Investment Advisory Services
What is my investment philosophy?
There are two main investment philosophies out there: active and passive. Active managers try to pick “things” in order to outperform some benchmark such as the S&P 500. On the contrary, passive managers invest with the market. They accept the returns of the market because they believe overall, markets are efficient and it’s hard to do better than the market.
As a PhD student, I spent years reading academic papers on investments. Although there certainly are arguments for active management, in the end, I will sum up the research in one sentence. Active management is expensive, and it does not have a consistent track record of outperformance (actually, it has the opposite record). This usually translates into lower returns to investors. Few funds (and managers) produce enough returns to justify those costs and more importantly, it is really hard to identify successful active management consistently.
Thus, I believe in investing passively, but this does not mean that you can get a few cheap funds and call it a day. Indexing (buying the S&P500) is not an investment philosophy that I can get behind. I believe in math, science and statistics. There is a better way to do things and cost is not the only thing that matters. Academic research shows that for a long-term investor, returns will come from factors, such as size, value and profitability. As a result, I build my portfolios around the factor approach. I do not think that the same funds will always be ideal for all the clients. For some people, I use passive Vanguard funds for the core holdings and more actively managed funds for the satellites in order to build the factors. For others, I use DFA funds that already incorporate the factors. Bottom line -yes, scientifically, there is a better way to build your investments and although I will never promise you any outperformance, I will make sure that whatever I put together is actually backed up by math and science and not by someone in an office who thinks that a fund is great, but is not able to explain why.
HOW MUCH WILL THIS COST?
The standard advisory fee is based on the market value of the account and is calculated as described below. These fees will be debited directly from your investment accounts and remitted to me. The fees are pro-rated and paid quarterly, in arrears or in advanced, depending on the custodian (where we keep the money).
| Account Value | Annual Advisory Fee |
| $0 ‐ $1,600,000 | 0.95% |
| $1,600,001 and above | A Flat $15,000 fee per year |
WHAT ELSE DO YOU NEED TO KNOW?
In addition to investment management, I also provide financial planning services. For a detailed description, please see the Comprehensive Financial Planning.