Welcome
Long-Term Capital Appreciation
The objective of this portfolio is long-term capital appreciation and compounding.
LTCA Sector Diversification
For risk management purposes, investors may choose to keep sector exposures similar to an index—unless they feel particularly strong about an individual sector’s opportunities. This helps control performance deviation risks from sector drift, and can work as a hedge against unknowable macroeconomic risks (e.g. new government regulations, commodity prices, consumer and technology shifts) that may impact a particular sector’s performance (positively or negatively). The goal isn’t necessarily to match index sector weights, but to be aware of them and the risks they may expose investors to.
LTCA Market Caps
Similar to sector risk exposures, market cap exposures pose risks that should be monitored. For example, small caps tend to be more domestic (less international) in their revenue generation, and geopolitics can cause them to perform better or worse at certain points in the economic cycle. The goal isn’t to match the sector weights versus an index or benchmark, but rather to be aware of the risks they pose, and to allocate your individual “risk budget” accordingly.