Pursuing A Better Investment Experience

We constantly pursue an improving investment experience for our clients. Our portfolio management approach couples qualitative and quantitative analysis to help align your expectations with investment risk and expected returns. Our job as your financial consultants is to balance your personal comfort level with the risk level of your portfolio, all while making smart investment decisions to diversify out unnecessary risk.

Behavior Modification

We all have different experiences. These experiences tend to shape our thoughts and beliefs about money. The biggest money mistakes are usually not based on a fundamental belief, but tend to be driven by a trigger of either fear, greed, or both. Even though you may have the best-intentioned ideas and investment philosophy, these triggers preset themselves in situations that make you think, “This time it is different!” Professional traders tend to make money off of these errant trades that are based off of feelings, rather than discipline. Sometimes, this can lead into a vicious cycle of making the worst possible decision at the worst possible time.

Recognizing these triggers and behaviors will help us plan and properly allocate assets. When you are triggered, we can help guide you through those uncertain times. Even better, over time, we can coach you and remove those triggers altogether.

Managing Risk

Humans are born to be bad investors. We are designed to protect ourselves and play things safe when we feel threatened. For example, when we see a car or train heading towards us, we inherently back up to avoid being hit. Avoiding physical injury is clearly a positive response in that situation. However, when markets go down, most investors feel fear and a loss of control. Our first inclination is to sell or become conservative after a crash, which, research shows, is often the worst thing to do.

A pullback, correction, or recession will not kill us. However, a lot of us don’t like to experience these types of scenarios. To be truthful, nobody does. So what is the solution? We all want less risk but with higher expected returns.

The first step is to see how much risk is in your portfolio.

Guiding Investment Principles

We have been investing and studying markets for over 20 years and there are some guiding investment principles that are evident in investing.

Are you an Evidence-based investor? Answer these questions to learn more.

You understand short-term market swings are inevitable, and you attempt to avoid the “noise.” 1, 2, 3, 4, 5 You believe you should make short-term decisions and trades based on breaking news.
You are comfortable that the markets have an expected return but that some periods will outperform others. 1, 2, 3, 4, 5 You feel a sense of urgency to make the “right” call to beat the markets, as occasional lower returns are not tolerable.
You are a believer in peer- reviewed academic research and evidence-based conclusions. 1, 2, 3, 4, 5 You rely on “expert” opinions from media and friends (with increased vulnerabilities to bias and incentives).
You define your success based on your personal values and goals. 1, 2, 3, 4, 5 You define success as outperforming others.
You believe over the long-term you will be able to capture market returns. 1, 2, 3, 4, 5 You believe you can outthink the market through market timing.

If your score is between 5-13, then we are potentially a great fit! If you score between 14-25, it means our investment philosophies differ from yours. However, just because our investment philosophies differ from yours, it doesn’t mean we can’t still be a great fit and serve you well as experienced financial advisors. If you are open to it, we would love to have a discussion with you about how you have aligned your investment philosophies and whether or not our philosophies could present a positive impact towards your goals. If you are in Chicago, Ann Arbor, or any of the surrounding communities, get in touch with us today.