The Best Thing Since Sliced Bread

On July 7, 1928, a bakery in Chillicothe, Missouri sold the world's first commercially sliced loaf of bread. It was a seemingly simple innovation that changed everyday life so completely that to call something “the best thing since sliced bread!” became part of our vernacular.

Of course, sliced bread wasn't really about the bread. Bread nourished civilizations for thousands of years. The breakthrough was making the consumption of bread more efficient, more consistent, easier to enjoy, and less wasteful.

Before sliced bread, every household produced its own "portfolio" of slices. Depending on the person, some slices were too thick, some cut at odd angles, and others too thin to survive the spreading of peanut butter. We can imagine some people forgoing a knife entirely and just tearing off pieces. A loaf disappeared faster than expected because thicker slices quietly consumed more of it. Even the most skilled bread slicer could produce a surprising amount of waste.

Sound familiar?

For decades, investing has had its own version of an unsliced bread loaf.

The “bread” itself was already excellent - global capital markets have created extraordinary wealth over time. But the way investors have traditionally accessed markets has often been inconsistent and less refined, built on hopes of consistently outguessing millions of other market participants through unproven stock picking and random allocations. 

In investing, as with bread slices, efficiency matters.

We have seen firsthand what benefits investors, and what hinders them, especially over longer periods of time. Our investment approach is built around what data shows rewards investors over the long run. Our objective is never to predict tomorrow's headlines. It is to build portfolios that pursue more beneficial long-term outcomes while minimizing unnecessary friction and cost wherever possible.

Just as uniform slices toast more evenly, consistent portfolio construction produces more predictable exposures. Reducing unnecessary waste preserves more of the resources you worked hard to earn. In the investment world, that waste often takes the form of emotional decision-making, uncompensated risks, unnecessary taxes, high-cost funds, and avoidable trading costs. Individually, each may seem small. Compounded over decades, they can consume a remarkable portion of an investor's financial "loaf."

Long-running data shows the average investor has historically underperformed the market benchmarks they invest in – they call it the “investor behavior gap.” Over a 20-year span, the S&P 500 averaged 9.6% annually while the average retail equity investor was up 5.5% - a significant 4.1% gap!

Markets will always fluctuate. Risk can never be eliminated. But thoughtful portfolio engineering can improve how investors experience those markets, just as one clever invention transformed the experience of enjoying bread. We aspire to do something similar. We systematically combine globally diversified portfolios with evidence-based factors, regular rebalancing, tax-aware implementation, and investing discipline. 

As we recognize the 98^th anniversary of commercially sliced bread, it's worth remembering that the most enduring innovations are often not those that reinvent the fundamentals. They're the ones that remove friction, improve consistency, reduce waste, and quietly make life better.

After all, almost a century later, we're still measuring great ideas against sliced bread.