Section · Invest
Investing
Allocation, risk, governance: how substantial portfolios are designed and overseen.
Educational reference: explanations and tradeoffs, never recommendations. Qualified professionals evaluate what fits a particular family.
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Asset Allocation
Asset allocation is the decision about how to divide a portfolio among broad categories of investments, such as stocks, bonds, real assets, and cash, and is widely regarded by practitioners as the primary driver of long-run…
01
Allocation
3 entries
Strategic vs. Tactical Allocation
Strategic allocation is the long-term policy mix of asset classes a family agrees to hold through market cycles, while tactical allocation refers to…
Liquidity Allocation
Liquidity allocation is the practice of organizing a family's financial resources into tiers based on when cash is likely to be needed, ranging from…
Risk Budgeting
Risk budgeting is a framework for managing an investment portfolio by treating risk capacity, not dollars, as the scarce resource to be allocated. Instead…
02
Objectives
2 entries
Capital Preservation
Capital preservation is the discipline of protecting a portfolio's purchasing power over time: its value after taxes and inflation, not merely its nominal…
Growth, Income, and Inflation Assets
Growth, income, and inflation protection are the three functional roles that investment assets play in a diversified portfolio, and understanding what…
03
Concepts
2 entries
Correlation and Diversification
Correlation measures how closely two investments move together, and diversification (spreading capital across assets that don't move in lockstep) is…
Rebalancing
Rebalancing is the process of periodically returning a portfolio's actual asset mix back to its intended target allocation after market movements have…
04
Governance
3 entries
Investment Committees
An investment committee is a formal governance body that a family or family office establishes to make, review, and oversee investment decisions according…
Benchmarks and Performance Measurement
Benchmarks and performance measurement are the tools families use to determine whether their portfolios, and the managers running them, are actually…
Manager Selection and Due Diligence
Manager selection and due diligence is the structured process by which families and their advisers evaluate investment managers before committing capital…
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