When I joined Hill Investment Group in 2015, I was still relatively new to evidence-based investing, which meant I needed a lot of flexibility as I too experienced a learning curve around the science of investing. Fortunately, a few meaningful messages went a long way toward helping me Take the Long View®. Warren Buffett’s 10-year bet against hedge funds was one such lesson that immediately made sense to me. Like some of my favorite yoga poses, or “asanas,” it has a lot to do with discovering the right perspective. (Yes, that really is me, practicing how to bend over backwards for our clients!)

Back in January 2008, Buffett made a substantial charitable wager in favor of index investing. He bet that, after ten years ending December 31, 2017, a low-cost S&P 500 index fund could outperform any selection of at least five hedge funds his competitor selected, net of fees. That’s how strongly Buffett believed in the power of keeping it simple and controlling costs – just like we emphasize here at HIG.

Buffett ended up so far ahead in the wager that his opponent graciously admitted defeat last May, months ahead of the year-end deadline. His example helped me further embrace the benefits of calm, purposeful evidence-based investing. It’s not only a less stressful way to go, it’s typically a rewarding way as well. Way to go, Warren!

Having embraced evidence-based investing as one way we help our clients enjoy simplicity and transparency in their financial lives, we are careful to the point of obsession when  considering fund manager alliances. We want to collaborate with firms who share our “client-first” business strategy, and are as thoughtful as we are about investing.

That’s why I recently attended a two-day AQR Capital Management Investment Symposium in San Francisco. I wanted to hear more about the traditional and alternative strategies AQR is working on to help investors capture market returns, manage market risks and minimize the costs involved. Insightful commentary about the way they think (like this piece here) is just one of the reasons the firm has experienced explosive growth over the last eight years.

Here are some of the event’s key takeaways that appealed to me:

• The firm takes a systematic approach to its investment strategies, to avoid the emotional bias that creeps in when “human interaction” is involved.
• They’re big on peer-reviewed research – others and their own.
• They look at lots of new strategies or how to improve on existing ones, but they only bring a handful of what they consider to be their best ideas to market.
• While many of AQR’s strategies are hedged, they are a rare breed as low-fee champions, decrying the traditional (excessive) “2 and 20” hedge fund fee structure. “We won’t do anything that will not provide – or leave – the investor with a reasonable return,” said managing and founding principal Cliff Asness. (That sounds smart to me.)
• They’re also big on diversification as an important way to improve on investor outcomes. “We look at everything,” said Asness. “If it’s uncorrelated, it’s additive.”
• Like us, they emphasize financial literacy and investor education as key. As AQR’s managing director Pete Hecht said, “We all should hold our managers accountable for what they claim to offer. … It’s our job to be helpful and to educate.”

Well said, and I’m glad I invested the two days. While AQR’s solutions may not fit well with every investor’s portfolio, personal circumstances and long-range plans, it was refreshing to hear what they had to say.