Investment Approach

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Our clients generally report having a great investment experience because our approach is based on the science of investing rather than speculation, we don’t make promises we can’t keep, and we focus on the factors we can control.

For a pdf summary of our Investment Philosophy, click here.

Our academic investment approach is based on several core investment philosophies designed to help you maximize your return while controlling risk.

1. Market Timing & Stock Picking Don’t Work – Asset allocation is the primary determinant of long-term investment performance. Paradoxically, most investors (and brokers) spend the majority of their time on security selection and market timing. We do not believe it is possible to consistently predict or "time markets" in any profitable manner. Studies show that security selection and market timing actually hurt investment performance over time and adds speculative risk, excessive costs, and needless tax inefficiency.

2. Buy Low, Sell High – While this sounds obvious, investors typically do just the opposite. Individual investors tend to invest based on emotional responses to the market, leading to inferior returns. Disciplined strategic asset allocation takes the emotion out of investing and inherently ensures that investors buy low and sell high over extended time periods. Fear, greed and a lack of complete information are the amateur investor's worst enemies.

3. Invest For The Long Term – Too many investors focus their energies on short-term outlook and short-term trends. We believe it is impossible to consistently predict short-term economic trends and/or short-term market events.

4. Understand Multiple Types of Risk – Most investors focus too much on volatility risk (fluctuations in asset values). Inflation is every long-term investor's silent enemy. Inflation persists and inflicts unrelenting damage to portfolio purchasing power. Investors need to understand and evaluate many different types of investment risk.

5. Know Yourself – Successful long-term investing requires adopting a formal investment plan. This formal investment plan (often called an investment policy statement) must include an assessment of an investor's needs, goals, time horizon, liquidity, return and income requirements, and ability to incur volatility (risk).

6. Boring Works! – New and exciting investments are designed so they can be easily sold. "Boring" investments like index funds are true investment workhorses. Academic research suggests that it is impossible to consistently "beat the market". Accordingly, "passive" and "index" investment vehicles form the cornerstone of our portfolio strategy. Passive investment strategies in aggregate, always outperform actively managed strategies. In any given period, there are always a few active managers that outperform unmanaged indexes; however, these managers are virtually impossible to identify until after the fact.

7. Broad Diversification – Broad-based asset class diversification increases expected portfolio return while simultaneously reducing overall portfolio risk.

Click here for a PDF chart with more information.

8. Optimize Returns Using MPT – We utilize portfolio design methods based on Nobel Prize winning "Modern Portfolio Theory", which is an investment approach that aims to construct a portfolio offering maximum expected returns for a given level of risk.

9. Minimize Expenses – The surest way to enhance long-term returns is to reduce overall portfolio expenses. Irrefutable research proves that high expenses are directly related to poor investment performance.

10. Get Objective Advice – Be sure your sources of investment information and education are unbiased and objective.