The basis for our philosophy is that investors overreact in the short run due to emotional stress or excessive optimism. If investors follow a structured and disciplined approach to investing they will avoid many of the biases which cause them to act in irrational ways. Our job as a financial adviser is to guide you through this process.
This most basic tenet of investment is paid a lot of lip service, but in fact is followed with great indifference. Diversification is one of the central planks upon which investment advice at our firm is based. This can mean either reducing risk for a portfolio that is inappropriately allocated to high risk investments, or increasing risk for portfolios inappropriately allocated to low risk investments.
With investments, the only thing we can be certain about are the fees. Performance will be variable and unknowable, but at least we can be sure about what the costs are. It is our philosophy to keep costs as low as possible, without diluting the strength of the investment proposition.
Superior investment performance is not our primary goal, but rather superior performance with less-than-commensurate risk. The emphasis at our firm is on consistency and protection and less on one-off high returns.
Between two-thirds and three quarters of money managers fail to beat their benchmark over the long run. This is not a result of market efficiency however. It is a result of misaligned incentive structures. We believe less efficient markets exist in which dispassionate application of skill and effort should pay off for our clients. As such we recommend both a passive and active approach for a portfolio.
Because we do not believe in the predictive ability required to correctly time markets, we structure portfolios with a long term time horizon in mind. That is not to say that the benefits of timing are illusive. Through a disciplined approach to re-balancing and through a commitment to invest on a regular basis, the benefits of market timing can accrue to an investor.
Economics and finance is a social science. The over-application of mathematical constructs within investing is dangerous. It is our view that there are many useful models within finance which if applied correctly and overlaid with subjective assessment can add value. We strive to exploit the best of both the art and the science within investing.
Global Life & Finance Ltd is regulated by the Central Bank of Ireland.
Global Life & Finance Limited – Reg in Ireland No. 323964
Reg. Office: Brook House, Unit C4, Donnybrook Commercial Centre, Douglas,
