Investment Management

At Solid Rock Wealth Management, you can enjoy many of the same advantages big institutional investors have over everyday investors. Our clients enjoy access to the same investments and strategies used by some of the nation’s biggest pension funds, endowment plans and institutional investors.

The investment portfolios and strategies we use are based upon over 60 years of academic research – investing on “what we know”, not “what someone thinks”. Our portfolios are fully invested across all markets and all asset classes, eliminating the speculation of security selection and market timing. Our portfolios are designed to capture the returns of asset classes that academic research has shown to reward investors with an expected increase in returns over time.

Our investment strategy is grounded in 5 key factors:

  1. Markets Are Efficient. The security markets do an excellent job of effectively pricing in all known and expected information available. We do not attempt to pick undervalued stocks or time the market.
  2. Diversification Is Key. Diversification reduces the risk associated with specific securities and asset classes. Our portfolios hold over 12,000 of the worlds companies and debt issues across 44 countries.
  3. Risk And Return Are Correlated. The compensation for enduring increased levels of risk is the potential for greater investment returns.
  4. Asset Allocation Determines Performance. The number one determinant of portfolio performance is asset allocation. In other words, how you allocate your money among different asset classes determines over 95% of the performance.  Market timing and security selection (stock-picking) account for less than 5%. (1)  Our portfolios are allocated among all major asset classes with a tilt in portfolio weighting to small companies, value companies and highly profitable companies.
  5. Rebalancing Adds Value. Your portfolio’s asset allocation will drift from it’s initial allocation due to market events, changing it’s risk and return characteristics. We regularly rebalance your portfolio to its target allocation.  This helps maintain your stated risk profile.  There is also evidence in academic research that a systematic rebalancing program may increase returns by taking advantage of market fluctuations over the long-term.  Because re-balancing forces you to sell asset classes that have performed well and buy asset classes that have underperformed, it can be a disciplined method for selling high and buying low.  And, because our clients don’t pay  transaction charges each time a trade is placed, you don’t need to be concerned about incurring additional costs for rebalancing your portfolio.
  1. Determinants of Portfolio Performance by Brinson, Hood & Beebower. Financial Analysts Journal, January 1995.

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