Portfolio Thermostat Strategy

Portfolio Thermostat Strategy

A philosophy driven by the need to manage risk rather than chase returns...

Canterbury takes a different approach to working with advisers and their clients, in that we focus on a strategy driven by long-term compounded returns over traditional risk tolerance objectives. This may seem to contradict our driving philosophy, yet consider that risk tolerance is the acceptance of a certain threshold of risk, while chasing compounded returns necessarily relies upon managing risk.

Canterbury’s philosophy maintains that added risk does not drive long-term returns but rather introduces large portfolio declines. Because each drawback requires a greater percentage advance to break even, substantial declines destroy the compounded effect. The challenge revolves around how to protect the portfolio from ruinous losses when portfolio volatility increases during market swings. 

The past has shown us that market turmoil can and does occur unpredictably and rapidly, at times pulling the reins out of our hands  and causing runaway volatility/declines. A viable investment strategy, therefore, needs to have the control capabilities to be able to produce the stability needed to maintain portfolio volatility, regardless of the broader market environment - in other words, seek portfolio optimization through stabilization.

Learn more about how our strategy keeps levels of risk in check so that your portfolio can go after the upside gains. Discover how we can keep your portfolio bullish even when the markets are bearish.

For a free copy of either an electronic version or hard copy of the full White Paper, please contact our office.