While staring off into space is all well and good when waiting for a total eclipse of the sun (what a treat!), when it comes to our clients and our firm, we prefer to be a little more focused.

That’s why, shortly after co-founding Hill Investment Group in 2005, Matt Hall and Rick Hill turned to Collaborative Strategies, an independent strategic planning firm, to help them articulate the vision they had for us, and to hold us accountable for getting the job done. Lots of businesses have ideals, but not nearly as many solidify them into the measurables: What will it actually take to achieve them?

In a way, our strategic planning began before Rick and Matt even co-founded HIG, sandwiched into lunch breaks at their previous career. Today, all of us convene with Collaborative Strategies every few years to revisit our plans. We hold our meeting out of the office, where we can focus on the business at hand. Our most recent round took place in July at the Saint Louis Art Museum (so we could wax creative). There, we reviewed our ongoing focus as a firm and tightened up our succession planning in the context of our larger, multi-office team.

Now, if you’ve been reading all of our commentary, you may think you’ve caught us in a contradiction, based on a comment Matt posted last spring about our Houston office: “Opening another office was nowhere in our strategic plan.”

The thing is, having a strong strategic plan in place is not only paramount for existing initiatives. It also serves as an essential touchstone whenever new opportunities beckon. While our Houston office wasn’t specifically part of the original plan – and neither was hiring me as the firm’s first COO – the idea fit so well with everything else HIG had in mind that what might otherwise have felt like a random wager became a clear, confident choice. Similarly, our leadership team also has felt more comfortable declining several other tempting opportunities when they did not fit as well with our existing plans.

So here’s to many more years of well-structured strategic plans, with the occasional twist of serendipity to season our success.

If you’ve got about 50 minutes to listen to a half-dozen big-name perspectives covering nearly 50 years of efficient market theory, I recommend Freakonomics’ podcast, “The Stupidest Thing You Can Do With Your Money.” It’s a wide-ranging overview of the active-passive debate that won’t disappoint.

Here are some of my own takeaways from listening in.

John Bogle – Reminisces on when he founded Vanguard in 1975 and launched the world’s first publicly available index fund. The costs make all the difference. With active fund costs ranging upward to 200 basis points (after expense fees and trading costs), versus index funds’ typical 4–10 basis points, the expense hurdle is too tough to overcome. It took a long time for people to get the idea, but now there is a passive revolution.

Ken French – Points out that it took 50 years for passive investing to grow from zero to 20% market share. Then, it jumped from 20% to 30% in the last decade. “Only the top 2-3% of active funds have enough skill to cover their costs,” says Ken. “If you don’t think you are one of the best people out there doing this, you probably shouldn’t even start.”

Eugene Fama – Developed the Efficient Market Hypothesis in the late 1960s (i.e., prices reflect all available information), which led to his being a co-recipient of the 2013 Nobel Prize in Economic Sciences. The gap between his early academic inquiries and wide, practical application of the findings is telling. (My take: Remember, one important quality in evidence-based investing is ensuring the theories have withstood the test of time!)

Barry Ritholtz – Reflecting on the title of the podcast, Ritholtz commented: “Sophisticated investors refuse to admit they can’t beat the market. … Costs are a tax on smart people that don’t realize their propensity for doing stupid things.”

I’ve barely skimmed the surface of the many insights, large and small, shared in this fast-paced podcast. Want to know where Mr. and Mrs. Bogle buy their favorite sweaters? Tune in to find out!

One of the biggest challenges people often face in embracing evidence-based investing is figuring out what it means to them, and putting it into words to remind themselves or to explain to others. Not to worry – we’ve got that covered here at Hill Investment Group. Recently, we produced a nifty advertisement, as well as an infographic/poster (in collaboration with Wendy J. Cook Communications and Mineral Interactive), to tell it to the world. I hope you like the results! (Click on each image to enlarge it.)