When it comes to investing, everyone faces two major risks: market risk (the risk that the value of your investment will decrease due to the overall performance of the financial markets), and purchasing power risk (also known as inflation risk, or the chance that cash flows from an investment won’t be worth as much in the future because of the rising costs of goods). By creating a detailed financial plan, we can decide how much of your portfolio is in cash, CD’s, or bonds, and how much should be invested in the stock market. This approach makes it personalized to you, versus a generic 70/30 or 60/40 portfolio.
We have a long-term approach to investing, and other than periodic rebalancing we utilize a buy-and-hold strategy. This may be different than your previous experience with investing, perhaps with advisors who attempt to “beat the market” and benefit monetarily from lots of activity in the account.
We believe in efficient markets and using low-cost, index-type funds, particularly those of Dimensional Fund Advisors (DFA). DFA is a leading global investment firm that has been translating academic research into practical investment solutions since 1981. Their philosophy has been shaped by decades of research, and they build portfolios that target higher expected returns in a cost-effective manner.
We use TD Ameritrade as custodian for our client’s accounts. We also help you utilize the best funds available in your employer plans, such as 401(k)’s and 403(b)’s.