Vermont Financial Advisor
Why the Name?
Dan Cunningham & Hans Smith
What we offer.
How this works.
Why this is different.
Lower fees matter. A lot.
Good questions. Real answers.
Prior newsletters

Financial Advisor, Redefined.

We are a very different type of financial advisor for individuals and 401k & 403b retirement plans. We know that decades of academic research shows that advisors, mutual fund managers, and stock pickers cannot predict the future or beat the market, and we do not think they should be trying, and incurring high fees, using your money. Instead, across all of your accounts, we invest in extremely low-cost, diversified index funds, relentlessly driving down your expenses. In addition, unlike 77% of advisors, we are not paid "on the back end" by the funds we put in your accounts. We think you'll like our low fees, our freedom from conflicts of interest, and our active communication style.

Dan Cunningham Hans Smith
About Us

We focus on 6 things:

#1: Performance

Overall returns of actively managed mutual funds have underperformed index funds for decades. Surprisingly, passive funds still comprise only 30% of the market! Volumes of research now show that active managers, no matter how hard they work or how smart they are, almost never beat passive index funds over the long term. Today, with thousands of index funds to choose from, there are important selection decisions to be made. Small differences in yearly performance compound into tremendous spreads over time.

#3: Dividends

Dividends historically have accounted for 42% of investment returns (S&P 500). Yet many actively managed mutual funds pay nowhere near the dividend levels of their index fund peers. This partly is because many of the underlying stocks that pay high dividends are boring, unremarkable companies. Investors making active decisions often overlook the importance of the quarterly dividend payment, a mistake index funds cannot make. Dividends also provide psychological benefit by paying cash every quarter. And they are more stable than commonly thought: since 1960, only in seven years have S&P 500 dividends decreased.

#5: Suitability

The time to discover what is suitable for you is not during a financial crisis. Or, conversely, at the top of a stock market bubble. We will work with you to learn how much risk you can tolerate, how much stability your job and other income sources provide, and where your comfort zone lies. Knowing your goals and upcoming life events is important. We'll work through scenarios together to try to differentiate how you think you might behave versus how you will act in a financial crisis. Suitability analysis is a critical part of what we deliver: you need to feel comfortable without giving up too much opportunity or taking on too much risk.

#2: Low Costs

Fees matter. Study after study confirms that lowering your investment costs is critical to retirement planning success. 2.5% aggregate annual fees over an investor's lifetime can lead to 70% depletion of savings in retirement. There are many ways we lower costs for you: buying index funds with extremely low fees and bid/ask spreads, reducing trading commissions, optimizing taxes, lowering your accountant's workload, and charging less for our services. If your assets are in our care, we will squeeze out the financial industry's fees the same way we do for our own savings.

#4: Taxes

Index funds allow incredible tax optimization, as gains can be deferred in time, sometimes for many decades. This allows you to earn capital gains and dividends on the "float," or money that otherwise would have been taxed away by governments. In contrast to our approach, active managers generate taxes constantly with their trading, both within mutual funds and between mutual funds, and these taxes reduce significantly your long term gains. Additionally, there are subtle but non-trivial tax advantages certain index funds deliver that we will make sure you achieve.

#6: Behavior

The challenge is won or lost based on behavior. Maintaining good investment behavior year after year is difficult. We are social creatures, and we like both the comfort of the flock and the excitement of the casino. But you don't do well as an investor chasing trends, you do well sticking to a model and a plan. This is easier said than done: when markets are surging, it's rational for an investor to believe she or he possesses unusual intelligence, and when they are crashing, a sense of panic sets in that the bottom is a long way down. Having experienced both the dot-com crash (many technology stocks fell 90%+), and the 2008 real estate crash, we know the importance of good investment behavior.
Read more on investor behavior.

Active funds rarely beat their index

Why would anyone pay for them?

Quotes for Thought

Overwhelmingly, mutual funds extract enormous sums from investors in exchange for providing a shocking disservice.

~David Swensen, Chief Investment Officer, Yale

When our financial system - essentially our money managers, marketers of investment products -- put up zero percent of the capital and assume zero percent of the risk yet receive fully 80 percent of the return, something has gone terribly wrong in our financial system.

~John Bogle, founder of Vanguard

Most investors, both institutional and individual, will find that the best way to own common stocks (shares) is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) of the great majority of investment professionals.

~Warren Buffett - Letter to Shareholders

The average actively managed mutual fund costs seven times more than the average index fund.

~Investment Company Institute 2014 Fact Book

"The expense ratio is the most proven predictor of future fund returns. The findings worked for every category over every time period."

~Russel Kinnel, Morningstar Research, 2016

There is no investment product so great that a fee cannot make it bad.

~Cliff Asness, hedge fund manager

It is surely arguable that when the average equity-fund investor earns one-twelfth of the stock market's return, that could itself be regarded as a scandal.

~John Bogle

“Paying the least for a haircut or for tacos usually is not a great way to go. But mutual funds are a very unusual market; it's one of the only types where price and performance are inversely correlated. That's hard to get your head around. Unlike most products, fees are what ruin performance.”

~William Birdthistle, author of Empire of the Fund

The stock market serves as a relocation center at which money is moved from the active to the patient.

~Warren Buffett

If you go back 40 years, Volcker likes to say, there have been only 2 meaningful financial innovations: the ATM machine and the index fund.

Paul Volcker, former Federal Reserve Chairman

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Form ADV Part 2A, Privacy Policy, and Cunningham 2B and Smith 2B

One Day in July LLC offers advisory services in the State of Vermont. One Day In July LLC also accepts clients in the other 49 states, pursuant to each state's regulatory restrictions. As such, these services are only intended for individuals residing in the United States. No offers may be made or accepted from any resident outside of the 50 states, the District of Columbia, or Puerto Rico.

Investing strategies, such as asset allocation, diversification, or rebalancing, do not assure or guarantee better performance and cannot eliminate the risk of investment losses. There are no guarantees that a portfolio employing these or any other strategy will outperform a portfolio that does not engage in such strategies. Graphs and content presented on this website are for educational purposes only and do not constitute investment advice or an offer to buy or sell any security over the Internet.

One Day In July LLC does not provide legal or tax advice. Each client should always consult his/her personal tax and/or legal advisor for information concerning his/her individual situation and to learn about any potential tax or other implications that may result from acting on a particular recommendation.