Our Investment Philosophy-
Modern Portfolio Theory

Kenneth E. Boone Advisory Services adheres strictly to using Modern Portfolio Theory for all of his clients' investments.

Modern Portfolio Theory, which won the Nobel Prize in Economic Science for its developers in 1990, is a result of research by the best and the brightest academic minds.  The theory’s three major contributors were Harry Markowitz and Merton Miller from the University of Chicago, and William Sharpe of Stanford University.

The Five Basic Concepts of Modern Portfolio Theory

1. Ineffective Diversification vs. Effective Diversification. 
Effective Diversification, also known as dissimilar price movement
diversification, reduces risk by combining investments that move
dissimilarly, thus reducing the volatility of a portfolio. 







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2. Lower Volatility. 
When comparing portfolios with the same historical average returns, the one with the lower
volatility (up and down movement) will have the higher cumulative rate of return.

3. Global Diversification. 
Global Diversification is one way for an investor to try to protect himself from a downturn in any
one asset or any one country’s market.

4. Institutional Asset-Class Funds. 
Institutional Asset Classes represent specific market segments and are used as tools to achieve
effective diversification. 

Kenneth E. Boone Advisory Services exclusively uses DFA Institutional Asset Class Funds. 
Ken Boone is the only Advisor in the Central Valley who is approved by DFA to use their funds.

5. Efficient Portfolios Matched to Investor Needs. 
Every investor has unique financial objectives and risk tolerance levels.  An efficient portfolio is
one designed to provide the highest expected return* for a chosen level of risk.

*Expected return is a calculation based on certain assumptions and historical information. 
It is not a projection of future results.