Investment Philosophy
Intrinsic Value investing
Intrinsic value is defined as the present value of all future cash flow available to investors. Bondurant Investment Advisory believes there are discrepancies between the market price and the intrinsic value of a security that arise from market behavior and market inefficiencies. These inefficiencies and mispricings can be exploited to benefit client portfolios. We seek to take advantage of prices moving towards intrinsic value over time. We believe that a long term approach to exploiting market opportunities is available to patient individual investors.
Drivers of Investment Philosophy
Behavioral Finance
Our investment process combines learnings from behavioral finance and academic literature in an effort to provide an optimal asset allocation to give clients the best opportunity to achieve their financial goals. We have found that common individual and advisor bias' often hinder portfolio performance. We seek to protect clients from making poor investment decisions and enable them to take advantage of market mispricings caused by behavioral biases.
Proprietary Asset Allocation Incorporating Mean Reversion
Academic research shows that asset allocation is responsible for over 90% of a portfolio's risk/return profile. Research also shows that equities held over long time periods have higher returns than bonds and similar levels of risk due to mean reversion. Our asset allocation process determines the mix of global assets based on our clients investment objectives and risk tolerance. Our propriety allocation includes risk assets and a risk control bucket that reduces the likelihood of being forced to sell risk assets at inopportune times.
Research Driven Global Security Selection
Over the years, Bondurant Investment Advisory has developed a broad research network, allowing access to a myriad of institutional providers and trusted investment professionals. This extensive network of sources drive our investment processes. Our investment experience and research enables our firm to evaluate and select securities on a global basis, which increases our investment opportunity set and provides diversification benefits that enhance the risk/return of client portfolios.
Long Term Horizon and the Power of Compounding
Our long term investment approach allows us take advantage of compounding returns. We believe that the power of compounding is critically important to achieving long term goals and typically under-appreciated. In a world dominated by short term thinking, our firm takes a long-term view in our approach to portfolio management.
