Understanding the investment process from a BBVA Compass professional, Part 1
Anne-Joëlle Viguier-Galley is BBVA Compass’ Chief of Equity and Alternative Investments for the bank’s Global Wealth team. She also doubles as the Chief Investment Strategist for BBVA Wealth Solutions, Inc., the bank's investment adviser affiliate.
As such, Viguier-Galley has a wealth of knowledge around the ins-and-outs of the investment process, and recently sat down to answer a handful of questions she frequently gets from clients and prospects looking to invest their hard-earned money.
Below is the first part from her Q&A with the BBVA Compass External Communications team, revolving around the philosophy of investing. The second part of the Q&A will involve risk management, and the BBVA Wealth Solutions Smartpath® suite of products, to be published later this week.
1) Why is an investment process important?
The investment process provides a structure for making investment decisions*. Successful long term investment can benefit from an orderly method. Investing takes work, dedication, and discipline. We believe that approaching investing in a methodical manner helps one stay the course and that it is important to have a deep understanding of market interactions and risk within this framework, as financial markets are volatile and often require a specialized, in- depth, diversified, flexible knowledge and attitude.
2) What is your philosophy within this investment process?
Any investment process must recognize the importance of risk. For me, risk is very important, maybe more so than returns. The best way to appreciate the concept of risk is to compare it to the idea of probability; in other words, what is the probability of losing money? If the probability of risk is high, then the odds of making money are low. Risk shapes a good investment strategy. As the environment changes, risk changes. A major cornerstone of an investment process is to assess the risk in the market place.
3) Why is risk so important?
If you lose 50% of your money, you have to make 100% to come back and break even, it is mathematical. The more money you lose, the harder it is to regain the losses. Thus, our preferred strategy is to try to protect a portfolio against large price declines. High volatility results in a portfolio more difficult to manage.
4) Does risk change over time?
Yes. Risk changes as we advance through the various phases of the business cycle. By acting gradually and adjusting portfolios to the new level of risk, we are trying to achieve a smoother path to the client’s objectives, thus being less dependent on timing.
Important Disclosures: The information contained herein is provided for general informational and illustrative purposes only and should not be considered investment advice. Neither BBVA Wealth Solutions, Inc. nor any of its affiliates are providing tax, legal or accounting advice. Please consult your individual tax, legal or accounting professional for advice regarding your particular circumstances.
Advisory services provided by BBVA Wealth Solutions, Inc., a registered investment advisor and affiliate of Compass Bank. Securities offered through BBVA Compass Investment Solutions, a division of BBVA Securities Inc., member FINRA and SPIC and an affiliate of Compass Bank and BBVA Wealth Solutions, Inc.
Securities and investment products:
- Are NOT FDIC Insured
- Are NOT deposits
- Are NOT bank guaranteed
- Are NOT insured by any federal government agency
- May LOSE value
BBVA Compass is a trade name for Compass Bank.
*The Peter Dag Portfolio Strategy and Management
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