Our philosophy is based on the academic research of Nobel laureates, evidence from market history, and scores of empirical studies done over the last fifty years. Below you will find some of the core tenets of our investment philosophy.

It is our belief based on research and experience that capital markets are "efficient," in that security prices reflect all available information and adjust instantly to any new information. Though prices are not always correct, markets are so competitive that it is unlikely that any individual can consistently profit in excess of all other investors. Thus, we do not expend valuable resources trying to out guess the market or pick a handful of hopeful stocks. We focus on strategies substantiated by academic evidence.

Many studies have examined the performance of stock pickers and market timers as a whole and suggest that net of all expenses, beating the market is an unlikely prospect. Furthermore, our experience with the traditional form of "active management" is that is is often guided by the laws of chance, dictated by human emotions, bias and speculations. In contrast, our investment approach is guided by academic research and the science of investing.

Most of us would agree, based on past evidence, that over a long period of time it is reasonable to expect higher returns from stocks than from bonds. This pattern should hold true in the future because investors demand a higher return from stocks due to the increased risk stocks present over bonds. Less commonly discussed is that studies have demonstrated within equities (stocks), returns are best explained by company size (small companies have higher expected returns than large companies) and price characteristics (low priced “value” stocks have higher expected returns than higher-priced “growth” stocks). Small companies and value companies afford higher long-term returns because they carry more risk.

These fundamental principals apply not only to domestic equities but also within international markets and emerging markets. We use this concept to construct our client portfolios in such a way as to target the desired return while balancing the risk. It is our goal to eliminate unsystematic risk (risk that can be eliminated from a portfolio through diversification) from our client portfolios and focus on attaining a reasonable return for your risk profile over the long term.

Empirical data supports Modern Portfolio Theory which states that assets should be selected on the basis of how they interact with one another, rather than how they perform in isolation. In this way, an investor can hope to achieve the highest possible return for the amount of risk taken. Capital markets are composed of many classes of securities, including stocks and bonds, both domestic and international. A group of securities with shared economic traits is commonly referred to as an asset class. There are several asset classes, all with average price movements that are distinct from one another. Investors can benefit by combining the different asset classes in a structured portfolio. Empirical Wealth Management typically incorporates 15-21 distinct asset classes when building client portfolios.  

Listed below are some of the investment services we provide for our clients on a continuous basis.

• Deciding on the asset classes to include in your portfolio
• Determining the amount to allocate to each asset class
• Selecting the investments to capture each asset class and monitoring them.
• Rebalancing to ensure optimal allocation. 
• Understanding and tracking the correlations among asset classes
• Minimizing taxes year round through tax loss harvesting and strategic asset class location.
• Minimizing investment costs through the use of institutional investments (investments available only through an investment advisor like Empirical Wealth Management) and investments that fall in lowest quartile of expenses for their asset category. 

It is the combination of these core beliefs, a disciplined investment approach and the time we take to understand our clients' objectives that make our services valuable to our clients.