Investment Management

 

Our purpose in managing your money is to not "beat the market," but to design an investment program tailored to your specific needs.  We will develop a portfolio with an appropriate level of market risk to support your goals while minimizing volatility and reducing the probability of large losses.

We employ a passive, asset-allocation approach to investing, guided by the following principles:

 Markets are “Efficient.” 

Security prices continually reflect all available information.  Active portfolio management cannot beat the market over time, especially when expenses and taxes are taken into account. 

 Diversification is Key. 

Concentrated investments add risk with no additional expected return.  A diversified portfolio with multiple "uncorrelated" asset classes should provide needed returns with the lowest possible amount of volatility.  The secret to long-term investing is to avoid serious losses. 

 Risk and Return are Related. 

Exposure to meaningful risk factors determines expected portfolio return.  Specific sources of investment risk include small capitalization stocks, foreign stocks, value stocks, real estate securities, and commodities.

 Portfolio Structure Explains Performance. 

Asset allocation along size, value, and market exposure dimensions primarily determines the results of a broadly diversified portfolio.  Selection of specific securities is less important than the original allocation decision.