Our Investment Principles

Investing involves taking risks. Not investing involves risks, too. The key is to recognize the risks you are taking and to manage them accordingly. Long-term investors may be rewarded precisely because of risk, not in spite of it. Market returns don’t follow a straight line; if they did there would be no risk, and therefore no potential for return. We believe financial markets reward long-term investors. People expect a positive return on the capital they supply and, historically, the equity and bond markets have provided growth that has more than offset inflation.

We don’t try to time the markets. We consider that to be speculation, not investment. What we do is structure highly diversified strategies around known sources of risk and return. By maintaining a well-diversified portfolio, you are managing risk, not trying to escape it. 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 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. Most people go wrong here and end up ‘buying high’ and ‘selling low’. We utilize a patient, low-key disciplined approach, requiring consistency and perseverance.

Emotions can get in the way of achieving your financial goals. Our biggest value to you may be in discouraging you from making poor investment decisions at the worst times. Look beyond the headlines—daily market news and commentary can challenge your investment discipline, stirring anxiety about the future or tempting you to chase the latest investment fad. We maintain our long-term perspective.

Make the most of things that you can control. But also be sure to evaluate factors that are somewhat or completely out of your control. You have no control over markets returns, but you do have complete control over your reaction to the markets. You also have some control over how much you save, how much you spend, when you retire, your health and longevity, and the investment fees you pay.

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. Investing involves risk and investors may incur a profit or loss regardless of the strategy selected.