Investment Philosophy

Risk and Return
Investments in the equity markets (stocks) will over time earn significantly higher rates of return than investments in the fixed income markets (bonds and cash). Investments in the equity markets will also suffer losses more frequently than the fixed income markets. This chance of loss is called risk. To balance this trade off between return and risk, we recommend broadly diversified portfolios allocated to multiple asset classes with additional diversification within each asset class.

Expenses and Taxes
It is not enough to just manage investment risk and return. Expenses and taxes are also key elements in any investment portfolio. Any reduction in expenses or taxes will improve a client’s rate of return and this improvement can be dramatic if, as we suspect, the markets experience rates of return lower than the historical averages. We use passively managed investments (low expense) for part of a client’s portfolio and actively managed investments for the portion of a client’s portfolio with higher risk. We explore all investment vehicles open to our clients to minimize taxes and expenses.