We understand that there are numerous sources of financial information in the world today. The question for many people is “who should I trust?” At Lach Financial, we believe the most reliable and unbiased source of information is the academic community. That is why every investment decision made at our firm is based on peer-reviewed academic research. Our approach is based on three principles:
1. Markets work
We believe that securities are fairly priced, and that any attempt to try and beat the market by searching for mispriced securities is a fool’s errand. Rather than try and beat the market, we design portfolios that are passively managed. This means that we simply try to capture the returns of the market without betting on a single security or sector. In addition, we design portfolios designed to capture premiums well-documented in academic literature, such as the size premium and the value premium.
Academic literature shows that an investor can reduce the risk of a portfolio by diversifying their portfolio. This is why our portfolios are diversified across sectors, countries, and firm size. The portfolios we design for clients have as many as 10,000 stocks.
3. Costs Matter
The fees that an investor pays a mutual fund manager will directly reduce the returns from the investment. This is why our portfolios are constructed using investments that charge low expenses.