Relationship Guide

This brochure is designed to provide information regarding the services available to our wealth management

The Flexible Valuation Approach (FVA) is a methodical and objective strategy for asset allocation, deeply rooted in academic research and effective in real-world applications. This approach forms an integral component of our Investment Philosophy, emphasizing the importance of a well-founded, research-based strategy in investment decision-making.

Key principles of FVA include a commitment to diversifying investments across a broad range of asset classes on a global scale. This diversification is crucial for spreading risk and enhancing potential returns. Additionally, FVA advocates for the disciplined practice of regularly rebalancing portfolios to maintain alignment with strategic goals, and it emphasizes the importance of a long-term investment perspective, advocating for staying fully invested over extended periods.

FVA involves calculating annualized return projections over a ten-year period, basing these estimates on current market valuations and fundamental analysis. This approach recognizes that asset class valuations, whether high or low compared to historical averages, can significantly influence future returns. Therefore, FVA dynamically adjusts its projections and strategies based on these valuations, acknowledging the historical trend that lower valuations typically precede higher returns, and vice versa.

Specialized Treatment of Risk

A critical aspect of FVA is its nuanced approach to risk management. Recognizing that the most substantial risk for investors is the possibility of severe losses during market downturns, FVA departs from traditional asset allocation methods that often fail to fully appreciate the frequency and intensity of such losses.

To mitigate this, FVA employs specialized risk metrics focused on extreme downside risks. By analyzing extensive historical data on asset class performance, FVA gains a deeper understanding of potential risks. This approach allows for a more informed assessment of the relationship between expected returns and associated risks. In FVA’s framework, higher expected returns are typically linked with higher risks, and this correlation is carefully considered when formulating asset allocation strategies.

By integrating these principles, FVA offers a comprehensive, risk-aware approach to asset allocation, aiming to achieve optimal returns while carefully managing potential risks. This methodical approach ensures that investment strategies are not only aligned with investors’ goals but also cognizant of the ever-changing market dynamics and risk factors.