We follow Modern Portfolio Theory as detailed by Harry Markowitz. Markowitz won the Nobel Prize for Economic Sciences in 1996 after decades of research and performances of his theory.

 

Asset Allocation

The first step in our methodology is to identify a broad set of diversified asset classes to serve as the building blocks for our portfolios. We determine the optimal mix of our chosen asset classes. 

 

Selecting Instruments

Walfrid Private often uses cost-effective, index-based Exchange-Traded Funds (ETFs) where a Client"s focus is on cost reduction.  We look for ETFs that minimize cost and offer market liquidity. The Instruments chosen will depend on the strategy ie. Active or Passive Portfolios.

 

Determining Your Risk

Once the Efficient Frontier has been established, it is necessary to pinpoint an investor’s risk tolerance in order to identify the ideal asset allocation for his or her needs. Rather than asking the typical 25 questions asked by financial advisors to identify an individual’s risk tolerance, Walfrid Private simplifies our risk identification process to fewer questions.

 

Rebalancing and Monitoring

Finally, we constantly monitor our clients portfolios and periodically rebalance each back to it’s target mix in an effort to optimise returns for their intended level of risk. After taking tax implications and trading costs into consideration, we rebalance periodically.