Sisto Investment Advisory, LLC is a fee-only registered investment adviser serving clients in the greater northern California area. We follow a fiduciary standard and believe in the utmost importance of putting our clients’ needs first. In doing so, our investment philosophy adheres to four core principles.
Markets work.
Our investment approach is deeply rooted in the belief that markets are “efficient.” As such, investor returns are determined principally by asset allocation decisions, not market timing or stock picking. The belief in market efficiency allows us to focus on the design and implementation of client portfolios. We are less subjective and more systematic in the design and asset allocation approach, even in challenging markets.
Risk should be compensated.
All portfolios carry some level of risk, but not all risk is equal. Limiting risk (or volatility) in your portfolio should be commensurate to your financial goals and time horizon. Creative and smart solutions to managing risk in your portfolio will allow you to sleep at night and not become jittery at the constant flow of investment “news”.
Diversify, diversify, diversify.
Studies show that over 90% of a portfolio’s return is attributed to asset allocation and portfolio design. Diversity in portfolio design reduces risk by focusing not only on the number of securities, but also on non-correlated asset classes. Asset class diversification may include allocations of domestic and international stocks and bonds, and value and growth companies, both small and large.
Stay the course.
It’s tough…and emotions play a role. We heard it throughout 2008 and 2009, and clients who stayed the course were rewarded with higher returns, less taxes and lower trading costs. More importantly, academic research and investor experience prove that staying the course enhances portfolio return and results in a better investor experience.
I believe that through knowledge and discipline, financial peace is possible for all of us.
Dave Ramsey, Author