A data-driven, evidence-based approach using 100+ years of data.
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Our SPOKE framework gives clients a strong idea of what we focus on and prioritize.
- Selection: There’s a lot of great opportunities in the market that index investing misses. We do active research to find where these opportunities exist and take a position once we’ve built enough conviction in them. This process entails a deep dive into a stock’s key business drivers and a fundamental approach to security valuation.
- Positioning: We know most large-cap companies are not going to grow at 20% a year (some exceptions exist, but most will grow slower). We use small and mid-cap securities to capture growth potential. Smaller companies have the potential to grow quicker, provided you select ones with healthy balance sheets and strong business models.
- Optimization: We keep an approximately equal-weighted portfolio and don’t let 3-4 stocks drive the majority of your portfolio returns (unlike the index). This not only gives small and mid-cap stocks a chance to perform but also keeps the volatility much lower by not letting any number of stocks rise and fall uncontrollably. Surprisingly, this can drive better returns over the long-run as it prevents your portfolio from taking big nosedives during recessionary periods, which are more difficult to recover from.
- Keeping balance: Outside of just equities, we also assess your risk tolerance and add fixed income exposure to reduce volatility in your portfolio. Building a diversified portfolio with multiple asset classes limits correlation and increases your risk-adjusted returns. These asset classes include North American equities, global equities, North American government bonds, international government bonds, corporate bonds, guaranteed investments, North American real estate, global real estate, venture capital, new IPOs, and private equity.
- Engagement: We proactively reach out to you when we find market opportunities, on top of our regularly scheduled touchpoints. During these conversations, we will swap out securities which have hit their potential with new ones where greater opportunity exists.
In a nutshell, it’s pretty simple: pick winners from parts of the economy which have been neglected to drive outperformance in your portfolio, while keeping the core of your portfolio safe and balanced. We use a vast array of research through Raymond James, UBS, and other leading research firms to sift through which investments make most sense, so you don’t have to.