Investment Philosophy at Whitecross Investments Ltd
Leverage diversification to reduce risk
It’s a fact – we’re all poorly wired for investing. Our emotions are powerful forces that can send us on a roller coaster ride with the market and cause us to do exactly the opposite of what we should – like buying high and selling low.
Seek lower volatility to reduce risk
Let’s consider two mutual funds. Each of them has had an average arithmetic rate of return of 8% over five years, so you would probably expect to have the same ending wealth value. But it is a mathematical fact that the one with less volatility will have a higher compound return.
Use Global Diversification to Enhance Returns
ndividual stocks of companies around the world with similar risk have the same expected rate of return. However, they don’t get there in the same manner or at the same time. The price movements between international and U.S. asset classes are often dissimilar, so investing in both can increase your portfolio’s diversification.
Employ Asset Class Investing
An asset class is a group of investments whose risk factors and expected returns are similar. Asset class investing will enable you to gain the same advantages previously enjoyed only by large institutional investors, including the benefits derived from lower operating expenses; lower turnover resulting in lower costs and lower taxes; and consistently maintained market segments.