Markets are efficient, avoid actively managed funds

Invest based on the evidence. Using actively managed funds to beat the market is costly to attempt and likely to fail. Instead, fully capture market returns using intelligently implemented passive funds.

Timing the market is impossible

Your investment allocation should reflect your long term plan, implemented consistently over time. It should NOT reflect your view on the relative valuation of the markets at any particular point in time, since consistently and accurately timing the market has been proven impossible.

Your portfolio should reflect your unique set of needs and goals

Your allocation between equities (for growth) and fixed income (to reduce portfolio volatility) should be based on your own unique set of goals, needs and risk tolerance. While there are rules of thumb to estimate an appropriate allocation, the right way to determine an optimal allocation for you requires a deep understanding of your particular situation. For many of our clients, the primary goal we are “solving for” is growth of the portfolio over time to fund retirement. This often results in a relatively larger allocation to equities than might be expected. The “cost” of this approach may be greater volatility in the short term. Yet for equities over the long-term, we believe that the market evidence is absolutely clear: the downs are temporary, the gains are permanent.

Diversification is your friend

To reduce risk, and to capture premium returns wherever they occur, diversify broadly across asset classes and geographies.

Invest based on evidence

Our approach to investing reflects much of the incontrovertible scientific evidence produced over the last several decades by academic and industry research. For example, over the long term, small company stocks (“small caps”) have been shown to outperform large company stocks. While some of this premium can be explained by the additional risk associated with smaller cap companies, there does appear to be an additional return premium provided for which is not explained by the additional risk alone. For this reason, we advise our clients to “tilt” their portfolios to have slightly more exposure to small cap stocks than would otherwise be the case in a pure index approach. Using this and other academically-grounded investment approaches, our goal is to achieve premium returns for our clients.

Costs and taxes matter

Own low-cost investments, minimize transaction costs, use tax-advantaged accounts wisely, realize gains and harvest losses strategically.