About

RiskWerk is all about investment risk. Possibly, and hopefully, everything that you ever wanted to know about investment risk but our starting point is the rather simple observation that

All investment is just and only the “purchase of risk” and like anything else that we might want to buy, we ought to know the price of it, that is, we ought to know “the price of risk”.

and

Investors don’t invest in order to lose their money. They invest in order to keep their money and obtain a hopeful return above the rate of inflation.

If we can get past that – and we will despite the well-known opinions of the professional investment community to the contrary – we can then show you that any equities market partitions into a portfolio of equities (B) that has the properties of a “risk-free” bond, such as a government or high-grade corporate bond, and a portfolio of stocks (N), the exact complement of the portfolio (B) in the same market, that has the properties of an equity portfolio, that is, it’s “volatility driven” and has an expected return of zero or less.

We call the portfolio (B) “The Perpetual Bond®” and with reasonable management it has the properties of “100% Capital Safety and 100% Liquidity” and, although it is not required and not predicted by the theory, it is “alpha-smart”.  For example, for the three years from early 2009 through 2011,

The Perpetual Bond (B)®
The Dow Jones Industrials – 16% per year (plus dividends)
The S&P TSX Companies – 18% per year (plus dividends)
The S&P 500 Companies – 23% per year (plus dividends)
The NASDAQ 100 Companies – 37% per year (plus dividends)

The Perpetual Bond (B)®
“Alpha-smart with 100% Capital Safety and 100% Liquidity”™
Guaranteed
With No Fees and No Loads on Capital

You will also learn – if you don’t already know it – to appreciate the following:

Notwithstanding your good luck or happenstance,
– if you accept the “risk/reward equation” – no risk, no reward – you will lose your money;
– if “caveat emptor” is good enough for you, you will lose your money;
– if “past performance is no guarantee of future performance” is good enough for you, you will lose your money;
– if you like Jeremy Siegel’s book, “Stocks For The Long Run”, McGraw-Hill, NY, 1994, now in its fourth edition, you will lose your money;
– if you give it to your clients, you will lose their money.

Take that to your investment adviser and see what they say!

Finally, we are a “Business of Societal Innovation and Enterprise”. We hope that these observations and truths will empower you to take charge of your investments, to ask the right questions and accept only the right answers, and eventually return the hegemony of the financial economy to its rightful owners – we, ourselves,  who are the people in it.

Ernst Goetze, President
The RiskWerk Company,
Toronto, Ontario, Canada

Email: RiskWerk@gmail.com

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”.

Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability.

We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now.

The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”,  “price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.