Capital markets are efficient.
The investment professionals at Passive Capital Management believe that markets quickly incorporate all publicly available information into security prices. This implies that the current price of a security is the best estimate of its true value. As a result, we believe it is virtually impossible to consistently find securities or sectors that are mis-priced and, therefore, trying to beat the market is a futile endeavor.

The level of expected returns is a function of the level of risk taken.
Over time, capital markets can reward investors for taking certain risks. Our professionals believe they understand how capital markets work and we understand which risks are generally worth taking.

Market fluctuations are random and unpredictable.
It is critical that investors structure well-diversified portfolios across global equity and fixed income markets. Diversification can help mitigate risk and improve risk-adjusted returns.

Asset allocation determines portfolio return and risk.
This means that investors should spend their time and money making sure they have the appropriate asset allocation. Unfortunately, most spend their time and money selecting individual securities even though this adds little value to portfolio returns and oftentimes increases risk. It is important to understand that investment professionals do not generate performance for clients – asset classes generate the performance. To us, the key is getting exposure to the appropriate asset classes in a cost-effective manner.

"Tilting" toward value and small cap can improve returns.
Research conducted by Eugene Fama, Ph.D, Kenneth French, Ph.D, and Dimensional Fund Advisors suggests that "tilting" each equity asset class toward value and toward small cap can improve returns. Passive Capital can apply these "tilts" to each segment of a client’s equity portfolio.