Evidence-Based Investing (EBI)

A disciplined investment approach built for long-term decision-making

Evidence-Based Investing is an approach to portfolio design and management that emphasizes discipline, diversification, and research over prediction. Rather than reacting to headlines or attempting to forecast markets, EBI relies on established investment principles and systematic implementation.

For individuals and families with complex financial lives, this approach provides a consistent framework for aligning portfolio decisions with long-term goals, risk considerations, and planning priorities.

What is Evidence-Based Investing?

Evidence-Based Investing uses academic research and historical evidence to inform how portfolios are structured and maintained. The goal is not to “outsmart” markets, but to make investment decisions in a consistent, transparent way—grounded in diversification, risk alignment, and long-term discipline.

EBI is especially useful when markets are uncertain, because the process is designed to reduce reliance on market timing and emotional decision-making.

Core principles that guide our investment decisions

Markets reflect available information. Public markets incorporate information rapidly through the actions of millions of participants. Rather than attempting to identify short-term mispricing, EBI emphasizes a disciplined strategy built for long-term participation.

Risk and expected return are related. Higher expected returns are generally associated with higher levels of risk and wider fluctuations in value. Portfolio decisions should balance growth objectives with an appropriate level of risk for each client’s circumstances.

Diversification is essential. Diversifying across asset classes, regions, and investment characteristics helps reduce reliance on any single outcome and supports a more resilient portfolio structure.

Certain characteristics influence expected returns. Research has identified persistent investment characteristics—often referred to as factors—that influence expected returns over time. These insights can inform how portfolios are structured and maintained within a diversified framework.

Focus on what can be controlled. Rather than predicting interest rates, government policy, or market direction, EBI prioritizes controllable elements such as diversification, costs, implementation discipline, and tax-aware decision-making.

How Evidence-Based Investing is applied in practice

Evidence-Based Investing is not a single product or model portfolio. It is a decision framework applied through:

• Portfolio construction aligned with objectives, time horizon, and risk parameters
• Ongoing oversight to maintain alignment as markets and circumstances evolve
• Disciplined rebalancing to keep risk exposure consistent over time
• Implementation decisions informed by costs, diversification, and suitability

Diversifying and alternative investment strategies (when appropriate)

In addition to traditional stocks and bonds, some client portfolios may include diversifying investment strategies designed to address specific planning objectives. These may include private market or alternative investment approaches evaluated on a case-by-case basis based on liquidity needs, complexity, risk tolerance, and overall suitability.

Alternative strategies are considered selectively and integrated within an evidence-based portfolio framework rather than used as standalone solutions.

After-tax investment implementation

Investment outcomes are influenced not only by market returns, but by how portfolios are structured and managed after taxes. Tax considerations are incorporated into portfolio implementation and ongoing management—coordinated within the context of each client’s broader financial plan.

Depending on circumstances, this may include coordinating investments across account types, evaluating the timing of gains and losses, and aligning portfolio decisions with planned cash flows.

Behavioral discipline and investor decision support

A well-designed strategy is only effective when it can be maintained through market uncertainty. Investor behavior plays a meaningful role in long-term results, particularly during periods of volatility.

We focus on helping clients stay aligned with the agreed-upon strategy—reinforcing long-term discipline and reducing reactive decision-making driven by short-term market noise.

Relationship to our Investment Planning and DBP framework

Evidence-Based Investing supports how we approach investment planning and portfolio oversight within a broader wealth management relationship. It also aligns with our Design | Build | Protect framework, which emphasizes thoughtful planning, disciplined implementation, and ongoing review as circumstances evolve.

For an overview of how we apply these principles within client portfolios, visit our Investment Planning page.

Learn more

For those who want a deeper educational overview of asset class investing and the research that supports diversified portfolio construction, you may download our guide.

Learn More: Download our Fundamentals of Asset Class Investing guide.

Asset class investing does not guarantee a gain or protect from a loss and involves risks, including the loss of principal.