Investment Principles

At TFS, we believe wise financial planning and investing are based on three principles…
1

Rational Investment Management

Market volatility is unpredictable, yet it is inevitable. With this in mind, we employ several risk mitigation strategies for your investments, but no amount of risk management can save investors from bad decisions. For that reason, we proactively engage with you regularly to help you maintain perspective and manage emotional responses when the markets don’t seem to be cooperating with your plan. The majority of the time, changing your plan because current market conditions are making you nervous can be detrimental for you down the road.

2

Goals-Based Investing

Your long-term goals should be reflected in your core portfolio. While you may have ancillary or satellite investments, we believe your financial situation should be so secure that if your investments lose a large portion of their value, your basic goals would not be jeopardized. The intent of the core portfolio is for a predictable, risk-managed outcome. Some might even call a strategic asset allocation “boring,” but we find them pretty exciting. Once your core is well-funded, you may decide to add ancillary or satellite investments. While a satellite might be at a higher risk level, if the value decreases, it won’t impact your core investments so you’re still on track for your primary goals.

To that end, our clients get not only our own experience and brainpower, but they get the addition of our partner, Dimensional Fund Advisors, which has been a thought leader in the investing world for decades, both in innovation and strategy.

3

Strategic Diversification

In order to reduce the overall risk of a portfolio, our allocations are generally broadly diversified while excluding certain groups of stocks with heightened risk or inefficiency. Diversification may help reduce volatility but it does not guarantee positive returns.

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