The entrepreneurial mind will create the vision, take calculated risks, avoid mistakes, and measure success toward achieving objective goals. For true wealth management, the performance benchmarks are the life of the client and dollars of future wealth. For the traditional advice model, it is historical percent returns.
Our calculated risks are rooted in market efficiency and its price mechanism. All widely known information in capital markets is contained in prices. Regardless, the investment management industry is fixated on the fallacy of mispriced securities. As a result, the easiest risk to avoid is the one always taken by tactical managers – underperformance risk.
Yet the evidence proves that the timing of future cash flows and sequence of investment returns will a much greater impact on an investor’s success or failure. This is because life happens – people save and invest when they are younger, and spend more than save during retirement.
To manage risk and measure performance, we use a Monte Carlo engine that is loaded with the most reliable capital market assumptions available. This is essential for helping investors live the one life they have in confidence and comfort.
We also anticipate the possibility of extreme markets and have a fallback plan, in advance. Traditional advice does not. On a continuous basis, we calculate the funding status of your investor’s plans, and will be flexible with strategy when their circumstances change. Again, because life happens.
Our principles are rooted in controlling what we can control and respect for the uncertainty of the future. The Poetic Justice Capital performance benchmark is forward-looking and objective – your investor’s probability of success for achieving their vision and values that require money.