Science illuminates our way
Should your financial plan require investment advice as part of implementation of a financial product then you can be assured we have a robust investment process to meet your needs. Our investment approach and philosophy has been developed using the core principles of Evidence Based Investing backed up with research from Noble Prize winning economists.
Evidence Based Investing (EBI) Portfolios have grown from ideas shaped, tested, and refined by financial science over the past fifty years. Every strategy, every solution, every new idea within our investment approach emits from an evidence-based understanding of markets and investing. EBI’s core beliefs are:
Free markets are efficient. The financial markets adjust to every new spark of information, and competition quickly drives prices to fair value. A stock’s current price is the best estimate of its true value. Attempting to forecast future events or time market movements is a futile endeavour that only burdens investors with higher costs and unnecessary risk.
Risk and return are inseparable. Stocks and bonds that offer higher average returns relative to the market almost always carry higher risk. Understanding this relationship enables investors to strike a balance between their performance goals and the degree of uncertainty they can accept.
Diversification is crucial. The most sensible way to seek higher expected returns is through broad diversification across many asset classes, industries, and geographical markets. A well diversified portfolio balances out the random effects of individual stock performance.
Costs matter. Whilst you can’t control what happens in the markets, you can control how much you pay to invest. Costs and expenses over the long term can erode investment performance because investment returns are reduced pound-for-pound by the costs incurred. By minimising costs, investors improve their chances of meeting their investment objectives. Skilful portfolio management and smart, patient trading can produce real cost savings over time. These savings accrue directly to an investor’s return.
Our investment approach will help our clients achieve the outcomes they expect and require.
Evidence Based Investing Offers An Enlightend Path
EBI uses the best ideas from leading academics to design strategies that work in the real world.
Recent times vividly illustrate the unpredictable nature of markets. Although unsettling, these periods highlight the importance of having a coherent, rational investment approach. After all, it is through higher risk that investors find the potential to earn higher long-term rewards.
No one controls the way free markets behave. But investors can control how they personally participate in capital markets. Time in the markets. not timing of the markets is key to outperformance. Every investor must assemble a portfolio that best fits his long-term goals and tolerance for risk. Making the right decision about asset mix, maintaining a high degree of diversification, and staying disciplined are the keys to a good investment experience.
With this perspective on markets and investing, the future looks bright. Strengthened by time-tested beliefs and equipped with portfolios to implement them, Investors who invest using EBI portfolios can look beyond daily market fluctuations and towards the legacy of wealth creation.