Over the years we have seen far too many otherwise rational people plunge into investing in the capital markets even though their financial houses were not on a sound and firm footing, or they lacked a clear understanding of what they expected their investments to accomplish. The result, quite predictably, was financial disaster!

People should risk investing in the financial markets if, and only if, their basic financial needs are under control; they have clearly defined objectives; they regard investments only as tools intended to achieve those objectives; and, they have in place strategies to manage risk. In other words, at minimum, their income exceeds their normal expenses; they have adequate insurance coverage (health, disability income, life, personal liability etc., as required); and they are fully aware of the risks that investing entails.

The ideal investment portfolio is undoubtedly one that achieves our financial objectives (the pursuit of capital preservation, the prudent accumulation of capital, a predictable income stream, or reliable liquidity, as the case may be) at the lowest possible level of risk. Unfortunately, no one can predict the future; risk, therefore, is always present in all investment decisions. Thus, at Galápagos Advisors we believe that understanding and managing risk should be the hallmark of each and every investment program.

We believe that . . .