Advanced Investment Portfolio Theory

Gekko Fund is a staunch advocate of Modern Portfolio Theory, a method that meticulously applies concepts such as asset allocation and strategic diversification when designing portfolios. Our primary goal is to align with our client's risk tolerance while maximizing the potential to

By striking a balance between risk and return, our aim is to construct portfolios that not only meet but exceed our clients' financial goals over time.

Risk vs Reward

If you're new to investing, terms like "asset allocation" and "diversification" might not sound exciting, but they are essential for effectively managing investment risk.

Asset allocation is a strategy that aims to strike the right balance between risk and reward. This involves diversifying your portfolio by investing in different asset classes, such as stocks, bonds, commodities, and mutual funds, in a way that aligns with your financial objectives and risk tolerance over a specific time frame.

Managing Your Risks

It's crucial to diversify your investments because different types of investments and individual assets tend to perform differently over time. This variance in performance can expose your portfolio to unpredictable fluctuations. By diversifying, you spread your risk across various asset classes, which helps to stabilize your overall portfolio returns.

For instance, if your portfolio includes a mix of stocks and bonds, a sharp correction in the stock market may cause losses in your stock holdings. However, these losses could be offset by gains in your bond holdings, as investors typically shift their capital into bonds when stock prices fall. Moreover, including other asset classes such as commodities, real estate, or international investments can further reduce risk.

This way, the impact of poor performance in one sector is minimized, providing a more balanced and resilient portfolio. Diversification not only helps mitigate risks but also enhances the potential for long-term growth by taking advantage of different market conditions and investment opportunities.