Restoring discipline, trust, and control to portfolio management
As a portfolio manager who has navigated multiple market cycles since 1997, I recognize the value of diversification in multi-asset portfolios. I have also experienced its limitations during severe market downturns, when diversification fails and portfolios breach client mandates.
Conventional portfolio management is largely benchmark-centric. Portfolios are constructed to closely track benchmarks and are limited in how far they can deviate. As a result, when benchmarks suffer significant drawdowns, portfolios follow—often regardless of a client's risk tolerance or capital-preservation objectives. A manager may be praised for "outperforming" a collapsing benchmark by 2%, even as a conservatively mandated portfolio suffers a 15% absolute loss. In this context, the benchmark becomes an excuse rather than a safeguard. This is where traditional investing fails the private client.
The solution is not to abandon benchmarks, but to correct this structural flaw. This is how the SATID methodology (Structured Approach to Investment Decisions) was conceived.
SATID is a disciplined framework grounded in benchmark portfolios, yet focused on what truly matters: strict adherence to the client's mandate, particularly the limitation of capital losses. Rather than passively tracking a benchmark when it diverges from client objectives, SATID actively enforces alignment at all times.
Portfolios retain the upside potential and diversification benefits of traditional construction, while systematically monitoring, quantifying, and communicating the maximum loss they are permitted to sustain. This delivers a high level of transparency, control, and confidence—especially during periods of heightened uncertainty.
SATID is not a "product" or a generic "service," but a direct response to the most common challenge faced by private clients: capital losses beyond what was expected or acceptable, compounded by uncertainty during market stress. In such conditions, emotional decision-making often leads to selling at peak discomfort and re-entering after recovery—crystallizing losses and eroding long-term wealth.
In summary, SATID enables investors to allocate capital with confidence. It clearly defines portfolio boundaries, provides continuous transparency, and ensures mandates are respected—particularly when it matters most. By systematically preventing mandate breaches, SATID restores discipline, trust, and control to portfolio management.