Portfolio Management

"Performance" is not a financial goal, and the only rational basis for the construction and management of a long-term portfolio is the long-term financial goal of its owners.  The most important questions are "Who is the money for?" "What is the money for?" "When will this money be needed?"

We believe individual investors should not manage their own investments, and their money should be professionally managed, passively pooled, or some combination of both.

The dominant determinant of real long-term return isn't what the portfolio does – it's what the investor does.  We believe investor behavior outweighs investment performance regarding the actual return investors earn.

Within the portfolio itself, the primary factor of total return is the asset allocation.  This simply refers to the mix of stock, bonds, cash, and alternative investments.

Disciplined diversification is the conscious attempt to not be able to make a killing in return for the blessing of not getting killed.

Diversification (or asset allocation) does not ensure a profit or protect against loss.