I founded 4 Beta to help individuals, including myself, avoid the most common investing mistakes such as mistiming the market, overpaying for investment services, and owing too much in taxes. We help investors whose primary interest is in accumulating wealth via prudent, diversified exposure to risk.
See my Full Bio.


Compelled by constant concern to check your account value 
Confused regarding what you own 
Worried and unable to sleep at night, especially during volatile markets 
Skeptical regarding your investment advisors’ motives


1 - The securities you own

2 - The costs you pay 

3 - The taxes that owe

4 - Your trust in your experts 


I strive to provide extra returns by carefully managing all four performance factors while prudently exposing portfolios to “the right kinds of risk”. “Beta” in financial jargon means systematic risk, i.e. the kind of risk investors are compensated for taking, hence 4 Beta Investment Management. All four performance factors are explained below, but first, let me explain WHY I created 4 Beta.
Between 2007 and 2018 I co-founded and was Chief Investment Officer of a financial technology and investment management startup. That company grew to tens of thousands of clients and billions of dollars under management. As Chief Investment Officer, managing other people’s money was a purely intellectual, almost academic exercise. Our team followed best practices consistent with the modern academic literature. Despite our efforts clients often became fearful and pulled money out of the stock market. These emotional decisions often times caused lower returns than adhering to the planned investment strategy.  

Fighting Investors’ Fears, Mine Included


Until 2016, essentially all of my net worth was invested in the company, but in early 2016 that changed when I sold some of the company to a private equity firm. Suddenly, I had to invest my own money and found that investing was no longer primarily intellectual, but rather was highly emotional. I finally felt what our clients had been feeling all along. I finally understood why our clients got frightened out of the stock market. Experiencing what clients experience and empathizing with them provided the insight necessary to create 4 Beta Investments. 4 Beta is designed to address both the financial and emotional needs of investors. Paramount to 4 Beta’s mission is that I manage clients’ money in a way consistent with best practices as determined by a thorough understanding of the academic literature and my decades  of experience as a financial markets participant. [1]
Deeply rooted in our primitive psyche is the fight or flight response. Humans developed this acute stress response in order to survive. Unfortunately, our proclivity to protect against hazard, often by running away, makes humans genetically unsuited for investing. When markets get scary our instincts tell us to sell. Fight or flight causes scared investors to sell at the wrong times. John Bogle, the founder of Vanguard, espoused, “Eliminate emotion from your investment program. Have rational expectations for future returns and avoid changing those expectations in response to the ephemeral noise coming from Wall Street.”



Running out of money is the most common fear of retirees and for good reason. Many Americans feel retirement insecurity, especially when the federal government’s ability to fulfill its social security promises is uncertain due to massive underfunding. Accordingly, responsible families are investing more to eliminate their reliance on Washington. Some investors succeed, but unfortunately many will fail to grow their savings enough to attain retirement security.  
Investors may potentially achieve returns of 2% per year higher than typical actively managed mutual funds by using strategies such as carefully selecting securities, reducing costs, improving tax efficiency, and reducing emotional decision making. [2]
You might scoff at a 2% improvement, but over decades 2% can compound to shocking increases in wealth. Over 40 years, earning a 9% return rather than a 7% return leads to over twice as much growth. A 4% rather than a 2% return leads to over three times as much growth. [3] Accordingly, if markets perform poorly, it’s even more important to control costs and taxes. And yes, 40 years is conservative, because men who reach 65 have a life expectancy of 83 and women 85 ½ . [3]
An increase in your return could easily be the difference between peace and stress, between sending your grandchildren to college or having to say no, between spending winters cruising in comfort versus contending with cold.
This graph represents hypothetical compounded returns and does not reflect the returns of 4 Beta actual or expected in any way. 


All stock market investments have the potential to lose money. I’d be remiss not to talk about risk with potential investors in 4 Beta. If you invest with us, you might lose money, especially if you get scared into selling during a stock market decline. The stock market rises and falls in unpredictable ways, so unpredictable that there’s scant evidence that anyone knows what’s going to happen next, especially in the short term. As a general rule, 4 Beta does not try to guess the direction of short term market fluctuations, but rather buys stock in companies we believe will excel in the long-term.
My grandmother, Marianne, taught me “Money does not buy happiness, but it can provide the freedom that makes finding happiness a lot easier.

How You Can Get the Four Performance Factors?

