Our clients are with us for the long haul. During that time our goal is to ride the bond market’s good times while avoiding its downturns. The more pain we miss—both in the bond market and in individual issues—the less we have to make up during periods of rebound. Achieving a targeted yield is important to us, but protecting that money from loss is essential. We will always trade less risk for a few basis points more in yield rather than put principal in jeopardy.

 

That’s why part of our investment discipline is to control our allocations. No single asset type or issuer can cause the portfolio severe damage if it goes south. The maximum allocation percentage for any one corporate bond issuer is 3%-5% of the portfolio.

 

All accounts at Envision Capital are actively managed. We try to employ a buy-and-hold strategy. But when something bad unexpectedly happens (such as restating financials, management failing to execute, an LBO, or issuing bonds to pay dividends) then we will not hesitate to sell. We do not attempt to predict the market’s wiggles and jiggles.