Financial Services

The Tao Financial Way

Our Investing Process & Philosophy

When it comes to the world of investing, accurately and consistently predicting both the timing and outcome of the future is highly improbable (if not impossible). Attempting to do this is frequently hazardous to your wealth. We focus on carefully managing the risks on the horizon for each client through the selection of specific asset classes, investing styles, and risk exposures. We then blend those exposures in a way that achieves a fully diversified mix of investments, tailored to each client’s needs. We believe that uncertainty is ever-present, that no outcome is guaranteed, and that only through a balanced and neutral perspective can you discover which way the wind is blowing.

Rather than playing at stock picking which, frankly, requires a whole team of experts dedicated to this function on a per-strategy basis (and who, on average, have also struggled to outperform in recent decades), we focus on identifying investment management teams who have successfully delivered results over time. In some categories, there can be so few of them that buying an index fund simply makes more sense. We use a set of defined criteria to evaluate each strategy’s future performance, and routinely evaluate whether the job they’ve been hired for is getting done or not.

We evaluate the full spectrum of styles and vehicles available to our clients when selecting investments to recommend, and carefully balance factors such as risk, liquidity, availability, fees, tax drag, and diversification benefits when making client-specific recommendations. This approach differs from our advice to 401k and other types of ERISA plans due to the specific needs of each individual which incorporate tax sensitivity, limited time horizons, and specific risk tolerances.

For ERISA plans, we focus on providing a range of investment choices that enable plan participants to intuitively build fully-diversified portfolios. This differs from the portfolios we build for individual clients because, in the case of ERISA plans, it is often the participant rather than the adviser who is selecting investments. This necessarily means that certain investment choices may be too narrow or too risky to be offered on a standalone basis when considered from the perspective of an ERISA fiduciary. Where a plan’s participants have a strong desire to access these types of investments, we frequently see the use of Self-Directed Brokerage Account (SDBA) windows as an alternative in the plan.

Like every client we serve, our relationship begins with a conversation. If you’re looking for a calculated approach to achieving your financial goals, contact us to schedule your free consultation.

Our Financial Services