Academically tested portfolio design

We don’t chase stories. We don’t believe in hot tips. Smart diversification works over the long term.

Our approach to investing


We’re not only experienced planners, we’re also intelligent investors. Our recommendations are based on the science of capital markets. We use low-cost, highly diversified, tax-efficient funds and don’t play the game of trying to call market swings.

After 30 years in the business, we’ve weathered good markets and bad, and have generated results that demonstrate an unwavering commitment to our clients’ financial well-being. We take our responsibility as stewards of an individual’s investments very seriously. For most of our clients, the assets we manage represent the bulk of their wealth. We aim to maximize returns while providing downside protection against market volatility. We maintain the discipline and perspective needed to resist the temptation to pursue speculative investments during sizzling markets or to let doom-and-gloom scenarios prevent participation during market rebounds. As a result, our client portfolios are resilient and designed to weather a range of unpredictable market storms intact.

Step One: Portfolio Design

When it comes to your investment portfolio, we start at the beginning: asset allocation. Getting the asset allocation right (most broadly, the mix of cash, [more]bonds and stocks) is key to constructing a portfolio that holds up against two realities investors must face: volatility and uncertainty. We believe that your asset and allocation should reflect your financial needs, concerns and circumstances, rather than a particular perspective or prediction of the financial markets or global economies. We never forget that the money we manage for you represents more than numbers on a page.

Your Portfolio Guidelines will be the foundation for every decision we make for your portfolio, and will contain our recommended asset allocation targets for you. Key components of your Portfolio Guidelines include:

  • Your investment goals
  • Your time horizon
  • Your risk tolerance
  • Your tax profile
  • Your current and anticipated income needs

By combining these factors we arrive at the mix of investments that is appropriate for you. Over time we will actively monitor your account and adjust your portfolio as needed to achieve your goals. Crucially, your target asset allocation will change in response to your own evolving needs, as reflected in your Portfolio Guidelines, rather than to perceived shifts in the investment climate.

Often our clients come to us with an existing portfolio of investments that may not be in sync with our allocation targets. We map out a plan to get from Current to Target, and over time make the shift, keeping in mind a host of considerations including capital gains taxes. Although we generally manage the entire investment portfolio for our clients, you may hold assets outside of our management, such as a 401(k) or another employer-based retirement plan. If this is the case, we will also put together your Global Asset Allocation, an analysis of the mix and diversification of your combined investment portfolio. We update and review this at least annually to ensure that your overall investment exposure is aligned with your optimal asset allocation.

Step Two: Portfolio Strategy

After we determine your target asset allocation, we turn our attention to investment strategy. The foundation of our strategy is built on three key [more] beliefs:

First, we believe that diversification is necessary and crucial for achieving long-term results. We are committed to diversification on a number of levels, including across asset classes (i.e., cash, bonds and stocks), and within a particular asset class (i.e., US and non-US stocks). This approach reduces short-term market volatility – a goal that cannot be achieved with strategies that try to time the market or beat short-term performance standards.

Second, we believe market timing cannot be done successfully over the long term. We keep abreast of economic trends and business developments, but do not make predictions with regard to interest rates or the stock market. Of course, prevailing market conditions will affect your portfolio’s performance. With the right asset allocation, you will have the solid foundation you need to maintain discipline and focus over the long term.

Third, our experience has shown us that mutual funds are the most appropriate investment vehicle for most individual investors. Funds exist to satisfy every investment niche, and we believe that the advantages inherent in funds (diversification and access to professional management topping the list) outweigh any disadvantages (for example, tax inefficiency and expenses).

Should your current portfolio include individual stocks, be assured that we will not sell them outright. First, we will assess them to determine whether they are compatible with your Portfolio Guidelines. We’ll also consider other factors, such as performance and potential capital gains taxes before recommending which stocks should be kept in your portfolio and which should be sold. We will never sell your stocks without your agreement, regardless of our long-term goal to shift out of individual stocks and into mutual funds.

Step Three: Portfolio Implementation

The three core beliefs that form the basis of our investment strategy lead us naturally to an implementation approach based on the science of capital [more]markets. When it comes to specific investment decisions, we invest with a range of mutual fund providers. Further, we rely heavily on the academic research of Dimensional Fund Advisors (DFA), led by their brain trust of Nobel Laureate Eugene Fama and Kenneth French.

DFA is a leading global investment firm that has been translating academic research into practical investment solutions for over 30 years. The firm’s approach is guided by a strong belief that ultimately, markets work. They believe that markets are efficient, and further, that security prices reflect all publicly available information as competition among market participants drive prices toward fair value.

Using efficient market theory as a starting point, DFA works closely with leading financial academics to identify new ideas and conduct research to benefit investors. Over time, this work has led to the identification of systematic differences in expected returns – coined by DFA as “dimensions.” Such dimensions include the equity premium, the small cap premium, the value premium and the profitability premium. DFA has created low-cost mutual fund portfolios that are structured to take advantage of these dimensions.

Managing Results

We provide you with quarterly updates and reports to ensure that your plan is implemented completely and seamlessly. As life changes and your financial [more]situation evolves, we proactively determine whether course corrections are warranted to keep you on track. We monitor the performance of your funds on an ongoing basis and will rebalance your portfolio on a quarterly basis – keeping all the elements of your Portfolio Guidelines in mind.