logo dsbl

Portfolio management

Investments are the cornerstone of wealth management. We create customized portfolios for our clients based on their investor profile, assets under management and tax situation. Because we are passionate about financial markets, we advocate an active portfolio management philosophy. Thus, the vast majority of our assets are managed internally (we seldomly delegate specific mandates). We create unique portfolios according to the following principles:

We design diversified portfolios that provide exposure to multiple asset classes, industries, geographic locations, and currencies.  Our goal is to build portfolios that provide market returns while remaining resilient in any economic environments.  We strive to optimize the risk-return relationship.

Our vision of the portfolio drives our decision-making process. We assess the impact of every transaction on our portfolio:

  • Are we increasing or reducing total portfolio risk? 
  • Is there a positive or negative correlation between the added asset and other holdings in the portfolio?
  • Are we underweighting or overweighting a sector beyond a reasonable limit?
  • Is our asset allocation in line with the macroeconomic situation and our expectations for interest rate movements?

We consider ourselves “value” managers.  What does that mean? It means we look for securities with the following features:

  • An attractive valuation, meaning the current market price doesn’t reflect the potential (or intrinsic value) of the company.
  • A solid balance sheet with a reasonable debt level.
  • The company operates in a sector with favorable fundamentals.
  • The company is profitable and generates cash flows that allow for optimized allocation of capital.
  • The company pays a dividend to its shareholders.
  • The executives own and buy shares.
  • The share price isn’t trending downward.

We strive to avoid permanent capital losses. Therefore, any security we select must have a safety net. Any downside risk of an investment has to be manageable and offset by a strong potential upside.

Our philosophy, inspired by investment pioneer Ben Graham, is not to acquire “pieces of paper”

 in the hope that they will increase in value, but rather ”pieces of businesses” assuming that we would buy the entire companies if we could.

We focus on net after-tax returns rather than gross returns. To achieve this goal, we work hard at optimizing your asset allocation to the right location (account) for the lowest tax bite. Here are a few examples:

  1. We invest fixed-income securities first in clients’ registered accounts because interest income is taxed at the marginal personal income tax rate.  For taxable accounts, we prefer to invest in Canadian equities with eligible dividends that are taxed at a lower rate than interest income. 
  2. When market conditions permit, we buy discounted bonds that offer potential for capital gains and a more attractive after-tax return.

As investors,

here are some questions you need to answer:

  • What is my investor profile?
  • What is my tolerance for market fluctuations?
  • What is my investment horizon?
  • Is this expected rate of return aligned with my investor profile?
  • What portion do financial assets represent in my total wealth?
  • Am I optimizing the taxation of my investments?
Our services

Discover our various wealth management services: