100 Europa Drive, Suite 410 Chapel Hill, NC 27517 Secure Client Portal
919 459 8181

Investing Philosophy

We believe we have found a better way to invest. It is grounded in academic research and common sense, and supported by analysis of almost 100 years of investment performance.

Create an individualized portfolio for each client, based on ability to bear risk.

Usually the key decision is the stock / bond mix. History shows stocks will almost surely do better than bonds in the long term, but there is more risk of decline in the short term.

Invest in a broad mix of investments:

US and non-US stocks, US and non-US bonds, real estate, etc. We do this with low-fee, highly diversified mutual funds.

“Re-balance” periodically.

This means selling a particular investment that has gone up faster than others, making the investor “overweight” that investment. The cash generated from the sale is used to buy investments that have declined. This discipline has the added benefit of “buying low” and “selling high”.

Target higher return with Nobel Prize-winning academic research.

Our preferred fund manager, Dimensional Fund Advisors, uses research to identify factors they believe will generate superior returns. For example, small stocks have historically out-performed large stocks. Our portfolios are typically “over-weight” small stocks in an attempt to capture that higher return. There are no guarantees in investing, but we think this strategy increases your likely long-term returns.

Don’t pick stocks, time the market or chase performance.

Every study we have seen suggests these strategies will, on average, reduce your long-term returns.

Maintain a long-term focus.

We design a plan for the long-term, and avoid reacting to short-term developments. We think this generates a higher return and reduces tax and trading costs.

We primarily use funds from Dimensional Fund Advisors (www.dimensional.com) and Vanguard (www.vanguard.com). Dimensional’s founders and advisors are some of the leading industry experts and have done ground-breaking research to develop and refine this investment strategy. Vanguard is the world’s best-known proponent of index funds. Both Dimensional and Vanguard offer a diverse range of low-cost funds.

Our methodology is equally attractive for what it does not require. We do not need to pick the next “hot” stock or sector. We do not need to predict the top or bottom of a particular market cycle. We do not need to borrow to magnify our potential risk and return. That’s good news, because we believe the probability of succeeding on that basis is low. The global financial markets are among the most efficient markets in the world. There is no evidence that an investor can consistently beat the market. Worse, by trying, you run a significant risk of under-performing due to increased fees and expenses.