Our investment philosophy is based on a few guiding principles.
Risk and Return are Related - Markets are relatively efficient; to achieve higher returns, one must take more risk.
Risk as a Focus - Choice of investments should be based on ability to bear risk through good markets and bad; spending policy, time horizon and liquidity needs drive decisions.
Asset Allocation - Selection of asset classes (treasury bills, small cap stocks, value stocks, etc.) is by far the most important determinant of performance.
Asset Diversification - Markets only compensate for risk that cannot be diversified so investments should include a range of fixed income, domestic and international equity securities.
Costs Hurt Performance - Trading costs, fees paid to active managers, market impact costs, taxes and other expenses can substantially undercut investment performance.
Comprehensive Investment Policies - Every investor needs a plan to
follow which should be reviewed annually and revised as circumstances change.
