“We Are What We Repeatedly Do. Excellence, Then, Is Not an Act, But A Habit”

Markets Are Efficient, Don’t Try To Outsmart Them

Consider Drivers Of Returns

The main driver of returns in a portfolio is the percentage allocated to risky investments, generally stocks.  The more stocks a portfolio has, the higher the future expected returns for that portfolio.  Conversely, a portfolio with a lower percentage of stocks (and thus more bonds) will have lower future expected returns.

Other drivers of returns are company size (large company vs. small company), relative price (growth vs. value), and profitability (high vs. low).  These characteristics are often referred to as ‘factors.’

At Thomas Financial Advisors we rely on decades of academic research to build world-class ‘evidence-based’ portfolios that incorporate current market prices, security factors, and future expected returns.

Manage Your Emotions

Fear and greed drive the market and unfortunately characterize the investment philosophy for many investors.  Markets will go up and down, but history has shown that investors can expect to be rewarded for taking risks in the markets.  That reward, however, can take years to be realized and as such, investors must learn to deal with their emotions.

At Thomas Financial Advisors we ensure our client's financial plan and investments meet their specific life goals.  We perform a detailed risk analysis to determine risk tolerance, capacity, and need to ensure you are appropriately invested in a portfolio that makes sense for you.

Diversify

Nobody can accurately and consistently predict what the future will bring and what stock, asset-class or region will outperform the other.  Because the future is unknowable, we diversify. 

At Thomas Financial Advisors we harness the power of diversification and invest our portfolios across nine asset classes, comprising thousands of individual securities around the globe.

Costs Matter

Investment costs can destroy the power of long-term investing and erode wealth building.  Investment expenses are contained within the investment itself, like those charged by the mutual fund or ETF, or outside the investment via transaction costs associated with buying and selling the stock, mutual fund, or ETF.

At Thomas Financial Advisors we use low-cost investments provided by some of the most trusted names in the financial services industry, like Dimensional Fund Advisors and Vanguard.  We use Charles Schwab & Co, Inc. as our client’s custodian because they have a commitment to keeping costs low for our clients.  Further, we negotiate with Schwab to use get the best pricing available for our clients.

Taxes Matter

Taxes are often overlooked when analyzing returns.  After all, after-tax returns are what really matter.  Investors should take advantage of every possible strategy and deduction allowed to maximize their investment returns. 

At Thomas Financial Advisors we are keenly aware of the importance of tax-efficient investing.  We deploy various strategies to ensure our clients’ have the most tax-efficient portfolio possible, focusing on asset location, tax-loss harvesting, Roth IRA conversions, filling marginal rate buckets, etc.

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