How We Optimize — A Quarterly CFP-Grounded Review

Most model-portfolio pages on the internet show you the holdings without showing you how they were chosen. We think the framework matters more than any individual trade. The framework is what survives a downturn, a thesis breaking, a client’s circumstances changing. Trades come and go. The standard does not.

Below is the playbook. It is grounded in the CFP Board Investment modules — the same body of work that certifies financial planners on portfolio construction, risk, alternatives, and special-circumstance suitability. Each model on the Portfolios page is built and maintained against this playbook. Each quarter we publish a summary of what we strengthened, what we added, and what we trimmed.

Our framework

Six modules from the CFP Board curriculum drive every model decision. We reference them by their standard codes so a client (or another planner) can verify the lineage:

What we screen for

Every model is checked against the same list every quarter. We do not adjust the list for cleverness — if anything we keep adding to it.

• Concentration limits. Single-stock cap of 5% across every model (CFP IN09). Single-sector cap of 22% on the concentrated tier, 18% on the broader tiers. If a position breaches the cap because it appreciated, we trim back to target on the next rebalance.
• Diversification standards. US equity exposure capped at ~75% on diversified tiers; the balance held via pure individual-name international exposure: 8 hand-picked international companies spanning developed Europe (ASML, NVO, SAP), Japan (TM), Korea (EWY proxy for Samsung-heavy exposure + CPNG for e-commerce), Brazil (PBR), and India (IBN). No passive ETF base — every position is a conviction call. Plus a small bond / cash sleeve. Diversification benefit is most of what asset allocation does — we do not skip it.
• Bond / cash sleeve. 4–5% in TIP (inflation-protected), SGOV (cash equivalent), and IEF (intermediate Treasury) on the diversified tiers, plus a 0.5% cash buffer on every model. Right-sized after May 12 review — smaller bond weight, the freed weight pushed into broader international. Provides a rebalancing source and a liquidity / settlement reserve so we are not forced to sell equity at the bottom of a drawdown.
• Tax-location. Each model card now shows Best fit / Acceptable / Avoid for the major account types (Roth, Traditional, taxable). The same asset in a Roth versus a high-bracket taxable account can produce a 1.5–2.5% annual after-tax return swing — we make the call explicit.
• Rebalancing triggers. Sector-deviation trigger (4% from target on diversified tiers, 5% on concentrated). Single-stock trigger (5% cap). We do not rebalance on the calendar; we rebalance when a band is crossed.
• Values-based / ESG screens. The Halal model uses an AAOIFI screen — no conventional banks, no conventional insurers, no riba-exposed financials, no AAOIFI-restricted business lines. Other models hold an open mandate; we build custom screens (no tobacco, no fossil fuels, no weapons, etc.) on request.
• Effective theme exposure. Sector labels under-state how much of a book is truly correlated. We publish net theme exposure on each model card (e.g., AI / Tech, Defense, Energy, International, Bonds / Cash) so the actual concentration is visible.

Our two-track sourcing methodology

Every Aggressive tier has two parallel books: a Tactical Conviction sleeve (Tier X-A) and a Fundamentals Core sleeve (Tier X-B). The two differ on sourcing methodology, not breadth.

• Tactical Conviction (A) picks come from our daily market commentary — earnings beats, geopolitical news, sector rotations, M&A. Names enter the book the same day the thesis materializes; positions are sized for conviction but held with shorter time horizons (3–18 months typical). The A sleeve is faster-moving and turn-rate higher.
• Fundamentals Core (B) picks come from CFP-grounded earnings analysis, balance-sheet quality, free-cash-flow durability, and secular thesis work. Names enter the book after multi-quarter fundamentals review; positions are sized for slow compounding and held through news cycles unless fundamentals deteriorate (3–10 year time horizons typical).

Clients choose A, B, or a custom blend depending on conviction style. The A sleeves run lower position counts (25–35); the B sleeves carry broader coverage (50–125 positions) reflecting the slower, more deliberate fundamentals process.

