How Do We Choose the Funds We Use?

When introducing evidence-based investing, we like to begin by explaining why we feel it’s the right strategy for those who are seeking to build or preserve their wealth in wild and woolly markets. Of course sensible strategy is best followed by practical implementation, so it’s also worth describing how we select the funds we typically employ.


You AND Evidence-Based Strategy

Once we’ve narrowed down our fund choices to a manageable group, the final step is to match the best funds with the most important factor of all: you and your individual goals.

This is one of many reasons why we want you to have a personalized plan in place, preferably in the form of a written Investment Policy Statement. For example, investing heavily in even the best emerging market fund may be a poor choice for you if your greatest goal is to preserve the wealth you already have accumulated. Conversely, an excellent bond fund may be best used in moderation if you are seeking aggressive growth (and are willing and able to take on some market risk to do so).

A Solid Fund Selection Strategy

Bottom line, our final round typically involves forming the remaining contenders into a unified team that is optimized to reflect your unique goals and risk tolerances. Then, you must stick by your carefully constructed portfolio, not just for a game or two, but over the seasons of your life.

When we talk about fund selection, we deliberately emphasize the qualities that decades of empirical and practical evidence have indicated are worth pursuing over time. We explicitly downplay the more typical “play by play” reactionary antics. Star performers – their glittery victories and agonizing defeats – may be interesting to read about and may seem important. But we believe that the best investment selections are the ones that help you achieve your own hopes and dreams by keeping your financial footing on solid, evidence-based ground.