Investment Philosophy

There are a handful of bedrock investment convictions that if followed, that can help you pursue a long term investment plan.

  • Purchase assets that have long-term value. Investing means owning assets that have an underlying intrinsic value.
  • Invest within the context of a long-term financial plan. Your goal is to increase your after-inflation, after-tax wealth over the long term. If this goal has not changed then we will not need to change your portfolio.
  • Diversification is a strategy that reduces risk by allocating investments among various financial instruments, industries and other categories. It aims to maximize return by investing in different areas, while minimizing risk. However diversification does not guarantee against loss.
  • Have optimism about the future. The world economy grows due to technological, financial and human capital coming together to grow existing profits or create new ones. This has been true over thousands of years of recorded history. Our investment philosophy is based on the assumption that this will continue to be true. However the economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
  • Rebalance on a disciplined basis. Re-balancing an investment portfolio each quarter if the current allocation drifts outside of the target allocations by 20% or more of the target. We will look often but, trade infrequently. Portfolio turnover is negatively related to return.Please note that rebalancing investments may cause investors to incur transaction costs and, when rebalancing a non-retirement account, taxable events will be created that may increase your tax liability. Rebalancing a portfolio cannot assure a profit or protect against a loss in any given market environment.
  • Exercise emotional control. We can be governed by the four words "This too shall pass” rather than “this time is different.”
  • Have a long-term focus. The only two rational definitions of risk are a failure to meet long term goals and permanent loss of capital. Everything else is volatility.
  • Don’t attempt to time markets nor predict the future. The near-term future is unknowable. It is better to be approximately right rather than precisely wrong.
  • Minimize fees and taxes to the greatest extent possible by utilizing low-cost, tax efficient methods to implement investment strategies.