Our scientific investment approach

Modern Portfolio Theory

We consider ourselves scientific investors. The basis of our scientific approach is Modern Portfolio Theory, a theory developed in the early 1950s by economist and academic Harry Markowitz (and others). His discovery is based on the very simple premise that diversifying a portfolio could reduce volatility while enhancing risk adjusted returns.

Don’t bet the ranch
Get more bang for your buck
Maximize output relative to input
Nothing ventured, nothing gained
Diversify instead of striving to make a killing
Don’t put all your eggs in one basket; if it drops, you’re in trouble
High volatility is like putting your head in the oven and your feet in the refrigerator.
Harry Markowitz, Economist and 1990 Nobel Prize Winner

Buy and hold with good rebalancing strategies based on solid asset allocation models is the secret. Numerous studies have concluded that in the region of 90% of the variability of returns is determined by strategic asset allocation. This is the proportion of shares (equities) and fixed interest (bonds) held.