This is a mistake many investors make – believing that to be successful they must have their finger on the pulse all the time. The investment management industry and financial press perpetuates this myth with daily chatter that offers rolling tips, predictions, warnings, speculation and advice. This material is produced by competitive media and funds sales industries that survive by attracting attention to themselves.
But virtually none of this information is of use to investors; in fact, it is distracting noise that can bully people into taking ill-advised actions. It is entertainment, not information.
Our investment philosophy is based on information and knowledge, not noise or entertainment. It is rooted in the work of cool-headed academics with no vested interest in selling investments or filling column inches.
This diagram shows that there are four categories of investment style. Some investors try to time markets to their advantage and/or select securities which they believe are mispriced. Investors who do not believe it is possible to make predictions about stocks or market performance - who cannot predict the future - are in box four.
We are in box four.