

Evidence-Based Investing

When was the last time you stopped to look around and marvel at what we have achieved as a civilisation in the past 50 or 100 years?
Humans inhabit every continent and are constantly finding ingenious ways to solve challenges that will benefit humanity.
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When it comes to solving problems, it requires us to look at how things work, rigorously test countless assumptions and then constructing a solution based on the best results.
Whether it’s constructing skyscrapers or diagnosing the most suitable medical treatments, decades of evidence go into developing the best and most reliable solutions to make sure we work towards the outcome we want.
Why should investing be any different?
Investing is a proven strategy to grow your wealth over time and help you achieve financial independence and security in your future.
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At its heart, investing your money looks to achieve two things:
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1. Growing your money by getting it working for you
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2. Protecting your money’s purchasing power so it doesn’t lose its value
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In our role as independent financial planners, we want to make sure we find the most effective investment approach for our clients which will support them on this journey. This has led us to evidence-based investing.
What is evidence-based investing?
As the name suggests, evidence-based investing is the process of making investment decisions based on decades of academic research and historical market data from around the globe.
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Rather than looking at short-term market trends or the current climate, it’s an approach rooted in the long-term observation of markets.
Our investment philosophy is built on decades of research-based data, not on gut feelings or best guesses.
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This strategy exploits the data by positioning investment portfolios to capture well-established performance premiums, such as value, size and profitability, wherever they occur.
So, why should you consider an evidence-based investment approach?
Access to a globally diversified portfolio
Lower costs so more of your money stays with you
A repeatable formula so we are confident when we invest
Back-tested data to stress test and apply risk-return scenario analysis
Prioritising our financial goals through careful risk management
Improved focus to block out the noise and keep us on track
Removing the guesswork.
Download our guide
This approach avoids common pit falls such as trying to actively guess the movements in the market which has been shown to be a flawed option over the long term (over a 15-year period, around 80% of active managers have underperformed compared to the market they benchmark – these are terrible odds).
Our guide walks you through the evidence and shows why we consider evidence-based investing to be a great investment choice. You can download it below. While we constantly review our approach, we believe an evidence-based approach, supported by a personalised financial plan is the most effective way.
Remember:
Your capital is at risk. The value of your investment (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.