Our Investment Philosophy

We help individuals and families pursue their ideal retirements.

Independent, objective financial advice

We believe in building lifelong relationships. We do this by taking what can be a very challenging topic - your financial life - and proving resources, clarity and recommendations so you can make informed decisions. At the end of the day, we specialize in independent, objective financial advice.

We are intentional about risk reduction and mitigation. Rather than unnecessarily taking inappropriate risks, one of our primary objectives for the majority of our portfolios is preservation of capital. Then, and only then, based upon your stated objectives, we insert calculated risks as efficiently and prudently as possible in an effort to achieve your goals. To deploy risk effectively, we diversify your portfolio and utilize low-correlated asset classes through the implementation of diversified structured funds, government treasuries, annuities and, when appropriate, various alternative investment and insurance products.

Our investment management methodology incorporates the Efficient Market Hypothesis, the Modern Portfolio Theory and the Fama-French Three Factor Model. Below are the academics behind these three philosophies:

Efficient Market Hypothesis asserts that the financial markets are “informationally efficient.” In consequence of this, one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the investment is made.

Modern Portfolio Theory, or MPT, was developed in the 1950s, and several of its creators won a Nobel Memorial Prize for the theory. It attempts to maximize portfolio expected returns for a given amount of risk, or equivalently minimize risk for a given level of expected return, by carefully choosing the proportions of various assets. MPT defines risk as the standard deviation of return, and models a portfolio as a weighted combination of assets, so the return of a portfolio is the weighted combination of the assets’ returns. By combining different assets that have returns that are not perfectly positively correlated, MPT seeks to reduce the total variance of the portfolio return. MPT also assumes that investors are rational and disciplined, and that markets are efficient.

The Fama-French Three Factor Model, or FFTFM, is a model designed to describe stock returns. Eugene Fama and Kenneth French were professors at the University of Chicago Booth School of Business. Contrary to the Capital Asset Pricing Model, the FFTFM defines three independent dimensions of equity returns, rather than only one. It is possible to apply these factors to measure the role of each factor in returns. The three factors are:

• The Market Factor — the extra risk of stocks vs. fixed income
• The Size Effect — the extra risk of small-cap stocks over large-cap stocks
• The Value Effect — the extra risk of high book-to-market over low book-to-market stocks

Different types of investments involve varying degrees of risk including market fluctuation and possible loss of principal value. There can be no assurance that any specific investment strategy will be profitable.

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