Company
History
Philosophy
Investment Style
Investment Advisors

Philosophy

At Carl F. Petersen, Inc., we seek to build long-term relationships with our clients. We do this by constantly striving to achieve above average long-term results relative to the risk assumed for our clients, and by believing that we have a fiduciary obligation to act in the best interest(s) of our clients and to place our clients’ interests before our own.

Our strategies and portfolios are tested not only for the returns achieved but also for the risks associated with these returns. In other words, it is not just enough to simply achieve a great return. This return must then be compared to the risks that are assumed under the strategy. By doing this, Carl F. Petersen, Inc. can expect an acceptable correlation between expected volatility and expected performance.

Modern Portfolio Theory establishes the quantitative link between risk and return, and the Capital Asset Pricing Model (CAPM) developed by William F. Sharpe, winner of the 1990 Nobel Prize in Economics, highlights the benefits of risk, and produced the first performance-based indicators. The most famous of these ratios today is the Sharpe Ratio, or originally called the reward-to-variability ratio, and is a measure of the excess return (or Risk Premium) per unit of risk in an investment asset or a trading strategy.

Even though we consider the Sharpe Ratio one of the most relevant performance measures to test our strategies and portfolios, we also use the Sortino Ratio and the Calmar (MAR) Ratio to help ensure our strategies and portfolios stay within expected objectives.

In designing our strategies and portfolios, we differentiate between conservative (semi-passive) investments and active investments. The conservative strategies and portfolios, while not passive in the strictest sense of its definition such as an index fund, are designed to minimize trading costs and, if possible, capital gains taxes; whereas the active strategies are designed to maximize the client’s return by exploiting new trends in the.

The conservative strategies all strive to achieve an above average rate of return over a full market cycle while not to fall further, or faster, in a bear market than the corresponding market given a 12 to 18-month cycle, while doing so with a better risk/reward ratio than provided by the market.

The active strategies all strive to achieve stable capital growth over a full market cycle in both bull and bear markets, and appeals to investors seeking a highly disciplined approach in the quest for a superior long-term risk-adjusted capital appreciation. Due to the active strategies’ more volatile nature, our objectives are additionally to fall no further, or faster, than the corresponding market given a 12-month cycle.