Regardless of the type of stock market investment, the same performance factors apply: stock selection, costs, tax efficiency, and your trust. I refer to these as the 4 Performance factors. Accordingly, when you invest in mutual funds, ETFs, and separately managed accounts you should consider these four characteristics.


Which securities you own obviously impacts how much your investments earn. 4 Beta focuses on allocating investments across a wide variety of equities and fixed income to provide prudent exposure to risk with the aim of maximizing risk adjusted return in a predictable manner.


Broad diversification of equities across industries, geographic regions, and stages of economic development is key to achieving an efficient risk adjusted return. Accordingly, 4 Beta invests across all GICS codes, in both developing and developed economies and on every continent (except Antarctica, but we’re waiting and ready). 
The S&P 500 and many other well known indexes are market weighted, meaning that the amount invested a company is proportionate to its market value. 4 Beta uses market cap weighted indexes in addition indexes that use other weighted methodologies, that may include but are not limited to equally weighted, sales weighted, earnings weighted, etc. Studies have shown that non market weighted indexed can outperform market weighted indexes, but non-market weighted indexes tend to have higher turnover. We recognize both virtues and accordingly invest in securities that use a variety of weighting methodologies.


Fixed income, i.e. debt securities, are also diversified, but the more relevant considerations for debt are credit quality and duration. We try to focus fixed income investments in the most favorable portions of the both. For example, if the interest rate premium for high yield bonds is small, then we try to move investments toward safer securities, but if the premium for taking a bit more credit risk is high we attempt to take advantage of the situation by providing liquidity where the market is paying the highest premium. The same logic applies to our investments along the yield curve. We try to focus investments on the section of the yield curve that is still upward sloping rather than flat. What this means in practice is that we seek the shortest possible maturity securities that pay relatively high interest rates.


Keeping costs low is critical to investment success. Most companies will tell you all the great things they do and then surprise you with exorbitant costs. Or, maybe they offer a fair price, but later you learn about additional resort fees, taxes, or convenience charges. I hate that. We keep it simple by charging $3.50 per month plus 0.35% on assets under management, which includes custodial and trading costs. In addition to what we charge for investment management, you will have to pay the ETF providers and sometimes the custodian. We try to select the least expensive ETFs that accomplish our goals, paying typically pay between 0.03% and 0.20%. These costs compare very favorably to the direct competitors of which we’re aware.
Costs are more important than most individual investors realize. “A penny saved is a penny earned” is a vast understatement. When investing over decades, a percent saved is many percent earned. For example, if you save 1% per year by using a lower-cost investment, after 30 years your $100,000 investment would be $1,006,265.69 rather than about $761,225.50. (Assuming an 8% rather than a 7% net return)  Over 30 years, saving 1% creates a 32.19% increase in account value.
Mutual funds, make knowing the true costs of your investments difficult to figure out by charging redemption fees, account fees, purchase fees, exchange fees, front end loads, back end loads, 12b-1 fees, management fees, and other expenses. They try to keep these costs confusing and hidden. Forbes magazine estimated these total 3.17% for tax-deferred retirement accounts and 4.17% for taxable accounts. [4]
If you know the true cost of owning your mutual fund, then I’m impressed.

3: TAXES  

4 Beta uses ETFs rather than mutual funds in part due to their tax advantages.
The most significant tax advantage is the automatic deferral of long term capital gains for the ETF owner. ETF owners only pay capital gains when each owner sells the ETF shares. In comparison, mutual funds are a pass through entity, meaning that any capital gains for the year are passed through to investors who own the fund on the record date, meaning no tax deferral.
Mutual fund investors also risk owing taxes on gains they did not benefit from if they buy the mutual fund near the record date. Whoever owns the mutual fund on the record dates is distributed the realized capital gains and has to pay taxes on them. While getting the gains might sound like a good thing, it’s not, because when the gains are paid the fund price falls by a similar amount but whoever receives the distribution has to pay taxes on it. Ouch! 
Mutual fund year-end distributions apply to all shareholders equally, so if you buy shares in a fund just before the distribution occurs, you’ll have to pay tax on any gains incurred from shares throughout the entire year, well before you owned the shares. This could have a significant tax impact.
Mutual fund investors can lose money and still owe taxes.


