- We treat asset allocation as a process, not just a description. Portfolio allocations are not static; they are dynamic and need to be managed over time.
- Most markets are “efficient enough” to make the lower-cost and lower-risk approach of passive investing (indexing) attractive. However, there are market segments and investment strategies for which passive investing is not the best option, such as fixed income and large cap growth.
- The costs involved in running a portfolio need to be understood and kept as low as possible.
- Rebalancing the portfolio to keep the risk/return profile on target is a critical success factor. Rebalancing is a portfolio management technique that forces the investor to buy low and sell high. Though it seems like a given in the investment world, few investors pay such close attention to this in a rigorous, ongoing, and disciplined fashion.
- The portfolio is successful only to the degree that it meets the needs of the organization and to the degree that the committee can exercise proper oversight. The ability to work with investment committees and within a well-defined governance structure is a vital part of ensuring a successful investment experience.
We offer our clients a well-defined investment philosophy. Our approach is predicated on several core beliefs which are grounded in both academic theory and empirical evidence, as well as our years of experience running client portfolios and working with committees: