An investment strategy must be based upon an understanding of the risk of loss of capital (market risk) and the risk of loss of purchasing power (inflation risk). Risks associated with an inordinate lack of liquidity and fluctuations in the cost of money must also be addressed. We believe it is important to minimize the volatility of the total portfolio.
Proper investment planning generally requires a balanced approach, with due consideration given to short and long term liquidity need, the blending of lower and higher risk strategies and the combination of income and growth oriented investments.
In managing investments, we focus on total return; current income plus growth in value. If current income is needed to meet living expenses, those funds may be obtained either from investment income or from liquidating a portion of the corpus including growth. We believe that yield, while important, is only one component of the return on your investments and must not override other considerations.
In order to maximize the probability you will meet your goals, our bias is toward selecting the lowest level of risk necessary to meet these objectives.
Only after we have identified your goals, determined your required rate of return and balanced that with a realistic level of risk do we begin to select the appropriate mix of investments to create your portfolio.