InvestLab's Process

It all comes down to one objective: minimising risk — the chance you don't meet your investment goals.

I define risk as exactly that: the probability of not meeting my goals, and how far short I fall if I do. Everything in InvestLab exists to shrink that probability.

Which means the first step isn't picking investments. It's defining your goals and constraints — precisely. Not a vague target like "good returns," but numbers: the returns you need (not want), the loss you can actually live with, and the outcome that would genuinely derail your future.

Take mine. A 4–6% real return — after inflation — through 2046 is enough to get me where I need to go. I couldn't hold through a drop bigger than 50%; I know the dollar loss would put me under too much pressure. And if my returns averaged below 2% real over the whole horizon, I'd likely miss my goals altogether — so I want that outcome to be extremely unlikely.

Yours will look different. But the principle is the same: "a comfortable retirement" — or just "rich" — isn't a goal. It's a wish. A goal has numbers: what you expect, by when, and the scenarios you couldn't survive. The Required Return Calculator and IPS tools on the platform are built to help you pin those numbers down.

So how do you build a portfolio that maximises those odds?

By now one thing should be clear: there is no single best portfolio. There's only the one that maximises your chance of meeting your goals under your constraints.

For me, that's clearly not 100% stocks. The risk of a deep drawdown is too high — and given today's valuations and a shifting macro backdrop, so is the risk of falling short of the return I need. Put more simply, if risk is the chance of not meeting my goals, 100% stocks is just too risky.

I need something more robust — a portfolio that doesn't depend on the next decade looking like the last and one with a lower probability of losing 50%.

There's no simple, magical answer. In fact, I've spent fifteen years on that exact question: first running risk parity and alternative risk premia at large London funds, then investing my own money.

The process I landed on has three layers.

Layer 1: Start by building a robust core

It's built to earn returns across a wide range of environments, combining multiple sources of return — equities, bonds, real assets, and other premia — weighted so my risk (not my capital) is well balanced. This is where most of the portfolio's risk and return comes from. The aim isn't to maximise returns in any one scenario; it's to raise the odds of clearing your required return across many of them.

There's no single right answer here. For an investor who genuinely understands and accepts the risks, a core close to 100% equities can be a legitimate choice. For me, it isn't — I'd rather be balanced in terms of risk, not capital, so the portfolio holds up across regimes instead of depending on one continuing. In practice that can be as simple as a 50/30/20 across global stocks, bonds and real assets, or a more deliberate all-weather construction that equalises risk contribution across the building blocks. For more advanced investors, it can extend to alternative premia like carry, short volatility, and factors such as value and quality.

Layer 2: Add some tactical strategies to reduce risk and profit from opportunities when the odds are in your favor

Where the core is built to deliver over the long run and across regimes, the tactical layer adapts to the one we're actually in. Markets shift, valuations move, risk isn't constant. A rules-based overlay tilts toward what's working and scales back when conditions deteriorate. A simple time-series momentum rule is the clearest example: cut exposure when an asset's trend turns negative, add it back when it turns positive. It won't always help — but over time it can improve the path of returns, and make the portfolio easier to stick with.

Layer 3: Feel free to try and generate alpha or go for the home runs, but make sure they don't kill you.

The satellite sleeve is where conviction lives. Individual stocks, themes, specific strategies — the bets you make because you believe you have an edge. This is the one layer chasing alpha, and alpha is genuinely hard: a real edge is rare, and most investors who think they have one don't. That's not a reason to ban it — there may be room for it — it's the reason to ring-fence it. Sized with a small risk budget, you can take those bets, and be wrong on plenty of them, without ever putting the whole plan at risk.

Put together, the structure is simple: a resilient core, an adaptive overlay, and a controlled space for conviction. It builds on the classic core–satellite approach, adding a layer to adapt to changing conditions while strengthening each component. It's not designed to be perfect — it's designed to give you the best chance of reaching your goals in a future that may not look like the past.

Here's how the three fit together:

The discipline is in the proportions. Most investors get this upside down — they pour their energy into stock picks at the top and treat the core as an afterthought. The pyramid is built the other way round: the base carries the weight.

Of course, the same process produces a different portfolio for everyone — because your three numbers aren't mine. That's why InvestLab isn't a single recommended portfolio; it's a set of building blocks. Each layer comes apart into components you can inspect, test against your own goals, swap, and recombine: choose a core, see how it would have behaved through past regimes, add a tactical overlay or leave it off, size a satellite sleeve or skip it entirely.

So the structure stays fixed while the contents flex. The three-layer logic is the part I have real conviction in — a resilient core, an optional overlay, a contained space for conviction. What goes inside each layer is yours to shape. That's the whole point: not an answer handed down, but the process and the blocks to build the portfolio that's actually right for you.