Adjusting for client preference

Our recommended setting is for an aggressive investment style in “normal” times and for a conservative (less risky) stance during periods of economic downturn. However, we recognize that our clients have different risk appetites. In our core portfolios, we employ rigor to pre-determine the appropriate risk buckets and we offer clients flexibility during normal times to choose how aggressive an allocation they prefer.

You can update your Investment Style within the app: Account tab > Investment Profile > Investment Style.

So, if you would rather take a less aggressive stance regardless of the economic environment, you may adjust your investment style to indicate this preference. Of course, all else equal, lower levels of risk generally imply lower average returns.

Adjusting for market condition

In the discussion of our process, we talked about the business cycles predictor (BCP) tool we use to identify the likelihood of market downturns in real-time. This tool was painstakingly developed over several years to help us add context to our portfolio management. Specifically, it enables us to make adjustments to how we manage your money when underlying economic conditions change. It allows us to adjust our aggregate risk exposure and in turn manage our drawdowns (irrespective of the client’s pre-specified risk appetite). These adjustments are made in real-time and typically, months ahead of when typical economic indicators declare a recession. It is important to note that such quantitative tools are adjunctive to the portfolio management process.

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