Our Investment Philosophy

Bootpack (noun) /BOOT•pak/:

“A steep, demanding path requiring preparation, skill and grit that leads to unparalleled views, abundant terrain and epic trails beyond.”

 

Bootpack’s core investment principles are built upon our nearly two decades of managing institutional capital.

Our hands-on experience navigating multiple economic cycles imparted invaluable lessons on the investment strategies and philosophies that stand the test of time.

These principles are the compass that guides us through the complexities of the market as we steward our client’s wealth.

 We believe:

  • The best investment strategy is the one you’ll stick with through up and down markets. In your portfolio, it’s imperative to understand what you own, why you own it and the potential drawdown risks, even if they’re temporary. This way, when the enviable market downturn does occur, which it will, you won’t panic and sell at the most inopportune time.

  • Asset allocation—the percentage invested in broad asset classes like stocks, bonds, cash, and commodities—is the most important determinant of long-term returns. Country, sector, and fund selection are secondary considerations. To grow your money, investing in stocks versus cash and sticking with it is 80% of the battle.

  • After asset allocation, diversifying globally across all investable markets and countries is one of the few free lunches in investing. Regardless of whether news headlines worldwide seem terrific or bleak, global markets are incredibly dynamic. They consistently outperform and underperform each other with zero predictability. Holding a global basket, preferably based on GDP weightings, and potentially earning the average return of all markets may help smooth out performance.

  • Attempting to consistently beat “The Market” though fundamental stock-picking is a extremely challenging. This applies to both amateurs and professionals. The vast majority of active managers (“stock-pickers”) underperform their benchmark, particularly in a taxable accounts (see Source #1).

  • For the patient investor, tilting a portfolio toward stocks with certain characteristics or “factors” in a systematic manner, such Value, provides decent odds of outperforming market-cap weighted indexes over the long-haul (see Source #2).

  • Market Timing aka consistently predicting the best times to buy or sell stocks based on anticipated market movements, is a futile effort. Missing just a few days or weeks while “waiting for the things to turn around” will cost you dearly in performance, taxes and transaction costs. To earn the highest return, you must remain invested through good times and bad (See Source #3).

  • Equities are one of the few asset class that allows investors to consistently grow their capital at an attractive rate higher than inflation. If you’re confident in long-term population growth and human innovation, global equities should be the core of your portfolio.

  • For some clients, alternative investments —such as private equity, hedge funds, and venture capital— can be a useful tool with diversification and, potentially, performance enhancement benefits. However, diligent manager selection is paramount as only a small minority of alternative managers are worth their fees and the lack of liquidity and transparency.

  • Financial media provides a constant reason to be anxious about your investments. Fear sells newspapers and clicks. Don’t let it interrupt your portfolio’s long-term march upward.

  • Compounding your money is akin to bootpacking - simple in theory, very challenging in practice. Long-term wealth creation is achieved through careful planning, disciplined management, and above all else, steadfast patience throughout the journey.

Sources:

(1) https://www.spglobal.com/spdji/en/research-insights/spiva/

(2) https://www.dimensional.com/us-en/insights/when-its-value-versus-growth-history-is-on-values-side

(3) https://www.dimensional.com/us-en/insights/what-happens-when-you-fail-at-market-timing

  • "Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas."

    Paul Samuelson (Nobel Laurate, Economist, Presidential Advisor)

  • “Compounding doesn’t rely on earning big returns. Merely good returns sustained uninterrupted for the longest period of time – especially in times of chaos and havoc – will always win.”

    Morgan Housel (Author)

  • “The function of economic forecasting is to make astrology look respectable.”

    John Kenneth Galbraith (Economist, Advisor to JFK)

  • “People often complain that the stock market is a rigged game. And so it is. It's rigged against the impatient – and in favor of those who can let their winners run. The longer you can let them run, the more rigged a game you get to play.”

    Jason Zweig, (WSJ Columnist)

  • “The idea that a bell rings to signal when to get into or out of the stock market is simply not credible. After nearly fifty years in this business, I don’t know anybody who has done it successfully and consistently. I don’t even know anybody who knows anybody who has.”

    Jack Bogle (Founder of the Vanguard Group)

  • “Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.”

    Seth Klarman (Legendary Investor)

  • “Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works.”

    Morgan Housel (Author)