Size and Value Factors
While diversification is necessary to minimize unnecessary risks, another key function of successful asset management includes capturing the highest expected return, given a specific level of risk. Numerous academic studies illustrate that value stocks (or stocks trading at low multiples of their book value per share) and smaller company stocks have historically offered higher returns. Since the early 1990’s, Willow Creek has been recommending institutional mutual funds from Dimensional Fund Advisors, an investment firm which pioneered the advantages of passively-managed, small company and value investingOpportunistic Rebalancing – “Buy Low, Sell High”
We introduced a proprietary rebalancing program over a decade ago that captures unpredictable, sporadic market movements. Our rebalancing strategy has helped our clients significantly in volatile markets. Rebalancing, if pursued with discipline and without emotion, is one of the best ways to systematically reinforce the practice of buying low and selling high.Tax Management
Willow Creek places a strong emphasis on after-tax total return through our ongoing portfolio tax management program, which focuses on capital gains management, tax loss harvesting, asset location, and other tax savings strategies unique to your particular circumstances.Investment Costs
While future returns to any individual investment or asset class cannot be controlled, we can exert control over the degree to which those returns are reduced by ongoing fees and expenses. Investments with low ongoing expense ratios should be favored over investments with higher expenses. A guiding principle of the Willow Creek discipline is keeping investment expenses transparent, straightforward, competitive and low, which proportionately increases net returns.