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Our Investment Philosophy

Decades of academic research concludes that most active managers – whether managing mutual funds, separate accounts, or hedge funds – don’t outperform the market itself. Although some active managers outperform the market during certain periods, it’s impossible to know in advance which managers will beat their relevant benchmark indices.

Broadly diversified funds that allow you to invest in the market as a whole are generally much less expensive and much more tax-efficient than traditional actively managed funds.

A better investment experience can be enjoyed by designing your investment strategy to capture the market’s returns, while also seeking to avoid risks that offer no additional expected returns. This involves tilting your portfolio towards securities that have been shown through academic research to produce higher expected returns over time.

Furthermore, focusing things that are in your control – like fund fees and to a lesser extent taxes – yields true benefits.  Therefore, using low-cost index funds and tax planning adds to the long-term success of your portfolio.

1  |  EMBRACE MARKET PRICING

The market is an effective information-processing machine. Each day, the world equity markets process billions of dollars in trades between buyers and sellers – and the real-time information they bring helps set prices.

2  |  DON’T TRY TO OUTGUESS THE MARKET

The market’s pricing power works against fund managers who try to outperform through stock-picking or market-timing. As evidence, only 22% of US equity mutual funds and 10% of fixed income funds have survived and outperformed their benchmarks over the past 20 years.

 

3  |  RESIST CHASING PAST PERFORMANCE

Some investors select funds based on their past returns. Yet past performance offers little insight into a fund’s future returns. For example, most funds in the top 25% of previous five-year returns didn’t maintain a top 25% ranking in the following five years.

4  |  LET MARKETS WORK FOR YOU

The financial markets have rewarded long-term investors. People expect a positive return on the capital they supply, and historically the equity and bond markets have provided growth of wealth that has more than offset inflation.

5  |  CONSIDER THE DRIVERS OF RETURNS

Academic research has identified these equity and fixed income dimensions, which point to differences in expected returns. Investors can pursue higher expected returns by structuring their portfolios around these dimensions.

6  |  USE SMART DIVERSIFICATION

Holding securities across many asset classes can help manage overall risk. But diversifying only within your home market isn’t enough. Global diversification can broaden your investment universe and should improve your results.

7  |  AVOID MARKET TIMING

You never know which asset classes will outperform from year to year. By owning a globally diversified portfolio, you’re well-positioned to earn returns wherever they happen.

8  |  MANAGE YOUR EMOTIONS

Many people struggle to separate their emotions from their investments. Markets move up and down, and reacting to current market conditions can lead to poor investment decision-making.

9 |  LOOK BEYOND THE HEADLINES

Daily market news and 24/7 commentary can challenge your investment discipline. Some messaging is meant to create anxiety about the future, while others are intended to  If headlines unsettle you, pause to consider the source, and maintain a long-term perspective.

10  |  FOCUS ON WHAT YOU CAN CONTROL

A fiduciary financial advisor can provide advice and guidance to help you focus on actions that will add value. This leads to a better investment experience and greater peace of mind.

READY TO GET STARTED?

OUR LOCATIONS

Our Portland office is conveniently located off the SW Denney Road exit from Highway 217.

6600 SW 105th Avenue, Suite 155
Beaverton, OR 97008

Our Bay Area office is located in downtown Santa Cruz.

133 Mission Street
Santa Cruz, CA 95060

SCHEDULE A FREE CONSULTATION

If you'd like to learn more about how we can help you build a solid plan for your future, let us know by filling out our contact form. Or give us a call at (888) 998-4796.

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