Our Investment Philosophy

Over the past few weeks, we’ve discussed the basics of investing from asset allocation to the questions you need to ask your financial advisor.  In today’s post we’d like to share a bit about our investment strategy and philosophy.

Just say no to market timing

The foundation of our investment philosophy—and what position we always urge our clients to take—is to be disciplined and efficient. Getting caught up in the prediction circus of letting market forecasts dictate asset allocation policy is a terrible mistake because the forecasts are bound to be wrong.  Just think of the past several years.  What market forecasters predicted 9/11, or the housing crash, or the fall of Lehman Brothers, or a potential default of Euro zone members, or for that matter a massive earthquake in Japan that terribly disrupted global supply chains?  Instead, be highly disciplined, control risk through asset class diversification and take advantage of market dislocations through rebalancing.

Fund manager selection

Picking an all-star team of funds for our portfolios is comparable to fielding an all-star baseball team.  If a player had a good season last year or even the last five or ten years, how confident can you be that the player will continue to perform at the same high level in the future? For fund managers their particular approach to investing could start to falter at any time as markets, industries, and economies change and evolve. Our research shows that the pool of top quartile of fund managers has very high levels of turnover — managers are moving in and out of the top group with great frequency.  We avoid playing the “picking the best managers game” as much as we can and instead focus on strategies like those of Dimensional Fund Advisors, which use extensive scientific research of the markets to build portfolios that are well diversified, and are super disciplined (non-emotional) about buying lower valued stocks and selling them as their valuations rise, low-cost, and tax efficient.

To the extent that we add in more traditional, stock-picking managers into our portfolios, we work with the extremely deep and broad resources at Callan Associates to make sure those fund organizations adhere to the very best organizational and operational standards and that their investment philosophy and strategy is clear and easily understood.  Callan also maintains outstanding databases that constantly monitor fund performance, fund cash flows and any portfolio management or organizational changes. We believe our monitoring of the funds is much more broad thanks to Callan. Callan oversees more than a trillion dollars on behalf of the largest institutional investors in the U.S. and around the world.  Their ability to collect and analyze data across the entire investment management industry is outstanding. At Hewins, we have full access to their resources and to a dedicated group of professionals there that know well the nature of our business and our clientele.

We generally buy institutional share classes for our clients, the lowest-cost share class.  We look for funds with low turnover (which minimizes trading costs and realized short-term capital gains) and that emphasize other tax-sensitive strategies.  Predicting markets over the course of a few quarters or a year or two with reliable accuracy is essentially impossible; instead we focus on the factors we can control like fund expenses and tax sensitivity.  Our research shows that over longer periods of time lower-cost mutual funds deliver better performance than higher cost funds. Low costs are actually a much better predictor of good long-term performance than focusing on recent performance results.


We have one source of revenue – the fees our clients pay us.  We do not earn a dime from the money management industry which allows us to maintain objectivity and to always call it straight.  We allow only the best academic research, as well as research from firms like Callan, DFA, PIMCO and others, to guide our approach to asset allocation policy, fund recommendations, and portfolio monitoring.

Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC); however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services, fees and conflicts of interest is set forth in Wipfli Financial’s current Form ADV Part 2A brochure and Form CRS, copies of which are available from Wipfli Financial upon request at no cost or at www.adviserinfo.sec.gov. Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
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Our Investment Philosophy

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