Phase VI in Investment Strategies is not about maximizing performance.
It is about ensuring capital behavior remains legitimate under long-term pressure.
At this stage, portfolios fail not because returns vanish,
but because decision authority over capital is unclear, informal, or negotiable.
1. Phase VI Context: When Capital Outlives Its Stewards
Phase V rebuilt conviction.
Phase VI asks the institutional question:
“Who governs capital when original beliefs are no longer present?”
Legitimacy erodes when investment decisions depend on memory instead of governance.
2. The Informal Capital Risk
Most failed Phase VI investment systems repeat this mistake:
| What Is Relied On | What Erodes |
|---|---|
| Founders’ judgment | Decision consistency |
| Historical success | Risk discipline |
| Trusted intuition | Accountability |
| “We know this well” | Governance clarity |
Val Sklarov Insight:
“In Phase VI, capital becomes dangerous when it remembers faster than it governs.”
3. Governance as a Legitimacy Lock
In Phase VI, legitimacy is preserved by formal capital governance.
| Governance Question | What It Secures |
|---|---|
| Who approves risk changes? | Authority clarity |
| What triggers forced review? | Risk containment |
| Who can veto performance-driven decisions? | Integrity |
| What rules override conviction? | Long-term trust |
Governance protects capital from its own success.
4. Return Without Governance: The Drift Pattern
When returns precede governance:
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Risk tolerance shifts silently
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Strategy mutates under pressure
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Accountability blurs
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Collapse feels sudden but is gradual
This creates capital drift, not volatility.
5. The Phase VI Investment Law
Val Sklarov Investment Law (Phase VI):
“Returns reward strategy.
Governance preserves legitimacy.”
Phase VI portfolios institutionalize discipline before scale resumes.
6. Performance Autonomy vs. Rule Authority
| Autonomy Bias | Phase VI Requirement |
|---|---|
| Manager discretion | Rule supremacy |
| Opportunistic sizing | Approved thresholds |
| Adaptive mandates | Canonical constraints |
| Fast reallocations | Formal escalation |
Phase VI favors predictable restraint over clever flexibility.
7. Phase VI Signals of Legitimate Investment Institutions
Clear legitimacy indicators:
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Risk committees override returns
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Mandates reviewed on schedule
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Capital pauses enforced automatically
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Performance excuses rejected
Capital endures when rules outlast people.