Whether you’re a long term client of Hill Investment Group or a new member of our family, you already know that, along with clarity and transparency, one of our key tenets is simplicity. This 2-minute article by Jim Parker, VP of Dimensional Funds, sets forth three core principles (which we adhere to) that lead to long-term investment success. Leonardo DaVinci’s words apply to investing too: Simplicity is the ultimate sophistication.

Just this week Gene Fama of the University of Chicago won the Nobel Prize in Economics for his research that fundamentally comes down to,“No one can consistently and predictably beat the market.”  Historically, investors have believed that they hired advisors to beat the market. If this can’t be done, then why would anyone pay to work with an investment advisor? It’s a great question and one that I’ve heard many times throughout my career.  In fact, I asked the same question myself before I became an advisor in 1997.

Put simply: A great investment advisor acts as “an emotional circuit breaker.” The real value of having an investment advisor that knows your goals, hopes, and dreams is that she or he can be your behavioral coach.  This is the person helping you “take the long view”.  The person that won’t let short term market gyrations disrupt a well thought out, long-term investment plan.

To learn more about “Advisor Alpha,” consider reading this April, 2013, research piece by Donald Bennyhoff and Francis Kinniry of Vanguard, one of the largest mutual fund companies in the world. Hill Investment Group holds Vanguard in high esteem for offering low-cost, tax-efficient, passive options. While Vanguard offers solid mutual funds, we are fortunate to be able to bring our clients what we feel are even better solutions (or choices).  The funds that our clients, and we ourselves, own are offered exclusively through advisors. For your information, each advisor at Hill Investment Group has an investment advisor serving their family too because we value the discipline or the advisor alpha.

We are thrilled to share the news that, this week, Eugene Fama, the “father of modern finance,” was awarded the Nobel Prize in Economic Sciences. Professor Fama was honored along with fellow professors Lars Peter Hansen and Robert Shiller for their “empirical analysis of asset prices.” Among America’s most prolific and cited researchers, he focuses much of his study on market prices.

It is rewarding to see such a high level of recognition given to Professor Fama. His contributions have served as a bedrock for our investment philosophy and have shaped how we help our clients achieve their most important goals. All of us at Hill Investment Group congratulate Professor Fama on this great honor.

To read more, visit nobelprize.org.