Capital Preservation
Protect What You’ve Built
The Capital Preservation memo is a monthly portfolio management newsletter focused on protecting your capital while still earning a reasonable return. Each month, you’ll receive a complete model portfolio of defensive positions with specific holdings, precise weightings, and the detailed research and reasoning behind every position and every change.
This isn’t about stuffing cash under a mattress and hoping for the best. It’s a carefully constructed defensive strategy—built to preserve your purchasing power, reduce volatility, and give you stability when the rest of the market can’t.
The Goal
The objective of the Capital Preservation portfolio is to protect your capital and preserve your purchasing power over time. This portfolio aims to deliver stable, positive returns with minimal volatility—prioritizing the safety of your principal above all else.
This portfolio is built for investors who have already accumulated wealth and want to keep it, who are approaching or in retirement and can’t afford large drawdowns, or who simply want a conservative anchor in their overall investment plan. The goal isn’t to chase the highest return—it’s to make sure what you have is still there when you need it.
Why The Compounding Memo?
Deep Diversification
1
Preservation isn’t about picking one safe-looking investment and hoping it holds up. Real protection comes from spreading your capital across a wide range of defensive positions—so that no single holding, sector, or interest rate move can put your portfolio at serious risk.
The Capital Preservation portfolio is built with extensive diversification across fixed-income instruments, defensive funds, and conservative positions. The result is a portfolio where stability isn’t dependent on any one bet going right—it’s built into the structure itself.
Low Volatility
2
One of the most overlooked advantages of a well-built conservative portfolio is liquidity and flexibility. Even when volatility is high, you can enter and exit positions without worrying about large price swings working against you.
The Capital Preservation portfolio is designed with low-volatility holdings that trade in stable, liquid markets. That means you’re not locked into positions that are difficult to sell without taking a hit, and you’re not watching your portfolio value swing wildly from day to day. You have the freedom to adjust when you need to—on your schedule, not the market’s.
Yield Curve Ready
3
The shape of the yield curve has a direct impact on how conservative portfolios perform—and most investors don’t have the tools or knowledge to position for it. When short-term rates are high, you want different exposures than when the curve is steep or inverted. Getting this wrong can mean leaving return on the table or taking on unnecessary risk for the yield you’re earning.
The Capital Preservation portfolio is actively positioned along the yield curve through intensive weighting control. Every issue includes precise allocation decisions across different maturities and durations, informed by the current rate environment. And because the portfolio draws from an extensive base of fund knowledge—spanning a wide range of defensive fund options—it can adapt to shifting conditions without being stuck in a handful of go-to holdings.
You get a portfolio that’s not just defensive, but intelligently positioned for the rate environment you’re actually in.
Performance
Total Return Versus Benchmark (%)
The line chart above shows the cumulative percentage total return of the Capital Preservation model portfolio versus its benchmark since inception, measured at monthly intervals. Cumulative total return reflects the combined effect of price changes and reinvested income over time, giving you a complete picture of how the portfolio has performed since day one.
Past performance is not indicative of future results. The model portfolio is hypothetical and does not represent an actual investment account. Please review our Investment Disclaimer for important information.
*During the October 2025 government shutdown, the Bureau of Labor Statistics did not release the scheduled CPI report for that month. To maintain continuity in our data, we estimated the October 2025 CPI figure by taking the square root of the ratio between the November 2025 CPI reading and the September 2025 CPI reading.
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