Evidence-Based Investing.
Predicting where the market will go is time-consuming and unsustainable day after day, year after year.
We apply a long-term perspective to the market and invest for the long haul. We can only control what we can, like the risks we take, the costs we incur, and the taxes we pay. Anything we can't control, we should hedge against, like a single company or country. You never know which market segments will outperform from year to year. By holding a globally diversified portfolio, investors are well-positioned to seek returns wherever they occur.
We try to beat the market, but not by timing or picking certain players, but by weighing your portfolio to areas of the market that academic research indicates will provide a higher expected return over time.
Academic research has identified these premiums (below), which are well-documented in markets worldwide and across different time periods.
1. Relative price as measured by the price-to-book ratio; value stocks are those with lower price-to-book ratios.
2. Profitability is a measure of current profitability, based on information from the individual companies’ income statements.
3. Diversification does not reduce the risk of market loss.