Embrace Market Pricing
The market is an effective information-processing machine. Each day, the world equity markets process billions of dollars in trades between buyers and sellers—and the real-time information they bring helps set prices.
Don’t Try to Outguess the Market
The market’s pricing power works against fund managers who try to outperform through stock picking or market timing. As evidence, only 18% of US-domiciled equity funds and 15% of fixed income funds have survived and outperformed their benchmarks over the past 20 years.
Resist Chasing Past Performance
Some investors select funds based on their past returns. Yet, past performance offers little insight into a fund’s future returns. For example, most funds in the top quartile of previous five-year returns did not maintain a top-quartile ranking in the following five years.
Let Markets Work for You
The financial markets have rewarded long-term investors. People expect a positive return on the capital they supply, and historically, the equity and bond markets have provided growth of wealth that has more than offset inflation.
Consider the Drivers of Returns
There is a wealth of academic research into what drives returns. Expected returns depend on current market prices and expected future cash flows.
Investors can use this information to pursue higher expected returns in their portfolios.
Practice Smart Diversification
Holding securities across many market segments can help manage overall risk. But diversifying within your home market may not be enough. Global diversification can broaden your investment universe.
Avoid Market Timing
You never know which market segments will outperform from year to year. By holding a globally diversified portfolio, investors are well positioned to seek returns wherever they occur.
Manage Your Emotions
Many people struggle to separate their emotions from investing. Markets go up and down. Reacting to current market conditions may lead to making poor investment decisions.
Look Beyond the Headlines
Daily market news and commentary can challenge your investment discipline. Some messages stir anxiety about the future, while others tempt you to chase the latest investment fad.
When headlines unsettle you, consider the source and maintain a long‑term perspective.
Focus on What You Can Control
A financial adviser can offer expertise and guidance to help you focus on actions that add value. This can lead to a better investment experience.
“Toby is never heavy handed giving me loads of information, he answers questions when I need him. I leave him to it and trust him which is the biggest thing.”
“Toby was very keen about meeting people face to face to get to know me. I was moving around and had no fixed accommodation. He took time to listen and was good at hearing what I said. I was happy to let him get on with it."
“I’ve had far better implementation dealing with Toby that I’ve previously had if I’ve been speaking to someone else. I’ve always been wary of consultants and would put financial advisers in the same bracket. Toby listens and it all comes down to that. [By listening] he can give better advice.”
