We believe a disciplined,
long-term investment strategy
and diversified portfolio offer the strongest
potential for realizing your desired rate of return. Our
investment advice is primarily focused on active and passive no-load mutual
funds with occasional recommendations for individual bonds.
Our investment process is based on these guiding principles:
We are mindful of our fiduciary responsibility
the trust placed in us, we treat your money with the same care and
prudence we treat our own. We act fully in your interest, making
recommendations that further your unique goals.
We develop diversified portfolios using multiple asset classes
Portfolio construction is
defined by principles collectively known as Modern Portfolio Theory,
based on the work of Nobel Prize Laureate Harry Markowitz. A primary
tenet of this theory is that there is a relationship between risk and
return. Portfolios composed of several non-correlating asset
classes will experience fewer price movements and less volatility than
more concentrated portfolios, even though more diversified portfolios
will inevitably include some underperforming positions at any given
time. The result tends to be a portfolio with a higher
We pay close attention to risk
manage portfolio volatility and downside risk, aiming for the desired
return within a client's risk tolerance. We measure risk for individual
asset classes and for the overall diversified portfolio. Although
investors can't earn significant returns without taking some investment
risk, risk can be managed prudently through appropriate asset
allocation, diversification, and disciplined rebalancing.
We develop portfolios for the long-term
Our portfolios are designed to
achieve long-term goals. We do not time the market nor make
decisions based on short-term market anomalies. Investors who
allow interim market swings to send them off course can fall short of
their goals. Therefore, we ask you to follow our investment
recommendations for sufficient time to benefit from the marketís
long-term direction and to allow temporary market declines ample time to
We monitor investment performance
Communications and performance monitoring are keys to a successful
investment advisory relationship. We measure the growth in your
investments against both your stated objectives and independent benchmarks.
We rebalance your portfolio to keep your asset allocations in
line with your plan.
We aim to reduce taxes
We believe tax
efficiency is critical to achieving your long term goals. During
portfolio construction, we minimize the impact of taxes by considering the
differences between taxable investment accounts and tax-deferred retirement
accounts. For example, year-end portfolio turnover, capital gains,
and distributions affect these accounts differently. Toward year-end,
we review taxable accounts, seeking opportunities for tax optimization.
When appropriate, we harvest tax losses to offset gains in
outperforming funds. We also work with clients to develop
effective distribution strategies for tax-deferred accounts.
We are cost conscious
We continually research investments to understand their hidden costs and
true value. We use only no-load mutual funds so clients never
bear front-end or back-end loads, and rarely incur 12b(1) marketing fees.
Within the no-load category, we select funds with lower expense
ratios, higher historical returns, and longer management tenure than industry
averages. When appropriate for the portfolio, we may use index
mutual funds for certain asset classes, which have lower expenses and lower
taxable distributions than actively managed funds.