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, this framework relies on established investment principles and systematic implementation.

For individuals and families with complex financial lives, Evidence-Based Investing provides a consistent way to align portfolio decisions with long-term goals, risk considerations, and broader planning priorities.

What we mean by Evidence-Based Investing

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

This approach can be especially valuable during periods of market uncertainty, because the process is designed to reduce reliance on market timing and emotionally driven decision-making.

Core principles that guide investment decisions

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

Risk and expected return are related. Higher expected returns are generally associated with higher levels of risk and greater variability in outcomes. Portfolio decisions should balance growth objectives with an appropriate level of risk based on each client’s circumstances.

Diversification matters. 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. Academic research has identified persistent investment characteristics—often referred to as factors—that influence expected returns over time. These insights can inform portfolio structure within a diversified framework.

Focus on what can be controlled. Rather than predicting interest rates, policy changes, or market direction, Evidence-Based Investing 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 product or a single 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 help 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 portfolios may include diversifying investment strategies designed to address specific planning objectives. These strategies are evaluated on a case-by-case basis, taking into account 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 or default 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 oversight 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 anticipated cash flows.

Behavioral discipline and decision support

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

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

Relationship to our Investment Planning and Design | Build | Protect 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 these principles are applied within client portfolios, visit our Investment Planning page.

Learn more

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

Learn More: Fundamentals of Asset Class Investing

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