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Investment Management

At Grecu Capital Management, Inc. our strict adherence to a philosophy of broadly diversified portfolios, risk management and asset class investing has helped our clients avoid making costly mistakes while providing them with the peace of mind that their financial  future is secure.

Our investment philosophy is academically based and market proven.  If you have a serious mindset about the future of your own money, then broadly diversified asset class investing is the only rational, intelligent approach to obtaining consistent long-term investment results.

Key Principles and Beliefs

  • Markets work and, for investment purposes, assets are fairly priced. Though asset prices are not always correct, markets are so competitive that it  is unlikely any single investor can routinely profit at the expense of all  other investors. Research by Dr. Eugene Fama Sr. at the University of Chicago and Dr. Kenneth French at Dartmouth strongly supports this belief.

  • Reduce risk through dissimilar price movement diversification. Simply investing in assets that do not tend to move together will lower risk while increasing returns.  The world’s markets do not move in tandem.  By combining asset classes with low correlation to one another in the appropriate proportions risk can be reduced and performance can be enhanced.  This observation by Harry Markowitz forms the basis for Modern Portfolio Theory and earned Markowitz the Nobel Prize in Economics in 1990.

  • Portfolio Structure explains performance. Diversification and reliable asset class exposure determine results in a broadly diversified portfolio. Academic research has concluded that the Asset Allocation Decision (what markets to enter, which segments of the market, and in what proportion) accounts for almost 100% of the performance results investors achieve.  Attempts to either select individual securities or time market movements contributed very little to investor performance, and in most cases had a negative effect.

  • Don’t attempt to time the market. Charles D. Ellis said it best in his classic book on Investment Policy titled Winning the Loser’s Game – “The evidence on investment managers’ success with market timing is impressive - and overwhelmingly negative.”

  • Invest for the long-term. “He who wishes to be rich in a day will be hanged in a year.” -  Leonardo da Vinci.  We believe that investment success is measured in years, not months or days.

  • Ignore market “noise.” The vast majority of Wall Street and the financial media only excite and confuse investors. Wall Street brokerage firms want investors to keep buying expensive and profitable in-house products.  The media is out to sell magazines, newspapers, or airtime. Neither is interested in informing and educating investors.

  • Use tax efficient strategies. Taxes are the single largest expense investors face. Taxes swamp any other cost related to the management of your taxable assets.  A tax efficient strategy will maximize your net return after taxes which is the measure that really counts.

  • Control costs. We believe the cost to invest is critical in portfolio construction. Portfolios are constructed to represent the asset classes and markets we target at the lowest cost.