How we work

An Investment Philosophy Based on Common Sense

Successful investing requires three equally important components, namely Discipline, Consistency of Strategy, and The Power of CompoundingKemp Family Wealth Management Group believes a disciplined approach and process is critical to investment success given the uneven nature of market returns. The power of compounding is the gift to the patient investor as it is only evident over time. Our four-step wealth management process is designed to create a long-term strategy focused on individual needs:

1) Discovery allows us to get to know you! We will cover the tangible investment-related factors such as short and long-term financial goals, income requirements, taxes and estate issues. We will also focus on the intangibles based on your personal circumstances.

2) Analysis helps us define risk tolerances based on your knowledge, investment objectives, views on volatility, and time horizon while reflecting on past experiences. The objective here is to ensure that your portfolio reflects your personal, financial, philosophical and intellectual comfort levels under all market conditions.

3) Educate & Implement pulls the information we have gathered together into a unique investment solution tailored to your specific station in life. Portfolio asset allocation is determined based on your risk tolerance then the plan is carefully reviewed with you to ensure that you are comfortable with the strategy. Ongoing education is a cornerstone of our philosophy as we believe an informed client is a successful client.

4) Monitor & Review means consistently monitoring the portfolio to ensure we maintain the proper asset allocation and therefore risk profile. Rebalance decisions are recommended as necessary. Progress Reports allow you to review one, three and five year performance on an annual basis benchmarked to the appropriate index.

 

Empty Chairs

Will your investment decisions help you live the life you want?


Our Asset Allocation Options

By far the most important decision you will make before investing is the choice of asset allocation.  Why?  First and foremost it represents who you are as an investor.  Most importantly, it is the primary determinant of the volatility of your portfolio.  Volatility is a fact of life when it comes to investing.  Selecting the proper asset allocation ensures that you use volatility to your advantage rather than viewing it as a necessary evil!  Select the asset allocation of choice and let’s take a closer look!

Asset Allocation

Indicated returns are for comparative purposes only and do not reflect actual performance.

Income
100% Fixed Income
Fixed income normally refers to Government, corporate, and real return bonds although many other bond-like investments can form part of an income portfolio including GIC’s and preferred shares. Income portfolios generally exhibit the least amount of volatility and therefore generally the lowest upside return over the long-term. An income portfolio will be more sensitive to changes in interest rates and can be structured to offer Government guaranteed returns.

Indicated returns are for comparative purposes only and do not reflect actual performance.

Conservative
65% Fixed Income
35% Equity
The conservative portfolio introduces the stock market into the asset allocation with a 35% equity exposure along with a 65% fixed income weighting. The equity allocation will include exposure to Canada, U.S., Europe, Asia, and Emerging markets. The addition of equity exposure to the portfolio adds diversification, tax efficiency and hopefully additional return over the long-term while maintaining a relatively conservative investment profile.

Indicated returns are for comparative purposes only and do not reflect actual performance.

Balanced
50% Fixed Income
50% Equity
The balanced portfolio equally weights equity and fixed income at 50% each. The equity allocation will include exposure to Canada, U.S., Europe, Asia, and Emerging markets. Equal weighting improves diversification, tax efficiency, and return potential at the expense of somewhat higher volatility. Downside volatility especially over the shorter-term periods needs to be recognized.

Indicated returns are for comparative purposes only and do not reflect actual performance.

Growth
35% Fixed Income
65% Equity
The growth portfolio favors the equity weighting at 65% with fixed income at 35%. The equity allocation will include exposure to Canada, U.S., Europe, Asia, and Emerging markets with consideration to both value and growth style disciplines. The higher equity exposure contains a greater emphasis on capital gains while increasing the return potential at the expense of much higher volatility. The downside volatility is significantly higher for longer periods and needs to be recognized.

Indicated returns are for comparative purposes only and do not reflect actual performance.

Maximum Growth
100% Equity
The maximum growth portfolio represents the “all in” model with a 100% equity weighting. The equity allocation will include exposure to Canada, U.S., Europe, Asia, and Emerging markets with consideration to both value and growth style disciplines. Diversification is also achieved geographically. The primary objective is maximum return with maximum tax efficiency given the emphasis on capital gains. Volatility is also maximized with significant downside over all time periods.

Permanent Portfolio

Portfolio

While Permanent Portfolio is simplistic, it is not simple. The Permanent Portfolio is an asset allocation strategy based on economic cycle analysis separated into four basic categories:

 

Economic Cycles

 

At any point in time the economy will be in one of these phases or transitioning from one phase to another.  The strategy does not attempt to predict which phase we are in or guess how long it may last.  Instead, it holds four specifically chosen asset classes at least one of which will respond well to the current phase.  This is the “secret” of the strategy and why it works.  No forecasts, predictions or guessing.  Instead, it utilizes a simple, yet disciplined, pre-determined strategic asset allocation.

 Our aim in launching Permanent Portfolio is twofold.  First, offer all investors a simple, cost and tax efficient investment solution devoid of decision-making with a history of delivering solid returns.  Secondly, offer investors an investment solution that is easy to understand, implement and follow that is based on common sense!

Most importantly from our perspective Permanent Portfolio honors the core values I have established as the absolute keys to long-term investment success namely discipline, consistency of strategy and the power of compounding.  If your investment portfolio were a house, Permanent Portfolio would be the foundation!

Sign up for one of our upcoming seminars or webinars to learn more!

To learn more, call us at 877-446-5711 or brenton.kemp [at] nbc.ca (email)