Modern portfolio theory essentially boils down to this: Don’t put all of your eggs in one basket. Ninety percent of a portfolio’s long-term return is driven by asset allocation. We build well-diversified portfolios using passive investments like index and exchange-traded funds to capture our targeted asset classes.

Risk tolerance and time. From our discussions, we get a thorough understanding of your feelings toward financial risk to come up with a balance of risk-on and risk-off investments to suit your appetite for the risk/return and time horizon tradeoffs.

Passive management. After years of watching active manager performance consistently underperform its benchmark, we became full-fledged believers in passive management. We don’t expect index funds to over or underperform the market (excluding fees), but active management can result in either. We prefer to limit downside risk more than potential upside gains.

Diversification. This chart shows the historical performance and volatility of different asset classes. It also shows a 60% equity/40% fixed income portfolio (white square), which incorporates the various asset classes shown. It highlights that balance and diversification can help reduce volatility and enhance returns.

Fees. Because we are a fee-only financial advisor, you can be assured that our advice is not based on what pays us the highest commission. We do not sell any commissioned product and are not licensed to sell insurance. We are independent, we are fiduciaries, and we work solely in your interest.