Investment Philosophy
Substantial wealth is created through successful participation in global economic activity, over the long term. Aspiriant manages client's portfolios to harness the wealth-creating power of global capital markets in order to deliver attractive investment returns as inexpensively, and tax efficiently, as possible, consistent with each client’s tolerance for levels of risk and appetite for levels of return.
In more efficient public markets, we predominantly use relatively low-risk and low-cost passive strategies. Where it is appropriate for the client, we supplement this allocation with actively managed, higher risk private investments that offer substantial opportunities sufficiently greater to compensate for their usually higher levels of cost, illiquidity, and risk.
World-Class Investment Platform
Aspiriant has built a flexible and innovative world-class investment platform designed to generate in the optimal way, risk-adjusted, after-tax returns to achieve each client’s financial goals. Employing true open architecture, we apply objective analysis to source, evaluate, and select “best in class” investments, wherever they are to be found.
We employ all the rigor of institutional manager selection and performance monitoring and analysis. However, since our clients are individuals, they often have long timeframes that institutional fiduciaries cannot easily adopt. Consequently, Aspiriant clients can develop investment plans that aim for higher returns than those enjoyed by institutional investors.
At Aspiriant, we believe that clients' risk tolerance should be determined by the level of return necessary or desired to achieve clients' objectives. Aspiriant clients make decisions about their own money, and are thus free to knowingly accept levels of risk that institutional fiduciaries would rarely accept.
Measured Approach to Risk
Still, we believe that risk should only be undertaken to the extent necessary to achieve the objective. For many of our clients, risk is not necessary, but instead is a preference. Our role is to provide clarity so that clients can be informed, deliberate and intentional about risk and return. But regardless of whether risk is a preference or a requirement, Aspiriant strives to achieve broad diversification both across and within asset classes to reduce the volatility that is inherent in any portfolio.
Open Architecture
We implement portfolios for each client using “best of breed” opportunities, regardless of their source. We may use outside separate account managers, and large, institutional managers, or investment funds not normally available to individual investors (or that may be, in fact, closed to new investors). In appropriate cases, Aspiriant also employs mutual funds, ETF’s and ETN’s in the construction of investment portfolios.
Equity Over Fixed Income
Portfolios tend to be broadly diversified among asset classes. Nevertheless, for portfolios designed to meet long investment timeframes, Aspiriant often favors strong equity weightings. History and the logic of necessary capital market behavior both support equity investing as most suitable for the funding of long-range financial objectives.
No Market Timing
An overwhelming body of evidence indicates that consistently making accurate near-term forecasts of a market’s direction is extremely improbable. The attempt can also be costly and very inefficient on an after-tax basis.
Moreover, one or two incorrect or ill-timed decisions can more than undo all of the advantage of remaining committed to equity investments over the long term. We coach our clients to accept and tolerate sometimes painful short-term volatility to reap the positive performance advantages that accrue over the long term.
Appropriate Use of Margin
Consequently, using leverage to finance diversified, long-term assets makes strong economic sense for clients who are able and willing to accept more short-term risk. For the right investor, a reasonable use of durable investment margin is a worthwhile strategy for augmenting long-term equity returns (Use of margin increases the volatility, or positive and negative risk in the portfolio, and the result of using margin may be, from time to time, exactly the opposite of the desired purpose and expected long-term results -- with losses greater than might have been experienced in an unleveraged portfolio. See important disclosures by clicking here.)
Sensitivity to Expenses and Taxes
Taxes are inescapable for virtually all of our clients and are a very significant consideration for many of them. Our wealth managers are experts in mitigating the tax consequences of portfolio management. We exercise great care in the appropriate placement of investments within taxable and tax-deferred accounts and continually monitor and review portfolios for tax opportunities.
Expenses reduce investment returns for every client. Since Aspiriant has no proprietary financial interest in any strategy or investment product, we always select investments for our clients that combine top performance expectations with the lowest possible cost. |
