Passive Indexing Strategies

Passive Indexing Investment Strategies tend to outperform actively managed mutual funds. For the 5 years ending in 2015, according to Morningstar, 61% of actively managed equity mutual funds underperformed their equity benchmark indexes. Therefore diversifying in Passive Indexing Strategies for a portion of your portfolio may be in your best interest. Our Passive Indexing Strategies include Morningstar 4 and 5 star funds, many of which investors cannot access on their own, as they are often institutional, no-load, extremely low fee funds that are only available to clients who are associated with DFA-trained and approved Registered Investment Advisory firms such as CMR, or have high minimum initial investments of $1 million that are waived for CMR clients. DFA has four Nobel-prize winners (Fama, Scholes, Merton, Miller) who have helped lead their research team and executive board.

The CMR Passive Indexing Strategies are based on the following principles:

Broad diversification assures your portfolio is designed to maximize long-term return while controlling the various risks.

A global approach is necessary as we are all global consumers, we should also be investing globally.

Markets are remarkably efficient. Therefore it is difficult to beat the market. Accordingly, low-cost, passive, evidence-based, asset allocation, and index funds form the cornerstone of this investment strategy.

Asset allocation is the single most important decision affecting your portfolio, as several studies have confirmed that over 90% of returns are attributable to allocation.

Tax management is a critical component of this passive indexing strategy.

Systematic rebalancing has been an effective method of reducing risk and potentially improving long-term market returns.

Preserving capital, for many investors, is just as important as growth.

Optimum cash flow management assures your portfolio delivers the income you need as well as your principal.