Investment Approach

Our Investment Approach

Our approach to developing and managing investment portfolios is predicated on certain fundamental assumptions with regard to the factors that most influence investment success; among these factors are the following:

Asset Allocation
The returns to a portfolio will be more influenced the particular mix of investment classes than by any other single factor. A study by Brinson, Hood, and Beebower showed that 94% of the variation of returns among institutional portfolios could be attributed to the asset allocation decision, while 4% was attributable to individual security selection, and 2% to market timing decisions. Asset class categories consist of things like money markets, bonds, domestic large company stocks, domestic small company stocks, international large and small company stocks, real estate securities, and emerging market securities, among others. When we develop your investment policy, it includes specific targets for each of these categories.

Value Criteria
Numerous studies have demonstrated that stocks trading at low multiples of their book value per share offer higher returns in the long run. If one particular market segment is to be favored over another, therefore, it makes sense to overweight value stocks over so-called growth stocks (i.e. low price-to-book ratio stocks versus high price-to-book ratio stocks). We typically give client portfolios exposure to the broader markets supplemented by additional investments in value stocks; we never make specific allocations to growth stocks.

Size Criteria
It has also been demonstrated that the size of a company influences its expected return, with smaller companies offering higher returns than larger companies over the long run. A well-diversified portfolio will have a significant allocation to smaller-company stocks.

Fees and Expenses
The future returns to any individual investment, or asset class, are not under our control. We can, however, exert prior control over the degree to which those returns are reduced by ongoing fees and expenses. Investments with low ongoing expense ratios, therefore, should be favored over investments with relatively high expense ratios, without regard to whether or not the investment vehicle was able to overcome its high expenses in the past.


“Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness that most frightens us. We ask ourselves, Who am I to be brilliant, gorgeous, talented, fabulous? Actually, who are you not to be? Your playing small does not serve the world. There is nothing enlightened about shrinking so that others won't feel insecure around you. We are all meant to shine. And as we let our own light shine, we unconsciously give others permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.” ~Marianne Williamson