Must match who a client is and where they want to go, to a plan and a portfolio strategy.

 Time horizon must match investment goal and will affect type of investments chosen. Redefine risk for time horizon. Historical rates of return per asset class and equity risk premium.

 Can’t time the market

 Hard to find anyone that can beat the market

 Individual securities are not nearly as important as different type of investing you are doing (asset classes). Asset allocation is like estate planning, we all have a plan whether we like it or not.

 A stockbroker can barely know 15-20 stocks really well.

 The goal is to get the client there, but not via a roller coaster. Undue volatility will deplete a portfolio.

 Passive and Active investing can work together.

 Risk changes from short term volatility to long term purchasing power as we invest for longer periods and we get older and live longer. Short term in unknowable the long term is inevitable. Don’t worry about being in the next 20% decline, worry about being out of the next 200% advance.

 Diversification is not just to avoid putting all your eggs in one basket or different mutual fund objectives but across size, geography, businesses, asset classes and value and growth investing. Therefore, usually up to one quarter each of a portfolio will include international and small/mid size stocks.

 The diversification effect is based on correlations within a portfolio and can mean more return with the same amount of risk or less risk with the same amount of return. Some should be working while others should not.

 A traditional portfolio has much fewer chances of long term success than a broadly diversified portfolio

 Invest in equities on any day of the week that ends in a ‘Y’

 Must inform investors of the interest rate risk and purchasing power risk of bonds. Postage stamps. We can’t let investors mortgage the future to pay for the present. Markets are volatile but retirement is certain. Volatility is why we get the return we get.

 We want to avoid managers that style drift and change their philosophy for what’s in favor, and push for short term performance numbers

 We want to find managers with low fees a longer tenure than 3 years. We want to talk with them and find out what they are going to do and if they’re doing what they said they would do.

 We want to monitor managers cash positions, their concentration into one security or sector, their fees, the risk they’re taking for the return they’re getting.

 We believe in the semi-strong efficient market theory that most information is known and prices reflect this but there are areas of anomalies where some advantage can be achieved.

 Power of dollar cost averaging

       Broadly Diversified Portfolios.