Investment Philosophy

It is not easy to separate emotion from investment decisions. Stock market swings combined with media hype and “get-rich-quick” schemes build false hope and play on our fears. Over the course of a common investment cycle, this can lead to impulsive decisions as we rush to buy the next hot stock then get out before it hits bottom. In other words, buy high and sell low. This is the opposite of what you need to build a strong investment portfolio. We help remove emotion from the investment process and help you create a plan based on actions that will add value.

Historically, the market has outperformed inflation and “safe” holdings like savings accounts. Naturally, there are variations, and there is no guarantee.  This uncertainty causes people to shrink away from investing. Building a plan can prepare you for the uncertainty and give you tools to deal with it. While you can’t control the markets, you can control how much risk you take. And you can control whether you have an investment professional in your corner for help making financial decisions to reach your goals.

Together we will create an asset allocation with targets based on your risk tolerance and goals. As your portfolio drifts away from its targets, we rebalance periodically with an eye towards maximizing tax benefits and keeping you on track.

Some key factors involved in building your investment allocation:

• Evidence-Based Approach: This helps take the emotion out of the investment decision-making process. Rather than looking at short-term market trends, it is an approach rooted in the long-term observation of markets.
• Diversification and Asset Allocation: We build a diversified portfolio (including investment type, sector, size, and location) which will better capture what markets have to offer. Diversification provides the opportunity for a more stable outcome than any single security.
• Low-Cost Investments: We use low-cost ETFs (Exchange Traded Funds) and index funds.
• Asset Location & Tax Efficiency: We answer the question of what should go into your Roth account versus your 401(k) IRA versus your brokerage accounts.

IFP has also begun focusing on sustainable investments for our clients. We use funds with a focus on climate change. These funds may hold companies which are carbon neutral or with a board of directors looking to address their impact on the environment in other ways. Our approach is to use funds with the objective of meaningfully reducing exposure to high emitters while emphasizing companies that outperform sector pears based on sustainable criteria.

We strive for transparency in our investment of client assets. In addition, because we are fee-only advisors, we do not accept commissions or other funds from third parties.

We work with Dimensional Fund Advisors [DFA], a low-cost passive mutual fund family. Dimensional’s investment philosophy is based on strategies built from the pioneering financial market research and analysis of Nobel Prize-winning economists.

Dimensional funds are not available to the public. You can only access them if you choose to partner with a Dimensional-approved firm like Indie Financial Planning.