Investment Selection

No one knows the future. Of course, many try to foretell the future, especially regarding investment markets, and some do so "accurately." However, with regard to the "correct" forecasting of market movements (timing), extensive research has demonstrated that we must attribute "accuracy" to randomness. Over the last one-hundred years, traditional securities market investing has been done with a process of selecting those particular issues that the chooser deems worthy and avoiding those deemed unworthy.  As with timing, research demonstrates that the success of security selection is random.

Every year, some active securities managers are successful, but reliable, persistent, superior performance eludes them. So, while active managers do strive to "beat the market," in virtually every time period approximately 75% of them fail to do so. The investor pays for failure with opportunity cost and below-market performance.

DHR's investment discipline uses the most thoroughly studied and trusted investment strategy in the world - indexation. No other strategy has been so rigorously and thoroughly examined by so many for so long. Its claims, methods, advantages, drawbacks and results have attracted the attention of academics, economists, theoreticians, practitioners and investors for over 60 years. "Index mutual funds" provide several distinct and important advantages to the investor: broad diversification, low costs and tax reduction. Indexing will reliably deliver the return of the market, making it superior long-term strategy. DHR client portfolios include funds offered by two mutual fund companies that provide indexed portfolios – The Vanguard Group and Dimensional Fund Advisors.

Continuing analysis has simply strengthened the conclusion which John Bogle of The Vanguard Group articulates as "The Triumph of Indexing."