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"A scientific framework for the art of investing."

The first purpose of Evidence-Based Investing (EBI) is to provide a template that, laid across the spectrum of topics confronting today’s investor, provides clear and simple principles that make it possible to better evaluate the wisdom of investment advice. EBI offers a way to answer investment questions in a systematic, analytical, and scientific manner as described below.

Evidence-Based Investing (EBI) Steps: 1) Eliminate Meaningless. 2) Ask Meaningful Questions. 3) Apply the Evidence. 4) Monitor for Effectiveness.




Step One: Eliminate Meaningless Questions

In Evidence-Based Investing, the only good question is one that can be verified. For example, consider the following question:

“Did the market decline today out of concern over Iranian oil production?”

There would be no way to irrefutably verify either a positive or a negative answer to this question. There are countless unverifiable questions and statements that dominate investment news on a daily basis. This brings to light the importance of the next step in EBI – the need to develop the right questions.

Step Two: Ask Meaningful Questions

Meaningful questions need to be formulated. That means asking questions that can be proven or disproven with reference to evidence. The questions must also have significance for the individual investor. This requires the experience and knowledge of an objective financial advisory team.

Step Three: Apply the Evidence

Once the right questions have been asked evidence can be applied to solve problems and integrate both advisor expertise and the individual investor’s values and goals.

Step Four: Monitor the Effectiveness

The final step in EBI is evaluating the effectiveness and efficiency of the process. This involves closely analyzing portfolio performance(after all costs) and revisiting the investor’s goals and values.

Effective monitoring presumes that the advisor is compensated in a manner in which they are able to maintain objectivity.

Data obtained must be applied in the context of an individual’s goals, needs, and circumstances. In this way, empirical research becomes more relevant to practical investing, and practical investing is backed by solid theory and economic knowledge. As a result, our EBI investment philosophy is designed to engineer broad, globally diversified portfolios that minimize risk and maximize after-tax return.

EBI is also an important part of the investor/advisor relationship we call The Building Ideal Futures ProcessSM:

  1. Determine What's Important
  2. Review Current Plan & Portfolio
  3. Develop Plan
  4. Implement & Coordinate Plan
  5. Conduct Review Sessions

EBI is part of step 4 of The Building Ideal Futures ProcessSM where an effective investment strategy needs to be implemented to assure clients earn an appropriate return for the level of risk they can afford. The end result is a time-tested and common sense approach. We provide investors access to an evidence-based portfolio option along with proactive and customized planning advice. Read more about the value of evidence in investing in a recent article in Worth Magazine featuring Brent Brodeski.


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