Learn More About Our Strategy
The Logic Behind Our Investment Approach:
Modern Portfolio Theory
We closely follow Modern Portfolio Theory by diversifying our client's portfolio. For the stock portion we allocate the majority of investment funds to US markets and with a healthy portion to international markets which, on average in the past, has lessened risk while producing higher rewards.
Efficient Market Hypothesis
People often believe that they can "beat" or time the market and as a result produce results based on luck. The reality is that the market is always shifting and, in the short run, impossible to predict. We believe that market level returns are a good tradeoff for the risk we put forward.
Three Factor Model
Based on historical data there very few factors that have an outsized influence on returns. The model acknowledges that stocks outperform bonds long term. The model also states that investing in smaller companies and companies with lower price to earnings ratios can lead to greater performance with an acceptable increase in risk. This means there is an opportunity to boost returns by outweighing specific sectors based on factor analysis. We work within the client's risk level and use this technique to skew the portfolio to those factors.