Our Investment Philosophy

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 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.

Pursuing a Better Investment Experience:

1Embrace market pricing
The market is an effective, information-processing machine. Millions of participants buy and sell securities every day, and the real-time information they bring sets prices.

2Practice smart diversification
Global diversification will broaden your investment universe and reduce risk.

3Don’t try to outguess the market
The market’s pricing power works against investors who try to outsmart other participants by picking individual stocks.

4Avoid market timing
You never know which market segments will outperform from year to year. No one can consistently and accurately time the market.

5Resist chasing past performance
Past performance provides little insight into an investment’s ability to outperform in the future.

6Manage your emotions
Markets go up and down. Reacting to every market condition will lead to poor investment decisions at the worst possible time.

7Let markets work for you
The financial markets will reward long-term, patient investors. People expect a positive return on the capital they supply, and historically, the equity and bond markets have more than delivered on this.

8Look beyond the headlines
Daily market news and commentary can challenge your investment discipline. Just ignore the media “noise” and keep a long-term perspective.

9Target the proven drivers of returns
Academic research has identified equity and fixed-income dimensions of expected returns, which we target in our portfolios.

10Focus on what you can control
We’ll help you meet your goals by creating a financial plan tailored to your needs, reducing expenses and turnover, diversifying globally, and minimizing taxes.

Evidence-Based Investment Philosophy

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.

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.

Targeting Expected Return Premiums

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:

  • Market Equity Premium - Stocks vs. Bonds
  • Company Size Small-Cap Premium - Small vs. Large Companies
  • Relative Price Value Premium - Value vs. Growth Companies
  • Profitability Profitability Premium - High vs. Low Profitability Companies
  • Term Term Premium - Longer vs. Shorter Maturity Bonds
  • Credit Credit Premium - Lower vs. Higher Credit Quality Bonds

Efficient Portfolios

We use institutional mutual funds and exchange-traded funds (ETFs) as the building blocks of our allocations. These investment vehicles allow for broad diversification, low costs, tax-efficiency, and minimal trading.

Ongoing Management

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.

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