Financial experts banking on the value of academics and science in investing

Wanting to keep their clients clear of the potential pitfalls and risks associated with the usual financial advice that comes out of Wall Street, some financial advisers are adamant that the reliance on academics and science may be the best way to avoid investment failures and financial pitfalls.

But while some may question the wisdom of this, dozens of interviewed financial advisers and experts overwhelming agree with the process, even though less than a handful of Wealth Management firms are known to have employed it.

However, in a bid to better analyze the effectiveness of the “academic and science” approach, this publication decided to interview Bert Doerhoff CPA, P.C, the founder of AccuBiz.net, and an expert financial adviser who also founded Aura Wealth Advisors LLC.

According to Doerhoff, taking the “academic and science” approach to investing is a more reliable and fail-proof method, when compared to the usual stock picking and market timing advice and processes that come out of Wall Street.

To support his view, the financial services professional explained that Aura Wealth Advisors (for example), has been utilizing the same financial analysis methodology since early 2000, and have seen repeated proof of success for their clients who utilized their academic and science based system.

 ‘We didn’t start the trend to use academics over Wall Street but we were fortunate enough to believe in it from the start back when ‘indexing’ was almost a dirty word.  Now everyone is trying to get on the wagon” he stressed.

Questioned on whether the company’s investment processes is based upon simple indexing, he rejected that suggestion, and explained that Aura Wealth has always gone beyond simple indexing to incorporate a structured factor investment approach utilizing factors proven to deliver higher expected returns over time for their client’s portfolios.

Explaining that in the last 50 years economic sciences have been able to take theory and apply it to real-world applications, he points to the fact that his company was able to gain access to institutional fund groups whose investment philosophy has used the research of four separate Nobel laureates in Economic Sciences.  As an example he noted that Eugene Fama, the most recent Nobel Laureate, acknowledged the practical application of the said research in his Nobel acceptance speech in December 2013, when he stated “…finance is far and away the most successful area of economics in terms of penetration of theory and evidence into real-world applications.”

But while there are still many investment advisers who believe Wall Street knows which security to pick and how to time the market, Doerhoff is seeing a growing trend of financial experts moving to the “academic and science” approach, as a better approach to help their client’s achieve their long term financial goals.

However, for some of us, the stigma that have long existed against Wall Street may be more than enough reasons to make sense out of Doerhoffs recommendations.

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