Our Investment Approach/Philosophy
Our investment philosophy rests on two key principles:
- Grandma was always right don’t put all your eggs in one basket or in other words… diversify, diversify, diversify. Why? Because of principle #2
- Nobody can predict the future!
Based on this, we use a combination of cash, bonds, stocks and hedges in a globally diversified portfolio because research has shown this has performed the best over the long-term. We break bonds further out into short, medium, long-term and domestic as well as foreign. We break the stock component out further into small cap vs. large cap, growth vs. value and domestic vs. foreign. Our hedges/alternatives include miscellaneous assets classes like real estate, precious metals, natural resources, energy and alternatives.
We base our investment decisions on sound investment research and help you remove the emotions from the investment process and stick to a disciplined strategy over the long-term. We believe there are three ways to invest:
By Greed – which means you buy when things are high. We believe money is a means to an end, not an end in itself!
By Fear – which means you sell when things are down
By Objectives – which means we have an overall understanding of your entire financial picture and we structure the portfolio to achieve the required rate of return to meet your goals
Everybody says the basics of investing are to Buy Low and Sell High. However, we find that impossible to implement! Why? Because we do not know when is low! When is high? Therefore, a foundation of our investment strategy rests on the fact that we do not believe in “market timing” (trying to outguess short-term market or industry movements) or “stock picking” (we believe in efficient markets that reflect all available information at any particular time). Our strategy looks at broad diversification through the use of passive/index funds that are low-cost and tax efficient, leaving more money for you. We believe in some tactical asset allocation as broad economic trends develop and implement it through a “core and satellite” approach.
Since we are Fee-Only financial advisors, we do not make any money based on the particular mutual fund or investment instrument selected, which allows us to put your interests first. We are proud to be a DFA approved advisor and we enjoy the support they bring to our clients and us!