Evidence-Based Investment Philosophy
What to do When the Only ‘Known’ is the UnknownOur philosophy is to participate in the growth of global capital markets through all conditions. We believe that broad diversification is key; that costs matter; and that markets serve investors efficiently the majority of the time. A conventional, predictive approach to investing might involve reading the economy, the market, geo-politics and company outlooks as if they were tea leaves. Then, investments would be chosen based on their predicted outperformance. At Woodstone Financial, our philosophy is based on the evidence which shows there is little advantage, if any, to following a conventional approach. We believe that markets are unpredictable and that investor behavior has the greatest impact on long-term growth. Our investment philosophy adheres to a few simple, evidence-based principles, which operate in tandem with prudent investor behavior:
- We believe that markets work, and that long-term participation in their growth is key
- We believe that risk and return are related
- We believe that diversification across asset classes and global markets is essential
- We believe that asset allocation, matched to our client’s goals, defines most performance over time.
- We believe in the use of structured portfolios that are designed to capture returns delivered by key elements of global capital markets.
- We believe that investor behavior has a significant impact on long-term results.