Our Investment Strategy
Premier’s investment strategy brings its academically based philosophy to real portfolios to real clients in the real world.
Active investing, which includes such strategies as stock picking, market timing, style picking and active manager selection based on past performance, often results in a wide range of outcomes, with failures outnumbering successes. Investors too often pay the price for these ill-conceived strategies. One of the primary problems with these strategies is that they focus almost exclusively on returns and pay little attention to risks.
Premier Financial Group realizes that risk is as equally important as return. We use an evidence-based, academically supported approach to identify what works and what does not.
The evidence strongly indicates that diversification provides the best protection against investment failure. The evidence also shows that “beating the market” is the result of luck, and that luck can never be relied on as a basis for financial success or financial peace of mind.
For all the academic and Nobel Prize winning research surrounding our investment philosophy to mean anything, Premier must be able to create real long-term portfolios that work for real clients. Before our clients can experience success, there must be a way to put the theory into practice.
For our investors this shows up in the form of a set of well-designed structured asset class portfolios, that are broadly diversified and, essentially, passive in nature. The building blocks for these portfolios are Dimensional Fund Advisors’ (DFA) structured asset class funds. Premier utilizes DFA funds because of their complete alignment with top academic research, their consistency and very low cost. Overall this is what we refer to as evidence-based investing.
These portfolios incorporate the dimensions of the market which have been shown to have the most reasonable risk and return characteristics. Large and small company stocks, growth and value stocks, and international large and small company value stocks, as well as Emerging Market stocks are all included in our portfolios. Each of these asset classes has good long-term rates of return, but significant variability in returns over shorter periods. Constructing portfolios with multiple asset classes increases diversification and helps maintain consistent returns.
