Investment Philosophy
Geometric’s philosophy on global stock diversification
With the U.S. stock market[1] dramatically outperforming the rest of the world over the past 16 years, it would be understandable to question whether one should invest internationally at all, let alone allocate a significant portion of their portfolio to international stocks.
What to do about GameStop
Two weeks ago, we emailed our clients to address the story of GameStop. Figuring that others might appreciate our viewpoint, below is the entirety of that email.
Philosophy Point 3 Dropdown
Once the appropriate allocation strategy is in place, investors need a well-defined plan for rebalancing. When market movement causes an individual asset class to deviate too far from its target within the portfolio – and therefore the overall risk profile of the portfolio to no longer match the investor’s needs – the necessary trades must […]
Philosophy Point 2 Dropdown
The single most important decision that an investor makes – the decision that will have the greatest impact on investment results – is the percentage of his or her portfolio to be allocated to “growth” assets versus the percentage allocated to “conservative” assets. When it comes to investing, risk and return are inextricably linked. Investments […]
Philosophy Point 4 Dropdown
Nobody can reliably predict which individual security, asset class, or geographic region will outperform the others. For that reason, we diversify. We diversify across asset classes, meaning that our clients invest in every productive asset class: US Equities, Developed Markets Equities, Emerging Markets Equities, Global Real Estate Investment Trusts (REITs), US Government Bonds, International Government […]
Philosophy Point 5 Dropdown
Small company stocks have been empirically proven to outperform large company stocks, and “value” stocks have been empirically proven to outperform “growth” stocks. This phenomenon can partially be explained by risk (i.e, small companies are inherently riskier than large companies, so investors demand a premium for owning them). However, the historical premium is larger than […]
Philosophy Point 6 Dropdown
Investment costs are the worst enemy of portfolio returns. Seemingly small fees can have an enormous effect on long-term returns. Investors must vigilantly protect their portfolios against any unnecessary expenses. Unfortunately, most investment costs are invisible to the average investor. The majority of expenses are contained within the investment vehicle (such as mutual funds or […]
Philosophy Point 7 Dropdown
While returns are nice, after-tax returns are what really matter. Investors should take advantage of every legal mechanism available to reduce the taxes owed on their investment gains. Geometric helps our clients minimize their tax burden in several different ways: First, we ensure that every client take full advantage of any and all tax-advantaged accounts […]
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Every investor should understand what they own, the purpose of each of account, and how it all fits together to form an overarching financial plan. Unfortunately, there is complexity built into the financial services industry that often prevents this from happening. We believe that this complexity is confusing, costly, and largely unnecessary. Most investors have […]
Philosophy Point 9 Dropdown
Investors are continuously bombarded with information that activates two of our most basic human emotions: fear and greed. The overwhelming majority of this information is “noise,” which has no effect on our long-term financial well-being. The more completely we tune it out, the better off we will be. Noise comes in many forms: news headlines […]