Key Concept 2

Put Science on Your Side

We Believe

Financial science gives us the knowledge and tools to address the "investment problem." Our Investment Committee builds portfolios with focused exposure to key "factors" of returns, such as company size, relative price (value), profitability and momentum. This factor exposure largely determines a portfolio's risk and return. Working with your advisor, we then recommend how much exposure to these factors is right for you. 

How We Know

Great thinkers and economists, including our Investment Committee members, Dr. Harry Markowitz and Dr. Meir Statman, have provided us with powerful insights into how portfolios should be constructed. 

We apply- and continuously test- academic research to address the investing problem

Landmark research by Professors Ken French and Eugene Fama Sr., identified two equity risk factors- small companies and value companies- that investors should expect to be compensated for over the long term. Further research also identified additional factors of return, including profitability and momentum. 

Greater potential risk= Greater expected long-term returns

The risks associated with investing in stocks and overweighting small company and value stocks potentially include increased volatility (up and down movement in the value of your assets) and loss of principal.