Our Investment Philosophy
From online get-rich-quick schemes to hedge funds touting their proprietary trading systems, everyone has an opinion on the best way to invest your money. At Silverstone Financial, time-tested common-sense and evidence-based investing strategies are what we trust. We believe that passive long-term investing is the best way to set yourself up for success.
However, "Passive" does not mean throwing you into a total market index fund and calling it a day.
We can be discerning by employing unemotional rules-based financial screening criteria to a total market index.
We can whittle down that index by eliminating unprofitable slow-growth companies and overly expensive stocks.
This way we replace the "buy everything and hope for the best" approach with a "buy only the best" approach.
PASSIVE
Active versus Passive investing is an age-old debate in finance. Although you can find evidence to support either side, studies show that the majority of Active investment managers under-perform their benchmarks consistently. In most cases, low-cost Passive investing strategies lead to higher returns over the long-term. We do not try to time the markets or "stock pick" with our clients. Instead, we advocate for index investing, just not your typical "total market index" ETF or mutual fund.
FACTOR-BASED
Not all stocks in a "total market index" fund are good investments. We believe that by using rules-based unbiased financial screening criteria, we can be more discerning investors. This is called factor-based investing.
Using Growth At a Reasonable Price (GARP) filters, such as historical revenue growth and basic valuation metrics, allows us to avoid both market hype cycles and slow-growing companies to ensure rational and prudent investing.
DIRECT INDEXING
With our modern technology, we use fractional shares of stocks to directly purchase the stocks that compose an index, rather than using traditional ETFs or mutual funds. Direct indexing provides many benefits including tax loss harvesting and eliminating the fees charged by mutual funds.
Tax loss harvesting: By directly owning all of the stocks in an index, we are able to systematically sell the lowest-performing stocks in the index for a short period of time to "lock in" those tax losses. Our trading software automatically does this for you. By capturing those tax losses over time, we can dramatically reduce the tax burden of your investments and improve the efficiency of your overall portfolio.
Growth At a Reasonable Price (GARP) Methodology
We believe in Factor-Based GARP Investing:
This strategy mathematically filters to the top 30% highest-growth stocks and then filters again to the top half of those with the highest quality and value. The top 15% of stocks meeting both growth and value criteria are then passively invested in.
Using the S&P 500 as an example, this is how to determine the top GARP stocks to invest in:
Our Portfolios
Which portfolio
is right for you?
Please use this free questionnaire to the left to determine your Risk Number.
It only takes 5 minutes!
Watch this video to learn more about why we use Nitrogen Riskalyze software:
This webpage is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.
Investments involve risk and are not guaranteed.
Please schedule a meeting with us to determine what
investment strategy is right for you.
Schedule a Free Professional Portfolio Review
Meet with a Financial Planner 1-on-1 for a complimentary, obligation-free consultation.
We will review your financial situation, answer any questions you may have, and explain our firm's offerings.