The goal of our investment process is always to build and preserve our client’s wealth. To do this, we use proprietary investment strategies: Fixed Income Strategy, Canadian Equity Strategy, Super MoVa All Equity, and our Super MoVa Tactical Strategy that each have their own focus and benefit in areas such as growth, income, or risk reduction.
Our investment process can be best described using the analogy of a soccer team. A soccer team has three types of players:
- forwards, whose job is to score goals;
- defenders, whose job is to stop goals from being scored; and,
- mid-fielders, who bounce in between the forwards and defenders to provide support where it is needed.
The Canadian Equity Strategy and Super MoVa All Equity are analogous to the forwards on the soccer team. These strategies are focused on delivering long-term growth through investments in equity (stock) markets. To us, portfolio growth is akin to the soccer team scoring goals and, in order to hit long-term growth needs, investors generally will require equity-based investments. This is due to the fact equity markets have historically delivered superior returns compared to fixed income markets. The Canadian Equity Strategy and Super MoVa All Equity are always looking for the best investments in the equity space just like forwards are always looking to score goals.
In soccer, scoring goals is great but allowing them is not. In order to win the game, your team needs to score more goals then they allow. A good soccer team plays solid defense and this is just as true in portfolio management as it is in sport. In our client portfolios, the Fixed Income Strategy is our defense. This strategy provides two main functions to the portfolio: first it provides income into the portfolio and secondly it provides stability. Fixed income markets and stock markets generally move in opposite directions during time periods of stock market stress. The stability that this component provides to the portfolio is invaluable in limiting the volatility in the portfolio and helping the portfolio achieve a smoother ride.
The final type of player on the soccer field is the mid-fielder. The mid-fielders' job is dependent on who has the ball. When a soccer team has possession of the ball, the mid-fielders will be supporting the forwards in an attempt to score goals. As the other team gains possession of the ball, the mid-fielders will switch gears and support the defenders as the team tries to protect their goal. Our mid-fielder is the Super MoVa Tactical Strategy which is designed to switch between equities and fixed-income based on the current economic environment.
For us, the current macro-economic environment is like ball possession in soccer. When economic growth is accelerating, equity market investments have historically performed very well. Opposing that, are time periods where economic growth is slowing and, historically, these time periods have been met with much weaker equity returns. Even worse, the weak returns come with a lot of volatility. When our signals suggest the economy is accelerating, it is like a soccer team having ball possession and the Super MoVa Tactical Strategy will shift into equity investments in order to maximize portfolio growth or “score goals”. As the economy weakens the Super MoVa Tactical Strategy will move into fixed income investments in an effort to protect the portfolio against volatility. The Super MoVa Tactical Strategy’s movements between equities and fixed income dynamically have our portfolios changing the asset allocations to adapt to the current economic environment.
The goal of our team is to always be building and preserving our client’s wealth.