Co-Founders' Monthly Note For Financial Advisors

March 2025:

A Disciplined Strategy Helps Avoid Self-Inflicted Wounds

Great investors don’t just accumulate experience — they learn from it. Over the years, we’ve had the privilege of working with financial advisors who have navigated every kind of market environment. The best among them share a common trait: they don’t chase what’s flashy or react impulsively. They rely on time-tested processes that remove emotion from decision-making.

One of those advisors, a seasoned industry veteran, recently reminded us why systematic investing stands the test of time. After decades of observing what works and what doesn’t, his conviction in trend following isn’t based on theory — it’s based on lived experience. He has seen investors make the same mistakes over and over: chasing past winners, selling in fear, and letting short-term emotions derail long-term success.

Every year, the data confirms what professionals like him have long known: investor behavior is often the biggest drag on returns. An annual study by DALBAR quantifies this gap, showing just how much poor decision-making costs the average investor. The takeaway is clear — having a disciplined strategy isn’t just about maximizing returns, it’s about avoiding the self-inflicted wounds that erode them.

In this month’s Co-Founders’ Note, we explore why closing the behavior gap is one of the most valuable roles an advisor can play. We also highlight why systematic trend following isn’t just an investment strategy, it’s a behavioral advantage that helps investors stay the course through all market conditions.

But first, here’s a summary of our take on what transpired in the markets in February.