focused on your investment horizon

Principles

At Stoic, we base everything on facts — more specifically: time horizon. How long can you do without your capital?

Longer than 10 years:
Money you won’t need for more than 10 years is invested 100% in equities. History shows that it usually takes no more than 10 years for stock markets to recover from a major correction. So any capital you can miss for more than 10 years can be invested in equities with confidence. The likelihood that your portfolio is worth less than it was at the start is very small. In most cases, equities grow your capital over a 10-year period — both in real terms and adjusted for inflation.

Shorter than 10 years:
After 10 years, the risk of loss in equities is low. But that also means there is risk if you need your money sooner. That’s why Stoic invests any capital you’ll need within 10 years in low-risk bonds. These come with lower returns than equities, of course — but you can be confident that your money will still be there, without losses, when you need it.

Risk profile

If we know what portion of your capital you can miss for more than 10 years, and what portion you want to use sooner, we immediately know how to allocate the funds and what your risk profile will be. The money you can miss for more than 10 years is invested 100% in equities. The money you will need within 6 months to 10 years is invested in a safe portfolio with low-risk government bonds. We make a distinction between capital with a time horizon of 6 months to 3 years and capital with a horizon of 3 to 10 years: Funds with a short horizon up to 3 years go into a separate profile: Stoic 0.0 Funds with a horizon of 3 to 10 years go into a regular Stoic profile The ratio between capital with a 3 to 10 year horizon and capital with a horizon longer than 10 years ultimately determines your risk profile. Example: If you can miss 70% of your capital for more than 10 years, and you want to use 30% within 3 to 10 years, your risk profile will be Stoic 70. The "70" simply stands for the percentage invested in equities.

The naming of our risk profiles at Stoic is deliberately factual. That helps us remove emotion from the decision. We prefer not to speak of a ‘defensive’, ‘neutral’, or ‘aggressive’ profile. Why not? Because if you have more than 10 years, a so-called ‘defensive’ profile (made up of low-risk bonds) might sound sensible, but in reality, it is the least rational choice. The facts show that money you can miss for more than 10 years can be confidently invested in equities. To keep emotion out of the picture, we give our profiles purely factual names: Stoic 90 means 90% equities Stoic 50 means 50% equities And so on.

Investment portfolio

Your final investment portfolio will consist of two components. Capital with a time horizon between 6 months and 10 years is invested in low-risk government bonds. Capital with a time horizon longer than 10 years is invested in equities.

About the equity component:
Individual stock prices fluctuate daily, but the global economy has always grown in the long run. That’s why at Stoic, we invest your equity capital across the entire global economy. This means a basket of roughly 11,000 stocks worldwide, weighted by market value. This approach does mean you must be prepared to endure significant market swings along the way. Know that we are here to help you keep a cool head in those moments — that’s essentially what we do. We’re called Stoic for a reason.

About the bond component:
This low-risk part of the portfolio consists of government bonds with very high credit ratings (only AAA/AA-rated bonds). The maturity of the bonds is aligned with the time when you’ll need the capital for other purposes. Returns are lower than those from equities, of course — but this way, you can be reasonably sure your money will still be there when you need it. This component is not so much for return on the money, but for return of the money, as they say in the financial world.

Control.

Once your capital is invested, we make as few transactions as possible. Every trade just adds unnecessary costs. We don’t choose ultra-wide diversification in the so-called “world economy” for nothing — speculation serves no purpose. And since your capital is already allocated based on the 10-year time horizon, there is no reason to make changes that do not match that horizon.

Not managing, but monitoring.
We do keep a close eye on your portfolio. As time passes, your time horizon naturally changes. That’s why we regularly check in with you to review whether the portion invested in equities still falls above the 10-year threshold. If not, we shift that part into bonds — or transfer it to your savings account.

Reporting.

Four times a year, we show you how your portfolio is doing. The report we share is essentially a “snapshot of reality”:

• we show you the current global dividend yield on equities

• we show you the current global inflation rate

• we show you the current rate of global economic growth

Together, this forms the expected return on your global equity portfolio.
For bonds, we also stick to the facts and look at the current interest rates on all bonds held. Based on your mix of equities and bonds, we then calculate the expected future return on your portfolio.

Facts prevent disappointment
The return projection we give you for the end of your investment horizon is purely based on current data.
We make no forecasts about potential market gains. After all, in the worst-case scenario, the market could be at the same level in 10 years as when you started. Who knows?

Because we at Stoic base everything strictly on the facts as they are today, you will never face unpleasant surprises with us.
And your actual return can only turn out better than expected.