Investment Philosophy

We believe that successful investing is not about beating the markets, but about achieving your objectives. The underlying objective of your investment policy should be to maximize your probability of successfully meeting your goals while avoiding any unnecessary risk. An important outcome of our philosophy is that we focus first on managing risk and then on obtaining required returns. We view these returns, not as an objective in themselves, but as a means to an end. Following are summary descriptions of the key components of our investment philosophy.


Every investment recommendation should be based upon careful research and analysis to ensure that it can be expected to efficiently and effectively further the client’s financial objectives, while presenting the client with acceptable risk characteristics.


The client’s investment portfolio should be as simple to understand and easy to manage as possible. Every component of the portfolio should be required to achieve the objectives. We advise our clients to consolidate accounts and use the smallest number of securities necessary to do the job.

Cost Efficiency

Investment management fees, transaction costs and taxes should be minimized consistent with the portfolio’s objectives. Over the long haul, investment costs are a significant drag on total performance and we believe it is unwise to handicap your portfolio with unnecessary expenses. Investment costs are certain, while superior performance as the result of active management is not.


The portfolio should be sufficiently diversified to maximize risk-adjusted returns within and among each asset class. Portfolio concentration introduces uncertainty and risk that are not adequately compensated by returns. Properly diversified portfolios always deliver better risk-adjusted returns than their concentrated counterparts.


The portfolio should provide maximum liquidity given the client’s objectives. It is critical that the portfolio provides for your cash needs without undue cost or risk. We design your investment policy to accommodate any anticipated cash needs, including reasonable emergency reserves.


Your investment strategy should be thoroughly tested against extreme market conditions to ensure its ability to survive reasonable future uncertainty. We use sophisticated modeling and simulation techniques to test your investment policy under extreme hypothetical market conditions.


The portfolio should be designed to maximize the probability of successfully meeting its objectives under uncertain market conditions. Our modeling system is designed to help you understand and optimize the variables that affect your plan (savings rate, income needs, age at retirement and investment policy).


Uncertainty should be eliminated from the investment strategy whenever and wherever possible. All other things being equal, we always prefer the predictable to the uncertain.

Our Investment Recommendations

Our investment philosophy leads us to avoid recommending investment in individual stocks, bonds, managed mutual funds or speculative market timing.

Whenever possible, we recommend that you invest your assets using exchange-traded market index funds (ETFs) in a discount brokerage account.

When this is not possible, we will recommend what we believe to be the best possible investment options available in your accounts. This is typically the case when you participate in an employer sponsored retirement plan, like the TSP or a proprietary 401k plan, but can also occur when you have invested in a variable annuity or life insurance contract that cannot be surrendered.

In the end, we’ll recommend that best investment securities possible, given your unique circumstances.