Investing Should Be Scientific Rather Than Speculative – Markets work. Traditional money managers attempt to outperform the markets by predicting the future, despite overwhelming evidence that such practices are detrimental to portfolio returns. Heritage instead uses scientific, engineered portfolios to harness the power of thousands of stocks, bonds and commodities from around the world. We do not engage in market timing or any other form of speculation, and we do not pretend to have a crystal ball. Our philosophy emphasizes rationality and investment science.

Risk and Return Are Related – Investment science has demonstrated that risk and return are inseparable. However, the vast majority of the emphasis on Wall Street is dedicated to portfolio returns, while risk is often ignored. At Heritage, we focus our efforts on the science of risk control rather than on misguided and futile attempts to control returns by predicting the future. We use global, comprehensive diversification to eliminate risks that are not worth taking, while we deliberately structure our portfolios to take advantage of other risks that will compensate our clients with higher returns.

Markets and Investment Science Are Constantly Evolving – As with any science, the science of investing is constantly evolving, and the Heritage portfolio strategy evolves with it. We maintain an open dialogue with prominent university professors in the field of financial economics, and our portfolio strategies will change as new evidence on the nature of capital markets is uncovered. The strategy is always moving forward, but the work is never finished.

Discipline Is Critical and Emotions Can Be Dangerous – Even a properly structured portfolio is rendered ineffective if its integrity is not maintained over time. The emotional aspects of the markets often work against investors, causing them to make poor decisions based upon feelings of fear, greed or regret rather than upon rational portfolio strategy. Heritage utilizes an approach that minimizes emotional pitfalls by establishing discipline at the outset and by relying on sound, scientific fundamentals to guide the process. We ignore the Wall Street media machine and instead approach portfolio management with objectivity, patience and rationality.