Evidence Based Investing
Logic vs. Emotion
Evidence Based Investing (EBI) is a disciplined approach to asset management that combines the data we have from the past and present with honesty about the unknowable future. EBI seeks to filter through forecasts, noise, and emotions in order to make reasoned investment decisions to avoid as much negative investor behavior as possible.
Strategic and Disciplined
Research shows that strategic asset allocation is the most important determinant of risk and performance—far more so than security selection or market timing. We design and implement globally diversified portfolios that invest in a calculated manner across the major asset classes. Using a disciplined approach our investment committee continuously monitors these allocations and the correlations between them.
Passive and Active
In efficient markets where the odds of outperforming the benchmark are small, we favor a broad passive approach (indexing). We seek to gain exposure to the asset class at the absolute lowest cost. In less efficient markets we prefer to use the expertise of carefully selected managers. With these actively managed funds we utilize the lowest cost institutional share class when appropriate.
Institutional Investment Approach
Institutional investing means disciplined decision making, using lower cost investments, and implementing effective diversification.
Our investment committee meets bi-weekly to monitor and review portfolios. We employ independent, objective thinking in our process. Our fee-only compensation structure allows us to seek out best-in-class investments without undue bias or conflict of interest.
As a professional investment company we have access to lower cost institutional share class mutual funds. These funds have very high minimum investments, (typically $1 Million plus), putting them out of reach for most retail clients. Clients benefit from our access to these lower cost funds.
When constructing portfolios we use investments that have a low correlation to each other. This is the essence of asset allocation—not having all of your eggs in one basket. Unfortunately most investors do not understand the correlations and relationships of one investment to others.
Socially Responsible Investing
Sustainable, responsible and impact investing (SRI) is an investment discipline that considers environmental, social and corporate governance (ESG) criteria.
A growing number of our clients want to align their investments with their personal values. We believe this can be achieved without sacrificing performance. The financial industry has created three basic parameters to determine if a fund is socially responsible. Those are environmental, social, and corporate governance factors. Among investments that meet these parameters, we select high quality passive and actively-managed funds—using the same process as we do with our core portfolios. The result is portfolios with purpose, performance and positive impact.