Investment Philosophy

From a fiduciary standpoint, to that of an analyst, we employ both sophisticated and empathetic measures alike to create a portfolio that is performative and meets all your financial objectives. 

We implement tactical asset allocations-making subtle shifts in your long-term strategic allocation when responding to market conditions. Each portfolio is tailored to fit the exact needs of our clients. When personal objectives change, we refit your investment plan.

As an Investment Advisor firm, we establish long-term strategies based on Capital Market Expectations. CMEs, or Capital Market Expectations, govern the risk and return prospect of asset classes dependent on our current economic outlook. 

To consider how an investor should allocate between two assets, such as stocks and bonds, a forward view of the economy must be adopted, considering factors such as growth, inflation, monetary and fiscal policies. This is our Macro Factor Framework. It helps predict how various asset classes will likely behave in each environment.

We want to Control Volatility

Our philosophy advocates disciplined long-term performance and draw-down control. Volatility, the statistical measure of the dispersion of returns for a given security, is often used as an indicator for risk. When constructing portfolios, we set a target level for volatility. 

As long as market remain calm, such a portfolio over-performs a passive investment in terms of both returns and risks. However, upon major downturns, the loss from a targeted volatility portfolio may exceed that of the market and offset years of over performance. For this reason, we employ reactive strategies.

Our team of active managers seek to deliver Alpha (surplus return over a selected benchmark’s return), while delivering some downside protection. Although there are merits to index-based passively held strategies, such strategies are unable to deviate from their rule-based discipline. Our active management strategies have great flexibility and can adapt to changing market conditions.

How do we Create an Efficient Frontier?

The Efficient Frontier is the highest attainable return at a given risk level, or the lowest attainable variance at a given level of return. Returns that surpass benchmarks, like the S&P500, are considered alpha. Alpha is excess return. By coordinating the construction of your portfolio with a set of investment models that abide to your risk tolerance, we can create an Effiicient Frontier that generates alpha.

How do we Diminish Portfolio Volatility?

We attempt to diminish portfolio volatility, to alleviate exposure to the downside, while either sustaining or increasing exposure to the upside. The use of Volatility Control Triggers can assist with the performance of a portfolio.

Is There Truth in Modern Portfolio Theory?

Modern Portfolio Theory states that portfolio volatility can be reduced by owning a number of securities that tend to move independently of each other. Increasing diversification can help, but most asset allocation models depend on static or slow moving risk and return assumptions, which expose them to short-term risk changes.

How do we Create Excess Returns?

To create Alpha, we employ fundamental index strategies referred to as “strategic beta” or “smart beta” because they provide brand based market exposure. They weight securities based on factors, such as: Carry, Momentum, Market, Defense, Quality and Value.


Investor Suitability

When developing portfolio composition, we consider multiple factors: including your time horizon, risk tolerance, investable capital and current asset allocation. It is important that we develop a clear, concise understanding of your financial objectives. 

Portfolio Composition

We design client portfolio compositions to coincide with four investment-specific factors.

  • Average Level of Real Returns, net of inflation.
  • Patterns of Returns, volatility and Sequence.
  • Investment policy: aggressive or conservative investing.
  • Attractiveness of financial conditions as the individual nears retirement.

Join our weekly newsletter to receive retirement pointers, economic updates and much more to help your retirement shine.