RISK MANAGEMENT

Scholtz & Company recognizes the importance of protecting our clients’ capital. As a result, we employ a risk management strategy to ensure that our clients can achieve their long-term financial goals without the need to focus too much on short-term market fluctuations. Below are the key tactics we employ to maintain an appropriate level of risk in all of our clients’ accounts.

• Maintain diversification by holding 25 – 35 securities (40 – 50 for larger accounts).
• Maximum position size is 10%; Average position size 2.0% - 2.5%.
• Limit position size of speculative stocks.
• No leverage used.
• Standard deviation is being successfully managed down: since inception: 4.74%, 5 year: 4.20%, 3 year: 3.32%.
• Use Quantitative models to monitor the health of the portfolio.
• Ensure there is ample liquidity relative to position size.
• Use of bonds to mitigate volatility (where applicable).