Our view of the market is influenced by the following fundamental worldviews:
We believe that, like the weather, the economy and markets are too complex and chaotic for short-term prediction. But that doesn’t mean there aren’t deep regularities that can be harnessed. These include the following:
In his 2004 book, The Wisdom of Crowds, James Surowiecki explored the many situations in which the collective wisdom of a group will surpass that of its smartest individual members. We believe this same wisdom of crowds manifests itself in the economy as a whole, and stock markets in particular, in the following ways:
This is why our investment approach is designed to harness that consensus – that wisdom of crowds – rather than trying to outsmart it.
How do we manage risk? We believe that diversifying globally, across different categories and within categories, while regularly rebalancing the portfolio’s allocation is the only truly effective way to manage risk.
Our process for creating an investment portfolio is as follows:
This is our unwavering process, and this is what we offer.
The Investment Answer, written by Daniel Goldie and Gordon Murray, presents the insights of more than 60 years of market research in clear and easy to follow language, and does so in a spare 96 pages. They framed their book around five basic decisions that every investor must make, and they make a clear and compelling case for a philosophy and approach that are very much consistent with our own. Hence our desire to let you know about it. Let us know if you’d like a copy.