Unique Philosophy

The essence of behavioral finance is that investors are often their own worst enemy and conventional wisdom-based wealth managers are often enablers of investors' worst instincts.

This statement is not intended to be provocative. Our job is to recalibrate an investor's mindset to free them to succeed. The ultimate risk actually materializes when we follow industry conventional-wisdom, advising building an allegedly “risk-averse,” “conservative,” or “safe” portfolio, which actually dramatically increases the real risk to the investor—losing their last dollar before their last heartbeat!

The industry, for example, defines risk as volatility. However, volatility is actually a friend to the investor, not what causes investments to fail. The ultimate risk is in building a risk averse (i.e. “safe”) strategy that decreases purchasing power by the very nature of its construction — holding too much cash or bonds. 

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Safety ≠ Principal Preservation

Safety = Purchasing Power Preservation

Investors in diversified stock portfolios, such as the S&P 500 Index, have never lost money unless they turn temporary market declines (the only kind ever experienced) into permanent losses by overreacting to current events and, in effect, humanly manufacturing a permanent loss. The other most common way investors lose money is by having too much invested in "safe" vehicles such as bonds or other assets that freeze their income, assets, and wealth for generations as consumer prices continue to compound higher.

Traditional advisory firms measure risk and safety in terms of principal preservation. They also mis-define risk as volatility. They define the investor’s problem as one of needing to preserve principal (or to keep it steady), rather than the actual problem, the need to preserve purchasing power. As such, they counsel loading up on investments—bonds—that freeze both income and principal for the entire life of the bond, and the investor. Stocks (i.e., S&P 500) have grown dividends (cash payouts to investors) by an average of about  6% annually (twice the rate of inflation) for much of the last hundred years.

That which leads to the protection and growth of purchasing power (diversified stock portfolios) is safe and that which leads to the freezing and destruction of purchasing power (bonds) is risky. So, in our view, when the problem is defined correctly (not to preserve principal, but to preserve purchasing power), it becomes clear that bonds are risky and stocks are safe, particularly as we go into 30-plus years of a retirement marked by 3%-plus compound annual increases in our cost of living!

That’s why our philosophy isn’t centered around asset allocation or risk profiles, it’s centered around behavior.

“Any reaction to the market is an overreaction.”

At Fusion, we are well versed in both the principles of modern finance and the principles of behavioral finance or as we call it, PsyFi®. We firmly believe that the highest likelihood of developing and maintaining custom-tailored solutions designed to optimize each client’s probability of achieving investment success is through fusing these two financial theories. To that end, we are proud to offer our clients advice based on the most current state-of-the-art advisory principles available: our PsyFi® approach.




Our Philosophy is demonstrated in our Process & Methodology.

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