Principles and Practices
- Faith in the Future: We believe that the world does not end, despite whatever
current "crises du jour" is sensationalized in the media or among your colleagues. Over
time, the free market advances permanently (albeit non-linearly) even as it occasionally
- Patience: We cannot know when the market will recognize the increasing intrinsic
value of the underlying companies, we only know that it eventually will.
Therefore, patience dictates not doing something inappropriate during the inevitable
periods of under-performance.
- Discipline: Like patience but more pro-active, we view discipline as the decision to
keep doing the right things, despite how the markets are reacting, e.g., continuing to
make contributions despite a drawdown in prices, and continuing to rebalance the
- Asset Allocation: As it applies to the mix of Stocks & Bonds, we are strong
proponents for the historical return advantage of stocks over bonds.
Although we fully recognize the purpose(s) of ﬁxed income — accruing wealth is not
one of them.
- Diversiﬁcation: As it applies to the portfolio within an asset class, we practice
diversiﬁcation that creates some "tensions" within a portfolio, i.e., owning components
that historically run on different cycles.
- Rebalancing: Returning the portfolio to it's target diversiﬁcation will (by deﬁnition)
cause the sale of high-priced/low-value sectors and the redeployment of those funds
into low-priced/high-value out-of-favor sectors.
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