ASSET ALLOCATION
Cardinal Point approaches investing from a scientific perspective. We leverage Modern Portfolio Theory, using mean-variance optimization to help put together the most efficient portfolio allocation possible.
ASSET ALLOCATION
Cardinal Point approaches investing from a scientific perspective. We leverage Modern Portfolio Theory, using mean-variance optimization to help put together the most efficient portfolio allocation possible.
We approach investing from a scientific perspective. We leverage academic research, starting with the pioneering work done by Dr Harry Markowitz, who won the Nobel Prize in 1990 for Modern Portfolio Theory. Markowitz’s now well-known theory uses mean variance optimization to help put together the most efficient portfolio allocation possible, taking into consideration not only the expected returns and volatility of asset classes, but also how the different asset classes covary with one another.
Professors Eugene Fama and Ken French put forth the notion of premiums within different types of stocks with their research on value and small companies. Their work showed that by tilting a portfolio towards stocks which were trading on a cheaper relative basis to their peers, or were smaller, unproven companies, investors could receive positive expected premiums compared to the market over the long term. Later work by others showed similar results when sorting companies by momentum or relative profitability. Sorting stocks in a quantitative manner like this is often known as factor investing or smart beta.
The custom asset allocation we create for each client includes a mix of income-oriented assets (Bonds) and growth-oriented assets (Stocks) that considers your risk tolerance and investment objectives and is combined with a smaller weighting toward Alternatives, meant to balance out different risks to a portfolio and enhance diversification. Then we apply academic research to determine the best mix of asset classes for the income and growth assets. In practice, we utilize a Core and Satellite approach.
This approach assigns the largest weights to those Core areas of the market- such as U.S. Stocks, Canadian Stocks, International Stocks and Investment Grade bonds. Our Core positions target their relative asset class returns, focusing on:
- Broad diversification
- Minimal cost
- Low turnover
- Tax efficiency
- Liquidity
- Transparency
We then add on smaller Satellite positions with the goals of either higher expected returns or enhanced diversification. Securities employed within the Satellite adhere to our rigorous quantitative and qualitative security screening process. Examples of these positions would be securities targeting High Quality Stocks, International Bonds, Emerging Market Stocks, or Floating Rate Bonds. Additional alternatives such as Commodities, Managed Futures, Market Neutral strategies or Private Markets exposures may be added to improve diversification. The Satellite component is managed using a dynamic investment strategy, and holdings within the portfolios can be increased or decreased as deemed prudent, for example as the size of an account grows, there may be additional investment options available within the Satellite component to consider.
Core Areas
This approach assigns the largest weights to those core areas of the market such as:
- US Stocks
- Canadian Stocks
- International Stocks
- Government Bonds
- Investment Grade Bonds
- Municipal Bonds
Satellite Positions
We then add on smaller satellite positions with the goals of either higher expected returns or enhanced diversification. Examples of these positions include securities targeting:
- Factor premiums, such as Value, Small, Momentum, or high Profitability stocks
- Emerging Market Stocks
- Commodities
- Private Markets Exposures
- Market Neutral Strategies
- Real Estate Investment Trusts
Who We Serve
Private Wealth Services for Residents of Canada
At Cardinal Point, we work with individuals and families who have made a commitment to excellence and expect it from others. Our clients come to us for a variety of reasons: the expertise of our investment management services; the integration of their tax, retirement, and estate plans; and the simplicity we bring to their complex financial lives.
Moving from Canada to the U.S.
Moving to the U.S. from Canada requires thoughtful financial planning strategies that address departure taxes, transitioning assets and investment interests across the border, managing Canadian dollar investment accounts while tax managing them based on the U.S. tax rules, as well as creating a cross-border estate plan.
Moving from the U.S. to Canada
Many people make the mistake of moving to Canada before addressing their financial affairs, resulting in missed tax-saving opportunities and potential double taxation. Our services are specifically designed to minimize tax liabilities for Americans relocating to Canada. Managing investments, taxes, and financial planning across borders is complex and requires a deep understanding of both U.S. and Canadian laws.
Canadians Living in the U.S.
For Canadians living in the US, it can be difficult to find a local financial advisor or tax practitioner that is well versed in Canada-U.S. cross-border financial planning. This forces many Canadian expats to work with multiple Canadian and U.S. practitioners which can be inefficient and costly. With Cardinal Point, Canadian expats can have the assurance of knowing all of their cross-border financial planning considerations can be addressed by one company.
U.S. Citizens Living in Canada
Our specialized services offer coordinated investment management for both U.S. and Canadian accounts, tailored Canada-U.S. financial and retirement planning, and strategies for U.S. retirement account distributions while residing in Canada. From comprehensive estate planning to optimizing retirement benefits like CPP, OAS, Social Security, and Medicare, we provide holistic advice to ensure financial peace of mind.
Private Wealth Services for Residents of the U.S.
Our clients seek a long-term relationship with a trusted wealth planner who fully understands their situation and goals. These affluent individuals and families grasp the importance of diversifying their investment portfolios, establishing a lasting family legacy, and seeking a more effective and fulfilling method for managing their wealth.
OUR RECENT PUBLICATIONS
Featured in the National Post: Kris Rossignoli on Why More Canadian Millionaires Are Eyeing Life Abroad
Kris Rossignoli, Senior Private Wealth Manager at Cardinal Point Wealth Management, is featured in the National Post discussing a rising trend among Canada’s wealthy: the growing interest in relocating abroad. According to a new survey, 28% more Canadian millionaires are now considering emigration compared to the last federal election. This shift is largely attributed to [...]
Section 899 – What Canada’s Wealthiest Investors Need to Know About the Proposed U.S. Retaliatory Tax
For affluent Canadians with significant U.S. investments—whether in real estate, public markets, or U.S. retirement plans—proposed changes to U.S. tax law could quietly and significantly erode your after-tax returns. Under a new legislative proposal—Section 899 of the Internal Revenue Code—the U.S. may impose penalty taxes on residents of foreign countries that it deems to be [...]
Another Proposed U.S. Law to Benefit Canadian Snowbirds? The Devil is in the Details
he proposed Canadian Snowbird Visa Act could extend the annual U.S. stay for eligible Canadians from 182 to 240 days without a visa. While this offers greater flexibility for snowbirds aged 50+ who maintain homes in both countries, the bill does not eliminate new federal registration rules or address complex tax residency risks.