At Redwood, we apply the same basic principles in our client’s portfolios as multi-billion dollar pension plans, foundations, and endowments. We utilize Modern Portfolio Theory (MPT), a Nobel Prize winning investment strategy dedicated to building efficiently diversified portfolios to reduce risk. We do not believe in chasing after hot stocks and market sectors. Nor do we try to time the market. Instead, we conduct thorough analyses on how to best combine a variety of asset classes in our portfolio to minimize risk and maximize return. We then employ the best money managers in the world, like Dimensional Fund Advisors or DFA, to implement our strategy. Our objective is to bring this disciplined and effective institutional approach to individual investors.
Our investment philosophy focuses on 4 things when building a portfolio: