The real difference in performance isn’t stock selection. It’s real-time, moment to moment risk control.
Many asset managers rely on AI models. But most portfolios today are not actively managed during genuine stress. They are designed for normal market conditions – and can falter during non-linear events such as wars, pandemic shocks, or sudden liquidity crises.
And here’s the mathematics most investors underestimate:
A 20% drawdown requires a 25% gain to recover.
A 33% loss requires 50%
A 40% loss requires 67%.
A 50% loss requires 100%.
Avoiding deep drawdowns isn’t defensive — it’s a compounding strategy.
Benefit
By actively managing portfolios at critical pressure points, I aim to minimise major drawdowns while still participating in upside.
That delivers three tangible outcomes:
- Reduced downside volatility
- Stronger cumulative long-term growth
- The ability for clients to stay invested without panic-driven decisions
It’s not about trading constantly and hoping for the best (time in the market).It’s about intervening decisively when risk/reward shifts.
The result is the best of both worlds:Participating in growth while actively protecting capital.
Reason to Believe
Take the recent silver trade for example.
The gold-to-silver ratio had drifted from its historical norm of around 50:1 to over 100:1 over a number of years – signalling silver was materially undervalued. We entered based on that imbalance, supported by technical signals.
When silver reached $100 per ounce and the ratio compressed below 50:1, valuation had normalised — and risk/reward had started to flip. At that point, I exited our remaining positions. It wasn’t at its absolute zenith but…
Shortly after, silver spiked to $120 and then fell more than 40% in a single weekend, opening that fatal Monday near $70 – the largest one-day drop on record.
Had I held on, my clients would have halved their value
My Actively managed portfolio turned a R1 million position into over R2 million.
Accounts that held through the full swing saw values drop below R500,000.
Extreme example? Yes, but its a real one.
Active, hands-on risk management during stress protects capital and materially improves long-term compounding.
That is the edge.