Investment Management

A Focus on Risk Management

Our Investment Team leadership, Chris and James, believe that the Investment Team's primary job is helping to preserve and grow your retirement savings, and keeping you from having to retire twice. That’s why we draw on our experience to embed multiple tiers of protective measures into our investment process.

We aim to help to guard your investment portfolio against severe periods of market duress, and to keep your plan on track for your goals. It's important to remember that no investment strategy will completely eliminate the risk of loss, but we believe that different investment strategies can affect the amount of risk investors take on.

Tiers of Protective Measures

To help mitigate market risk, we implement four tiers of protective measures into our investment process:

    1. Core4 Asset Allocation
    2. Position Sizing
    3. Diversification
    4. Strategic Re-Positioning and Cash Generation

Core4 Asset Allocation

The first and most important risk-mitigation measure in helping to keep you retired is the right asset mix for you. The vast majority of your investment return depends on your asset allocation. We firmly believe that most our clients should not allocate more of their capital to risky assets than necessary to accomplish your goals. The less exposure you have in the first place; the less risk you have.

How much should you have in stocks? How much in bonds? Are you putting more money at risk than you need to? Not answering questions like these can have serious consequences for your retirement.

In contrast, we take the time to understand you and your retirement vision. Our aim is to help you understand how much equity risk you need to take on in the first place. It may be less than you had assumed! In our experience, it may be surprising when you see the custom retirement plan we develop, and discover that you may be able to accomplish your retirement goals without taking on as much exposure to stock market risk as expected.

By allocating across the Core4, and taking on the appropriate stock market exposure from the outset, we may be able to help reduce your level of portfolio volatility and overall risk.

Position Sizing 

Position sizing refers to how much of your money you have invested into a single holding. So how big should your positions be? Is it OK to let positions grow to be 5%, 10%, 20% of your investment portfolio?

Well we believe there are limits, and in fact, we limit the size of any single stock position we may purchase or hold in a client portfolio. Your stock portfolio should not depend on just one or two very large holdings for its return, and if one or two stocks happen to suddenly decline, your whole portfolio should not be crushed. Position sizing limits the risk of any single holding in your portfolio.


Position sizing is one way to prevent any single holding from having an outsized influence on your portfolio return. Diversification provides a similar protective effect, but at the sector or industry level. Diversification in this case refers to buying stocks across different economic sectors and industries. And we believe it's important to always maintain a well-diversified portfolio of stocks.

We focus on buying what we believe are good companies with good prospects. But even so, not every industry performs well at the same time; leadership rotates around sectors over time. Technology stocks may stumble, while utilities or material stocks outperform the market index. REITs (Real Estate Investment Trusts) may have a strong quarter, while consumer discretionary is on the back foot. Leadership moves, and it moves quickly.

The answer to this is to maintain a diversified portfolio. Keeping a portfolio diversified lessens the risk that a large portion of your portfolio might be concentrated in a group that performs poorly for a period of time. In addition to reducing risk, staying diversified also ensures that your portfolio captures the changing market leadership over time.

Strategic Re-Positioning and Cash Generation

We never simply "go to cash." Market timing is largely impossible, and we believe that such efforts fail to add any material benefits for clients over the long term.

Instead, we strategically trim the size of positions that have grown over time and close out positions we no longer wish to hold in order to generate cash. In times of market duress, such cash generation can reduce portfolio volatility.

And in the event of a long-term, negative change in the character of risk markets, we may seek to hold a larger-than-usual cash position in client accounts for a time, and then use that cash to strategically buy our portfolio names at discounted prices. This has the dual effect of not only reducing risk over the long term but increasing the long-term return potential of our holdings.

The Investment Team monitors our portfolio names on a real-time daily basis. When various portfolio names go on sale by declining in price, whether due to a company-specific event, industry trend, or broader market theme, we can elect to use cash that has been generated to buy the names we want at a discount. We know the merchandise we want to buy; if we can buy it at a 10% or 20% discount, we take advantage of the opportunity.

Our mission is to place your bests interests at the forefront of our strategic actions. The Investment Team monitors the markets on a daily basis to help ensure we stay focused on giving our clients the right exposure to risk markets.

We are confident that our investment process helps us better manage risk and steward the assets our clients worked a lifetime to earn.


Ready to take the next step? Contact us to schedule an appointment and learn more about our investment approach and how we may be able to help you.

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