Our Mission and Our Process

Our mission is to carefully serve a limited number of selected clients, lavish them with a level of service that they deserve and yet rarely find, and strive to have a significant impact in their lives. 

When we say that we wish to carefully serve selected clients, we mean that we do not try to be all things to all people.  We fully appreciate that you have an enormous task in choosing a financial advisor among the endless possibilities of people who want your business.  We also recognize that we may not be the right firm for you.  For example, if you love to trade commodities, we are not the right firm for you.  If you enjoy foreign currency exchange, we are not the right firm for you.

One thing that comes from over 30 years of experience is learning what you are good at and what you are not good at.  Knowing your strengths and weakness is a key to success in any business venture.  You can't be good at everything.  So what do we focus on?

To discuss our strengths and to help you evaluate us, we would like to share our Investment Decision Making Process also known as our Investment Policy Statement.  It will give you an insider's view into how we think and what we believe.  As you read through the policy, ask yourself if you agree or disagree with the 6 primary statements.  This will help you determine if  we are the right firm for you. 

We believe a disciplined investment process forms the foundation for a sound portfolio.  These are the guiding principles and fundamental beliefs that influence our personal investment decisions and recommendations for clients of Rivers Investment Management.  You may want to use this as a guide to develop your own personal Investment Policy Statement.

1.  We believe that over time, stocks outperform cash.1  Not every day.  Not every month.  Not every year.  There certainly are times when stocks decline in value.  That's when you could earn interest in a cash account and attempt to avoid losses.  Nevertheless, we believe that over long periods of time, stocks as an asset class should generally outperform cash.  Of course past performance is not a guarantee of future results.

2.  We believe that over time, stocks outperform bonds.2  Of course, bonds can provide stability to a portfolio and can sometimes produce a better current income.  Bonds have a place in some portfolios.  Nevertheless, we believe that over long periods of time, stocks, in general, should outperform bonds as an asset class.

3.  We believe in managed money.3  For most people stock selection is not their primary talent.  Thus, we believe the selection and replacement of individual stocks and the management of the group of stocks should be left to only the most seasoned and dedicated professionals.  Furthermore, we also believe that the selection and monitoring of individual mutual funds and the management of a group of mutual funds should be left to only the most seasoned and successful professionals.

4.  We believe it is very difficult to beat the market.  It is extremely difficult to anticipate the market and be ahead of the market.  Attempts to time the market are often counterproductive.  Despite all the hard work that goes into fundamental and technical analysis, the stock market is not predictable, especially in the short term.  We readily admit we can't forecast market movements any better that we can control them.

5.  We believe "Buy and Hold" doesn't mean "Hold Forever".  Naturally, you need to buy what you believe to be only the highest quality, and you must be patient.  However, we believe that successful investors cannot be passive or lazy.  There are instances when you need to sell and move on to something else.

6.  We believe that the two most important components that contribute to long-term success are . . .

(1)  appropriate asset allocation4 and

(2)  systematic re-balancing.

Furthermore, we believe many investors who have attempted to buy a variety of investments in their portfolios are still  not using asset allocation as a strategy.  Without a defined asset allocation, the investments may be better described as "scattered," rather than "diversified."

1Stocks offer long-term growth potential, but may fluctuate more and provide less current income than other investments. An investment in the stock market should be made with an understanding of the risks associated with common stocks, including market fluctuations.

2Investments in fixed-income securities are subject to market, interest rate, credit and other risks.  Bond prices fluctuate inversely to changes in interest rates.  Therefore, a general rise in interest rates can result in the decline in the bond's price.  Credit risk is the risk that an issuer will default on payments of interest and/or principal.  This risk is heightened in lower rates bonds.  If sold prior to maturity, fixed income securities are subject to market risk.  All fixed income investments may be worth less than their original cost upon redemption or maturity.

3Independent money management may not be suitable for all investors.

Investing in mutual funds involves risk.  The principal value and investment return will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.  All investing involves risk, including the possible loss of principal.

4Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns.