At Kraus Capital, we firmly believe in a data-driven approach to investment. While emotions play a significant role in everyone’s financial journey, we are resolute in our conviction that emotions, whether they are ours or our clients’, should not drive daily investment decisions. Our approach is underpinned by decades of academic research, which guides us in identifying the optimal asset mix and making informed investment adjustments. We are steadfast in our belief that relying on science, rather than emotions and predictions, is the most effective way to serve our clients.

Diversification is the cornerstone of our investment philosophy. A comprehensive, global asset allocation strategy neutralizes risks that are specific to individual securities. We consider diversification the most potent response to uncertainty. By spreading investments across various segments of the market, we reduce short-term performance variability, safeguard capital during challenging times, and deliver attractive long-term returns.

Academic research consistently concludes that investment returns are primarily determined by an investor’s mix of assets, encompassing stocks, bonds, and cash. It’s not about whether an individual fund or stock outperforms the market. Our focus is on personalized planning that caters to our clients’ unique needs, emphasizing long-term thinking over short-term timing.

At Kraus Capital, we understand that taking on higher levels of risk can potentially lead to greater returns. However, we place immense importance on controlling risk. Managing and mitigating risk are paramount to our investment strategy.

The asset classes that constitute a portfolio and their associated risk levels are the primary drivers of portfolio returns. We attribute the majority of return variability to portfolio structure.

We advocate for a long-term approach to investing. Long-term investing helps reduce risk and increases the likelihood of success. We acknowledge that short-term fluctuations can be significant, even in traditionally conservative and secure investments. Holding investments for extended periods, particularly five years or more, smooths the investment journey, making it more stable and secure.

Over the years, we’ve observed that unexpected risks are the leading cause of investors straying from their strategies and failing to achieve their goals. This is why a substantial portion of our efforts revolves around reducing risk in your portfolio. Lowering risk can also lead to increased returns by producing more stable investment performance.

Capital markets excel at fairly pricing all available information and investor expectations concerning publicly traded securities. Our decisions are rooted in this efficient market hypothesis, and we place low reliance on market predictions.

Controlling costs, encompassing taxes and trading expenses, is a critical aspect of maximizing returns. We opt for low-expense funds that are highly tax-efficient. At Kraus Capital, we focus on allowing the markets to work for our clients, not against them. The evidence is clear: efforts to “beat the market” typically yield unfavorable results. Market tracking indexes and passive funds form the foundation of our approach.

Portfolios are only as robust as the investments they comprise. We favor globally diversified portfolios of mutual funds, exchange-traded funds, and a select few specialized investments and securities to help our clients achieve financial success. Our loyalty is solely to our clients, and this independence allows us to select what we consider to be the highest-quality investments for your portfolio.

At Kraus Capital, we recognize that emotions such as fear and greed can be obstacles to sound investment decisions. The key to real-life, long-term results is investor behavior. Maintaining the discipline to adhere to a sound long-term plan, unaffected by the emotions of the day, is our guiding principle.