Investment Management starts with a healthy respect of risk.
Investing is inherently risky. If one could fund their desired retirement lifestyle without ever investing their capital they should seriously consider doing so. Unfortunately, the reality for the majority of us is that we will fall far short of our financial goals unless our portfolio can grow, not only through diligent saving but also through investment returns.
The A Street Investments investment philosophy begins with a deep respect for risk. In our opinion, the majority of investors (even the "pros") place too much emphasis on seeking potential returns and not nearly enough on understanding potential losses. Preserving capital for investors was the primary motivating factor for the creation of A Street Investments. Our objective is to construct investment solutions that first protect capital from large drawdowns, and second, seek long-term growth with relatively low volatility.
These are the pillars of our investment philosophy:
- Lower volatility through broad diversification
- Disciplined valuations-based rebalancing process
- Minimize cost
Though our comprehensive client solutions are customized for your unique circumstances, the long-term model portfolio asset mix looks similar to this:
The portfolio is further diversified through multi-manager and multi-style within the broad asset classes. We are biased toward a portfolio that is more risk-balanced than most, which tend to be very equity centric. More than 90% of the volatility in a typical 60/40 (stock/bond) mix is driven by the equity exposure; we would call this very risk-unbalanced.