Evidence-based investing relies on decades of academic, unbiased, and peer-reviewed financial research to identify the factors of return. The central idea is that markets are naturally efficient. Recommendations based on historical, observable market behaviors leads to steadier, more predictable results over the long term.
For a simplified illustration, many investors debate active versus passive. Evidence-based investing pulls the best features of these approaches into one cohesive strategy. You benefit from both the lower fees of passive management, without being handcuffed to an index, and the promise of higher returns of active management, without the higher fees and lack of consistency. The end results are very efficient portfolios with lower risk for level of expected return.
Our investment philosophy is grounded in academic research, so it makes sense that we primarily use mutual funds that employ the same philosophy in how they construct their funds. Dimensional Fund Advisors, AQR, and Vanguard are three of our primary partners that employ evidence-based investing to build and execute their mutual funds. We are among a small number of firms in Kansas City that offer these fund choices.