Droms Strauss Wealth Management investment philosophy is based on three key concepts, supported by academic research:
- Risk and return go hand-in-hand in the capital markets. A fundamental principle of "Modern Portfolio Theory" is that increasing return is accompanied by increasing risk.
- Historical market patterns are a reliable predictor of how asset classes will perform, at least in direction, if not magnitude, over the long-term.
- Attempting to time the securities markets by jumping in and out of different asset classes based on forecasts of future returns does not enhance long-term investment results.
"A good portfolio is more than a long list of good stocks and bonds. It is a balanced whole, providing the investor with protections and opportunities with respect to a wide range of contingencies."
Harry Markowitz — Founder of Modern Portfolio Theory and winner of the Nobel Memorial Prize in Economic Sciences