November 26, 2018 in Articles & Newsletters | by Scott Wood

Investing 101: Our Portfolio Strategy

The Value of a Financial Advisor

A good financial advisor can help guide you financially through major life events, but financial advice is only half the story of what they should provide. The other half is making sure you’re in the portfolio that is suited for your needs. Issues arise when a portfolio’s securities are not aligned with your goals and you’re forced into one that has little merit.

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From our experience, Investment portfolios that are misaligned are likely to be the biggest obstacle to anyone’s financial success. At True North Advisors, we are value-oriented investors and are very strategic about the portfolio we select for you based on research conducted by our investment team. This is the only way we ensure a strategy fits with our philosophy prior to becoming part of your portfolio.

Investment Research and Focus

We prefer managers that employ a ‘bottom’s up’ approach to security selection through an examination of the competitive advantage of a business, its cash flows, and balance sheet. Investment managers that outperform the benchmark over a market cycle are what we look for prior to our selection. We also research niche investment opportunities within both traditional and non-traditional investments (private placements). We don’t assume anything about a strategy until we’ve completed all of this research.

Prior to selection, our long-term investment philosophy ensures that our portfolio’s value evolves  over time and isn’t a result of ‘crowd mentality.’ We want our choices to outperform the benchmark, but they can’t if they look just like the benchmark and are similarly priced. Investment styles, asset classes, asset sectors and geographies go in and out of favor over time. By remaining mindful of each strategy, we diversify our investment holdings and improve the overall risk-return profile of the portfolio. Our aim is to compound capital slowly and steadily over market cycles and preserve capital when the market is down.

Once our research is complete, our Investment Policy Committee debates and discusses the research, finalizes asset allocation parameters, and confirms the investment manager and moves the strategy onto our approved list. We utilize active portfolio management but will employ passive options when appropriate, remaining disciplined to not let emotion and market fluctuations influence our investment decisions. True North Advisors constructs its own portfolios which enables us to change the portfolios, if appropriate, dependent on regular and continuous research by our investment team.

Portfolio Selection and Wealth Management

Every client has their own story. Our wealth managers make it a priority to learn about a client’s past, their future aspirations, and what we can do to help them to live a more fulfilled life. We analyze a client’s needs, risk tolerances, and performance goals. Only after this can our wealth managers utilize the approved allocations and managers from the Investment Policy Committee. The wealth manager then creates a customized investment solution from our portfolios for each client with their specific goals in mind. At True North Advisors our internal research in creating optimal portfolios, along with a wealth manager to guide you through advice helps to ensure your customized portfolio is one that is best for you.

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