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Strat Doc 3Q18 – Why philosophy matters in investing

01 August 2018

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by Nick Dennis

Why is it important to have an investment philosophy?

An investor with a well thought-out philosophy and process gives him or herself the best possible chance of outperforming the market over the long term. I put those odds at roughly 20%. This figure may seem depressingly low, but it’s consistent with reality – the bulk of investors underperform their benchmarks after fees.

Source: The Concentration Manifesto, Cameron Hight, Alpha Theory.

The table above only tells half the story. Absent a robust and coherent philosophy, I believe the odds of outperforming fall to 5% or less.

The thoughts below are not intended as a prescriptive to-do list. Readers are encouraged to take the underlying principles and apply them to their own specific circumstances, beliefs, and skill-sets.

Click here to read the full article.

Click here to read the full strategy & asset allocation for the 3rd quarter of 2018.

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