At MASECO, our Investment Philosophy originates from deep rooted beliefs about how best to preserve and grow our clients’ wealth. Most fundamentally, we believe that markets are efficient, that diversification is essential and that investing involves balancing risk with expected returns.
This framework underpins the construction of robust portfolios for the long term, focusing on asset allocation and cost minimisation. Investors currently are having to adjust to lower returns on offer compared to previous eras, and in this environment reducing costs is critical in order to provide clients with meaningful returns.
We do not attempt to time markets, which is generally at best a futile pursuit, but rather focus on proven sources of long term return that have been evidenced by decades of academic research. That does not mean we stand still. In fact, we are continually researching new ways of allocating capital more efficiently. However to meet the grade, these findings must be proven to be pervasive and persistent – not just the latest fad.
Below we describe some academic evidence that underpins our Investment Philosophy.
- The Power of Markets
This video explains how security prices are set and change based on collective knowledge of buyers and sellers. Armed with this information investors can be more confident about the power of the financial markets.
- Eugene Fama on Modern Finance
Nobel Laureate and University of Chicago Booth Professor, Eugene Fama talks about the evolution of modern finance
At MASECO we adopt a Smart Beta approach to investing. This concept is sometimes tricky for investors to understand. This video series explains the approach and gives a balanced opinion as to its merits.
- Passive Investing Theory
MASECO’s Smart Beta is somewhere between Passive and Active investing. This four part series explains the intellectual foundations of the passive approach to investing.
- Stock Market History: A Crash Course For Investors
This 8-part series looks at the lessons we can learn from the history of the stock market.
- Fund Managers Uncovered
What makes fund managers tick? Under tremendous pressure to outperform, yet faced with overwhelming evidence that this is impossible in the long term; how do these undoubtedly bright and hard-working people deal with the seemingly contradictory nature of their jobs?
- Whitepaper Series
- Economics 101
Every morning when you turn on the news you will be bombarded with facts and figures on the economy – things like the improving budget deficit, the growth in GDP, a rise in the RPI and a new round of quantitative easing. What does it all mean and does it matter? This whitepaper provides a bluffers guide
It is easy to be convinced that the world’s future lies in the East and other emerging economies and that investing in fast growing emerging economies is where future strong returns will come from. It is easy to forget that real risks exist, such as asset expropriation, capital controls and the lack of a developed rule of law, among many others. Reality may surprise some. This note takes a balanced view of the returns and associated risks of investing in emerging market equities.
The trappings of wealth such as beautiful art, fine wine, classic cars and old watches may have an aesthetic value, but are they good investments? This note provides a quick look at collectables in an unemotional light. In short, the answer is that their superficial allure and headline grabbing returns fail to match a hard-nosed practical reality. Own them only if you enjoy them!
MASECO Investment Letters
Access all of our monthly Investment Letters, The Tortoise and the Hare, since 2009 here.