Investment Philosophy
We believe that money is simply a facilitator - a means to achieve the peace of mind and the life you are looking for. Our independent investment recommendations are based on multi-asset-class investing, which has over 30 years of proven performance. Our Investment Philosophy is a set of core values based on academic research, to help you make smart decisions about your money.
Our Beliefs | Description |
Capital Markets Work | Markets throughout the world have a history of rewarding the long-term investors for the capital they supply or investment they make. We believe that these markets and asset classes generate a return above inflation (known as the Real Return). |
Risk and Reward are related | Over the last fifty years, evidence from practising investors, financial economists and leading academics alike points to an undeniable conclusion: risk and reward are related. They have provided us with the understanding that taking a chance may result in a gain, but not all risk-taking is rewarded. Everything known about expected returns in equity markets can be summarised in three dimensions – (1) Stocks are riskier than bonds and have greater expected long-term returns, (2) Small company shares have higher expected returns than large company shares, and (3) Lower-priced value shares have higher expected returns than higher priced growth shares. We also incorporate short-term, high-quality bonds, which have less risk, as a strategy to reduce volatility, whilst maximising overall portfolio benefit. |
Strategic Asset Allocation | Academic studies have shown that over 90% of the variance in investment returns are derived from asset |
Diversification | Academic Studies have shown that a crucial component of risk management in investing is diversification. The key to diversification is the age old adage, don't put all of your eggs in one basket. The main point of diversification is to reduce risk rather than improve expected return. |
Buy & Hold | Market timing adds uncertainty, reduces efficiency and increases taxes and costs, all of which threaten your financial objectives. |
Passive Investing | Passive fund management allows investors to gain exposure to different asset classes at much lower cost than actively managed funds. Repeated academic studies illustrate that when active funds do outperform benchmark indices, this is down to luck rather than skill and no more than would be expected from random chance. |
Rebalance Annually | Over time, markets move and the asset class parameters can drift away from the originally agreed benchmarks. To avoid having too much exposure to any one asset class, we believe it is important to regularly rebalance. |
Efficient Implementation | We believe in driving down the costs of portfolio management wherever possible and use state-of-the-art trading, administrative technology and e-commerce systems to reduce overheads and direct costs to our clients. |
