Our Investment Philosophy

How We Invest?

We believe the primary goal in investing shouldn’t be to beat the market, but to harness the power of financial markets. By structuring an appropriate asset allocation, maintaining discipline, and minimizing fees and taxes, investors can greatly improve the odds of meeting their financial goals.

The Traditional Approach, aka the Wizard of Oz Approach

While the evidence clearly shows that trying to “beat” the market is a losing game, most investment advisors focus their entire marketing and retention efforts on trying to convince customers that they have a secret formula, magic bullet, or crystal ball. Often, the result is increased complexity and turnover so the advisor can appear to be doing sophisticated things behind a curtain of mystery. Meanwhile, clients pay the price in the form of increased fees, transactions costs, and taxes. As Steve Forbes put it, “You make more money selling advice than following it.” So while the majority of the financial industry will continue to do what they get paid to do – sell ad space, gather assets, etc. – we believe there is a better way.

Our investment policy - Switchpoint Financial

An Alternate Approach

Fortunately, there is another approach that is supported by decades of academic research. The key to this approach is understanding how capital markets work. Investing is not a zero-sum game where one investor must lose so another can win. Over the long run, markets reward investors for taking risk and providing capital.

In addition, the price mechanism of markets allows for the rapid processing of new information. At any given time, current prices reflect the knowledge and expectations of all investors. Although prices are not always “correct”, markets are so competitive that it is unlikely any single investor can routinely profit at the expense of all other investors. In other words, there is no free lunch—the only way to expect to earn higher returns is to take more risk.

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Our Focus

With this foundation, we can turn our attention from the losing game of trying to outguess the market, and instead focus on the things we can truly control. We start by understanding the needs, goals, investment vehicles, risk tolerance, and attitudes of each client. We then diversify broadly across a range of assets classes with an emphasis on minimizing expenses and taxes. Lastly, we work with our clients on a continual basis to provide perspective and discipline. We believe this approach helps our clients keep their share of market returns and gives them the best chance of reaching their goals.

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Applying Investment Research to Your Portflio

Dimensional Fund Advisors (DFA) is one of the primary mutual fund companies we utilize in client accounts. See how they utilize leading investment research to build portfolios.

Partner with us for a transparent, no-gimmick experience.