Chances are, if you go looking for the next “hot stock” or try to pinpoint the perfect time to get in or out of the market, you’re not going to build wealth. You’re just going to move backwards. There is no need for these counterproductive and emotionally draining strategies. The true value of a financial advisor often reveals itself in the form of “behavioral investment counseling.” Part of our job is to bridge the behavior gap – the difference between the returns of an investment and the returns of the average investor.
This gap exists because of the natural human tendency to allow emotions to overwhelm rational thinking when making investment decisions. There is a better way. We let decades of financial research and analysis guide our recommendations. Our evidence-based investment management strategy brings logic and simplicity to your life, so you can focus on the things you can control and ignore the things you can’t. We’ll be here to ensure you never veer off the track.
Many money managers claim to know the “right” investments to “beat” the market. With vast (and expensive) resources at their disposal for investment research, they spend their entire career studying the markets in that attempt. Yet academic study after study shows that very few will succeed, yet many will charge high fees trying. Ignoring the sales hype, we design and manage well diversified, low cost and tax efficient portfolios which take the least risk needed to achieve your financial goals.
Your investment portfolio is the growth engine behind your comprehensive financial plan. Without proper construction and risk allocation, you could be in danger of not meeting all your goals – or worse, even enjoying a comfortable retirement. You must ensure that your portfolio is built on evidence and a solid understanding of the financial markets – and our financial advisory services will set you up for investment success.
Asset type selection and allocation trumps picking “great” individual investments.
The greatest indicator of long-term investment performance is your choice of asset classes and their allocation, not the specific stocks, bonds, mutual funds, or ETFs within those classes. This is not to say that the chosen investment vehicles don’t matter, but only that those decisions are secondary to the overall portfolio allocation. If you get the overall allocation of your portfolio wrong, it most likely won’t matter what individual investments you choose to represent the asset classes.
This finding underpins our investment philosophy and is commonly known as Modern Portfolio Theory. Over time, we rebalance your accounts as different segments of the market (asset classes) go up and down. This systematically buys assets when they are lower priced and sells them when they are higher priced in a slow, deliberate, and tax efficient way.
Many investors and advisors focus on recent performance numbers when choosing investments. This approach ignores a multitude of factors:
History teaches us that very few managers or securities can sustain above average returns for more than a few years. One of the best indicators of success is fees: the higher the fees, the lower the average performance. We scan the investment universe to select low cost, tax efficient, and suitable funds / individual securities for you.
The three R’s of investment risk.
The first step in our investment process is to determine the risk tolerance, risk capacity, and risk need you have for your investments.
A wealth of evidence suggests that those who do not adequately match their optimal portfolio risk to their actual portfolio risk will trade excessively, or worse, abandon their entire portfolio, and damage their long-term returns.
Our risk assessment methodology helps quantify your optimal risk level, enabling us to construct a portfolio for you that will avoid the common pitfalls and knee-jerk reactions that ruin many financial plans.
Our 10 Principles for Investing Success
The stock 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.
You never know which market segments will outperform from year to year, or which direction it’s headed in the short-term. No one does. By holding a globally diversified portfolio, investors are well positioned to seek returns wherever they occur.
A financial advisor can offer expertise and guidance to help you focus on actions that add value. This can lead to a better investment experience.
Our investment management philosophy is heavily influenced by the Nobel Prize-winning work of Harry Markowitz and Eugene Fama. We’ve developed a deep understanding of how to best capture the returns of the financial markets. Our approach is based on established facts and real evidence, not empty opinions or speculation. Investment recommendations based on historical, observable market behaviors and prices take emotion out of the equation, and ultimately leads to steadier, more predictable results over the long-term.
We build global portfolios that include stocks, bonds, and where appropriate, real estate and commodities. By diversifying across many different asset classes we’ll help you balance the relationship between risk and return to ensure your long-term wealth goals will be achieved.
We are strategic, long-term investors, and do not engage in market timing or forecasting. We’ve extensively researched each asset class used in our portfolios, so we understand what to expect and the purpose each serves in a diversified investment allocation. As a client of Financial Synergies, we’ll create a custom investment portfolio to suit your unique goals. It’s what makes our financial advisory services different from the rest.
You can feel confident knowing that your investments are managed by an experienced team of professionals who adhere to a disciplined, time-tested strategy. It’s refreshing to be able to tune out the daily, irrelevant “noise” of the financial media.
Financial Synergies offers our clients access to private markets and alternative strategies, but only if it is in their best interest and fits into the overall long-term plan. This allows qualified clients (usually higher net worth) to further diversify their portfolios by investing in securities and markets that are not publicly available. Note that private securities are not appropriate for everyone. They can carry more inherent risk and are typically subject to higher fees and longer holding periods than public securities.
Some examples of private investment types:
Decades of academic research and analysis has taught us that there are proven expected return premiums when investing in stocks and bonds. For example, over the long-term we expect value stocks to outperform growth stocks, and longer maturity bonds to outperform shorter maturity bonds. These expected return premiums are pervasive, persistent, and robust and can be targeted in diversified investment portfolios.
We construct our investment portfolios to capture these premiums:
Once your investment plan is implemented we’ll monitor the portfolio daily to make sure your assets are performing according to your long-term plan. We’ll rebalance, make adjustments, and provide tax-loss harvesting as necessary, so you never have to worry about your investments. What’s more, we help you understand the evidence behind it all, helping you feel even more confident in the decisions we make together to best safeguard your financial future. Finally, an investment management solution that works for you.
4400 Post Oak Pkwy #200
Houston, TX 77027
Financial Synergies Wealth Advisors is a fee-only, fiduciary Financial Advisor in Houston, Texas. We specialize in wealth management services, including comprehensive financial planning and investment management.
For more than thirty years we’ve been serving the financial needs of individuals, families, and businesses in Houston, Texas and around the country.
Wealth Management Services include financial planning, retirement planning, investment management, tax planning, insurance planning, estate planning, and company retirement plans.
Find out if we’re a good match for your financial planning and investment management needs. We offer a free, no-obligation consultation to help us get to know each other. We can meet by phone, in-person, or online.
4400 Post Oak Pkwy #200
Houston, TX 77027
Financial Synergies Wealth Advisors is a fee-only, fiduciary Financial Advisor in Houston, Texas. We specialize in wealth management services, including comprehensive financial planning and investment management.
For more than thirty years we’ve been serving the financial needs of individuals, families, and businesses in Houston, Texas and around the country.
Wealth Management Services include financial planning, retirement planning, investment management, tax planning, insurance planning, estate planning, and company retirement plans.