Investment philosophy

Each year, investors pay billions of dollars to financial advisors and fund companies who claim they can achieve superior returns. This claim is unjustified. Very few advisors have the skills needed to beat the markets, and those few people cannot be identified in advance. Every academic study on the subject points to one clear message; in aggregate, the more you pay to invest, the lower your returns will be.

Our clients do not participate in the massive wealth transfer from Main Street to Wall Street. They earn their fair share of market returns by holding a select basket of low-cost index funds and exchange-traded funds (ETFs) that match market  performance. There is no question this is the best method; the question is, how do you do it?

Portfolio Solutions is a leader in low-cost portfolio management. We have spent decades researching and compiling information on efficient asset allocation and investment selection using index funds and ETFs, and have published a half-dozen books on the subject. For a small annual fee, we will design, implement and maintain a low-cost, passively managed portfolio that is appropriate for your needs. Our services are economical, efficient and practical.

Active Versus Passive

There are two roads a person can follow when managing an investment portfolio; active management and passive management. Active management embraces the idea that a person can achieve superior returns over market indexes. In contrast, passive management is all about achieving, as close as possible, the returns of the financial markets. Passive investors understand that market returns are good returns.

The human desire to beat the market is a powerful force. Investors will spend a considerable amount of time and money searching for superior returns. That search is promoted by a multi-billion dollar Wall Street marketing campaign that employs an army of talented salespeople.

Despite all the time and money spent trying to identify ways to beat the markets, the net result falls far below expectations. Very few mutual funds and investment advisors are able to achieve superior performance with enough consistency to make it worth the effort. After paying mutual fund fees, advisor fees, broker commissions and other related investment costs, an investor's return typically falls below the market by the amount they spent to beat it.

Spending time and money trying to beat the market with active management is counterproductive. At Portfolio Solutions, we specialize in low cost passive investing. It is economical, efficient and honest.

LEARN MORE about our Asset Allocation Decision Process.

LEARN MORE about our Security Selection Decision Process.

LEARN MORE about Rebalancing and Account Maintenance.

Contact Portfolio Solutions today to learn how to become a client.