Our approach to family investment management is founded on three facts:
Markets Work in Unpredictable Ways - Because the future is uncertain, the wealth creation process of capitalism always occurs in unpredictable ways. Traditional money managers attempt to outguess the markets by predicting the future, despite overwhelming evidence that such practices are detrimental to portfolio returns. We instead do not engage in market timing or any other form of speculation, and we do not pretend to have a crystal ball. Our philosophy emphasizes rationality and investment science.
Risk and Return Are Related - Investment science has demonstrated that risk and return are inseparable. However, on Wall Street the emphasis is on portfolio returns, while risk is often ignored. At Family Wealth Advisors, we focus on the science of risk control rather than on misguided attempts to control returns by predicting the future. We use global, comprehensive diversification to eliminate risks that are not worth taking, and we deliberately structure our portfolios to take advantage of other risks that will compensate our clients with higher expected returns.
Behavior Determines Performance - Even a properly structured portfolio is rendered ineffective if its integrity is not maintained over time. The emotional aspects of the markets often work against investors, causing them to make poor decisions based upon feelings of fear, greed or regret rather than a rational portfolio strategy. We utilize an approach that minimizes emotional pitfalls by relying on sound fundamentals to guide the process. We tend to ignore the Wall Street media machine and instead approach portfolio management with objectivity, patience and rationality.