Risk Management

Active timing of market exposure via cash positions avoids risk

The flexible control of cash positions and the use of derivative hedging instruments can minimise sharp price fluctuations. A basis for this is to observe short-term mood swings in the market. Our fast decision making process assists in seizing opportunities or avoiding losses. This is the reason why DJE Kapital AG has usually been successful during market downturns.

We always have a conservative view on earnings trends. Generally most investors tend to pay too much for growth stocks, which is why in the long-term our value oriented approach has turned out to be the better option.

Loss limitation is more important than maximising profits

We first consider the risk of loss before we look at profit opportunities. This means, we identify the dangers before we evaluate potential opportunities and pursue an "absolute return" way of thinking. Every investor knows that losses require a disproportional profit growth in order to offset them — a 50% loss requires a compensatory profit of 100% in order to be offset. Furthermore, we prefer stocks that are below book value or for which a compensation offer is expected which would limit the downward risks.