Our Investment Philosophy

There are many different approaches to investing. Some investors subscribe to technical analysis or market timing in an attempt to determine market movements. There are also those that believe that active managers, those who buy and sell stocks based on information believed not to be widely held, can beat overall market returns.

While these practices can at times provide returns in excess of market returns, research confirms that results are not consistent and that most who engage in these practices will fail to meet, much less exceed, market returns over the long term. Consequently, we do not believe that anyone can with any degree of consistency predict the direction of market swings or the resulting returns.

Our approach is to ensure that we control those things that are actually within our ability to do so. This approach resonates with our clients. We believe that:

• Proper diversification across broad asset classes provides the best opportunity for matching or exceeding market returns.
• Accurate gauging of client time horizons and individual risk tolerances can have a more important impact on portfolio performance than trying to guess market swings.
• A long term view of market performance makes sense and we help clients focus on their goals rather than short term market movements.
• Costs and commissions associated with the sale of investment products negatively affect returns.
• Our only compensation should come from the client, not third parties who may benefit from the sale of their products. As a result, we are a fee-only firm.

The Failure of Active Management

The debate over market efficiency may never be settled. But no one can argue the historical returns evidence, which shows that active management does not pay for itself, in aggregate.