Portfolio Planning

Once you have a financial plan that matches your risk tolerance and your goals to the appropriate asset allocation we can continue to manage your portfolio so that it is consistently on track.

Our portfolio management clients benefit from:

  • In-depth quarterly reports that are written in plain English (rather than financial-speak),
  • Timely updates via our electronic newsletters
  • Instant online access to account information through our online client portal.


Of course, we’re always just a phone call away to answer any questions that might come up for you.

We have access to Institutional funds not available to retail investors.  In addition to core investments in equities and fixed-income through mutual funds and exchange traded funds, we also conduct research on alternative asset classes. We invest in nontraditional investments in real estate investment trusts, managed futures funds and absolute return funds.  Where possible, low cost, tax efficient index-type funds and exchange traded funds are the building blocks of this approach.


You are our partner in this process and as a result you will feel our our concern for your well being as we collaborate with you.  We use the art of listening closely as well as scientific evaluation tools to help us know you better and craft the best solutions for you.

The first step in this process is for us to be in touch.  You can get a taste of our scientific approach by taking a risk survey.  Simply click  the FinaMetricatm button on our home page.  To find out more, please send an email to: Advice@MFAwebsite.com

The following provides insights into our philosophical approach to planning, investment and re-balancing.


Core Investment Philosophy
Our core investment philosophy is that over time asset class investing outperforms index investing which in turn outperforms active investment management.


  • Research consistently shows that most active money managers fail to beat broadly diversified portfolios of asset class funds over time.
  • It is impossible to predict which active managers will beat their relevant benchmark indexes.  Past performance has proven to be a poor indicator of manager talent going forward.
  • As actively managed funds become larger they are forced to invest in larger company stocks to avoid “moving the market” which causes size drift.
  • Many active portfolio managers change investment styles or try to follow trends.  This behavior leads them to stray from the type of fund you originally chose.
  • Actively managed portfolios charge higher management fees than asset class and index funds.  Higher fees reduce your returns.
  • Asset class funds do less trading than most active funds and are therefore more tax efficient.

Asset Class Fund Investing
Asset class fund management describes the investment philosophy in which investors do not chase performance, or pick individual stocks, or try to guess which direction the markets are headed.  Asset class managers ignore market hypes and remain disciplined and diversified across every sector and investment type.  These strategies stem from several decades of academic research to prove their effectiveness.  Asset class funds differ from index funds in that they are engineered to replicate what works in markets over the long run and do not simply mimic an index that was not designed as an investment vehicle.  An asset class managed portfolio is especially appropriate for investors who desire investments with:

  • Great tax-efficiency
  • Lower volatility
  • Low cost

Robust Academic Research
We rely on academic and industry research to lay the foundation for our approach to help control portfolio volatility, the constant rising and falling of investment prices. We do not rely on subjective approaches such as forecasting and market timing, which have proven to be poor predictors of investment performance over reasonable periods. We believe the market is efficient and that no single investor can consistently beat the market through stock/bond picking and market timing.  A few investors manage to beat the market over short periods of time, as people win games of chance at casinos, but it is improbable that any investor will systematically beat the market over time, as no one can continuously win roulette.


Most active managers cannot overcome the expenses of their services to beat the market over time. Many experienced investors recognize this and invest in a carefully constructed portfolio of low cost index-type funds.  Academic and investment industry research conclude that asset class diversification, not stock picking or market timing, has the greatest impact on portfolio returns over time. Therefore, investors are far better off adopting strategies that use index funds and structured asset class funds to meet their long-term portfolio objectives.

Financial markets offer higher returns to investors who are willing to accept higher levels of risk.  The more time an investor has to invest the more confident we can be of reaching the desired goal.  Long-term investors are rewarded for their patience.  Highly concentrated positions can create or extinguish wealth.  The best way to preserve and grow wealth is through diversification.

Portfolio Construction
We strive to develop portfolios that build wealth over years, regardless of market conditions.  Our portfolios are designed to reach our clients’ investment goals by controlling risk and generating above-average returns with above-average consistency.

Selecting superior funds and the most appropriate mix of the funds to meet varying client objectives and risk tolerance are critical to long-term success in investing. Most finance academics and investment professionals acknowledge today that there are three primary factors influencing portfolio returns:

  • Market Factor – the mix of stocks versus bonds and cash
  • Value Factor – the percentage invested in growth versus value stocks
  • Size Factor – the mix of large company versus small company stocks

Since risk and return are directly related, investors should expect to receive higher returns from stocks than bonds and cash over time because stocks are riskier. Stocks of small companies are also riskier than large companies and, as expected, have generated higher average returns over time. Value stocks—those that sell at lower prices relative to their earnings and book values—are also riskier than growth stocks and have produced higher returns over time as well.

Marin Financial Advisors diversifies portfolios among stocks, bonds and cash positions according to each investor’s objectives and risk tolerance. We allocate equity investments to funds of large and small company stocks.  Both value and growth style stocks are represented.  We also allocate over geographies accessing a mix of U.S., foreign developed and emerging market stocks. Since many of these asset classes tend to move in different directions, at different times, and in varying degrees, asset class diversification helps to smooth out portfolio returns and provide greater downside protection.

We believe asset class selection is the single greatest determinant of risk and return.  At MFA, we spend time with our clients working to identify an appropriate asset allocation based on each client’s time horizon and ability to handle risk.

Our portfolios predominately include low cost institutional mutual funds and exchange traded funds, but we work around existing individual bond and stock positions when appropriate. Additionally, advanced hedging techniques can be applied to certain portfolios when deemed necessary to avoid a substantial decline in any one issue.  In recent years, many investors have experienced significant depreciation in their assets by holding concentrated single stock positions.  We design hedging strategies to diversify such portfolios and reduce risk.

Investment Selection
All investments being equal, a low cost alternative will outperform a higher cost alternative.  Marin Financial Advisors strives to keep costs to a minimum by using funds with low operating expenses and custodians with reasonable transaction fees.  Moreover, portfolios are constructed and trades are placed with taxes as a primary consideration.

A typical portfolio managed by Marin Financial Advisors will utilize quite a few Dimensional Fund Advisors Inc (DFA) funds because we believe they efficiently target asset classes that are generally unavailable elsewhere, and they are very low cost.  Exchange traded funds such as iShares and other open and closed ended mutual funds are also used to achieve our asset allocation targets.

We are long term investors following a buy-and-hold discipline that is altered through periodic rebalancing as asset class allocations stray from our targets or client circumstances may dictate.  Taxable accounts are always rebalanced with tax consequences in mind.  Ongoing monitoring and rebalancing ensures that our portfolios maintain the portfolio risk/return characteristics we desire.