Our Investment Philosophy

1) Embrace Market Pricing

The Market is an effective information-processing machine. Each day, the world equity markets process billions of dollars in trades between buyers and sellers— and the real-time information they bring helps set prices.

2) Don’t Try to Outguess the Market

The market’s pricing power works against fund managers who try to outperform through stock picking or market timing. As evidence, only 17% of US-domiciled equity funds and 14% of fixed income funds have survived and outperformed their benchmarks over the past 20 years. 

3) Resist Chasing Past Performance

Some investors select funds based on their past returns. Yet, past performance offers little insight into a fund’s future returns. For example, most funds in the top quartile of previous five-year returns did not maintain a top-quartile ranking in the following five years. 

4) Let Markets Work for You

The financial markets have rewarded long-term investors. People expect a positive return on the capital they supply, and historically, the equity and bond markets have provided growth of wealth that has more than offset inflation over the long term. 

5) Consider the Drivers of Returns

There is a wealth of academic research into what drives returns. Expected returns depend on current market prices and expected future cash flows. Investors can use this information to pursue higher expected returns in their portfolios. 

6) Practice Smart Diversification

Holding securities across many market segments can help manage overall risk. But diversifying within your home market may not be enough. Global diversification can broaden your investment universe. 

7) Avoid Market Timing

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. 

8) Manage Your Emotions

Many people struggle to separate their emotions from investing. Markets go up and down. Reacting to current market conditions may lead to making poor investment decisions. 

9) Look Beyond the Headlines

Daily market news and commentary can challenge your investment discipline. Some messages stir anxiety about the future, while others tempt you to chase the latest investment fad. When headlines unsettle you, consider the source and maintain a long-term perspective. 

10) Focus on What You Can Control

A financial advisor can offer expertise and guidance to help you focus on actions that add value. This can lead to a better investment experience. 

• Create an investment plan to fit your needs and risk tolerance. 

• Structure a portfolio along the dimensions of expected returns. 

• Diversify globally. 

• Manage expenses, turnover, and taxes. 

• Stay disciplined through market dips and swings. 

Disclosures: Past Performance is no guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio.

Diversification does not eliminate the risk of market loss. There is no guarantee investment strategies will successful. This information is for illustrative purposes only. See back page for additional exhibit information and important disclosures.

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