We Look at The Evidence

EVIDENCE-BASED INVESTING

Paul W. Abele

We begin with the evidence: From decades of data, analysis and insights from some of the best minds in finance and academia.

We're very careful in looking at new research that comes along that we make sure it's robust and correct.

Evidence-Based Investment Factors

So, which factors appear to best explain different outcomes among different portfolios? In what combinations are these factors expected to create the strongest, risk-adjusted portfolios? What explains each factor’s return-generating powers, and can we expect those powers to persist?

Based on the academic answers to these practical questions, we typically mix and match the following factors in our evidence-based portfolios, varying specific exposures based on each investor’s personal goals and risk tolerances:

  • The Market: Stocks (equities) vs. bonds (fixed income)
  • Company Size: Small vs. large company stocks
  • Relative Price: Value vs. growth company stocks
  • Profitability: High-profit vs. low-profit company stocks

What would your best evidence-based investment portfolio look like? It depends on your personal financial goals; as well as your willingness, ability, and need to take on investment risks in pursuit of those goals. That’s where we come in, to structure the right mix for you, and help you navigate through the ever-distracting informational overload.

If you feel your current investment philosophy is not aligned with your long-term investment goals, I would love to discuss the benefits of evidence-based investing with you. Contact us today for a complimentary Get Acquainted meeting. We look forward to meeting you.

Paul W. Abele, CFS, FPA

Who Am I?

My name is Paul W Abele I was born and raised here in Birmingham and my two boys Paul and Charles. I am married to my lovely wife Bartley Statham Abele.

For over 37 years I have been a financial advisor, I have worked with individuals, families, and company retirement plans to provide exceptional investment management and holistic financial planning services. As an Alabama Investment Advisor, I am a fiduciary to my clients and dedicated to put my clients’ interests first. From investment management, retirement planning, financial planning, estate planning guidance with your Estate Attorney, and tax planning guidance with your CPA – my goal is your financial peace of mind.

I am dedicated to offering My clients the highest level of expertise and service. I hold a designation as a CERTIFIED FUNDS SPECIALISTSTM (CFS®), and Financial Planner Advisor (FPA)

I hold a Bachelor of Science Degree in Finance from The University of Alabama and I interned at Merrial Lynch while attending the University.

Ten Beliefs Underlying Our Investment Process

  1. Remain humble. No one can predict the future. There are simply too many variables.
  2. Don’t confuse likelihoods with certainties. You can calculate probabilities, but there are no guarantees.
  3. Be prepared for the unexpected. History provides insights about the future, but it won’t repeat itself.
  4. Academic research finds “truth” by looking
    backwards. Consider how it will translate in the future.
  5. Good ideas take time to mature. Knowing something will happen is not the same as knowing when.
  6. Controlling expenses is important. Reducing fees, transaction costs and taxes improves results.
  7. It is difficult for active managers to add value. Reaping their value requires knowledge and patience.
  8. Diversification works. But it should be done intelligently to avoid over-complexity and excess costs.
  9. Emotion is the enemy of good decisions. Discipline is important. Judgment and restraint are mandatory.
  10. Every portfolio has an investor attached. A portfolio is the result it produces and the experience it creates.

These Nobel Laureates-have greatly helped put financial science on your side.

The Nobel Laureates

Eugen Fama (*) 2013
Harry Markowitz (*) 1990
Myron Sholes (*) 1997
William Sharp (*) 1990

(*) Date they Won the Nobel Prize in Economic Sciences.

Looking to Proven Academic Research

There is a wealth of academic research into what drives returns. Expected returns depend on current market prices and expected future cash flows. Investors can use this information to pursue higher expected returns in their portfolios. Research Has shown that Securities offering higher expected returns S hare certain characteristics. Which Should meet the following To be considered as a risk factor.

Sensible,
Persistent over time,
Pervasive across markets
Cost-effective to capture.

  1. Stock Market vs Bonds
  2. Small vs Large Stocks
  3. Value Vs Growth Stocks
  4. Highly Profitable vs Average Profitability Companies

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