Looking for "the better way?" Our approach delivers.

Getting Wealthy vs. Staying Wealthy

Most of our clients have two things in common:

  • They’ve achieved a degree of success in their lives, financially.
  • They care about their wealth and their future.

Over the decades, we've noticed that there is a big difference between getting wealthy and staying wealthy - between making money and keeping money. Fundamentally, two different skill sets are required, and it can be difficult to manage the critical mindset transition. There are many ways to build wealth, but just a handful of ways to mess it all up (misplaced trust, excess risk, unnecessary concentration, poor diversification, leverage, unrealistic expectations).

Our goal is to bring the needed tools and tactics to the table, tailored to where you're at on your wealth journey. Like in sports, we've found that synergy in this effort is important. You can have two skilled players, but if each approaches the game with different attitudes or priorities, they may not perform at optimal levels when put together.

The same is true in working with a wealth planner or money coach: you want to have a level of agreement on some of the foundational principles. For over 30 years, we’ve found that these things matter, and are helpful in determining if we are a good fit for a new client.

So here's a snapshot of how we think about different investment concepts through the lens of, what we believe to be, the "better way."

"Evidence" Is Better Than "Opinion"

The track record of the financial media ‘experts’ is worse than a flip of a coin, and yet their opinions abound.1 Day after day, we are exposed to relentless predictions about what will happen tomorrow morning or next year. We avoid this approach, by relying on the weighty evidence of history to build portfolios with a slight edge, putting the odds over time meaningfully in your favour.

1 A report from CXO Advisory Group analyzed 6,582 public market calls made by 68 pundits from 2005-2012 and found that their average accuracy was 47%, slightly worse than chance.
"Simple" Is Better Than "Complex"

Some of the fastest growing financial management companies in the world today package sophistication and simplicity together.

This pushes against the conception that greater wealth requires more expensive, boutique, and extravagant methods. The feeling is: more fancy features = more control. But this is not true. Markets are generally too complex and sophisticated for the casual participant to have an impact.

As other areas of your financial life get more complex, we fight the urge to compound complexity. We opt for simple, understandable, well-diversified, explainable strategies to reduce worry and build confidence in the overall plan.

"Systems" Are Better Than "Manual Decisions"

The emotional toll of making a big decision is far greater than the cumulative effect of small, automated systematic decisions. Imagine if air traffic controllers had to manually decide what was best every time a new plane was nearing their airport. Without a system in place to determine flight path, runway procedures, timing, and communication tactics, this would be terribly inefficient and mentally exhausting (not to mention, dangerous).

We want our clients to have peace of mind by removing the bombardment of feeling like fresh decisions are required with every new dollar or news headline. Developing things like systems, habits, and micro-actions, etc., will have massive compound effects.

“Enough” Is Better Than "More"

The goal of your portfolio should be to earn your required rate of return with as little risk possible.

Gambling on high risk investments to get richer isn't a risk worth taking unless you already have more than enough. Because, ultimately, contentment is just wisdom expressed financially.

"Global" Is Better Than "Domestic"

Canada represents just 3% of the world market. It is similar in size to countries like Australia, states like California, or individual companies like Apple. So when we build portfolios, we want to expose our clients to the opportunities beyond the 49th parallel.

"Diversified" Is Better Than "Concentrated"

We cannot know what the future holds. Often the biggest world events come from unimaginable tail risks (think Pearl Harbour, 9/11, COVID-19). So what’s better? Searching for the perfect investment strategy and dropping all your ‘seeds’ next to each other? Or looking for a thousand good spots and planting those seeds individually?

When we build portfolios we resist the urge to concentrate our investments in one location. We never want to have a single point of failure in a portfolio. Instead of trying to make perfect, concentrated decisions, we simply try to avoid making bad ones. And we do that through diversification.

"Probability" Is Better Than "Possibility"

Who has the advantage: the house, or the gambler?

It’s important to recognize the difference between a good bet and a wise decision. We work to know what constitutes accurate evidence and then invest where that evidence leads, giving our clients an advantage. For example, to worry about the “possibility” of the market going down and simultaneously forgetting about the “probability” of markets going up, is to forget that markets skew positively. Positive-return years outnumber negative-return years. Through time and repetition, the laws of probability will prove that the low-cost, diversified investor has an edge.

We work with probability so you can be the house, not the gambler.

"Low Cost" Is Better Than "Expensive"

Why do so many funds underperform? A major factor is high costs, which reduce an investor’s net return and increase the hurdle for a fund to outperform.

All funds incur costs. Some costs, such as expense ratios, are easily observed, while others, like trading costs, are more difficult to measure. The question is not whether investors must bear some costs, but whether the costs are reasonable and indicative of the value added by a fund manager’s decisions.

Let’s consider how one type of explicit cost - expense ratios - can impact fund performance. Our research shows that funds with the highest expense ratios had the lowest rates of outperformance. Especially for longer horizons, the cost hurdle becomes too high for most funds to overcome.1

High fees can contribute to underperforming because the higher a fund’s costs, the higher its return must be to outperform its benchmark. So to put the odds in your favour, we prefer low cost to expensive alternatives.

1Dimensional Fund Advisors, The Fund Landscape 2022: A Study of US-Domiciled Mutual Fund and Exchange-Traded Fund Performance, May 2022
"Computers" Are Better Than "Humans"

Ready for some movie references?

We’re not idealizing dystopian digital tyranny like in The Terminator by saying this. But what we do want to do is take advantage of the way in which computers can supplement human decision-making. The ability to use the resources of technology to calculate probabilities, measure risk, and execute algorithmic security selection results in enhancing returns and increasing outcome reliability.

Innovation accompanies technology. Investing benefits from every advantage that computers bring through quantitative methods and statistical models. Just like in Moneyball, traditional baseball scouts were limiting their team’s success because they had a 150 year old flaw in their thinking: that wins come from runs, not players. Independent of computational support, all their human experience, intuition, and industry knowledge was not worth paying for.

The same goes for investing.