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  • Writer's pictureKevin Burrows

Investment Pillars

1) Long term Investing

  • Outperformance requires a long-term outlook with continuous adjustments to the portfolio

  • Compounding is a powerful force: reasonable returns compounded over long periods can produce astonishing results and is more effective if large losses are avoided

  • Costs and taxes have a significant impact on net returns and should be minimized

2) Asset Allocation (the mix of asset classes) is an important driver of return

  • Diversification has benefits, allowing investors to reduce risk without necessarily sacrificing return

  • Assets that are uncorrelated (or have low correlations) help to reduce total portfolio risk

  • Tactical asset allocation and security selection and also contribute to returns

3) Valuation is an important determinant of future returns

  • Price and value ultimately converge, creating opportunity when they deviate

  • Over the short term, market psychology, sentiment and emotions play a strong role in market movements, creating noise which can mask the fundamental characteristics of An investor is often rewarded for assuming the short-term discomfort of other investors by doing the opposite trade

  • Have patience in identifying opportunities and be willing to hold cash in the absence of attractive valuations

4) Stewardship principles increase the odd of meeting our clients’ goals

  • Risk is not simply the “volatility” of an investment but also the “shortfall risk” of not achieving a client’s goal

  • Investing, by definition, involves assuming risk. We strive to effectively manage this risk through diversification at the asset class, manager and security level, and also by adhering to a robust, valuation-based investment process

  • Investor education and effective communication are critical (and often overlooked) components of a successful investment strategy

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