Please click on the relevant sections below for information on our investment process and philosophy.

Rebalancing

Once we have selected appropriate passive funds for our clients in each of the asset classes a rebalance occurs every year where the assets are rebalanced back to their original percentage allocation. 

This might seem slightly counter intuitive as you will effectively be selling off part of the asset class that performed the best to buy the asset class that performed the worse.  You are in fact selling high and buying low. 

Often investors chasing the next best performing asset class end up doing the opposite, buying high, chasing the asset class that has outperformed, and then selling low when the asset class falls out of favour and the price drops.

We believe markets are broadly efficient and it is extremely difficult to consistently make accurate market decisions or speculation as to which will be the next best performing asset class or sector. 

Making market timing predictions obviously works well when you get it right, but the times when you get it wrong will more than likely offset all the extra returns you made when you got it right. 

Over the longer term it appears that statistically you are more likely to have a much greater chance to achieve better, consistent, returns by simply being fully invested in the asset classes and rebalancing your investments on an annual basis.

The dramatic effect of being out of the market even for a relatively short period attempting to time the market is demonstrated over a 20-year period to December 2010 in the table below. Please click on the chart below.

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