Our Investment Strategy

Our overall approach is based on four basic principles:

1. Return is a product of risk.

2. Time horizon, not age, determines the appropriate investment vehicle.

3. Proper asset allocation is vital.

4. Quality active managers can outperform indexes with less volatility.


Return is a product of risk.
To measure return, we examine the performance from 1970 through the present, provided by equities (as measured by the S & P 500 Index), bonds (as measured by Ibbotson’s Corporate Bond Index) and cash (as measured by the rolling one-month CD rate).

To measure an investment’s volatility, or risk, we use standard deviation. Standard deviation is a measure of how much the annual rate of return on an investment is deviating from the expected range of future returns.

By examining the historical results of these two investment measurements, we can make two basic conclusions.

  • Stocks typically provide better returns than fixed income investments, and fixed income instruments typically outperform cash.
  • Stocks are more volatile than bonds, and bonds are more volatile than cash.

From 1970 to 2015, U.S. equities (as represented by the S & P 500 Index) provided the best annual return in 28 of those 45 years, corporate bonds led for 10 and cash and equivalents led for 7 years. During the same 45 years, the compound annual average return of stocks was 10.3%, bonds averaged 8.7% and cash and equivalents averaged 4.9%.

Even more telling, the standard deviation of stocks was 17.4, the standard deviation of bonds was 10.2 and the standard deviation of cash was 3.4, supporting our conclusions about risk.

Time horizon, not age, determines the appropriate investment vehicle.
Our financial advisors consider time horizon, not age, in determining the appropriate investment vehicle. Our advisors follow a disciplined approach that accounts for your goals and how these goals change throughout your life.

Proper asset allocation is vital.
Asset allocation is more than just diversification. It is looking at a wide variety of investment choices from several categories and then developing a diverse portfolio of stocks, bonds and money market instruments. The process of determining which mix of assets to hold in your portfolio is based upon your specific financial goals. The asset allocation that works best for you at any given point in your life will depend largely on your time horizon and your ability to tolerate risk.

Quality active managers can outperform Indexes.
We have identified managers across the various asset allocation categories that share our risk-sensitivity. As a result, they have consistently outperformed their respective indices over long periods, and have done so with lower volatility.