Wealth Preservation-Centric Investment Management

Wealth Preservation-Centric Investment Management

Based on the return requirements necessary to meet the client’s objectives, Concorde designs an “allocation of capital policy” which addresses the “how” in the implementation and management of their investment strategy. Each policy is client-specific in order to target appropriate returns within the client’s context of capital preservation.

A client’s Investment Policy is not just a simple statement of “stocks vs. bonds”; rather, it provides specific guidance in the allocation among the various asset class components and investment vehicles based on specific attributes, preferences and conditions of the account owner. The resulting “construction” of the portfolio is typically comprised of three basic asset classes: Growth, Income and Defensive.

Growth Assets: The primary objective of the Growth component is to generate a total valuation increase over the long term through appreciation along with current income. Growth assets consist primarily of equity-type securities and can be either Domestic or International.

Income Assets: Income assets, comprised principally of US dollar-denominated debt instruments, preferred stocks and special purpose institutional mutual funds, perform two functions for an investment portfolio: 1) generate current cash flow, primarily from dividends or bond interest and 2) provide stability during any volatile market price fluctuations of the more growth-oriented securities. The current yield can either be distributed to satisfy current income needs, or reinvested.

Defensive Assets: The need for defensive assets varies over time and is generally a function of specific macro-economic risks that arise or that are anticipated in addition to typical market and investment risks. Concerns over the weakness in the US dollar relative to other currencies of countries with better fiscal conditions, and rising US inflation or the debasement of the dollar’s value vis-a-vis tangible assets over the intermediate term are examples of macro risks that can prompt adding defensive assets in order to mitigate the risk.