The Matisse Difference

We believe investment management and advisory is about more than just watching financial markets. For all our clients, we aim to provide an excellent client experience and be a resource for your investing questions. As a boutique investment firm, we can offer a variety of investment solutions for our clients.

Grounded in Modern Portfolio Theory

At Matisse Capital, much of our investment style and philosophy is influenced by the basic investing principles of Modern Portfolio Theory (MPT) and the efficient frontier. Introduced by Nobel Laureate Harry Markowitz in 1952, MPT is a portfolio construction theory on how investors can potentially maximize their expected returns based on an assumed level of risk (or minimize their portfolio risk given a desired rate of return). We believe MPT is an incredibly useful tool, and its principles guide us in building both diversified and efficient portfolios for our clients.

The majority of our advisory client portfolios (see model portfolios) are built using traditional open-end mutual funds and ETFs, with a primary focus on portfolio diversification, asset allocation weightings, and keeping fees down.

After nearly four decades of professional experience in researching mutual funds and fund managers, constructing portfolios, and working with clients, we are deeply rooted in the following fundamentals and they are key to both who we are and what we can deliver:

1. We believe your asset allocation determines 80% to 90% of your portfolio returns.
   • We help our clients determine, implement, and monitor their asset allocation mix.
2. Diversification can help reduce risk.
   • But having too much diversification can be a negative (what we call di-worse-ification), potentially expensive, and confusing for clients.
3. We think fees should be kept to a minimum.
   • Core holdings and asset classes can be in low-cost index funds, ETFs, or open-end mutual funds (whether active or passive).
4. We believe you should only pay higher fees for assets that can’t easily be indexed or serve a very specific purpose in your portfolio.
   • This includes hedge funds, private equity, venture capital, real estate, and niche products.
5. We think it’s important to understand your fees and know how your advisor gets paid.
   • Including any potential conflicts of interest your advisor may have.
6. We advocate for having a written Investment Policy Statement (IPS) in place.
   • The IPS is your roadmap that identifies your risk tolerance and establishes benchmarks to use in measuring how well your account (and advisor) is performing.
7. We firmly believe that market timing and speculative investing doesn’t work in the long run.
   • We aim to implement long-term investment plans and strategies for our clients.

We promote a client-first culture. Our formula for success draws heavily on our team’s cumulative industry experience and knowledge of products in the marketplace. This is critical for our firm, our employees, and most importantly: our clients.