The core beliefs of Ritholtz Wealth Management (RWM) lie not in attempting to beat the market. Rather, we focus our energies on not letting the market beat us. From 1990-2009, the average mutual fund outperformed the average mutual fund investor by more than 300%, annually. Since ERISA was passed in the 1974, enabling 401k accounts, the market has returned an average of 11% per year. However, the average 401k investor has gained only 3% per year.
This “behavior gap” is driven by a number of well understood cognitive errors. I have spent decades studying how and why investors make these errors, and the best approach to avoid them.
Our approach attempts to bridge that gap by the way we construct and manage our portfolios. Our investing success is not attributable to chasing last year’s winners, or predicting what will be this year’s best sector or hottest stock. Rather, we run a multi-asset strategy that takes advantage of diversification. How markets are going to behave is beyond our control; knowing how we are going to behave in any market environment is something that few people can claim. At RWM, we take a great deal of pride in our ability to remain objective and neutral.
By systematically rebalancing our portfolios, we are able to take advantage of market gyrations. Trimming what has gotten rich and adding to what has soured enables us to take advantage of volatility rather than become paralyzed by it. Our portfolios rely on multiple streams of beta to deliver returns to our clients that are commensurate with the risk they need to take.
Every portfolio we construct is premised on the work our clients do with RWM financial planners. Knowing a client’s situation, risk tolerance and liquidity needs is paramount to determining a target return.
Our goal is to help our clients reach their goals with the lowest assumed risk possible.
If you have any general information questions, please email me
Info -at- RitholtzWealth -dot- com