The Process (Part 2)

Jan 22, 2025

How do we stay invested and stay diversified? Core and Tactical

Our investing principles start with Stay Invested and be Diversified, but those are simply guardrails against fear and anxiety, even protection against greed. This is applied through our “Core and Tactical” approach to portfolio construction.

Core:

These investments represent the bulk of any portfolio. We start with various assets, generally Exchange Traded Funds (ETFs), each serving a specific purpose (diversification) within the portfolio. We select funds after careful research, analysis, and comparison to countless similar funds that attempt to accomplish the same outcomes. We add these positions to your portfolios with the intent to hold them over a long investment horizon. These Core holdings provide the foundation on which we can add other assets to take advantage of short and medium term opportunities in the market.

Tactical:

These are the additional investments we choose with a shorter time frame in mind. With a steady core to build on, we utilize the Tactical portion of the portfolio to look for market outperformance. Generally, we make these decisions on a Macroeconomic (Macro) forecast. Many times, this will be a sector fund (Utilities for example) or something outside the mainstream (Gold as another example). These additions to the portfolio are geared for a timeframe of less than a year and are solely for the purposes of excess Capital appreciation.

Our years of experience has taught us one thing when it comes to money: to live comfortably, maintain our standard of living, and enjoy what’s ahead in life, we need to make investing a priority. History teaches us that we can rarely grow our wealth in any meaningful way without investing and we cannot invest if we do not save. The way that our financial system is structured, we strongly believe that individuals should not attempt to hide from inflation, but instead BUY inflation through investments in assets that benefit from its existence.