Investment Philosophy

Our investment philosophy reflects a practical, common-sense approach that has been refined with many years of experience. There are certain principles that we strongly embrace, and they influence the way we manage investments.

Select a principle below for more detail.

Would you rather be told that “your portfolio is up 14%” or that “you are still well on track to achieve the kind of life you want for yourself and your family”? We believe the best performance benchmark is progress towards your individual goals.

Once you have goals that are achievable, why would you want to take on more risk than is necessary to reach them? Ironically, many people get caught up in trying to maximize their short-term returns and expose themselves to much more risk than they realize. Why? Perhaps they do not know how much money they need to achieve their financial goals – or worse yet, don’t even have any goals.

It is important to measure your investment performance in the context of your life’s goals. Otherwise, how can you achieve the proper balance between living today and preparing for tomorrow? Without that context, how does knowing “your portfolio is up 14%” give you any comfort? Our first step in investing is to help you define realistic goals based on your circumstances and desires.

Would you rather be the tortoise or the hare? Our investment approach seeks steady progress towards our clients’ long-term financial goals rather than maximum quarterly returns.

We are more concerned with preservation of capital than with seeking unrealistic returns, and for good reason: a major factor in realizing your long-term investment goals will be how well you avoid overwhelming losses. The performance of the stock market over the past six years demonstrates the “irrational exuberance” and subsequent anguish associated with pursuing unsustainable returns.

Steady progress with less volatility is superior to wild upswings and downturns - both for your long-term results and for your short-term peace of mind. We build and manage portfolios with this in mind.

When the stock market was headed down, did you own other assets that were appreciating in value?

Asset allocation is the most critical determinant of portfolio returns – far more important than individual security selection or market timing. A properly balanced portfolio is not only positioned for long-term growth, but should also reduce potential short-term losses due to its multiple asset classes.

From January 2000 until December 2002, as the S&P 500 fell by more than 34%, other asset classes, such as bonds and real estate, returned 34% and 67%, respectively 1.

Yogi Berra said, “It's tough to make predictions, especially about the future.” Trying to time the market or pick the next quarter’s top performers is a fool’s errand. Your best bet is to take a long-term approach and invest in a portfolio comprised of the appropriate balance of asset classes.

1 Return figures are S&P 500 Composite Total Return Index, Lehman Brothers Aggregate Bond Index, and NAREIT Index.

Large-cap growth? Small-cap value? Perhaps these labels are helpful for Morningstar to organize its mutual fund reports, but we see things differently.

We prefer to view investments simply as “over-valued” or “under-valued” - and we hire managers who share this philosophy. Rather than be boxed in by artificial boundaries, these managers seek primarily to invest in good companies at good prices, regardless of the style or category.

We embrace a long-term perspective when making investments. Our approach is intended to help our clients achieve their lifetime financial goals – not to maximize quarterly performance.

Investing is intended to achieve long-term goals, and a short-term perspective can lead to bad decisions. We prefer investing to speculating. Markets rise and fall every day and investing fads come and go, but we have the confidence and the discipline to stick to our investment approach and position our clients’ portfolios for long-term success.

Have you ever waited on a losing investment to “come back” before you sold it? If you did not already own your current investments, would you still buy them today?

It is often very difficult for individuals to take a purely objective, unemotional view of their own investments. As an outside professional resource, one of the ways we add value is by actively and unemotionally evaluating our clients’ portfolios and making objective decisions as needed.

Does it seem strange to see a mutual fund brag about beating the S&P 500 – even though it lost money?

If the S&P 500 is down 22% next year, and your portfolio is down “only” 16%, we will not consider that a success! Our investment approach involves preservation of capital and minimizing the downside, while steadily increasing the purchasing power of your investments by generating real returns in excess of inflation, over a long period of time.

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