The Process (Part1)

Oct 3, 2024

Many Buffalo Bills fans know that GM Brandon Beane and Head Coach Sean McDermott like to talk about “The Process”. What makes them remarkable is that they identify a standardized process and then consistently refer to it publicly. All investment managers have a process of their own, whether they can identify it or not. Not having a process is in itself a process (and in my opinion a pretty bad one). Our process in managing your investments start with 2 core principles:

#1. Stay invested

We believe that there is always something investable in all market conditions. Very rarely would we find the need to be “uninvested” or holding a disproportionate position in cash. It is, in fact, more important to be participating in the market for as long as possible, than it is to try to time the market. History bears this out over time as illustrated below:

Even when the outlook is gloomy, there are investments that can be made to benefit from whatever conditions may arise.

#2. Be Diversified

It is extremely difficult to predict what asset class will outperform. As shown below, the top 3 asset classes over the last 15 years are nearly always different. A diversified portfolio allows you to participate in all market conditions. The keys to diversification are proper investment sizing/weighting and patience.

It is our belief that the investor who stays invested and stays diversified maintains the best opportunity for positive returns over the life of their investments. These beliefs inform our principles which we put into action daily.

Our years of experience has taught us one thing when it comes to money: to live comfortably, maintain our standard of living, and enjoy what’s ahead in life, we need to make investing a priority. History teaches us that we can rarely grow our wealth in any meaningful way without investing and we cannot invest if we do not save. The way that our financial system is structured, we strongly believe that individuals should not attempt to hide from inflation, but instead BUY inflation through investments in assets that benefit from its existence.