© Marco Galli 2019
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Innovative approach to investment
The investment philosophy is based on an innovative approach, derived from the academic world.
Academic research
Design
Implementation
Study of the best research conducted in the academic world to continuously deepen the knowledge of markets, their functioning, and expected returns
Design of efficient portfolios, built on the dimensions of expected returns and volatility
Creating value for the investor by integrating academic research, portfolio design and management, and operational implementation
Goal-based Investing
The winning investment strategy is based on the investor's goals.
To successfully manage an investment project, it is essential to start with an accurate definition of the investor's long-term goals, so as not to confuse them with reactions, opportunities, or simple milestones.
A good advisor devotes time and resources to understanding the investor's goals, the constraints imposed by their current and prospective financial and liquidity situation. Based on this analysis, they define the best strategy to achieve the goals.
Subsequently, their role is to help the investor implement the investment strategy and take advantage of any contingent opportunities, provided that they do not contradict the long-term strategy.
Long-term investors outperform short-term investors
A long-term investment horizon allows the investor to profit from market trends. The pursuit of easy short-term gains inevitably leads to value destruction in the long run. An adequate long-term investment plan systematically generates new value for the investor.
Diversification
Multi-asset portfolios are crucial for benefiting from true diversification. Selecting the sub-asset class that will achieve extra returns in a given period is extremely difficult and exposes the investor to greater risks and ultimately to unsatisfactory results.
Cost control
Commissions and fees are certain costs and have a significant impact on the portfolio's performance. For this reason, they must be managed very carefully and limited to the remuneration of the added value provided. It is the advisor's job to keep costs under control.
Skepticism towards active managers
Most active managers underperform the market, net of costs, particularly in asset classes traded on efficient markets. Only a very limited number of them justify their existence by operating in less efficient market segments.
Volatility is your friend
A portfolio with proper and consistent risk exposure has the best chance of generating high returns in the long run. The prudent investor is concerned about permanent capital losses and not about portfolio fluctuations related to mark-to-market.
Simplicity is better
The savings and investment industry tries to create complexity to justify its own existence. In reality, the best approach is to ensure that investment activity remains simple, transparent, and easily understandable.
No market timing
The prudent advisor and investor plan, implement, and continue to manage a long-term investment project over time. Entering and exiting markets based on short-term forecasts is very costly and negatively affects investment returns.
"Serious investors avoid timing markets" - D. Swensen
Winning consulting is a process
Financial consulting based on the solidity and validity of the process is what leads to the best results. The ability to design an appropriate process and the attitude to follow it over time is the key to achieving good results and generating value.
Our investment philosophy is based on scientific, objective, and evidence-based investigation of what actually works in the field of investing.
© Marco Galli 2019
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Cookie Policy