focused on your investment horizon

Our starting point

Stoic aims to invest your wealth as safely as possible. Two aspects are key:

• Minimising the chance of an absolute loss.
• The longer you invest, the more important it becomes that your wealth maintains its purchasing power — or increases slightly.

Emotion is the biggest risk factor in this process. That is why Stoic bases its approach purely on facts — more specifically: time horizon. How long can you do without your wealth?

We divide your wealth into three “buckets” with different time horizons: Stoic Short, Stoic Medium and Stoic Long.

Stoic Short: Time horizon up to 3 years
Money that you need in the short term (and is often held in a bank account) is invested in very short-term government bonds from countries with strong public finances (AAA credit rating). This provides better protection than a bank account, usually offers a higher interest rate, and can be converted into cash on a daily basis.

Stoic Medium: Time horizon between 3 and 10 years
Money that you do not expect to need for more than 3 years, but that does not have the time horizon suitable for equities (longer than 10 years), is invested in government bonds from countries with strong public finances (AAA credit rating), but with a longer duration.

Stoic Long: Time horizon longer than 10 years
Money that you can do without for more than 10 years is invested 100% in approximately 12,000 globally diversified equities. History shows that it typically does not take longer than 10 years for stock markets to recover after a major correction. Therefore, all money that you can miss for more than 10 years can be invested in equities with confidence: the chance that your portfolio is worth less than at the time of entry is very small. In the vast majority of cases, equities ensure that your wealth has grown after 10 years, both in absolute terms and adjusted for inflation.

Risk capacity and risk appetite

Can you emotionally tolerate significant fluctuations in the value of your portfolio?
Equities are the best way to protect purchasing power over the long term. In the short term, however, prices can fall significantly. In a crisis, a decline of 40% is not unusual. This is unpleasant, but not a problem in itself, as long as you have enough time to recover.

During periods of major market movements, we keep a cool head for you. That is a key part of our role. At the same time, your situation may change. You may have less financial flexibility, or you may find that market fluctuations make you more uncomfortable than expected. In that case, we will review together whether the allocation of your wealth is still appropriate. If necessary, we shift part of your portfolio into bonds.

Risk profile

The risk profile is the final allocation of your wealth, based on the rational allocation according to time horizons, your risk capacity and your risk willingness.

In the asset management industry, risk profiles are often described using terms such as defensive, neutral and offensive. An offensive profile suggests higher risk (i.e. equities), but also a higher potential return. A defensive profile, on the other hand, sounds safer because it mainly consists of bonds.

At Stoic, we help you keep your emotions at a distance. In our view, that is the key to sensible investing. For that reason, we do not describe our risk profiles using emotional terms such as defensive or offensive.

Clients might otherwise choose a defensive profile based on feeling, while a large part of their wealth could easily be invested for more than 10 years. From a rational perspective, that money should be invested in equities.

At Stoic, we completely abandon traditional labels. Your wealth is simply divided into Stoic Short, Stoic Medium and Stoic Long. Because your situation is unique, we tailor the allocation to match your specific circumstances.

Investment portfolio

Once the risk profile has been determined, the three time horizons are filled in.

Stoic Short
We invest in very short-term government bonds from countries with strong creditworthiness. This part is stable and available on a daily basis.

Stoic Medium
We invest in government bonds from countries with strong creditworthiness, with a longer duration. We do not consider equities suitable here: the risk is too high that you may have to sell at the wrong time.

Stoic Long
Funds with a time horizon longer than 10 years should be invested in equities to provide maximum protection against loss of purchasing power. In our view, no one can predict the future, so we always invest in “the entire global economy”.

By following the global economy, we achieve maximum diversification. We do this through index funds — investment products that track the global index. This ensures that we always move in line with the global economy, without having to worry about which companies will succeed in the future and which will not.

After all, it is always only a relatively small group of companies that drive returns. Simply put: Trying to pick the right stocks is like looking for a needle in a haystack. So we simply buy the whole haystack.

Investment risks and sustainability
At Stoic, we do not believe in predictions about financial markets. Because the future is inherently uncertain, we focus on broad diversification and a simple investment process.

For that reason, we do not take specific risk indicators into account when selecting investments, including sustainability risks. Although we support a more sustainable society, we do not specifically focus on sustainability or sustainable investing. We therefore do not offer services or products that specifically target sustainable investments, nor do we take sustainability risks into account.

Calm Capital Control

Emotions drive financial markets. Stoic is not driven by them.

By placing ourselves between you and your wealth, we help protect you from emotional decisions. By dividing your wealth into time horizons that match when you will need it, you become less dependent on short-term market movements. Once your wealth is invested, we keep transactions to a minimum. They only create unnecessary costs. What we do continuously monitor is whether costs within the “buckets” can be reduced further, whether the funds are still fiscally appropriate, and whether they are doing what they are supposed to do.

Not managing, but controlling
We do continuously monitor your wealth. As time passes, the time horizon naturally changes. Your situation may also change. That is why we periodically review your time horizon with you, to ensure it still matches your goals and preferences. If not, we adjust the allocation. We therefore do not call this traditional asset management. We call it Calm Capital Control. It is not only good for your peace of mind, but also for your wealth.

Reporting

Four times a year, we prepare a report for you.

In this report, we focus purely on the facts:

• the return over the past quarter
• the costs
• the current allocation across the different time horizons