Modern Portfolio Theory (MPT) was pioneered by Harry Markowitz. MPT was further refined by Eugene Fama and he influenced the development of index funds. In 2013, Eugene Fama won the Nobel Memorial Prize in Economic Sciences.
Our Investment philosophy is based on overwhelming evidence and empirical data in the field of Investment Science and Modern Portfolio Theory.
Our clients draw comfort from the knowledge that our investment management strategies are shared by many noble laureates in economics, investment gurus such as Warren Buffet, and top business schools throughout the United States.
FIS realizes that every client has different goals and a unique set of financial circumstances that must be factored into their financial plan. We respect the distinct needs of every client and do not subscribe to the “one size fits all” strategy. At FIS, we create an unique strategy for every client by seeking to obtain the highest expected return with the least amount of risk, using a low-cost, globally-diversified, tax-efficient portfolio.
Clients receive an Investment Policy Statement that is specific to their investment plans. The IPS details each client’s asset allocation parameters and tolerances and is reviewed and updated annually.
FIS focuses primarily on the use of DFA funds when constructing a portfolio to reduce clients’ investment expenses while relying on evidence-based investment construction. However, we will also use other no-load, low-expense mutual funds from Vanguard as well as Exchange Traded Funds (ETFs).
From time to time, FIS may choose to keep existing positions of a client’s portfolio, including stocks, individual bonds, and other mutual funds, when a potential tax liability is evident.
Some investors are uncomfortable with stock market volatility and investment risk.
One approach that has been very effective in minimizing this risk is to dollar cost average. Instead of lump sum investing, clients partially invest over a specified period of time. If the market falls during this period, clients are relieved to not have invested all at once. Conversely, if the market rises, clients are pleased that a portion of their portfolios were invested and they are able to reap the rewards.
Every investment situation is unique, and there are innumerable approaches that can be taken to build clients’ confidence and risk tolerance.
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