Wealth Management
Crimson Wealth’s strategy is driven by three core beliefs
Our Strategy
Invest to Make Money – Not Avoid Losses
This is the most important point. We are investing to make money. There is a risk of loss, and if you cannot bear to take a loss (either financially or emotionally), you should not invest. However, in the long term, investing works out – and works out very well. Over the last 20 years, the S&P 500 (the standard measure of the US Large Cap market) has been up almost 10% annual. This means on a compounding basis, investors made over 6x their original investment in 20 years.
However, investors need to be prepared for down years. Of the last 20 years, we have had 4 down years, including 2008 when S&P 500 was down almost 40%.
Avoid international exposure
Most advisors encourage international exposure. Outside of specific high conviction ideas, we actively avoid dedicated international exposure. This really boils down to three factors:
- Our clients live in the US and have US-denominated obligations. Why add currency risk (along with country risks) by investing internationally?
- US Large Cap companies indirectly already provide this exposure as roughly 30% of their revenue comes from outside the US.
- Overall, companies domiciled outside the US perform worse than US-domiciled companies.
Crimson Wealth believes in the barbell approach to public equity investing where clients split their investments between low-cost index strategies to mirror the market and a concentrated portfolio of potential high conviction investments
Commit to high conviction investment ideas
As part of our portfolio construction, we strongly believe in allocating a material part of your portfolio to our best ideas, whether we are talking individual stocks or thematic ETF. As I highlighted above, we invest to make money, not to avoid losses.
This is not to say that we do not believe in portfolio diversification. This is why we heavily use low-cost index funds. We balance between concentrated bets and index fund based upon your risk appetite and return goals.
If you are interested in our periodic market reports, please sign up here:
If you want to learn more, please contact us