Our Investment Philosophy
Our investment philosophy is founded with the following principles in mind:
We believe domestic equity markets are superior to other segments of the United States economy in terms of liquidity and long-term wealth generation.
Diversification allows us to minimize the unsystematic risk inherent in the equities markets.
Specific sectors of the market behave differently in times of economic expansion and contraction.
A well-positioned portfolio maintains a long-term outlook and keeps an open policy to shift into and out of specific sectors of the economy.
Federal Reserve monetary policy affects investment securities markets and should be acknowledged.
Our Investment Approach
Portfolio Construction
Asset allocation between stocks, bonds, and cash is the dominant factor in determining portfolio performance. Our approach is to look at specific industries and sectors of the market and the companies within those industries and sectors when weighing our portfolios.
After determining weighting, we then select companies for their business prospects, believing this will ultimately be reflected in their stock price.
Our process involves:
Analyzing the market as a whole.
Selecting a portfolio weighting allocation we find optimal based on impending and realized economic data.
Constructing your investment portfolio (based on our strategy and model) and monitoring them closely.
Adjusting your investment portfolio as needed to ensure that you stay on track.
Our Top-Down Analysis on the Market
Strategic capital allocation focused on protecting your long-term capital.
Tactical asset management to take advantage of market growth opportunities.
At Portafolio Capital Management, our approach involves analyzing the broader economic and market conditions before making investment decisions. This approach focuses on higher-level analysis, such as asset allocation and sector selection, and then looking at specific companies within their respective industries.
In addition to building perspectives on the broader market, we enjoy analyzing the macroeconomy and Federal Reserve (FOMC) monetary policy.
Strategic Capital Allocation
Our portfolio management process starts with a top-down view of the global economy and market environment to develop a strategic asset allocation and investment strategy for our clients. This approach takes into account factors like:
liquidity and income needs
time horizon
return expectations
risk tolerance
and asset constraints
Tactical Asset Management
Our management process involves adjusting a portfolio's asset and sub-asset class allocation based on market forecasts and evolving economic conditions. We understand that markets shift and the tide changes from time to time. Our tactical asset management approach allows us to consider when we need to take advantage of these opportunities and when we need to shift our investment portfolio to a more defensive approach.
