Evidence Based Investing
North American Markets are Efficient
Active managers cannot consistently beat the market. While prices might not always be right, the market is the best tool we have for assessing value. The evidence is clear that efforts to identify mispriced stocks are rarely rewarded in large portfolios.
Diversification is Key
Investors are rewarded for taking risk in the equity and bond markets, but not for the risk of holding individual securities. By building portfolios with thousands of stocks and bonds we are able to capture the returns of the markets with less volatility.
Risk and Return Are Related
Increasing the expected return on a portfolio requires additional exposure to the equity market. Our portfolios will scale this exposure based on both your individual needs and your risk tolerance.
Portfolio Structure Explains Performance
Asset allocation—not picking stocks or timing the market—accounts for most of the performance in a diversified investment strategy. Our portfolios have long-term asset allocation targets and are rebalanced when necessary.
Asset Location
Asset location is a tax minimization strategy that takes advantage of the fact that different types of investments get different tax treatments. Using this strategy, an investor determines which securities should be held in tax-deferred accounts and which securities should be held in taxable accounts in order to maximize after-tax returns. We fit our strategy into you, rather than fitting you into a strategy.
Focus on What We Can Control
What Risks Do You Want To Take
What Asset Classes and factors do you want exposure to – and how much exposure should you have to each?
Diversify The Risks You Take
Diversify sufficiently to minimize the unsystematic or uncompensated risks.
Invest in Evidenced Based Vehicles
When possible, focus on passively managed vehicles that are based on rigorous research, as opposed to opinions. In overseas or less transparent markets, utilize rules based active management that is specialized to that market.
Keep Your Cost Low
Understand and minimize all costs, including taxes, fees and bid ask spreads. The risks you take provide your returns, our job is to minimize the drag of costs and taxes through planning and efficiency. Ultimately your net returns are what matters.
Stay Disciplined and Rebalance
Take the time to make a plan and to understand the assets you own. Market moves will happen, both ups and downs. Have a strategy of how to react so emotion doesn't take over.
Never be Stagnant
We are constantly reviewing new products and solutions in order to continue to deliver optimal solutions for your wealth in an ever changing environment. While we are confident in the strategies we are using, we understand that the world is dynamic and the constant review of both regulation and innovative products is necessary to maintain an optimal solution.
