Todd (Co-Founder) & Mike (Founder)
It Started With a DREAM
Right before the crash of 2008, an unlikely friendship began. Two ordinary guys met over eggs, potatoes, and pancakes to share their stories. Mike had spent 20+ years learning and making a healthy living on Wall Street, while Todd had 20+ years of experience doing business development for high-tech software firms. Both with a passion for family, Torah and making life simple. Both driven by truth and freedom. Each with a dream to simplify Wall Street for Investors.
A Dream to Simplify Wall Street
But, in order to simplify Wall Street, you really have to go back to the beginning, the very beginning. You see, the founding document of Wall Street was The Buttonwood Agreement, its constitution if you will.
Investors first need to understand that Wall Street was never really about them. As you can see here, written into the Buttonwood Agreement was a “By the Broker, For the Broker and Of the Broker” bias. If you read the words carefully you will see in plain English that this agreement was drafted as a pledge “to each other” to engage in commission price fixing and preferential treatment “to each other” in all negotiations. The idea was to give preferential treatment to a select group of brokers (now the financial establishments) which enabled them to create a huge advantage over the average investor. Sound familiar?
The Buttonwood Agreement
“We the Subscribers, Brokers for the Purchase and Sale of the Public Stock, do hereby solemnly promise and pledge ourselves to each other, that we will not buy or sell from this day for any person whatsoever, any kind of Public Stock, at a less rate than one quarter per cent Commission on the Specie value and that we will give a preference to each other in our Negotiations. In Testimony whereof we have set our hands this 17th day of May at New York, 1792.”
The Dream Team
Most people don’t fully understand the complexities of stocks, bonds, mutual funds, large cap, small cap, options, derivatives, shorting, leverage, etc. So what do they do? They find and hire a broker to try and explain it to them. And when the market strategy is explained to them, they typically answer, “Yes, that all makes sense” (when it really DOESN’T make sense at all) and the COMMISSIONS begin.
So what can two ordinary guys really do to simplify Wall Street? Well, what if you could choose just one diversified index fund to invest in to keep up with (or even beat) the stock market?
Really, just one fund? YES. It’s actually quite logical if you think about it. Everyone is trying to beat the S&P 500® Index, when in reality over 80% fail to even keep up with it over long periods of time. But there’s one strategy that consistently beats it - S&P 500® Equal Weight Index (EWI). In fact, the S&P 500® Equal Weight Index outperformed 94% of all large-cap managers over the last 10 years and outperformed 98% of all large-cap managers over the last 15 years. Did you catch that? When was the last time you invested in a core index strategy that beat its peers 98% of the time?
In December of 2013, Mike approached Todd with his discovery of what he now calls the best investment strategy on Wall Street. He shared his story that over his 20-year career in Wall Street, he was unable to consistently beat the S&P 500® Index, nor was he aware of any of his colleagues who had.
Mike went on to explain his dream to utilize the S&P 500® EWI strategy to create a low-cost index fund to empower ordinary investors with the potential to beat the best managers on Wall Street. With $15 trillion in the world of mutual funds, there was plenty of room for a better option. Todd was intrigued and wanted to know the plan to make this happen. “Let’s take the best index we can find, offer it at the lowest cost possible, and give it a ticker symbol that everyone can remember… INDEX!” Todd was hooked. He loved the simple concept, the challenge of bringing in a billion dollars in assets and the opportunity to partner with Mike. And the adventure began!
The INDEX Story
We believe the Next Wall Street will be dominated by low-cost index investing, so we created a Fund and gave it the perfect “ticker to remember” – INDEX.
We created INDEX because we see a wave of Institutions and Investors just like us (and Warren Buffett) who realize the S&P 500® Index is an investment best to own rather than to fight.
We created INDEX because we discovered that the best way to beat the S&P 500® Index is to own it, equally.
We created INDEX because we believe the equal-weight methodology corrects an intrinsic “buy-high-sell-low” trading flaw embedded in the market-cap methodology.
We created INDEX because we see the entire investment process transitioning into a simple, performance-driven, low-cost model.
We created INDEX because we see a global realignment coming and believe a flight to quality is only in its early stages and that the constituents of the S&P 500® Index will be big benefactors.
To many investors, going up against Wall Street alone may seem to be a lot like going up against Goliath. Our goal is to give investors one smooth stone to help even the odds.
The David and Goliath story is a story of triumph over impossible odds. We like to think we approach Wall Street with this same spirit personified in our logo.
King David was perhaps the most popular king in the history of Israel. But before he became king, he faced off against a giant warrior in the middle of a valley separating two armies.
According to Scripture, David called upon the one true God of Israel and used one smooth stone to defeat an enemy most believed to be insurmountable.
Our logo captures David staring into Goliath’s eyes the moment before his epic victory.