We believe that long-term investment performance can be achieved through a disciplined investment strategy combined with effective management.
Our core beliefs regarding effective investment management include:
- Risk and return can be proportional to each other.
- Investment performance should be judged over a long period of time and on a risk-adjusted basis.
- Diversification among asset classes, risk factors, and economic factors can potentially reduce both volatility and individual risk and may improve long-term risk-adjusted returns; however, diversification and asset allocation do not ensure a profit or protect against a loss.
- Risk associated with one asset should be viewed from the perspective of an entire investment portfolio and how the asset fits into the portfolio.
- Rebalancing is an essential strategy of long-term value investing. However, rebalancing is hard to implement as it challenges most investors’ tendencies to continue to invest in line with current market trends.
- Tax liabilities, transaction costs and fees can be harmful to overall performance and should be incurred efficiently and with transparency.