Our Investment Philosophy
An appropriate asset allocation and a well-diversified portfolio are fundamental to investment success.
Selecting the right mix of bonds, stocks, and cash helps limit your short-term investment risk, and broad diversification prevents a single negative event from having a large impact on your wealth. We build portfolios to reflect your overall financial situation while targeting the least possible amount of risk needed to reach your goals.
Costs matter, so investors should look to limit fund and trading expenses.
Abundant research indicates that funds with lower costs often have superior relative performance. Infrequent trading can help keep costs down and boost returns.
In public capital markets, traders compete away any profitable active trading opportunities.
Well-capitalized and informed traders act quickly on new information, so the current price of a specific asset represents the best unbiased estimate of its true value. For this reason, and because active trading also tends to increase costs, “passive” investment vehicles (e.g., index mutual funds) offer the best long-term investment experience.
Investors should focus on long-term average performance and not chase short-term trends.
We believe that investors who try to time when to get in and out of markets usually harm their long-term returns. An appropriately built and rebalanced portfolio represents the best way to reach long-term investment goals.
Small company stocks and “value” stocks offer higher long-term performance both domestically and internationally.
Historically, stocks of smaller companies and stocks whose prices reflect deep discounting by the market have provided premium returns over long periods of time. We attempt to emphasize these types of assets within an overall portfolio context.
Fixed income investments (e.g., bonds) serve mainly to reduce a portfolio’s daily fluctuations, so it is important to emphasize high credit quality and short-term maturities. Income is a secondary benefit of bonds.
We target higher long-term performance by increasing your total ratio of equity to fixed income; therefore, fixed income should provide risk reduction.
