Time-Tested Investment Approach
What to Expect
Client recommendations are limited to long-only equity, fixed income, and alternative investments strategies. Hevel Capital does not advocate the use of margin for clients. The firm builds portfolios grounded in economic theory and backed by decades of empirical research. To construct client portfolios, Hevel employs a proprietary model tailored to each client's specific needs combined with a disciplined review process to guide investment decisions and manage portfolio risk. We analyze investments on a case-by-case basis but tend to recommend exchange-traded funds (ETFs), mutual funds and/or a direct indexing strategy to clients due to their tax-advantages, low fees, and diversification benefits. We seek to design portfolios that have a broad exposure to the total stock market and bond market, both domestically and internationally.
Investment Philosophy
Hevel’s investment philosophy incorporates the best of both active and passive investment approaches. We believe that the markets are a good representation of fair value and efficiently incorporates new information based on the expectations of millions of buyers and sellers in real time. Therefore, it is difficult for active portfolio managers to consistently outperform their benchmark over long periods of time. Hevel Capital primarily recommends ETF products to build client portfolios that track broad benchmarks (“passive”) across various investment buckets, enhanced index products, direct indexing strategies, and actively managed ETFs and mutual funds in segments that are more likely to generate alpha (e.g., small cap, emerging market).
Power of Compound Interest
Albert Einstein called compound interest the "eighth wonder of the world" and Warren Buffett has attributed compound interest to much of his success stating that it is an "investor's best friend". The financial markets have rewarded long-term investors. Investors expect a positive return on their capital, and historically, equity and bond markets have provided returns that have more than offset inflation. We believe time in the market is more critical than trying to time the market which typically leads to suboptimal portfolio returns.
Asset Allocation
The primary consideration when building a client’s portfolio is asset allocation; the way in which assets will be divided between different investments (stocks, bonds, real estate, and cash). Academic studies have shown asset allocation to be the most important determinant of investment return and risk. Hevel Capital primarily holds securities across many market segments, sectors, industries, and geographies to increase diversification and help manage overall risk. A disciplined rebalancing strategy restores the portfolio’s target allocation once a minimum or maximum threshold has been exceeded. This disciplined process serves to keep risk at the appropriate level while minimizing trading costs and taxable gains.
3857 Pell PL Unit 103 San Diego, CA 92130
mk@hevelcapital.com
(636) 236-9039
