NWP offers five distinct investment strategies to help you meet your objectives:

NWP INVESTMENT STRATEGIES:[1]

Core Investment Strategies:

  1. NWP | Lower Risk Growth Strategy
  2. NWP | Moderate Growth Strategy
  3. NWP | Aggressive Growth Strategy

Special Purpose Strategies:

  1. NWP | Starting Account Growth Strategy
  2. NWP | Rainy Day Liquid Fund Strategy

The first three Strategies “Core Investment Strategies” are geared towards growth.  What differentiates them is how much risk we’re willing to take in the pursuit of earning a return.  In general, portfolios that take more risk, have the potential to earn greater returns.  Likewise, the more we reduce risk, the more likely it is that the returns will be lower.

The way that we determine which strategy or strategies to use for your account(s) is driven by your life goals, financial planning goals, your net worth relative to those goals, your liquidity needs and of course, your risk tolerance and the market environment.

That said, the goal of the portfolio is not to “make more” at all costs, but rather to help you meet your goals, which the least amount of risk necessary.

There are essentially three ways that we regulate risk (in logistical order):

  1. the careful selection of individual securities (including ETFs) that are used in the portfolio
  2. the mix of “growth” securities vs. “defensive” securities in a portfolio
  3. the determination of when to sell a security when it is going ‘the wrong’ direction

The question that many people like to ask is “How much will each Strategy make?” Since the future looks quite different than the past, we cannot say, and any such prediction would be reckless and misleading – because each market season offers different risks and returns. 

However, what we can say is that for the low, medium and aggressive growth strategies a long term goal of 3-5% per annum returns net of fees, 5-7% and 7-10%+ respectively, represents a reasonable target – but again, actual returns will vary in the short run based on market conditions.

Based on historical drawdown statistics for stocks and bonds and related ETFs, one should not invest in growth strategies unless you are can tolerate (it is ok not to like it, nobody does) drawdowns up to 15%, 21% and 26% respectively.  As you would expect, our goal is to use the risk management actions outlined above to keep drawdowns below these levels.

 

[1] Note: the only permitted strategy for Starting Accounts is #4 above (accounts with less than USD $100,000) and #5. The only acceptable strategy for Rainy Day Accounts is #5 above.