This quarter’s optimization summary

What we strengthened in the May 12 review:

• Strengthened the Sharia screen on the Halal model. Consolidated the prior smaller Sharia-ETF positions into a single 6% HLAL (Wahed FTSE USA Shariah ETF) anchor. AAOIFI screening is now disclosed on the model card and applied across the full book. Halal model totals 100% with the diversified Sharia compliance core.
• Added a 4–5% bond sleeve to Tiers II / III / IV. TIP + SGOV + IEF combined. Tier II 4% (1.5 / 1.5 / 1.0), Tier III 5% (1.5 / 1.5 / 2.0), Tier IV 5% (2.0 / 1.5 / 1.5). Right-sized after the May 12 client review to free weight for broader international diversification while preserving the correlation-diversifier and rebalancing-source benefit per CFP IN09. Tier I (the highest-conviction concentrated tier) remains 100% equity by design — this is disclosed as a feature, with the recommendation to hold a separate liquidity reserve outside the model.
• Expanded international exposure to 16–23% across diversified tiers via 8 individual ADRs. Pure individual-name intl exposure: 8 hand-picked international companies spanning developed Europe (ASML, NVO, SAP), Japan (TM), Korea (EWY proxy for Samsung-heavy exposure + CPNG for e-commerce), Brazil (PBR), and India (IBN). No passive ETF base — every position is a conviction call. Tier I 3% (ASML 1.0 + NVO 1.0 + EWY 1.0), Tier II 16% (ASML 2.5 + NVO 2.5 + SAP 2.0 + TM 2.0 + EWY 2.5 + PBR 1.5 + IBN 1.5 + CPNG 1.5), Tier III 20% (ASML 3.0 + NVO 3.0 + SAP 2.5 + TM 2.5 + EWY 3.0 + PBR 2.0 + IBN 2.0 + CPNG 2.0), Tier IV 23% (ASML 3.5 + NVO 3.0 + SAP 3.0 + TM 3.0 + EWY 3.5 + PBR 2.5 + IBN 2.5 + CPNG 2.0). Funded jointly from the halved bond sleeve and from staples / low-conviction equity trims — defense, energy, and Mag7-core theses preserved.
• Each tier maintains a 0.5% cash buffer for liquidity and rebalancing settlement. An explicit Cash / Operational Reserve row (SGOV-style settlement buffer) is held in every model so the prescribed-weight side of each tier totals exactly 99.5% + 0.5% cash = 100% of model weight. Absorbs settlement timing, dividend reinvestment lag, and rebalancing friction. AAOIFI-permitted on the Halal model.
• Trimmed Tier I defense to within concentration limits. Smaller-cap defense names sized closer to 2% each; core LMT / NOC / RTX / GD weighting preserved. Single-sector exposure now under 22% per CFP IN09 concentrated-portfolio guidance.
• Codified the Investment Policy Statement on every model card. Six-line IPS — risk band, time horizon, liquidity need, return objective, rebalancing trigger, and excluded screens. Same standard as the Vanguard / Fidelity templates clients compare against.
• Added Tax Location Guidance on every model card. Best fit / Acceptable / Avoid-for-high-bracket account-type recommendations. Aggressive tiers lean Roth; Halal screen is portable across account types; income models acceptable in taxable with the qualified-dividend rate.
• Added Effective Theme Exposure disclosure. Each Aggressive tier card now shows net theme exposure (AI / Tech, Defense, Energy, International, Bonds / Cash, etc.) rather than hiding overlap in granular sector codes.
• Cosmetic: rounded display weights. Floating-point artifact (0.21250000000000002%) cleaned across the Dividend Yield Focus model.
• Tier I now splits into a True Concentrated sleeve (27 names) and a Diversified High-Conviction sleeve (~75 names). The concentrated sleeve lands at the CFP IN09 sweet spot of 25–30 names where diversification benefit plateaus; the diversified sleeve preserves theme breadth for clients who want the long tail. Each sleeve is independently portal-synced (slugs aggressive_50k_concentrated and aggressive_50k).

Our standards

What this is not

This is not back-tested historical performance. This is not a prediction. This is the construction discipline we apply to every model on the Portfolios page. Past performance does not guarantee future results, and any client position should be reviewed against the client’s specific objectives, tax situation, and risk capacity. The CFP standards we reference are construction standards — they do not guarantee outcomes.