Risk-Adjusted Returns

We’ve Got The Wheel
Road trip! What just came to mind? Did you imagine a spontaneous,
speedy or even precarious drive to anywhere? Or, maybe you thought of a long anticipated family vacation to a carefully planned destination. Whatever your ideal road trip, people often approach investing the same way. It all depends on your comfort level with risk. As a FAM Funds shareholder, you probably appreciate our methodical, risk-conscious investment approach. Our objective is to help you reach your financial goals and get you from point A to point B as smoothly, calmly, and safely as possible.

Risk-Adjusted Rate of Return
Due to a variety of risks, there is no guarantee that you will make a profit when you invest. One of the basic investment principles is that the greater the potential reward, the greater the risk. Risk-adjusted rate of return is a measure to determine how much return an investment may provide given the level of associated risk. You cannot simply look at the potential payoff of any investment and rank them from highest to lowest in terms of attractiveness. The reason is that there are underlying risks that can hinder their likelihood of success. Just because an investor may be willing to take on a lot of risk, doesn’t mean they should — especially when investing for the long term.

For example, think of us as your trusted chauffeur. Fenimore Asset Management, the investment advisor to FAM Funds, has a team of investment professionals who are experienced, focused, patient, disciplined, and mindful of road hazards. They are defensive drivers first and foremost seeking to protect your capital and grow it intelligently over time.

The aim of the Investment Research Team’s process is to make sure that each mutual fund is a quality vehicle— a collection of financially strong, durable businesses with adept leadership. These companies may not be the flashiest on the “lot” or the most popular, but they all have multiple engineering and safety features to help guard you against accidents and make the ride as smooth as possible. Built for the long haul and equipped for all road conditions, we also invest in them at what we estimate to be a bargain price to give us a ”margin of safety.” This additional protection does not eliminate risk, but it‘s intended to reduce the possibility of permanent loss of capital and maximize potential long-term gains.

Stick to the Roadmap
As we navigate the highway under sunny skies, you may notice that some investors choose to steer themselves and that other cars have no one in the driver’s seat. You’re also bound to see various colorful, sporty cars weaving in and out of traffic, enjoying the perfect conditions.

Inevitably, as we continue onward we will encounter bumps and, at times, severe weather. The more hazardous the conditions, the more cars you will probably see broken down on the shoulder or fishtailed in the median. We may even pass some of the flashier cars as they lose traction while others head for the nearest exit ramp. However, we stay the course.

Though there are no guarantees and numerous ways to invest, we will adhere to our steadfast, time-tested approach in order to mitigate risks and increase the probability of reaching your destination. So sit back,relax, and leave the driving to us.

Please see Fenimore disclosure.