Smart Investment for Managing Risk and Preserving Capital

Balancing risk and reward is crucial to smart investing.
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In the investment world, being smart with your money is key. Investors who take too much risk can either win big or lose everything. On the other hand, those who take no or little risk don’t have much to gain. Being a successful investor means finding a balance for risk management, constant exploration of new opportunities, and paying attention to emerging markets.

Most lately, investment firms like Lazard have been looking globally for growth opportunities in both the long term. Lazard’s new “Global Hexagon” hedge fund, headed by Jean-Daniel Malan, is seeking to identify companies that it believes has sustainable or improving productivity. Using a six-part process, the strategy identifies “Long” and “Short” companies.

Longs are those companies that have strong fundamentals, excellent business models, undervaluation, and catalysts. Shorts, on the other hand, are companies that have weak fundamentals, flawed business models, accounting problems, and that make strategic mistakes. The fund continues to invest in long companies, while short companies are sold off.

The detailed six-step process allows Lazard Global Hexagon to carefully analyze and manage its investment portfolio. Such a strategy allows for lower volatility, more stability, capital protection, and a diverse set of assets.

“We continuously screen globally for undervalued companies that have improving or high and sustainable financial productivity,” Director Jean-Daniel Malan said. “Our aim is to give our clients exposure to differentiated and often under-researched investments that offer the best asymmetric risk-reward outcomes. Yet we also have to be attuned to exogenous developments and changes in the market sentiment, which often present as many opportunities as they do challenges.”