Investment process:
GLOBAL MACRO FACTORS
Our investment process begins with a top-down analysis of the macroeconomic environment to formulate investment themes.
SECURITIES LIST
Based on our macro analysis, we screen for high-quality securities that best align with our outlook and create our “buy” list.
FUNDAMENTAL ANALYSIS
Next, bottom-up fundamental analysis is conducted to select securities with competitive or comparative advantages over their peers.
Investment Strategy:
A low volatility, total return approach.
Strategic Asset Allocation| A process that involves setting target allocations for various asset classes based on your risk profile and unique financial goals. Strategic diversification of asset classes, geographies, and investment styles effectively improves risk/return dynamics. We combine passive index-tracking ETFs for core asset classes with concentrated equity and bond model portfolios that align with our investment themes, your risk profile, and portfolio size.
Dividend-growth and Tactical Models| Concentrated U.S.-centric models that hold up to five high-quality equities, harmonizing different asset classes and sectors with varying levels of volatility.
Bond Models | Based on portfolio size, concentrated models that hold Treasury and investment-grade bonds with defined maturities and annual coupons. Bonds are purchased for income, capital preservation, diversification, and as a hedge against economic weakness.
Buying a portfolio investment| In-depth, independent research helps ensure an understanding of potential risks and rewards. Please refer to Investment Process above.
Selling a portfolio investment| A portfolio investment will be sold when the portfolio manager recognizes that a macroeconomic and/or fundamental investment assumption is flawed, identifies an unfavorable structural change in a specific business, a security is trading at or above its intrinsic value or has any other valid investment-related reasons. The portfolio manager employs a tax-smart strategy using specific identification cost basis methodology.
“The essence of investment management is the management of risks, not the management of returns.”
Risk management:
Risk Tolerance| Understanding your risk tolerance refers to your ability to endure fluctuations in the value of your portfolio. We will determine your risk profile by evaluating your comfort level with various market scenarios.
Volatility | While volatility and risk are related, they are not interchangeable. Statistically, it’s the standard deviation of a market or security's annualized returns over a given period - essentially the rate at which its price increases or decreases. For example, investments in small and mid-size companies can be more volatile than those of larger companies, as the price can fluctuate rapidly in a short period. Volatility increases more after a large drop than after a large rise and occurs in clusters. Combining different asset classes with varying levels of volatility can help to smooth out overall portfolio fluctuations and improve risk-adjusted returns. Managing volatility is crucial to maximizing portfolio longevity for investors who are taking withdrawals.
Dynamic hedging| If the portfolio manager (pm) anticipates poor near-term prospects for equity markets, the pm may adopt a defensive strategy for clients’ accounts by investing in fixed-income securities and money market instruments. At certain intervals, the pm will use an option purchase to limit the potential upside and downside of a security in the portfolio. There can be no guarantee that using defensive techniques will avoid losses.
Portfolio Monitoring| Conducting ongoing due diligence and monitoring investment holdings are vital parts of the investment strategy. Each portfolio is rebalanced at a pre-determined interval to its original strategic asset allocation weighting. Rebalancing aims to reduce volatility in your portfolio and manage potential risk by creating a systematic process to take profits from investments that have performed well.
