The Science of Portfolio Strategy

Your investment portfolio is the engine of your financial journey—it helps move you down the path towards your long-term goals. Each piece plays an important role in reaching the outcomes you desire.

Whether you need help growing your wealth or protecting it, we design your portfolio so that each investment has unique characteristics and will react differently to economic, political and societal influences. This is part of the diversification process, and it’s one way we use science over guesswork when designing your portfolio.

The Pillars of Evidence-Driven Investing™

We design portfolios to help you achieve your financial goals. We don’t believe in trying to time the market, anticipate trends or identify mispriced investments. These techniques have been shown to be a highly unreliable way to build wealth.

Backed by over 70 years of research, we use an approach rooted in smart diversification, low costs and tax-aware investments. We call this unwavering commitment and our approach to the data and research that drives everything we do, Evidence-Driven Investing™.

Our Evidence-Driven Investing™ Portfolios Are Built on Five Pillars

Markets Are Highly Efficient

Billions of dollars are traded daily where buyers and sellers come together and agree on a price. Given so much competition, we believe the current price reflects both the latest news and the latest outlook for the investment and the economy. That’s why we say the price is the best estimate of the current value, and we don’t try to outsmart the market.

Risk & Expected Reward Are Related

If you want the potential for more return, you’ll need to accept more risk and likely greater fluctuations in value. Sometimes these risks pay off with more return, but sometimes they result in losses. Although adding more unique sources of risk and return can create a portfolio with steadier growth, we don’t believe in taking more risk than you’re comfortable with.

Diversification Is Essential

Diversification has been called the only free lunch in investing. This is because using a single stock, strategy or investment type is riskier than mixing lots of different types of investments. Holding multiple investments reduces the risk that any single investment will cause a drag on portfolio performance.

Pursue Factors Of Returns

Science has shown us that allocating more of your portfolio to companies that share certain characteristics can increase your potential for return. Although these investments typically bring more risk, our portfolios are built to most efficiently allocate across multiple sources of risk—even if it means performing differently than headline indexes.

Focus On What We Can Control

We don’t try to predict interest rates, anticipate the impact of government actions or outsmart other traders. Instead, we focus on the areas within our control—such as setting a thoughtful investment strategy and following a disciplined review process.

Your Portfolio Building Blocks

We use this approach across all different types of investments. Although we can’t predict where markets will go, we feel that it’s highly unlikely anyone else can either. Instead, we focus on building a portfolio that increases the probability that your plan will be successful.

Each part of your portfolio, whether stocks, bonds or alternatives, plays a unique role in the risk and return profile of your portfolio. When combined, they create a path towards achieving your personal financial goals.


Investing in companies can increase the growth potential of your overall portfolio. We believe any prudent stock portfolio should be invested in companies, both big and small, all around the world.


High-quality bonds are the bedrock of your portfolio and can preserve what you’ve worked hard to achieve. A reasonable allocation to high-quality bonds can help reduce the amount you lose in market downturns and help you recover faster.


Alternatives can be used to improve overall portfolio results. These assets can cushion the portfolio from declines in stock markets while offering greater chance for portfolio growth compared to bonds.

An Evidence-Driven Investing™ Approach

While most professionally designed portfolios will use a combination of stocks and bonds, Buckingham uses financial science to look beyond asset classes to better understand both the risks that drive performance and how to effectively capture those risks. This is done with the goal of providing true diversification to help improve your investment journey.

Your portfolio is different in these ways:

  • Uses decades of research to understand the risks that drive returns within each asset class
  • Captures returns more effectively given your tolerance for different types of risk
  • Strategically blends your investments and tilts toward higher returning assets
  • Balances stock risks with only the highest-quality bonds

The Benefits of Portfolio Tilts

Stocks | Bonds | Alternatives | Portfolio

Tilt Stocks To Improve Your Outcome

We use stocks to grow the portfolio. Every portfolio we design starts by investing in companies around the globe. The result is a portfolio that can include more than 8,000 companies across more than 45 countries.

In addition, research has shown that investing more in companies that share certain characteristics, such as being smaller, of higher quality and less expensive, can change the risks of your portfolio, also increasing your potential for higher returns.

We call this tilting the portfolio – a method of potentially improving the performance of your stock portfolio.

Curious which types of companies tend to have better returns over time?

The Benefits of Portfolio Tilts

Stocks | Bonds | Alternatives | Portfolio

Pinpoint Bonds that Offset Stock Market Risk

The main purpose of bonds is to protect the wealth you’ve worked hard to accumulate. We achieve this by focusing on only the most secure and creditworthy bonds, like those backed by the U.S. government. This is done to minimize the risk of default on your investment. Including bonds that will be repaid (or mature) within the next one to 10 years helps insulate the portfolio from the larger price swings that stocks often endure.

This protection becomes especially important as you start withdrawing from your portfolio. The impact of including high-quality bonds in your portfolio can be significant, leading to a smoother ride and providing the cushion your portfolio needs to endure through poor stock market performance.

The Benefits of Portfolio Tilts

Stocks | Bonds | Alternatives | Portfolio

Add Alternatives to Improve Your Portfolio

Alternatives are simply investments that have unique sets of risk compared to traditional stocks or bonds. Although we remain skeptical of most alternative strategies, a small collection of alternatives can offer truly unique sources of risk and return.

Adding alternatives can cushion the portfolio from stock market fluctuations while offering a greater chance for growth compared to high-quality bonds. Even a small allocation to alternatives can soften the portfolio from stock market declines—often giving you a smoother ride compared to a portfolio that is only allocated to stocks and bonds.

The Benefits of Portfolio Tilts

Stocks | Bonds | Alternatives | Portfolio

Tilt Your Portfolio to Create a More Secure Future

Combining these building blocks in our approach offers a portfolio with:

  • More consistent outcomes and smaller average swings in value
  • Better opportunities for growth and similar downside risks as a traditional stock and bond portfolio

Whether you’re saving or spending from your portfolio, our portfolio strategies are designed to help you along your journey.

See how these levers create a unique portfolio experience.

Designed for Better Outcomes

We know all investments will go through periods of decline, and our portfolios are no exception. We don’t chase the latest trend, try to keep up with an index or sell before the next decline. Instead, we design portfolios to let the power of the markets work for you.

By combining multiple sources of risk and return, tilting our stock portfolio to companies with a higher potential for future return and protecting your wealth with high quality bonds, we can increase the probability that you remain confident in the success of your financial goals.

Above Confidence Zone

Driven by Evidence. Built for You.

We believe an Evidence-Driven Investing™ approach to portfolio building can improve your experience and help put you on the right path to meet your financial goals. Leveraging decades of academic and real-world research, we avoid unnecessary risk to help provide you a more dependable outcome. Our broad community of academics, researchers and advisors are committed to continuously finding new ways to use science to better design and build dependable portfolios.

Because in the end, despite the inevitable ups and downs of the market, we believe our approach to your portfolio can increase your confidence along your investment journey.

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