"We invest your money the same way we invest our own money."
It has been our experience that investment success is more likely achieved with clearly defined investment principles - these principles define our investment philosophy. We act as your lead advisor, adhering to these principles, managing your money, and helping you stay on course toward your goals.
"After more the 35 years in the financial services industry, I have found that having an investment philosophy - one that is robust and that you can stick with - cannot be overstated." David Booth, Dimensional Fund Advisors.
Our Investment Principles include the following:
1Embrace Market Pricing
The market is an efficient information-processing machine: millions of participants buy and sell securities in the world markets every day, and the real information they bring helps set prices.
2Don't Try to Outguess the Market
The market's pricing power works against mutual fund managers who try to outperform the market through stock picking or market timing; as evidence, less than 20% of the US equity mutual funds have survived and outperformed their benchmarks over the past 15 years.
3Resist Chasing Past Performance
Some investors select mutual funds based on past performance; research shows that most of the funds in the top quartile (25%) of previous five-year returns did not maintain a top quartile ranking for one year returns in the following year; past performance offers little insight into a fund's future performance.
4Let the Markets Work for You
The financial markets have rewarded long-term investors; people expect a positive return on the capital they supply, and historically, the equity and bond markets have provided growth of wealth that has more than offset inflation.
5Consider the Driver of Returns
Academic research has identified "dimensions" which point to differences in expected returns: and investors can pursue higher expected returns by structuring their portfolios around these dimensions.
6Practice Smart Diversification
Diversification helps reduce risks that have no expected return, but diversifying your home market is not enough; global diversification can broaden your investment universe.
“Diversification is about the closest thing to a free lunch in capital markets, so you may as well get a huge helping of it.” Ken French, Dimensional Fund Advisors.
7Avoid Market Timing
You never know which market segments will outperform from year to year; by holding a globally diversified portfolio investors are well positioned to seek returns whenever they occur.
8Manage Your Emotions
Many people struggle to separate their emotions from investing; reacting to current market conditions may lead to making poor investment decisions.
9Look Beyond the Headlines
Daily market news and commentary can challenge your investment discipline: when headlines unsettle you consider the source and maintain a long-term perspective.
10Focus on What You Can Control
Create an investment plan to fit your needs and risk tolerance; structure a portfolio along the dimensions of expected returns, diversify globally, manage expenses, turnover and taxes, and stay disciplined through market dips and swings.
Academic research has provided evidence that an investor's asset allocation, the selection of asset classes, including US equities, Non-US equities and both US and Non-US fixed income, and the portfolio percentage allocation to each, is the single most important element in a portfolio strategy. Asset allocation accounts for over 90% of a portfolio's performance.
Our Investment Portfolios
We offer a selection of both taxable and retirement investment portfolios that provide a wide range of equity and fixed income exposure levels. We recommend for you the portfolio determined to be the most appropriate and consistent with that of your personal goals, objectives, time horizon and risk tolerance.
David Wealth Management charges a single fee for its advisory services, which includes both financial planning and investment management services. The fee is charged annually, billed quarterly, and is based on a percentage of assets under management.