Our Investment Philosophy
Parker Financial Advisors' investment philosophy is academically based, grounded in Modern Portfolio Theory and strongly influenced by diversification strategies developed by Nobel Prize-winning financial economists. It is centered on the following principles:
Intense competition drives the market to equilibrium. As a result, securities prices are fair and reflect the best estimate of the company’s actual value. Efforts to identify undervalued stocks or markets are not consistently rewarded. For a more in-depth explanation, check out the video below:
Risk and Return Are Related
Only nondiversifiable risk is systematically rewarded over time. So, differences in the average returns of portfolios are due to differences in average risk. Multifactor investing brings a systematic approach to harnessing these risks to deliver above-market performance over time. Evidence from practicing investors and academics alike, points to an undeniable conclusion: Returns come from risk. Gain is rarely accomplished without taking a chance, but not all risks carry a reliable reward.
Diversification Is the Key
Diversification reduces the impact of individual securities and enables investors to scientifically employ the risk factors that offer higher expected returns.
Portfolio Structure Determines Performance
Asset allocation, not stock picking or market timing, accounts for most of the performance in a diversified investment strategy.
We believe in managing the risks a client takes in pursuit of investment returns. By systematically harnessing the power of capital markets, our goal is to help our clients accomplish everything that is important to them.