Investment Approach
Invest Smarter, Live Better
A wise man proportions his belief to the evidence
David Hume, Philosopher
When it comes to investing your money, there are several differing schools of thought on what will achieve the best outcomes.
Of course, everyone has their own idea of what a successful outcome looks like and therefore it is imperative that any investment decisions should be preceded by discussions about your goals and aspirations as well as your appetite for taking risk.
However, it is clear that various factors mean that markets do not tend to behave in the way we expect, particularly over the short term, and so it is very difficult, even for high cost, professional fund managers to beat the market.
Therefore we have adopted an investment philosophy which is based on Nobel prize winning academic research by renowned economists, and which is often referred to as Evidence Based Investing.
Essentially, by holding and sticking with a globally diversified, multi-asset portfolio over the long term (at least 5 years) you are likely to achieve a successful return, whilst at the same time removing the anxiety of market fluctuations and unnecessary costs.
The Key Aspects of
Evidence Based Investing
Historical Research
As the name suggests, the idea of EBI is that the investment decisions are based on decades of empirical research and data analysis, which provide some key aspects of how markets tend to behave over time. This provides a repeatable framework for building portfolios which can be utilised any time a client is ready to invest.
Diversification
We are all familiar with the risky concept of holding all of your eggs in a single basket and this applies to our investment philosophy. The evidence based view is that capturing as much of the global market within your portfolio, means that, along with the right asset allocation, we can ensure a good relationship between risks taken and returns generated.
Low Cost
By holding a diverse range of assets from outset, there is very little if any requirement to carry out any trading and therefore the cost of setting up and managing a portfolio of this kind means charges are lower. The research tells us that reducing investment cost with an evidence based investment approach, leads to higher returns.
Long Term
It is very easy to be drawn into exciting new trending stocks, and emotion based reactions to fluctuating markets are part of being human, however this kind of reactionary investing can lead to missing the best investment days, and making financial mistakes. The evidenced based approach, combined with a trusted advice partner, can help remove the noise and keep you focused on your long term vision.
