Investment Philosophy

Investment Philosophy.

The Cornerstone Investment Philosophy is based on comprehensive mix of academic theory and real world practitioner experience gleaned from my career (30+ years) experience.  This site helps anyone get started investing.  It also provides in-depth analysis for high net worth-HNW and institutional accounts.

The Cornerstone Investment Philosophy focuses on sophisticated asset allocation that includes both strategic and tactical asset allocation.  Strategic asset allocation models cover portfolios ranging from conservative to aggressive.  Tactical adjustments are used to actively manage the equity/fixed income weights, the mix of various stock market capitalization levels, the investment style between growth and value, domestic/foreign, developed/emerging markets, sectors, risk levels, etc.  Models are structured to achieve an optimal mix of passive indexes and active management.  Diversified models are constructed and the goal is to achieve the best tradeoff between expected risk and return for each model.  Models are structured to achieve the market return less the frictional costs of investing.  After-tax performance is sought for taxable holdings.  Models are rebalanced based on time and significant market moves.

Models utilize mutual funds and exchange traded funds to achieve proper asset allocation and diversification.  Cornerstone also considers variable annuities, partnerships and other products that may possibly enhance the relationship between risk and return.  A methodology is maintained for common stocks, but common stocks are not part of existing models.

Cornerstone criteria for investment recommendations:

-Fundamental research to analyze quality, long-term strengths, risks, and valuation.

-Low cost and fee structure.

-Minimize technical/charting analysis, “hot products”, and short-term trading.

-Independent, Objective research-based seeking to provide consistent, competitive performance.

Fundamental analysis incorporates ongoing monitoring of economic variables and corporate earnings reports.  Consideration is given to consensus expectations and factors that appear to be priced in the market.  Proprietary econometric forecasting is maintained to help understand and gauge future prospects.  Forecasts are maintained not so much for predicting as maintaining perspective and avoiding over-reacting to short-term events.  Cornerstone maintains disciplined data corroboration from multiple sources to ensure accuracy.