Investment Process
Investors today have complex goals and objectives. As you will visualize in the graph below, your Vision 360 Capital Partners client experience begins with a discovery consultation – a detailed conversation to better help us understand your goals and objectives and construct an investor profile.
The single most important factor within your portfolio is asset allocation. Efficient portfolio diversification, whether that be domestic or global in nature, or companies that may be early-stage opportunities or in mature markets, whether they be small or large, are a way to lower portfolio risk while helping to maintain your anticipated return. Alternative investments, such as currencies, commodities, and hedge funds may also be used to complement your portfolio of investments. Research shows that the strategy of selecting the percentage of stocks, bonds, and cash in a portfolio can be responsible for more than 90 percent of the variability in portfolio returns.
Individual security and manager selection is our next sequential step. We research, evaluate, and select investment securities and managers based upon the outcome of our in-depth discovery consultation. During this very important decision-making process, we remain agnostic and have no favorites or biases. As a result, we do not favor specific types of securities or managers from any specific company. Our decisions, as well as asset allocation, must be tactical because buy-and-hold strategies are no longer relevant.
Once investment options are evaluated, your portfolio construction begins by selecting opportunities that will complement each other and fit well within a larger whole. Ideally, your overall portfolio should be reflective of your goals and objectives.
After your portfolio is constructed, holdings are monitored and evaluated. As such, this an iterative process, and depending upon market performance, your ideal asset allocation may shift or adjust to leverage short-term inefficiencies.
Balancing Risk and Loss
Experience has taught us that the essence of investment management is the management of risk, not just the management of returns. While investors strive to achieve a certain return, few take the time to consider the risk side of the equation. Over the years, we have met many an investor who believed they were averse to risk, when in reality, they truly had an aversion to loss. For many, risk can be challenging to understand, and the value of prudent portfolio construction is underestimated.