Our Investment Principles

Risk and return are related over long periods of time. The key is to recognize the amount and the kinds of risks you are taking and to manage them accordingly.

We believe that diversification through strategic asset allocation is the key to managing risk. While it is generally agreed that diversification is best for most investors in the long run, it does mean you’re likely to underperform the hottest areas of the market in the short run.

We don’t try to time the markets. Most people go wrong here and end up ‘buying high’ and ‘selling low,’ which can lead to big losses. Moving to cash increases the risk that you may miss market rallies, which often take place in short bursts. We utilize a patient, low-key, disciplined approach, requiring consistency and perseverance.

We are not dependent on hunches. The world is too complex for simplistic predictions. We can analyze long-term trends, and we can assign some probabilities to those trends, but we can’t predict the future.

We generally prefer simplicity over complexity. Over the years, there has been a tremendous amount of innovation in the capital markets, which has often led to higher levels of complexity and risk. Generally, simpler is better.

It is better to err on the side of prudence than to be too aggressive. Keep expectations realistic. Any investment that purports to provide significantly higher than market-rate returns or that seems too good to be true may not perform up to expectations.

Emotions can get in the way of achieving your financial goals. As long as fear and greed remain part of the human condition, you may have anxiety about the future or be tempted to chase the hottest parts of the capital markets. When it comes to your investments, this can lead to unsuccessful outcomes.

Make the most of things that you can control. You have some control over how much you save, how much you spend, the asset allocation of your investments, when you retire, and your health and longevity. We employ a “three tax buckets” strategy where possible for tax diversification.

Taxes matter. Taxes can be a help or a hindrance to achieving your financial goals. We pay considerable attention to the tax consequences of any financial decision.

While our investment principles do not change, we are continuously evaluating our investment process and testing our assumptions using some of the best financial research data that’s out there. Every improvement matters, big or small. Above all else, we’re committed to our clients.