Our Investment Philosophy

FIND SIMPLICTY IN COMPLEXITY BY LEVERAGING MARKET EFFICIENCY

In a world riddled with opaque, risky, and expensive investment products, our belief is finding simplicity in complexity. There are thousands of stocks to pick from, and even more mutual funds and exchange traded funds available for investment. Where does one begin? We begin with our belief in the elegance of capital markets. While most advisors try to fight markets, we look to harness its power. The bedrock of our philosophy is in the wisdom of crowds – that the collective knowledge of all market participants is superior to any one individual. In simpler terms, the price of a security today already reflects all publicly available information about future earnings and growth potential. Its new information that changes the price of a stock – and since by definition news is unknown, trying to predict the future of markets is an almost impossible task. Understanding how capital markets function in this sense frees us from the traditional Wall Street approach of picking stocks and timing markets. Not only is that approach expensive and tax inefficient, the now 60+ years of evidence proves that its archaic and simply doesn’t work. There are endless studies from the University of Chicago and other top economic schools to support this claim, however you don’t have to look any further than the semi-annual studies provided by the Standard & Poors (S&P) https://us.spindices.com/documents/spiva/spiva-us-year-end-2016.pdf

UTILIZE A TIME TESTED STRATEGY BACKED BY NOBEL PRIZE WINNING RESEARCH

Over five-year periods, anywhere from 80% to96+% of traditional managers fail to beat their respective benchmarks. Why start with an approach that puts the odds of success against you? Instead of falling for the latest fads, we look to academia and time-tested Nobel Prize winning research to guide the way. Sensibility is another key factor in pursuing a successful investment experience. Strategies should be rooted in economic reasoning, backed by robust research, and the results should be persistent through time and pervasive across global capital markets.

FOCUS ON INVESTING NOT SPECULATING

Everyone wants to “beat the market,” how you go about it makes a difference. The difference between investing and speculating. Investing allows us to pursue higher expected returns in a systematic and prudent fashion. Speculating can be fun and exciting, but often leads to poor results. No one put it more eloquently than Mark Twain when he said “October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” If Mark Twain can’t convince you of the dangers in speculation, look no further than Nobel Prize winner Paul Samuelson “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”

Downtown

655 West Broadway
Suite 1650
San Diego, CA 92101
T: 619.546.0973

Bird Rock

5623 La Jolla Blvd
La Jolla, CA 92037
T: 858.729.9943
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La Jolla Cove

7825 Fay Ave, Suite 140
La Jolla, CA 92037
T: 858.454.2238
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Encinitas

90 N Coast Highway 101, #211
Encinitas, CA 92024
T: 760.230.1513
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