Our Investment Philosophy
Our investment philosophy is informed by the results of decades of Nobel Prize-winning research in capital markets and financial economics conducted by legendary academic scholars. The investment structures that we put together for our clients are tailored to incorporate the personal risk and return preferences of each client while adhering to the following investment principles:
- Markets are Efficient – we believe that capital markets quickly incorporate all available information into the price of securities being actively traded on that market and that the efforts of managers to time-the-market or to otherwise capture outsized returns by outguessing the market are futile.
- Risk and Return are locked together – we believe that over a sufficient window of time, the markets reward risks taken by the investor; but, that only a few investment dimensions (size, value and profitability) have been consistently rewarded over and above what the overall market provides. Simply put, if you do not understand why a particular investment yields a favorable result over a given period of time then you likely do not understand the nature of the risk that you are taking.
- Diversification Matters – we believe that the more concentrated your positions are in too few companies, geographical markets or even asset classes the higher your risk. By utilizing the broadly diversified funds of companies such as Dimensional Fund Advisors, Vanguard, American Funds and others, we are able to spread investment risk across more than 10,000 companies located in both the U.S. and abroad.
- Portfolio Structure determines performance – we believe that creating client portfolios that are well diversified, that emphasize those dimensions that are consistently rewarded, that take into consideration the client risk profile, investment management costs, turnover and taxes will better serve our clients in the long run.