Investment Philosophy

Pursuing a Better Investment Experience

Investors, individuals and many professionals alike just can’t help it – they want to beat the market, become the next Warren Buffett. When people follow their natural instincts, they tend to apply faulty reasoning to investing. Investors often struggle to separate their emotions from their investment decisions.

“The investor’s chief problem—and even his worst enemy—is likely to be himself.”

— Benjamin Graham, The Intelligent Investor

From a practical standpoint, one must understand that humans are not wired for disciplined investing. It’s been our experience that, in the absence of a formalized plan, investors tend to wander from strategy to strategy, drawn by anecdotal evidence or recent success, creating costs and incurring needless losses as a consequence. Investors with a clearly defined investment strategy tend to be more consistent and disciplined in their investment choices.

You’ll find that we’re meticulous listeners and detail-focused on our journey. We’ll work with you to define your feelings about risk, time horizon, tax status and your specific goals and align them to a core asset allocation discipline – the foundation of our investment philosophy. Our relentless passion for thoroughly vetted solutions assures that every option is explored when designing and managing your customized strategy.

In a world of changing markets, Keeney Financial Group takes a deliberate approach to capturing opportunities and managing portfolio volatility. Prudent investing requires taking calculated risks while seeking more consistent performance. We believe the most dependable way to achieve this is through disciplined asset allocation. 

Modern Portfolio Theory

Many decades of experience have demonstrated the importance of asset allocation and diversification, not only in terms of performance, but also the sense of confidence and ease they foster. Since the 1950s, economists have used mathematical models to calculate the risk and return of particular asset classes and specific investments and how they behave in relation to one another. These studies helped lay the foundation for Modern Portfolio Theory, which provides the underpinning for asset allocation, and have proven, quantitatively, that diversifying by adding a less correlated security or asset class will lower a portfolio’s volatility. Of course, correlations are dynamic and change over time. But as a rule, reduced volatility increases as the correlation between the performances of two assets decreases.

Modern Portfolio Theory has significant practical applications for our clients. Our advisors are tireless in applying this proven theory for developing custom financial strategies. Using models that apply Modern Portfolio Theory and historical data allows us to estimate the expected returns of all possible combinations of assets that go into an investment portfolio. While these estimates aren’t accurate forecasts of the future, they do provide a tool that we utilize to make informed, objective choices, rather than acting emotionally or purely in response to market conditions. These models allow us to better understand relative levels of risk and return and adjust them to better suit our clients’ individual needs.

Asset Allocation

Asset allocation is the process of distributing investment capital across various asset classes, each of which may behave differently at any particular time. Though asset allocation doesn’t ensure a profit or protect against losses, it does help us to diversify our clients’ portfolios and help promote performance of individual investments. The science that we apply to investing is derived from the disciplined structure that Modern Portfolio Theory brings to this careful process.

While asset allocation has always been a wise strategy, we believe it’s become even more essential in recent years. A growing array of investment options, both international and domestic, complicates the portfolio construction process. At the same time, these expanding choices offer new ways to increase potential return and manage volatility.

The asset allocation process at Keeney Financial Group goes far beyond applying a formula to an investor’s portfolio. We take into account your investment preferences and specific objectives then apply sophisticated analysis to help protect your purchasing power against inflation. We also understand that making initial investments for your portfolio is just the first step in this journey together. Long-term success requires ongoing management to keep your financial plan aligned with your objectives.

At Keeney Financial Group, we remain committed to keeping clients on track for long-term success. How do we do it? By approaching all of our client services distinctly different from most other wealth management firms. We value our client relationships and take on their goals and success as our own. To build that success, we’re diligent in everything we do and approach the financial world as a dynamic set of possibilities ready to be turned into opportunities.