There are two main philosophies of investing. Passive or index investing focuses on capturing the economic growth of the world's economies. Stock picking or active management attempts to increase returns over passive investing by outsmarting other active investors.

Because active investing is a zero sum game (i.e., for every investor who wins a dollar using this philosophy, there is another who is losing a dollar using this philosophy), each active investor is in an arms race against the others. The tightness of this race makes it impossible to predict tomorrow's winners. And because the cost of participating in this arms race is so high (e.g., high expense fees and tax inefficiency), over the long term most active managers end up under performing their passive counter parts.

I therefore see active management, especially in the short term, as speculation (i.e., gambling) rather than investing. Here are the basic tenets of my investing philosophy.

• Manage risk not returns -- asset allocation is driven by your personal need and tolerance for risk.
• Be tax efficient (i.e., low turnover and correct placement of assets)
• Keep investment expenses low
• Use funds that consistently capture the returns of an asset class

To meet these objectives, I have assembled an array of best in class investment vehicles to deliver tax efficient, highly diversified portfolios at costs well below industry averages. These include funds from companies such as Vanguard, Dimensional Fund Advisors (DFA), iShares, StreetTracks, and a few others.

If you are interested in learning more about these concepts please visit my education center.