Broker Check

Philosophy

  • Markets work, especially over longer time horizons. This is based on numerous academic studies, market analysis, and historical results. These studies show that stock picking and market timing rarely outperform the market. Over shorter time horizons, some pricing inefficiencies or aberrations may occur but are soon brought back to appropriate valuation equilibrium.
  • Portfolio returns are directly related to risk. Investors willing to accept greater risk will be rewarded with potentially greater return. However, greater risk may involve increased volatility and greater chance of loss.
  • It is the proper allocation of the right mix of equities and bonds that help determine total portfolio returns and not the specific selection of a stock or bond. Studies show that proper asset allocation can account for more than 90 percent of portfolio variability.
  • Analytic studies and historical data reveal that, over time, small cap stocks outperform large cap stocks and value stocks outperform growth stocks. Therefore, a bias, within a proper asset allocation, to small cap equities and value equities will typically yield greater returns.
  • Fixed income securities or bonds are used to help control risk. Shorter termed securities are used to avoid uncompensated volatility risk associated with long term bonds. Higher quality bonds will better control credit risk. Municipal bonds are used for clients in higher tax brackets.
  • And finally, minimizing expenses and taxes is a critical step to achieving successful market returns.