Investment Management

While momentum and small value have delivered excess returns over long periods, we don’t know which asset class or factor will lead in any given year. Markets are efficient enough that making concentrated bets is a losing game over time. That’s why we diversify.

We diversify across asset classes, including US Stocks, International Stocks, US Government Bonds, International Government Bonds, Investment-Grade Corporate Bonds, High-Yield Bonds, Treasury Inflation-Protected Securities, Cryptocurrencies, and more.

It is important to note that we intentionally do not invest in Chinese or Russian stocks.

Many investors make big bets, often without knowing it, typically on a particular company, country, or asset class. By diversifying properly, we help our clients avoid this mistake. We rely heavily on low-cost, passive ETFs (Exchange Traded Funds) to accomplish this. ETFs are not only cheaper than actively managed mutual funds but also more tax-efficient, generating far fewer taxable events along the way. The average fund expense ratio across our portfolios is under 0.10%.

Bear markets can be unnerving, prompting many investors to sell their holdings in panic. However, these downturns are usually short-lived compared to the ensuing bull markets. Investors who sold during the early-2020 pandemic selloff, the 2022 rate-shock correction, and the 2025 tariff-driven pullback missed the recoveries that followed.

We buy during significant market weakness and leverage the wisdom of being contrarian. As Warren Buffett famously said, “Be greedy when others are fearful.” This means systematically buying stocks during market dips to benefit from the eventual upswing. Such a strategy aims not just for recovery but for capturing above-average gains by capitalizing on these inevitable cycles of market volatility.

We allocate a small percentage (usually 0%-5%) of client portfolios to alternative assets, including gold and bitcoin. These are not speculative bets, but rather serve a specific purpose in a diversified portfolio.

Gold is not always the inflation hedge most people think it is. We wrote about this in detail. During periods of high inflation, gold has produced negative real returns more often than not. But gold does serve a purpose. It is a store of value with thousands of years of history, it tends to hold up during periods of prolonged currency debasement, and it behaves differently from stocks and bonds.

Bitcoin is still a young asset class. We think of it as an awkward teenager. It is mature enough to be trusted in some situations, but it still has room to grow. In our view, Bitcoin will either continue to gain adoption or go to zero. There is no middle ground. We believe the former is more likely, but we size the position accordingly.

In an era when most major economies continue to expand their money supply at an unsustainable pace, we think a small allocation to assets outside the traditional financial system makes sense.

ETFs are perhaps the most tax-efficient investment vehicle available. Investors are surprised to learn that most mutual funds can distribute capital gains to shareholders annually, even if they didn’t sell anything. ETFs avoid this, giving us more control over when to recognize gains.

In retirement, the order you draw from your accounts matters as much as what you own. Pull from the wrong one at the wrong time and you can land in a higher bracket or trigger taxes on your Social Security. We plan which accounts to tap and when, balancing your taxable, tax-deferred, and Roth dollars to keep your lifetime tax bill in check.