In terms of both dollar impact and investor happiness, trust is likely the most critical of the 4 performance factors. Distrust, doubt, and fear cause investors to sell when the market falls, which is exactly the wrong way to invest.
From 1997 to 2016, the 20-year annualized S&P return was 7.68% but over the same period the Average Equity Fund Investor earned only 4.79%, underperformance of -2.89%.[5]

There you have it. The four performance factors of 4 Beta Investments.

To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or insider information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.” Warren Buffet
4 Beta Investments’ portfolios are designed to provide an emotional support system that facilitates adherence to the intellectual framework, especially during difficult markets.

How To Join 4 Beta!

If you’ve read this far, you must be wondering how to get started. Keep in mind that 4 Beta is an investing specialist, not a financial advisor.

A good financial advisor will likely provide you with

Financial planning 
Investment recommendations that likely include stocks, fixed income, annuities, and/or alternative investments
Insurance guidance
Succession advice
I believe that humans’ decisions impact our outcomes and our happiness. You now have an important decision to make. You can continue investing with the same giant, expensive, impersonal institutions, and continue accepting the same disappointing results, or you can join us at 4 Beta. Remember, Einstein’s definition, “Insanity is doing the same thing over and over again while expecting different results.” You can benefit from the prudent security selection, low costs, tax efficiency, and trust. Getting started is easy.
Dr. William R. Nelson is an expert in asset management and the associated technology. As the Co-founder and Chief Investment Officer of EQIS for over a decade, he was instrumental in the development of technology including their proposal generation system, reporting system, and Mutual Fund Stress test. He also oversaw the due diligence of outside money managers and was the primary manager of the EQIS portfolios. Dr. Nelson's acclaimed original research has been published in the American Economic Review, De Paul Journal of Health Care Law, The International Conference on Information Technology ITCC 2004 Proceedings, the Journal of Economic Behavior and Organization, Latin American Finance and Capital Markets, the Latin American Law and Business Report, and Public Choice, among others. He also co-authored Mutual Funds Exposed, an Amazon Best Seller, with Dr. Kenneth A. Kim. Dr. Nelson’s broad range of academic excellence and industry experience set him apart from most investment professionals. Few others have, like him, interned at a wirehouse, floor traded futures on the Chicago Board of Trade, earned a Ph.D. (economics from George Mason University), published in top academic journals, founded a company, designed software, performed due diligence on hundreds of money managers, simultaneously managed several dozen separately managed account strategies, and overseen over $2 billion in assets for tens of thousands of families. He holds a Series 65 securities license.


I am an

[1] I also own investments outside of 4 Alpha and 4 Beta, much of which I purchased prior to creating 4 Alpha and 4 Beta.

[2] Returns are only for example purposes only and are not suggestive of any expected returns by 4 Beta.

[3] Organisation for Economic Co-operation and Development (OECD). Health data 2017. StatExtracts. Accessed on November 22, 2017. Available from: http://www.oecd.org/; NCHS. Vital statistics of the United States (selected years). See Appendix I, Organisation for Economic Co-operation and Development (OECD) Health Data. 

[4] Ward, Judith. “4 Reasons For Saving For Retirement In A Taxable Account.” Forbes, Forbes Magazine, 3 Apr. 2019, www.forbes.com/sites/judithward/2019/04/03/4-reasons-for-saving-for-retirement-in-a-taxable-account/#7a6f383f2827.

[5] DALBAR: Quantitative Analysis of Investor Behavior 2016


ALLEN TX 75013

The information contained herein is developed from sources believed to be reliable and is provided for informational purposes only. This is not an offer to buy/sell securities or provide investment advice which may be done only after a client suitability review is conducted and appropriate disclosures are made. Certain investment strategies may carry higher degrees of risk and have a level of complexity which may not be suitable for all investors. Before investing you should identify with the assistance of your financial adviser your specific goals, risk tolerance and investment time horizon. 4 Beta does not provide tax or legal advice. Diversification does not ensure a profit or protect against loss in declining markets. 4 Beta does not promise to maintain a diversified portfolio and may at times be concentrated in specific industries, geographic regions, growth/value, market capitalizations, etc. 4 Beta might also alter the investment types in the portfolio as deemed prudent. All investments carry with them a degree of risk to include a total loss of principle. Past performance is not a guarantee of future results. 4 Beta may change the allocations for each strategy if deemed necessary from time to time. Investment Advisory Services offered through Sofos Investments, Inc., and SEC-reporting Registered Investment Advisor.