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 Bonds, Investment-Grade Corporate Bonds, and Treasury Inflation-Protected Securities (TIPS).

We also diversify within asset classes.  For each of the asset classes mentioned above, our clients own hundreds – or often thousands – of individual securities (held via low-cost, passively-managed mutual funds and ETFs).

Combining investments that are not highly correlated (meaning that they do not move in the same direction at all times) results in an overall portfolio with less volatility – and higher risk-adjusted expected returns – than any of the individual assets that comprise it.  This is the power of diversification.

Many investors make big bets – often without realizing it – on a particular company, country, or asset class.  By diversifying properly, we help our clients avoid this critical mistake and the unnecessary risks that come with it.