- Benjamin Graham once reminded his students, "The essence of portfolio management is the management of risks, not returns."
- At Main Street Value Investor, we focus on four broad indicators that measure the downside risk of the stocks held in our portfolio or taxiing on our watchlist.
- The recent market downturn, regardless of its ultimate duration, is a stark reminder that managing risk should be the number one priority for the self-directed investor.
- Here's our take on screening company risk profiles toward uncovering quality stocks with limited downsides that protect our invested capital.
The sudden downturn in the market reminds us of something we consider a cornerstone of the Main Street Value Investor Model Portfolio: understanding the downside risk profile of each stock owned or taxiing in our watchlist.
Here is Main Street Value Investor's model for practicing due diligence in uncovering, managing, and executing downside risk in your stock portfolio.