Blue Water Advisors Philosophy

We believe that the best way to help our clients achieve their goals is to:

  1. Discover what is most important to them in life, their values,
  2. Quantify their tangible financial goals,
  3. Analyze their current resources, and finally,
  4. Develop and implement a comprehensive, written financial strategy that maximizes their chances of achieving all goals while minimizing risks.

When advising on clients' investment assets, we believe in safety first.  Always be diversified. No big bets.

Alpha generation (excess risk-adjusted return generation) can be achieved. We do it in four ways.
 
Investing is difficult and requires domain expertise. No single firm is the best in every asset class. We recognize that most active managers underperform unmanaged indexes. We use true specialists that really add value net of the fees they charge. Finding them, and sticking with them even in difficult times, is the key.
 
Low expenses are generally desirable, but some managers are worth paying more for. It’s value that matters, not just price.
 
Our goal is to deliver above-average returns, over long periods of time, with below average expenses and below average risk.
 
We have an absolute return orientation (desire to avoid declines in investment value), but realize that long-term performance is what matters most. We are willing to experience modest volatility in the short run in order to achieve higher returns in the long run.
 
Low turnover leads to tax efficiency, better manager selection, and better asset allocation decisions.
 
Strategists, economists and analysts can provide useful information, but no one person or firm is accurate in their forecasts regularly. Take predictions about the future with a grain of salt.
 
Investment patience and gradualism (slow changes over time) is rewarded. So is hard work.
 
Avoid groupthink, beaurocracy and conflicts of interest like the plague. Bigger is not always better.
 
Co-investments are the best way to align interests. We eat our own cooking ($34m* invested in same strategies as our clients), and look for our underlying managers to do the same.
 

There are two ways to best understand client needs: 1) Meet with them regularly, and 2) Be one (see co-investment above). We’re portfolio managers AND advisors who sit with clients. 

*Asset value as of 11-09