us. We don’t like to subsidize things,” he said on an interview on CNBC Tuesday announcing the deal with the PGA.

But whether the Saudis’ investments are driven by a desire for profits or good publicity, what’s clear is that pro sports are not the only place where the Saudis are flexing their financial might.

For example, it has a total of $7.5 billion in investments in several leading video game companies, according to its most recent filing, giving it a 9% stake in Electronic Arts

, a 7% stake in Take-Two Interactive and nearly a 5% stake in Activision Blizzard

. It also owns more than 5% of Live Nation

, the concert promoter and owner of Ticketmaster, and significant stakes worth hundreds of millions each in cruiser operator Carnival Corp

., Uber

and Zoom


Its biggest US investment is in upstart electric vehicle maker Lucid

. The PIF owns 60% of Lucid

’s stock, worth $7.6 billion as of Tuesday’s close. Lucid

recently announced the PIF would invest another $1.8 billion in the company to help fund its operations.

In 2018 when Elon Musk was thinking about taking Tesla

private, he sought funding from the PIF, which already had a stake in Tesla

at that time. It no longer lists Tesla

as one of its holdings. But last year it helped Musk with his $44 billion purchase of Twitter by agreeing to roll over its existing $1.9 billion investment in the social media platform to the new Musk-controlled company.

LIV Golf and PGA Tour merger: here’s everything you need to know


Not all of the PIF investments have been publicly disclosed. For example it’s not clear exactly how much it invested to start up LIV Golf. And the Washington Post has reported that it invested $2 billion into a private equity firm created by Jared Kushner, Donald Trump’s son-in-law, soon after Kushner left his position in the White House in January of 2021. CNN has not been able to confirm that report, but what is known is that LIV Golf tournaments have been held on Trump Organization properties.

Saudi Arabia and human rights criticisms

Many of these investments, including the creation of LIV Golf, have sparked controversy.

The PIF is chaired by Mohammed bin Salman, the Crown Prince of Saudi Arabia. Bin Salman is the man a US intelligence report names as responsible for approving the operation that led to the 2018 murder of journalist Jamal Khashoggi. Bin Salman has denied involvement in Khashoggi’s killing.

In addition, the US State Department says the Kingdom’s dismal human rights record includes free speech restrictions, torture, political prisoners and enforced disappearances.

And families of some of the victims of the Sept. 11 terrorist attack decried the news of the LIV-PGA agreement Tuesday. Some have accused the Saudi government of complicity with those attacks. Fifteen of the 19 al Qaeda terrorists who hijacked four planes were Saudi nationals, but the Saudi government has denied any involvement in the attacks. The 9/11 Commission established by Congress said in 2004 that it had found “no evidence that the Saudi government as an institution or senior Saudi officials individually funded” al Qaeda.

– CNN’s Coy Wire, Jack Bantock and Steve Almasy contributed to this report



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