Investment Philosophy

Long ago, a valued client summed up his instructions to us like this:

“Get me a good return and keep me out of trouble.”

Although we use proprietary quantitative and technical tools to aid in our stock and bond selections, we are essentially fundamentalists with access to extensive institutional research.  We are conservative investors who value capital preservation. That means we sincerely do not want you out on the risk curve where you could lose your money.  Our minimum variance strategy of portfolio construction is designed to optimally minimize risk as a key factor in delivering performance.

The “Minimum Variance Anomaly” was first identified in academic literature in 1975. (Haugen & Heins, “Risk and the Rate of Return on Financial Assets: Some Old Wine in New Bottles”; Journal of Finance and Quantitative Analysis, December 1975). It is considered an anomaly because it contradicts the relationship between risk and return predicted by the Capital Asset Pricing Model, a tenet of Modern Portfolio Theory.

This low volatility portfolio strategy has been shown to produce higher risk-adjusted returns than portfolios with high volatility stocks in nearly all markets studied.

By consistently applying our risk-managed approach, we are founded on the principle that markets tend to reward investors who manage their risk.