Strata Capital

Strategic Wealth Management | Fairfield, NJ

Investment Management

Investment Philosophy

The number one reason retail investors’ returns trail professional investors is because of their inability to correctly assess their appetite for risk, match their investment with their time horizon, and stick to a strategy.

Our investment philosophy is simple, take the time to understand your appetite for risk, when you’ll need your money, and design your portfolio accordingly using the highest quality investment vehicles the industry has to offer.

Investment Management that reflects you, your preferences, and your goals…

At Strata Capital, we only design portfolios once we understand your financial plan, not the other way around. This allows us to make better investment recommendations to improve the probability of you hitting your goals.

Understand You and Your Plans

Understand your Preferences,
Needs, Risk Appetite
Design, Build, and Align Your
Portfolio with Your Financial Plan

Your investment portfolio should be a function of your specific preferences, appetite for risk, and financial goals. Whether you prefer active management, passive investment vehicles, or anything in between, we can design a portfolio that you can feel good about.

Unique Circumstances and Considerations

 

Appreciated investments with unrealized capital gains often become a source of headaches for investors, especially as you near closer to retirement and want to begin reallocating your portfolio for your golden years. Our team will work with you and your tax advisor so that you can reposition your portfolio while minimizing taxes and realigning your portfolio with your desired risk profile.

 

Single stock concentration can happen if your company stock options vest, your company IPOs, you receive stock compensation, inheritance or maybe you just made a great investment! No matter the reason, high single-stock concentration can put your portfolio at risk. Our team can create a strategy to manage around the concentrated position to mitigate risk while also creating a plan to realign your portfolio to match your objectives while minimizing tax consequences.

 

Tax events are often a huge detractor from long-term investment performance, especially when the investment strategy is not taking into account your income and tax situation. Our team will take the time to understand your tax situation so that we can build you a portfolio that maximizes your return while minimizing taxes.

 

Your investment goals should be aligned with your values. Our team can work with you to create strategies that perform well while doing good.

Unique Circumstances and Considerations

Large Unrealized Gains

Appreciated investments with unrealized capital gains often become a source of headaches for investors. Especially as you near closer to retirement and want to begin reallocating your portfolio for your golden years. Our team will work with you and your tax advisor so that you can reposition your portfolio while minimizing taxes and realign your portfolio with your desired risk profile.

Single-stock Concentration

Single stock concentration can happen if your company stock options vest, your company IPOs, you receive stock compensation, inheritance or maybe you just made a great investment! No matter the reason, high single stock concentration can put your portfolio at risk. Our team can create a strategy to manage around the concentrated position to mitigate risk while also creating a plan to realign your portfolio to match your objectives while minimizing tax consequences.

Tax Conscience Investing

Tax events are often a huge detractor from long-term investment performance. Especially when the investment strategy is not taking into account your income and tax situation. Our team will take the time to understand your tax situation so that we can build you a portfolio that maximizes your return while minimizing taxes.

ESG and Values Based Investing

Your investment goals should be aligned with your values. Our team can work with you to create strategies that perform well while doing good.

Investment Due Diligence

With tens of thousands of investment choices at our fingertips, it is important to have an effective strategy for selecting and monitoring investment options for clients. At Strata Capital we know investment manager selection and due diligence is more than just about past performance. Past performance is important to consider when selecting a manager, but it is only one of the selection criteria used in our proprietary screening process.

Performance Data

  • Compare past performance and reasons for outperformance. Does the manager consistently outperform over time or did they have one amazing year by reviewing past decisions on allocation within asset class?
  • All funds to be considered must have at least a three-year track record
  • How much risk are they taking to get their return? Is a peer taking less risk to get the same amount of return?
  • How has the fund performed in adverse conditions?
  • Are they maintaining their promises to their investors for what type of fund they are (style drift)?
  • What are the costs associated with the fund or investment and how does it compare to other options and peers?

People and Principals

  • Manager’s resume
  • Manager tenure and transition plan for retiring managers
  • Who are the people involved in making allocation decisions
  • Are the managers investing in their own fund
  • Firm culture and investment philosophy

Process and Investment Philosophy

  • Is there a well-defined process for selecting their positions or is it based on the manager’s ability to select a security?
  • Strategy: are they buy and hold or are they tactical?
  • Review individual position concentration to identify risk
  • Leverage and the use of derivatives
  • Review the fund’s policies and controls for detecting and preventing fraudulent activities
  • What are the tax implications and structure of the fund: net return, turnover, 1099 or K1?
  • What are there embedded capital gains or losses?
  • Does the firm have the ability to stop capital redemptions?

Once we have selected the menu of investments to be used in our portfolios, we continually monitor the funds with our due diligence process on a quarterly basis to make sure all the above criteria are still being met. If they aren’t, they are replaced.