Guiding Principles

• Financial markets are usually efficient:  Because they are so highly competitive, financial markets usually price securities correctly.   Security prices above or below intrinsic value are rare, and they don’t last long.
  
  
• The long-term average return to speculation is zero, minus costs of investing: Speculation is a bet on the short-term change in market price of a security.  Over the short run, some speculators gain and some lose, but over the long run, the average return is zero, minus costs of investing.
  
  
• The long-term average return to a broadly diversified portfolio of securities has been historically positive:  The longer one invests in a broadly diversified portfolio of securities, the more likely the return will be the risk-free rate of return plus an appropriate risk premium minus costs of investing.
  
  
• Broad diversification eliminates uncompensated risk:  By selecting a portfolio of securities that is broadly diversified, both within and across multiple asset classes, investors reduce or eliminate uncompensated risk.
  

Our Investment Philosophy

• KAM’s role as a fee-only Registered Investment Advisor is to
  
  
• Help clients identify and understand their financial goals;
  
  
• Help clients understand their individual willingness and ability to accept compensated risk while avoiding exposure to uncompensated risk;
  
  
• Match each client to a broadly diversified portfolio of assets that minimizes costs of investing and maximizes the after-tax, after-cost, long-run average rate of return, given each client’s level of risk tolerance;
  
  
• Measure clients’ portfolio performance regularly and assess continuing progress toward each investor’s financial goals;
  
  
• Rebalance clients’ portfolios as needed and re-evaluate the portfolio for possibly changing financial goals and possibly changing willingness and ability to bear risk;
  
  
• Help clients understand emerging global economic and political forces, so they may peacefully weather the inevitable challenges of market volatility and bear markets.
• KAM does not recommend active portfolio management strategies, which are employed by about 95% of mutual fund managers.  Active investment strategies tend to reduce investors’ average long-term rate of return and increase costs of investing.