Investment philosophy

Investment Philosophy

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We believe in a straightforward investment philosophy that focuses on diversification, time horizon and your personal risk tolerance level. Before any investment strategy is recommended, it is important to complete a full financial planning review to determine important information.

• What rate of return do you require to achieve your financial goals?
• When will you need access to your money, either for monthly income or annual expenses?
• What is your personal tolerance to risk and how comfortable are you with changes in the value of your investments?

We strive to find the right balance between risk and return. While diversification cannot protect your portfolio against a loss, it is one way you can help reduce the risk and volatility. Asset allocation is the process of not putting all of your eggs in one basket and we recommend building a portfolio that includes different types of investments that will smooth out your overall investment returns.

Matching the specific investment strategy to your time horizon is one of the most important considerations. We use the “bucketing” approach by dividing your investments into three buckets that have different time horizons. Your “short-term bucket” holds guaranteed and liquid investments that are required within the next 1-3 years. Your “medium-term bucket” would hold a combination of conservative and growth investments with a time frame of 4-7 years, and finally your “long-term bucket” would have a higher exposure to growth investments knowing that you do not need these funds for income for 8 or more years down the road. You end up protecting amounts needed for income in the short-term while allowing you to participate in equity markets over the long-term.

It is important to have a disciplined approach to investing. Re-balancing your portfolio on a quarterly basis is recommended. This will ensure that you are disciplined to make the right decisions as market conditions and the value of your investment account changes. When the equity positions are up, we will take profits and move back to fixed income (ensuring that we are selling high). When equity positions are down, we will take advantage of lower temporary prices on quality investments and move from fixed income to equities (ensuring that we are buying low). As markets move, the target asset mix of a portfolio should be revisited to ensure it is appropriately aligned to the current environment. This is known as tactical asset allocation and seeks to take advantage of near-term opportunities based on timely cues.

Regular meetings and review will ensure that your plan is continuously monitored and always up to date. Life changes and we need to be able to have flexibility to adjust your financial plan and investment strategies in the future.