Your goals, circumstances, and personality are unique to you, your investment portfolio shouldn’t be any different.
We believe crafting an investment strategy that reflects your unique characteristics increases the likelihood of achieving your goals. After accounting for what’s important to you, we filter our investment decisions through a few core beliefs focused on managing the variables in our control and diversifying against the risks outside our control.
Allegiance to Asset Allocation
A portfolio’s asset allocation has been shown to drive over 90% of the variability in investment returns 1. That’s why we use your tolerance and capacity for risk, personal and financial goals, liquidity needs, and other unique circumstances to produce your custom asset allocation.
Championship caliber sports teams are comprised of players with talents that complement each other and make up for their teammate’s shortcomings. We construct portfolios using the same methodology, diversifying across investments with risk/return profiles intended to complement each other and limit portfolio drawdowns.
Your asset allocation was tailored to your exclusive situation and risk profile. Without rebalancing, portfolios become less diversified and take on risk contrary to the investor’s intended allocation. While rebalancing may marginally increase returns, the primary benefit is reduced volatility aligned with your expectations 2.
TAX EFFICIENCY & COST CONTROL
Your after-tax, net of fee return represents the portion of return that stays in your pocket. We seek to minimize costs and optimize tax efficiency by employing low cost, passive ETFs to allocate across most asset classes. In addition, our comprehensive financial planning process familiarizes us with your specific tax circumstances so we can determine if tax-exempt securities have a place in your portfolio.
Capitalizing on Behavioral Inefficiencies
Studies consistently show the average mutual fund investor underperforms their respective benchmark 3, largely due to poor attempts at timing the market. Maintaining a long-term investment perspective during times of short-term volatility may allow disciplined investors to capitalize on the irrational, fear driven decisions of their speculative counterparts.
1 Gary P. Brinson, Brian D. Singer & Gilbert L. Beebower (1991) Determinants of Portfolio Performance II: An Update, Financial Analysts Journal, 47:3, 40-48, DOI: 10.2469/faj.v47.n3.40
2 Ilmanen, A., & Maloney, T. (2015). Portfolio Rebalancing, Part 1: Strategic Asset Allocation. AQR Website. Retrieved March 8, 2023, from https://www.aqr.com/research-archive/research/white-papers/portfolio-rebalancing-part-1-strategic-asset-allocation
3 DALBAR (2015). DALBAR’s 22nd Annual Quantitative Analysis of Investor Behavior. https://cdn2.hubspot.net/hubfs/5341408/EP_Wealth_Advisors_April2019/pdf/2016-Dalbar-QAIB-Report.pdf