Ensuring Every Asset Serves a Purpose

Once we have determined your precise risk tolerance, leveraged through a financial plan, we build equities around your desired and appropriate level of safety in risk controlled assets such as Bonds. We approach equities, to be first and foremost, tax and cost efficient. Equity portfolios are built with individual securities, Mutual Funds, and ETF's with this in mind. We can take a boutique approach to your portfolio and manage around existing positions for tax efficiency and potential alpha. 

The “Safety Runway” is a key strategy to help preserve and protect your lifestyle through times of economic and market distress. For many investors, lifestyle is often the highest  value goal because it encompasses your ongoing, annual spending needs. It answers the  question, “How much do I need in a portfolio today to fund my annual spending needs in the  future?” The desire to protect lifestyle spending is usually paramount; hence, an investment  strategy should aim to meet this important goal with a high degree of confidence. 

The Lifestyle Runway represents the number of years of lifestyle spending you want to protect and is comprised of a diversified portfolio of cash and high-quality bonds. It serves as a safety net to fund your lifestyle through uncertain economic environments. Behavioral finance research shows that many investors let emotions drive investment decisions, often selling equities after a market downturn or buying at the top, which can undermine long-term financial goals. 

WinCap Financial's approach seeks to fund your goals while minimizing these behavioral hurdles, improving your odds of successful long-term outcomes. Drawing down the Lifestyle Runway investment during economic distress allows you to maintain a long-term view for your equity assets, providing time for equities to recover and increasing your confidence in capturing higher returns.

This approach empowers you to redefine risk in terms of protecting years of spending rather than through standard deviation or volatility. Identifying your risk preference is crucial to determining how many years of lifestyle spending your customized Lifestyle Runway protects. Just as an airplane needs a runway to get off the ground, the Lifestyle Runway gives equities in your portfolio time to recover from downturns. Longer Runways, with greater exposure to fixed income securities, are generally more suitable for investors with lower risk tolerance or significant excess assets. 

Additionally, risk preference is often framed by historic periods of distress, such as the 20 years it took for equities to recover after the Great Depression. Families with significant excess assets might establish a Runway capable of funding lifestyle through prolonged economic downturns, while those in the wealth-accumulation stage may protect only a few years of spending. The Lifestyle Runway is designed to help withstand key risks to fixed income, such as inflation, deflation, default, liquidity, and interest rate changes.

As principal, capital gains, interest and dividends are available to fund each of your goals, we will use a  total-return approach to help meet your goals and manage your Bond Runway, using both qualitative and  quantitative information. The flexibility of the Bond Runway allows you to preserve the overall strategy in  normal periods and draw the Bond Runway investment down in periods of economic distress, giving equities  time to recover. At WinCap Financial, we define investment success as the achievement of your financial goals.  The Bond Runway gives you the confidence to take a long-term view of your investment portfolio to help  you achieve those goals.