blending the art & science of value investing
AT Demming Financial, We are…
Independent
Transparent
Persistent
Opportunistic Investors
“Skin in the Game”
Our investment philosophy is nuanced but can be simply stated as: We believe in value investing principles, prefer owner portfolio managers who have “skin in the game” and “eat their own cooking”, which align interests when making investment decisions, and costs matter in the long-run.
Our investments tend to have below-average expense ratios as we take advantage of our capital base to get institutional pricing for our clients, regardless of individual account size.
Balanced Approach
Invest like a business owner, strategic and long-term oriented. Know your history and do not repeat the mistakes of the past.
We believe that markets are emotional, human creations that can be invested in prudently by diversifying markets, asset classes, managers and durations by actively rebalancing portfolios in times of volatility.
By maintaining a value investing bias, we intend to avoid overvalued investments and strive to avoid catastrophic losses.
Our asset allocations are derived from an Investment Policy that defines a client’s risk tolerance and then we use a Core & Satellite approach to construct client portfolios.
Act with Prudence
Many of our core managers are boutique investment firms who appear better at managing capital for their shareholders than producing large marketing budgets.
These management teams tend to close their funds when management deems there are not cheap enough securities to warrant putting new capital to work.
They have no problem using cash as ballast to the portfolio and we view this action as a strategic decision, providing a natural rebalancing when valuations appear frothy.
We also believe that limiting additional capital flows into a fund is the prudent act of a true fiduciary.
Long-Term Vision
Managers who are given the flexibility to go anywhere and own eclectic securities, in our opinion, are more likely to preserve capital and outperform on a risk-adjusted basis. Understanding the difference between a temporary impairment of capital (i.e. the risk of a security being temporarily depressed due to market fluctuations) vs the more troubling permanent impairment of capital (i.e. bankruptcy or a default) is key to having the unique temperament required for long-term, absolute return-oriented investing success.
“Be fearful when others are greedy, and greedy when others are fearful”
Warren Buffett
“Invest at the point of maximum pessimism”, having confidence in one’s analysis is key to long-term investing success.
Sir John Templeton
Learn more from one of our fund advisors, Dimensional Fund Advisors, below:
