At Strategence Capital, our investment approach can be summed up in a simple equation:
Investment Approach = Allocation + Rebalancing – Noise
We work with you to determine a mix of investments that we think will help you reach your long-term goals. We call this your asset allocation. We also talk to you about risk, because investments have risk, and their prices can fluctuate—sometimes, a lot. We don’t want you to panic and sell out of your investments when they go down, because, inevitably, you will want to get back in those investments after they’ve gone back up.
Because of the ebb and flow of investments (one category may do well while another does relatively poorly), your mix of investments at any one time will be different from your asset allocation. When it becomes significant, that’s when we rebalance, which is to say we return your account’s investments to their desired mix, your target asset allocation.
By noise, we mean the constant bombardment of information one can get from the internet and news. Noise can include the latest economic forecast or the latest tweet. We ignore this, and instead focus on your long term goals and the likelihood of your investment asset allocation helping you to reach those goals.
So that’s our investment formula: Allocation plus Rebalancing minus Noise
Investing involves risk. Loss, including loss of principal, may occur. No strategy assures success or protects against loss.