Investment Philosophy

Hirtle Callaghan's investment philosophy is built around our mission, which is to enhance rather than create wealth. Whether our assignment involves working with a family group, a college endowment or a pension plan, we always focus primarily on "wealth" rather than operating capital. Consequently, we have three objectives in descending priority.
Our first investment objective is to protect principal. It is reported that even Albert Einstein was fascinated by the power of compound interest. However, for the miracle of compounding to work, the corpus of a portfolio must be protected.

Our second investment objective is significantly to out-perform inflation net of all fees. Over long periods of time, stocks deliver returns that are substantially in excess of inflation because their short term returns are far from certain. In other words, they incorporate substantial risk. Bonds, on the other hand, do not significantly outperform inflation because their short and long-term returns are far more certain. The trick is to significantly out-perform inflation while minimizing risk, in order to remain true to our first investment objective.

Our third investment objective is to achieve attractive returns relative to appropriate benchmarks and manager peer groups. We are intent on beating indices and benchmarks. Every specialist money manager that we engage on our clients' behalf has been thoroughly scrutinized and is selected because we believe they are the organization most likely to consistently out-perform their peers over a market cycle.

Maxims

Keeping our investment objectives in mind, our investment programs are built around five maxims.

• Diversification among and within asset classes is the key to prudent asset management.
  
• Strategic decisions dominate portfolio performance variability over time.
  
• Market timing is destructive.
  
• Active management techniques are most effective when applied to inefficient market segments.
  
• Specialist money managers are superior within their respective areas of specialization.