At Next Horizon Advisors, we do not attempt to beat the market. Rather, we focus our effort on not allowing the market to beat us. From 1994-2013, US Stocks as a group were up 9.2% annually, Oil was up 8.4%, Gold was up 6.6%, and Bonds were up 5.7%. The average investor portfolio was up just 2.5%. Over this period an average investor lagged all asset classes and barely beat inflation which was up 2.3%*. The underperformance may be largely attributed to a “behavior gap” caused by investor sentiment.
Our investment approach seeks to minimize the impact of emotions to bridge that gap by the way we construct and manage client portfolios. Our investing strategy is not focused on chasing last year’s winners, or predicting what will be this year’s best sector or hottest stock. We adopt an objective multi-asset strategy to build well-diversified portfolios consistent with a client’s specific risk profile. How markets are going to behave is beyond our control; knowing how we are going to behave in any market environment is something that few people can claim. At Next Horizon Advisors, we take a great deal of pride in our ability to remain objective and focused.
* Source of data: http://www.blackrock.com/investing/literature/investor-education/investing-and-emotions-one-pager-va-us.pdf