Evidence Based Expert Advice
We believe that Evidence-based investing (EBI) offers individual investors a smarter, more reliable way to grow their wealth. Rather than chasing trending stocks or trying to time the market, EBI relies on decades of academic research and real-world data to guide investment decisions. This approach helps investors stay disciplined, with greater confidence, knowing their portfolio is built on strategies that have stood the test of time.
Academic studies on investing date back to the 1950s, with several Nobel Prize-winning contributions. Yet, many financial advisers still ignore this evidence.
The research highlights the key principles of Evidence Based Investing (EBI) as:
Empirical Research
Investment decisions are based on peer-reviewed academic studies and historical market data rather than personal opinions or market predictions.
Factor Investing
EBI identifies and utilizes factors such as value, size, momentum, and low volatility, which have been shown to drive investment returns over time.
Low-Cost Investing
EBI emphasizes cost efficiency, advocating for low-fee index funds and ETFs to maximize net returns.
Risk and Return Are Connected
Higher potential returns generally come with higher risks, though nothing is guaranteed.
Diversification
Spreading investments across different asset classes, sectors, and geographic regions reduces risk and increases the likelihood of stable returns.
Markets Are Efficient
Prices reflect all known information, making it difficult to consistently outperform the market.
Behavioral Discipline
Investors following EBI avoid emotional decision-making and stick to data-driven strategies, preventing panic selling and excessive trading.
Long-Term Focus
Instead of reacting to short-term market fluctuations, EBI promotes patience, recognizing that markets tend to reward disciplined investors over time.
Review and Rebalance
Over time portfolios drift away from their intended structure. Regular rebalancing helps keep risks aligned with your expectations.
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. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.