Investment Style

About Our Investment Style

Every investment advisor has at least a slightly different investment style, and many have radically different styles. We acknowledge that different investment styles suit different investors, and what has worked in the past may not be predictive of the future. Therefore, we will never disparage the style or ideas of other individual advisors. However, we will vigorously defend VFM’s investment style with logic and data, which is consistent with our engineering background.

With respect to stock investing, VFM uses an active approach that is focused on participating in stock market gains to the greatest extent possible, and avoiding losses (or drawdowns) to the greatest extent possible. In other words, we seek a higher “upside” capture rate and a lower “downside” capture rate. This is very different than passive index investing and other buy-and-hold styles, and is driven by our strong belief that wealth is built through steady, long-term growth that avoids wasted time recovering from large losses. A good example of this is the 13 years it took the market to recover from the 2000-2002 dot-com bear market.

Another strong belief that influences our investment style is that meaningful diversification can only be achieved through investments that DO different things. As a counter example, owning several mutual funds might feel like diversification, but if they all do the same thing (i.e. buy stocks), the odds are they will end up performing very close to the same over multiple years. VFM utilizes a wide range of conventional and alternative investments to achieve true diversification in a wide range of market conditions.

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