Investment Philosophy

Stock and bond markets have been around for centuries and are conduits for capital. Investors forego certainty on their money, for the prospect of having more in the future.

However, there are times when investors get trapped in secular bear markets and do not make money for years. That is when they may lose hope.

Fortunately, empirical evidence shows that markets spend 70% of the time going up. The markets will work in your favour as long as you stay patient and have a proper investment roadmap in front of you.

Historically, capital markets have made money for long-term investors. In return for supplying money for capitalism, investors receive a return that is far above inflation or even the guaranteed CPF rate.

Even though investors will be subject to market cycles and at times receive a return lower than bank deposits, the power of markets will eventually reward long-term investors.

It is easy to be swayed into chasing the hottest investment, but only a small percentage of such “bets” ever pan out. Given that forecasts are nearly always wrong, the best strategy is to maintain a long-term perspective.

Investing in the best company or the most interesting forecast by well-known financial institutions has been shown to be detrimental to your capital. Forget about stock-picking, be systematic, and diversify broadly and globally to obtain the best risk-adjusted return.

A market sector which outperforms in one year typically does poorly for the next. It is thus extremely difficult, if not impossible, to forecast winners.

Rather than try to time the market, the most systematic way to receive returns is to hold a broadly-diversified, risk-adjusted portfolio suitable for each individual's risk tolerance.

Buying a basket of stocks that are concentrated in one industry or country exposes investors to unnecessary risks. Many investors are blissfully ignorant of what their investments could lose.

We believe that no investor should be kept in the dark. Everyone deserves a scientifically-constructed portfolio with properly-quantified and verifiable risk and return statistics. All our portfolios undergo periodic simulations to check possible losses should any adverse market event occur.

You need an accuracy rate higher than 70% for your investment calls to beat the market. Even the forecasts of the best “investment gurus” in the world don’t come close to that number. Stringing several buy and sell decisions together reduces your chances of a positive outcome even further. When you add in your transaction costs, you will realise that active trading is a losing game.

No one can control nor predict whether markets would go up or down tomorrow. However, it doesn’t mean that you sit still and do nothing. We help control your investment experience through proper portfolio construction, risk management and, most importantly, managing costs within a portfolio.

The brightest minds from finance academia have provided us with great ideas to construct our investment portfolios. We choose to implement these concepts based on decades of empirical research to our client’s benefit, rather than speculate and predict market movements based on fleeting and transient themes.

Good investing is simple and need not be complex nor difficult to understand. Decades of empirical research has shown that securities that are able to achieve higher expected returns share similar characteristics.

Using an investment approach grounded in this economic theory, we help investors achieve their goals over the long run by building portfolios focusing on the following equity and fixed income dimensions of returns:

Headlines stir our emotions and trigger impulsive thought processes that bypass our rationality and may result in decisions that we later regret.

Investment decisions should take place within a process-driven framework: starting from the advisory process to portfolio construction, asset allocation, right down to when you enter or exit the market.

Our proprietary Risk Matrix system presents us with objective data that may guide us to stay invested even when market pundits are telling us otherwise, or to stay out of the market when over-exuberant investors are piling into risky assets.