Welcome to Seabolt Capital Management based in Nashville, Tennessee.  Our website has been developed to help educate investors about the Nobel Prize winning philosophy known as “Modern Portfolio Theory”, and the help them integrate it into their own portfolios. The information you will find on this site is all backed by the leading universities and independent   research centers around the world, not the hand picked data produced by Wall Street’s marketing machine. 

 

  “The best way to own common stocks is through an index fund..."

 

  – Warren Buffet  - Chairman of Berkshire Hathaway and generally regarded as the

 greatest investor of all time.

 

  “All the time and effort people devote to picking the right fund, the hot hand, the

 great manager have, in most cases, led to no advantage." and "Most individual

 investors would be better off in an index mutual fund."

 

  – Peter Lynch  - Legendary manager of the Fidelity Magellan Mutual Fund

 

It’s amazing that many investors still put their trust and their money in what are commonly known as actively managed mutual funds. Actively managed means that the fund hires a manager to pick stocks for you based on his/her outlook for the future. The only problem with this is that no one in history has ever proven they can consistently predict the future. As the future changes, the manager must constantly buy and sell stocks to accommodate the changing landscape. The net result is high transaction costs to buy and sell stocks, high taxes to you on whatever gains are left, and foregone profits on cash sitting idle. Add to that sales commissions when you buy a fund and management expenses that are routinely charged to you and you’ve got profits leaking everywhere. A 15 year study (1) showed that as a result, the average active fund investor only kept 46% of what the stock market returned. Ouch!

 

If you can’t beat them, join them

A better alternative would have been to buy a simple index fund, which is a mutual fund that tracks the overall market.  A good example is the Wilshire 5000, an index that virtually comprises the U.S. market.  Index funds have numerous advantages over actively managed funds, including:

• very low management costs because no active stock picking takes place
• low stock turnover and related transaction costs because the fund only buys and sells when the index changes.
• Minimal taxable gains each year because of fewer stock sales
• No idle cash sitting by in the fund waiting for “opportunities”.  100% of your money is invested at all times.

If you had employed this simple strategy over the same 15 year period, you would have kept 86% of the markets gains!

(1) Source: Bogle Financial Markets Research Center

Taking a good thing and making it better

Is it possible to improve upon the performance of an index fund?  Yes.  Nobel Prize winning research has shown that certain segments of stock indexes have performed better than others. A mutual fund company called Dimensional Fund Advisors (DFA) has used this research to pioneer a family of index funds designed to capture these high value segments. DFA consistently ranks at or near the top of the twenty five largest U.S. mutual fund companies, both in terms of performance and client satisfaction.

We at Seabolt Capital Management, in conjunction with our Federally Registered Investment Advisor partner Modern Portfolio Management, specialize in setting up portfolios of these high value funds. We also combine them in such a way that minimizes the day to day volatility inherit to the markets.  Our portfolios offer:

• Global Diversification
• High Tax Efficiency
• A wide range of investment strategies for the conservative to the aggressive investor

Our website follows a logical progression that we think you will find very educational. Our recommended path is outlined below:

Step 1

The first step in the process is to fill out a Risk Profile. As you navigate through the site this will allow you to see what kind of investor you are, where your portfolio is now, and where you want to be. Please click on the tab below to begin the 15 question survey. IT MAY BE THE MOST IMPORTANT STEP YOU TAKE!

                                                            

Step 2

Start navigating through the website, starting with the Philosophy and Biography section. It is very important to be comfortable with whom you are working with. Please be sure to checkout the background information on our firm as well as Dimensional Fund Advisors (DFA).

Step 3

Take the investor 101 course to get a clear understanding of our philosophy. The information in these pages is to help you understand asset class investing, and why it is the most efficient way to invest your money. It covers key points such as; why asset class investing is different than indexing, why DFA is a vital key to your portfolio, why stock picking and market timing don't work, never have worked, and never will work.

Step 4

Give us a call or set an appointment to go over your specific situation, so that we may determine your needs, and help you develop the asset class portfolio to meet your goals.