Investment Philosophy

The Chain Bridge Bank, N.A. investment philosophy has four key principles: 

 

1. Diversify broadly;

2. Allocate prudently; 

3. Pay close attention to investment costs; and

4. Stay the course.

 

Diversifying a portfolio to model the breadth of the global economy, allocating it to fit the needs and objectives of the client, minimizing the costs associated with investing, and staying the course through economic cycles is the best strategy for maximizing investment returns over the long run. 

 

Chain Bridge Bank, N.A. uses low-cost, broad-based, total market index funds to execute this strategy. 

 

Not only does Warren Buffett recommend the passive investing approach, but numerous academic studies including those of Nobel Prize-winning economist Eugene Fama, have found that few active managers beat their reference markets over the long term. Due to the high costs of active management, on average and over time, active managers underperform the markets. The costs that drag down their returns include management fees, turnover costs, bid-ask spreads, administrative costs, commissions, market impact, and taxes.  Over time, the amount by which active managers lag the markets compounds into large sums.