Rebalancing in an Ever-Changing Environment

As long-term investors, we maintain a disciplined approach to sustaining our clients’ strategies. Market drawdowns, such as those observed during the COVID-19 pandemic, introduce difficult decisions for all of our clients. Even though some may take advantage of the dips and “buy low and sell high” through disciplined rebalancing implementations, others may not have the ability to do so due to operational needs or risk tolerance. This is a testament to why differing client needs must be considered when it comes to investment strategy decisions.  

As an investment consulting firm, we also face similar challenges when it comes to rebalancing, or in our case, reinvesting. Putting resources back into the firm is an important step as a part of a long-term business strategy. While 2020 produced many challenges for global investors, the strategic decisions we made as a firm added some incremental trials and tribulations. Our rebalancing came across three asset classes: our people, brand, and technology.

Treating our people well

Our people are single-handedly the biggest asset we have as a firm. As such, we strive to provide a collegial work environment that encourages collaboration and recognizes contributions. Furthermore, a generous benefits package and a successful work/life balance are paramount to attract and retain hard-working individuals. Ensuring that each and every one of our colleagues has the necessary hardware and software to securely connect to the network in a remote fashion is something that we have always valued. This allows our employees the ability to work from home whenever necessary. When shelter-in-place orders were announced, we were well prepared. 

However, not everyone fully appreciates or enjoys working from home. In addition, home offices do not always offer the same accouterments as a corporate environment, so we regularly query our colleagues to make sure that they have everything necessary to perform daily tasks as effectively and efficiently as possible. Although the list of asks was very manageable, one of the biggest voids on the list was the daily camaraderie of being together. To accommodate this, we sought out virtual alternatives, such as a game show, happy hours, a home-delivered ice cream social, coffee breaks, and an escape room—all of which provided some solace and sense of inclusion. And when that was not enough, an outdoors, socially distanced, paintball challenge was the next best thing. While it is not the same as being together in person all of the time, we feel it is the small investments like these that enhance our culture and have afforded us the luxury of being named as one of the Best Places to Work in Money Management by Pensions & Investments.  

Reinvesting in our brand

With our 20 year anniversary on the horizon, we realized it had been two decades since we evaluated the way we present our work and our firm. We took this opportunity to enhance the way we communicate our research, recommendations, values, and culture to our clients and the marketplace. As a result of reinvesting in our brand, we created a new logo, reporting formats, style guide, and color scheme. While we maintain a customizable approach to providing bespoke investment solutions, our goal through this investment is to harmonize our message. In addition, we hope to attract clients aligned with our culture while enhancing the enterprise value over the long term.

Enhancing our technology

Due to the pandemic, one of the best performing sectors of 2020 was technology. Cardinal is no stranger to technology, and we continue to reinvest in it to be more efficient and provide more timely data and reports for our clients. Specifically, we upgraded all of our servers as well as our communications platform and invested in a business intelligence platform that will enhance our reporting capabilities. These technological enhancements will continue to evolve over the years to come, however, our dedication to providing the best service possible to our clients will remain the same.

Key takeaways

In short, we will continue to show our employees that we care for and value them, as well as reinvest in our brand and technology. Despite the challenges presented by the COVID-19 pandemic, Cardinal will continue to work relentlessly as a firm to fully meet our clients’ needs.

Scott Skornia, Managing Director

Scott joined the Cardinal team in 2005. He is the lead consultant for several clients and is also involved with equity research. He leads both insurance and pension client relationships and helps lead the firm’s pension practice.