Our investment approach is grounded in academic research and has evolved over many years in response to changing financial conditions. Below you will find some of the core beliefs and principles at the heart of Model Investing.
Invest for the Long-Term
Our strategies are aimed at helping investors accumulate and grow their wealth over a long time horizon. We do not cater to the get-rich-quick mentality, and as a result do not provide individual stock picks or try to capitalize on short-term market moves. Instead, we focus on earning the highest risk-adjusted returns over multiple market cycles.
A key component of our approach is avoiding severe market downturns associated with economic recessions. During the dot-com collapse and the most recent financial crisis, many investors lost over half their wealth. Avoiding these disastrous setbacks will put you on the fast track towards reaching your financial goals.
Momentum is not well understood by the everyday investor, but its application is critical for any successful investment strategy. Driven by behavioral psychology, this anomaly has persisted for hundreds of years and has rendered many individuals wealthy, and others poor, simply based on whether the concept was understood and applied.
Have you ever noticed that winning investments have a tendency to keep on winning? Or that losing investments have a habit of staying losers, no matter how much we hope for them to rebound? This is momentum at work, and if it is allowed to work against you, the results can be devastating.
Many of the investment strategies outlined by financial professionals today are relics of an older time. The financial markets are constantly evolving, and we must evolve with them. Increased volatility (risk) in recent years has rendered some approaches (such as buy-and-hold) more dangerous than ever before. While investors still need to maintain a long-term focus, they now must be much more flexible and attentive to changing conditions.
Asset allocation is a major area of concern, particularly the perceived safety of bonds. There is a widespread belief that bonds are safe investments. While this may have been the case over the last three decades, bonds have a dark history and investors need to tread carefully here. Don’t buy into outdated concepts that can’t hold up under rigorous scrutiny.
Skin in the Game
Unlike many other investment services and most brokers, our money is invested in the recommendations we provide. We have skin in the game. Our client’s and our incentives are aligned for the sole purpose of generating the highest risk-adjusted returns … we wouldn’t have it any other way.
Putting it all Together
At the end of the day, most investors are looking for a straightforward way to achieve financial security. They want to be able to retire comfortably, and fall asleep at night knowing their money is working hard for them and not exposed to excessive risk.
We understand this and have done our best to create a simple and intuitive way to manage your investments. Give our Investment Models a try today and see for yourself the clarity, peace of mind, and enhanced returns they can provide.