Our Investment Process

 

Your investment portfolio is too valuable to be left unnecessarily exposed to market risk, because it is your retirement, your legacy plan, your security for an uncertain future.  At Calibrate Wealth we understand this, and it’s why we offer our clients a modern portfolio design that was previously only available to institutional investors.  A portfolio design that balances the risk contributed by each invested asset.  A portfolio design that can perform well in various market climates, not just one for when the stock market goes up.  

The old, traditional 60/40 model showed its shortcomings over the last 20 years, rising and falling as the tide of the stock market rolled in and rolled out.  So-called balanced portfolios were exposed for what they were, highly influenced by the volatility of the stock market.  It became evident, that as the stock market went so did your investment portfolio.  To understand why, we’ve illustrated how a 60/40 stock bond portfolio appears when view from the perspective of risk:

Perhaps, this explains why many of these similarly constructed portfolios were down nearly 30% in 2008.

In contrast, Calibrate Wealth accepts that the future is uncertain, and builds portfolios accordingly.  We create three distinct market outcome portfolios:  Market Up, Market Down, and Market Flat.  Within each outcome portfolio we allocate to investments which typically outperform during that market environment.  We then allocate funds among the market outcomes to balance risk contributions.  We call it Market Outcome ERC and it looks like this:

Working with each client individually, we determine his or her risk tolerance and investment needs and adjust our portfolio to match those specific criteria.  Your investment portfolio calibrated to you.