Investment Philosophy

On an individual level, stocks, bonds and even indexes experience many up and down periods. A globally diversified portfolio that includes stocks, bonds, real estate, commodities and alternatives, with a focus on cash flow provides far more consistent long term results. Our approach means you can save for your goals with more certainty while retaining the confidence to invest, even if things start to get rough for certain asset classes.

More Than Stocks And Bonds

Today's investment landscape is bigger than just Canadian or US stocks and bonds. We've carefully researched and identified several distinct asset classes that, when well-distributed within a portfolio, act to reduce volatility and produce returns to meet your goals.

Periodic Table of Assets

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Source: MorningStar. Past performance is no guarantee of future results. The information provided is for illustrative purposes and is not meant to represent the performance of any particular investment. Assumes reinvestment of all distributions. It is not possible to directly invest in an index. Diversification does not guarantee a profit or protect against loss.
  • Real Estate - FTSE NAREIT All REITs TR
  • Canada Equity - S&P/TSX Composite Index TR
  • US Equity - S&P 500 Index TR
  • International Equity - MSCI EAFE Index
  • CBOE S&P 500 Buywrite BXM
  • Government Bonds - DEX All Government Bond TR CAD
  • Corporate Bonds - DEX All Corporate Bond TR CAD
  • High Yield Bonds - BofAML US HY Master II TR USD
  • Senior Loans - Credit Suisse Leveraged Loan USD
  • Gold - London Fix Gold PM PR US

True Asset Class Diversification

Research has consistently shown that asset allocation is the primary source of variability in investment returns. Even using just two distinct asset classes can reduce volatility by 1/3rd with a negligible impact on long-term returns. Our portfolio is diversified across 9 distinct asset classes to get you the best long-term result, all while minimizing short-term volatility and the negative impact of volatility drag on your savings.

Return & Volatility Chart

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Source: MorningStar. Past performance is no guarantee of future results. The information provided is for illustrative purposes and is not meant to represent the performance of any particular investment. Assumes reinvestment of all distributions. It is not possible to directly invest in an index. Diversification does not guarantee a profit or protect against loss.
  • Stocks - S&P/TSX Composite Index TR
  • Bonds - FTSE TMX Canada Universe Bond
  • Traditional 60/40 - 60% S&P/TSX Composite Index TR & 40% FTSE TMX Canada Universe Bond
  • Diversified - 15% NAREIT All REITs TR, 11% S&P/TSX Composite Index TR,
  • 5% S&P 500 Index TR USD, 7% MSCI EAFE GR Index, 8% CBOE S&P 500 Buywrite
  • BXM USD, 25% DEX All Corporate Bond TR, 10% BofAML US HY Master II TR USD,
  • 15% Credit Suisse Leveraged Loan USD & 5% London Fix Gold PM PR USD.

Low Correlation Asset Classes

We take our asset allocation one step further. Diversifying across asset classes that do not react to market movements in the same way further reduces volatility and the risk of large losses and while providing more consistent returns in the overall investment and reducing the negative effects of volatility drag.

Correlation Table

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Source: MorningStar. Past performance is no guarantee of future results. The information provided is for illustrative purposes and is not meant to represent the performance of any particular investment. Assumes reinvestment of all distributions. It is not possible to directly invest in an index. Diversification does not guarantee a profit or protect against loss.
  • Real Estate - FTSE NAREIT All REITs TR
  • Canada Equity - S&P/TSX Composite Index TR
  • US Equity - S&P 500 Index TR
  • International Equity - MSCI EAFE Index
  • CBOE S&P 500 Buywrite BXM
  • Government Bonds - DEX All Government Bond TR CAD
  • Corporate Bonds - DEX All Corporate Bond TR CAD
  • High Yield Bonds - BofAML US HY Master II TR USD
  • Senior Loans - Credit Suisse Leveraged Loan USD
  • Gold - London Fix Gold PM PR US

Driven By Cash Flow

Our portfolios are also constructed to generate income to provide you with flexibility. The income can be reinvested, used to supplement your lifestyle needs or to acquire more assets at opportune times. Different asset classes have different sources of cash flows such as real estate from rents, equities from dividends, fixed income from interest and alternatives from options.

Regular Rebalancing

While over the short term, market conditions and speculation may cause one asset class to under-perform, others will invariably rise to take its place. Our diverse asset allocation, combined with regular rebalancing ensures that the stronger asset classes provide a source of capital to buy underweighted asset classes when they are at a discount.