Investing

SYM sets a high bar for recognizing valid investment strategies. We believe that, while we have access to more complex instruments, a blend of stocks and bonds are best for most people. By focusing on investments that have theoretically-sound rates of return that pay their owners over time, we feel investors are better able to stay committed during short-term periods of volatility.

SYM sets a high bar for recognizing valid investment strategies. We believe that, while we have access to more complex instruments, a blend of stocks and bonds are best for most people. By focusing on investments that have theoretically-sound rates of return that pay their owners over time, we feel investors are better able to stay committed during short-term periods of volatility.

SYM sets a high bar for recognizing valid investment strategies. We believe that, while we have access to more complex instruments, a blend of stocks and bonds are best for most people. By focusing on investments that have theoretically-sound rates of return that pay their owners over time, we feel investors are better able to stay committed during short-term periods of volatility.

Based on a combination of theory and many decades of historical observation, SYM aims to allocate seven years of spending needs from the portfolio into bonds. While we expect stocks to outperform bonds over most decades, stocks are also associated with greater price declines along the way. Historically speaking, according to NBER and MSCI, 7-10 years is enough time to wait out even severe bear markets, and owning funds in safer bonds allows an investor to “wait it out” and avoid selling stocks low.

Because we believe the stock strategy can run its course over 7-10 years, SYM owns a higher concentration in stocks with the potential to outperform over the long run. We consider opportunities in different geographies, investment styles, and currency profiles in this effort. Bonds are used to meet shorter-term needs and have a role in dampening volatility. Therefore, we consider safety first and then pursue opportunities that are prudent for the bond allocation. For both stocks and bonds, we highly prioritize low-cost diversification and the avoidance of catastrophic risk.

The SYM portfolio uses the MSCI All-Country World Index (“ACWI”) as a starting point. This is a capitalization-weighted index of the largest 85% of companies throughout the world. Sixty percent of the index’s companies are domiciled in the United States, and forty percent are domiciled in other countries. The ACWI starting point seeks to provide a neutral reference with no active bets. While a U.S.-centric benchmark such as the S&P 500 may feel more familiar to some American clients, U.S. indexes omit important global companies.

We opt to adjust our portfolio when we see what we believe are reasonable opportunities to enhance returns or lower risk. We consider several return enhancement methodologies: factor-based strategies such as highly profitable businesses, businesses with low share prices relative to their business activity, small companies’ stocks, or trending stocks; active management strategies which select stocks that proven analyst teams believe have stronger future prospects; and leveraged strategies which exaggerate the broad market’s movements in either direction. We may also adjust the regional exposure to the United States and other countries. We consider a variety of evidence-based methods in an effort to reduce risk as well. Under most conditions we deploy several complementary strategies that, based on our experience, we expect to pay off in different environments.

This depends on the net-of-expense return profile and how well the style complements other holdings in your portfolio. We aim to a) not let any particular component have an outsized influence on the entire strategy; and b) smooth the sequence of beating and lagging the index such that few 12 month periods lag by more than 4%. We strive to reach an annualized 1% outperformance to the ACWI over a 10-year horizon, net of all fees.

Don’t sell stocks when they’re low.
Don’t switch strategies when the current one is out of favor.

The most impactful change we anticipate is the percent invested in stocks and bonds. As you approach retirement or other sizable cash needs, we expect to increase the weight to more stable investments. If markets hit an extreme opportunity or risk characteristic which provides an opportunity to enhance returns or lower risks over the next 7-10 years for stocks or 3-5 years for bonds, we may pursue it. Our trading team leverages technology in an effort to buy routine dips caused by shorter-term market volatility. As deposits come in, withdrawals go out, and as investments pay cash
coupons and dividends into your account, the team is able to see where to potentially lock profits or buy at a discount. We generally seek to avoid trades motivated by detractors like buying yesterday’s winner today, reacting to sensationalized news headlines, or short-term market sentiment.

1. Positive returns over most decades.
2. Outperforms bonds, inflation, and cash over most decades.
3. In the short run, it is an unreliable endeavor to attempt selling before market declines and repurchasing before rallies, and even trying to do so is often very costly.
4. In the short run, we strive to keep the strategy within 4% of the MSCI ACWI in most 12 month periods.
5. Remains highly diversified. We forego the chance of extreme single stock home runs in an effort to avoid the risk of extreme catastrophes. This tradeoff is aimed to boost your reliable outcomes.

1. Positive returns in most 3-year periods.
2. Outpace inflation, cash, and CD’s over most 3 – 5 year periods.
3. Bonds remain liquid, facilitating quick and penalty-free cash when you need it.
4. Strive to keep the strategy within 4% of the Bloomberg Barclays US Bond Aggregate (“BarCap”) over most 12 month periods.
5. May take more or less risk than the bond benchmark in certain environments but are viewed as an important component of an aggregate strategy combining stocks and bonds.