"It got to the point where no matter how good the research we had was, or how well thought out it was, it could be severely damaged by unforeseen events," Kirk says. "So we did a lot of soul searching."
What Kirk decided was that his firm was no longer going to try to out-think the market. It was, for him, a new outlook-one that landed him smack in the fold of DFA Advisors, one of the investment world's more outspoken vanguards of passive investment strategies.
About a year ago, Kirk decided his firm would dismantle his research group and transition his 100 clients, and their $120 million in assets, to a strategy focused on DFA's funds and model portfolios. Twelve months later, he says that transition is about 98% complete. Only five clients were lost through the transition, he says. "It's greatly simplifying our client investment approach, and I think given them a much higher probability of achieving positive long-term investment returns," he says.
Kirk adds that he's not looking to hit homeruns with the change; only to safeguard clients-and the firm-from Worldcom-like events that lie in the future. "Events like that kind of freeze you like a deer in the headlights," he says. "My goal is to have the client achieve returns that are available in the market at less risk."