The 6 Principles Guiding Our Investment Decisions

Why Every Investor Needs a Written Investment Mandate

Most investors know what they own. Far fewer know why they own it — or what they'd do if things suddenly changed. That gap matters more than most people realize.

We recently worked through a situation with a client that illustrated this perfectly. They had a solid, globally diversified portfolio doing exactly what it should. Beyond that core portfolio, they had a small allocation — around 5% — in some alternative assets. Reasonable. Deliberate. Agreed upon.

Then those assets performed well. Suddenly 5% became a much bigger slice of the pie, and the question on the table was: do we rebalance, hold, or lean in further? What started as a clear, rational framework turned into a conversation full of "maybes" and "I'm not sure I'd sell at that point." Emotions had quietly taken the wheel.

This is exactly why we believe every investor needs a written investment mandate — not just a philosophy they hold loosely in their head, but something documented and agreed upon before things get interesting.

What Goes Into an Investment Mandate?

At Align Wealth, our investment philosophy is built around six core principles. These aren't abstract ideas — they're practical guardrails that guide every decision we make with clients:

1. No market timing. We don't try to predict when to get in or out of the market. No one can do it consistently. Time in the market always beats timing the market.

2. Global diversification. Canada represents about 3% of the world's stock market. Investing only at home means missing 97% of what's happening globally. We want exposure to companies across the world — different countries, sectors, and economies that ebb and flow independently.

3. Keep costs low. Investment fees compound just like returns do, only in the wrong direction. There's no consistent evidence that paying higher fees for active management produces better long-term outcomes. We keep it simple and cost-efficient.

4. Faith in the future. Investing is an act of optimism. Not blind optimism, but a grounded belief that real people will continue to innovate, build companies, serve customers, and generate returns for shareholders — even through recessions, pandemics, and political uncertainty.

5. Tune out the noise. Financial media is not designed to help you make better long-term decisions. It's designed to get your attention. Learning to filter out the noise — especially in turbulent times — is one of the most valuable skills a long-term investor can develop.

6. Manage your behaviours. This one is probably the most important and the hardest. You can be in the best portfolio in the world and still dramatically underperform it by making one emotional decision at the wrong time. A written mandate helps remove emotion from the equation.

Why Write It Down?

You don't need it in writing until you need it in writing — and by then, it's too late to write it objectively. The time to document your investment mandate is when things are calm, when you're thinking clearly, and when you're not reacting to a headline or a portfolio swing.

Going back to our client: when we reviewed these six principles together at the start of the meeting, there was unanimous agreement. Two thumbs up. Then twenty minutes later we were in the weeds of whether to increase exposure to a speculative asset because of recent performance. The mandate didn't change — but the emotion of the moment almost did.

A written mandate gives you something to return to. It answers questions like: if Bitcoin doubles and now represents 15% of my portfolio instead of 5%, what do I do? If you've already decided — in writing, rationally, without the influence of market excitement — you don't have to figure it out in the moment. You just follow the plan.

One Final Thought

Your mandate will evolve over time, and that's okay. Life changes — you sell a practice, have kids, approach retirement, or go through a market downturn and discover your actual risk tolerance doesn't quite match what you thought it was. Those are valid reasons to revisit and update your framework.

What isn't a valid reason? The headlines. If you're changing your investment mandate because of news or market conditions, the mandate wasn't strong enough to begin with.

If you don't have a written investment philosophy — or you're not sure yours would hold up when things get bumpy — that's worth addressing now, not later.

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