Investment Philosophy

Before making any investment decisions, we help you determine where you’re at and where you’re going. We focus on your priorities and work with all areas of your financial life.

We believe there are simple catalysts for creating long term wealth, consistent dedication to living within your means (saving) and a tax efficient, low cost, efficient approach to investing. Simply stated, avoiding costly mistakes and being in a position to take advantage of opportunities.

Don’t let your savings adjust to your spending needs. Let your spending adjust to your savings needs.

Financial security does not require extraordinary income or investment “home runs.” It requires, first and foremost, that you start saving and investing early, and add to your investments consistently.

To ensure good stewardship of your savings, we follow an investment philosophy we believe to be the surest path to financial independence.

• Markets are highly efficient: Financial markets discover and distribute financial information so quickly that it is impossible, over any statistically relevant period of time, for active managers to consistently outperform the overall market.
• Costs and taxes matter: The high costs of active management make it almost impossible to outperform indexed investment strategies consistently. Over time, a diversified portfolio of passive funds will, in the aggregate, generally produce a yearly after-tax return measurably greater than that of a corresponding actively managed portfolio.



• Market timing is a losing proposition: Academic research suggests that over the long run, the use of market timing does not result in market beating returns.
• Past performance has no predictive value: While past performance is the guideline most often used by the active investment community in selling future performance, most available data not only shows that past performance is of no value in selecting superior performing investments in the future, but also concludes that above average performance in the past often turns into below average performance in the future.
• Asset allocation counts: The asset allocation decision (the amount we invest in stocks, bonds and cash) is the most important factor determining investment return (estimated to account for as much as 94% of variations in portfolio performance).
• Asset location counts too: In an effort to find the optimal location for different asset classes, we analyze your tax situation, cash flow needs, prevailing tax laws, and the characteristics of asset classes to achieve a higher after tax return.
• Diversification is the key: Effective diversification strategies serve to reduce the risk in a portfolio without sacrificing the portfolio’s long-term expected return. Returns of different asset classes have significant variations from year to year. This years winners could easily be next years loses and vice versa.



• Endogenous Risk Analysis: A tailored asset allocation specifically based on risk factors unique to your situation ensures you maintain the proper balance of equities and fixed income investments.
• Risk and return are related: Investors who focus on the possibility of earning over-the-top returns must be prepared to accept the consequences of assuming excessive risk. In the short run, in particular, excessive volatility can be the investor’s worst enemy (remember how the unforgiving math of the market works: down 50% means up 100% just to get back to even).

“All the time and effort that people devote to picking the right fund, the hot hand, the great manager, have in most cases led to no advantage.”

- Peter Lynch

Important Links:

• Dimensional Fund Advisors – www.DFAUS.com
• Treasury Direct – www.TreasuryDirect.gov