Investing Strategy


Rather than trying to outguess the market, let it work for you.

Investing StrategyHype from Wall Street brokers, insurance companies, and the financial media supported by Wall Street's advertising dollars, perpetuate the myth that it's possible to consistently ‘beat the market over long periods of time.'

As a result even smart investors and even smarter investment managers strive to beat the market by taking advantage of pricing ‘mistakes', attempting to predict the future prices of their selections.

Over the long run, and often in the short run, this proves costly and futile. Predictions go awry and amateurs and professionals alike miss the strong returns that capital markets provide by holding the wrong stocks, asset classes, funds or cash at the wrong time. Meanwhile, capital economies thrive-not because markets fail but because they succeed.

Good News for the REALLY Smart Investor
The futility of speculation is good news for the investor. It means that prices for public securities are fair and that persistent differences in average portfolio returns are explained by differences in average risk and costs. It is certainly possible to outperform market, but not without accepting increased risk.

How the REALLY Smart Invest: Global Asset-Class Portfolios
There is a new model of investing. A model based not on speculation but on the science of capital markets. Decades of academic research and historical performance guide the way.

Principles of Global Asset-Class Portfolios

  • Markets work. Capital markets do a good job of fairly pricing all available information and investor expectations about publicly traded securities.
    Diversification is key. Comprehensive, global asset allocation can neutralize the risks specific to individual securities.
  • Risk and return are related. The compensation for taking on increased levels of risk is the potential to earn greater returns.
  • Portfolio structure & costs explain performance. The risk levels of the asset classes that comprise a portfolio, and the ‘all in' costs (bid/ask spreads as well as transaction fees) of those asset classes are responsible for most of the variability of portfolio returns.