To gain access to evidence please click Research Articles-Bank of Evidence

Today, high-quality research exists to show us the investment approaches that are most likely to work in the future, as well as those approaches that are unnecessarily risky.

There is overwhelming data about how impossible it is to pick stocks, trade in and out of them, and fare as well as the market.  Likewise, searches for systems by which one can consistently profit by timing the purchase and/or sale of securities have been unsuccessful.

The data we have is crystal clear and it is a compilation of work by Nobel Laureates and other highly acclaimed thinkers and academics creating a consensus over the past two decades.
 
Nevertheless, many investment and financial advisers pay no attention to the evidence and instead follow a pre-scientific model.  Their conventional investment approach assumes that investing amounts to speculation and forecasting, and that the goal is to use “special” knowledge to achieve returns that are greater than the market as a whole.
 
This “conventional approach” perpetuates because millions of years of evolution leaves us all ‘hard wired’ to believe mankind can find patterns, trends and predict outcomes; contrary to the evidence.

An easy sell 

It is easier to sell products and investment solutions with a good story; investors want and expect this.  Evidenced based investment solutions are ironically harder for people to accept such is the power of our nature and nurture (and the reason for so much important work on Behavioural Finance). If you wish to access a collection of articles and papers, representing part of our evidence bank, which is a library holding most of the scientific evidence, please click on the link below.

Please bear in mind that most of the research was undertaken in the US which represents nearly half the world’s capital markets.  American academics, journalists and financial advisers completed most of the work. There has been relatively little research undertaken by UK institutions, although recently more UK focussed evidence has been completed.

Not available until 2004

Suitable funds to enable implementation of the strategies advocated by this body of work were not available in the UK until 2004. The Vanguard Group, the world’s largest provider of low cost institutional asset class funds, still does not see a market big enough in the UK or Europe to warrant launching funds.
Research is grouped into the following subject groups

• Asset Allocation
• Behavioural Finance
• Bonds
• Commodity Futures
• Dimensional Fund Advisors (DFA)
• Diversification
• Efficient Market Hypothesis (EMH)
• Emerging Markets
• Equity Premium
• Exchange Traded Funds (ETFs)
• Fama/French Three-Factor Model
• Foreign Investing
• Hedge Funds
• Index Weighting
• Market Timing
• Modern Portfolio Theory (MPT)
• Mutual Fund (unit trust and OEICs) Persistence
• Passive vs. Active Management
• Pound Cost Averaging
• Real Estate Investment Trusts (REITs)
• Rebalancing
• Reversion to the Mean

To gain access to evidence please click Research Articles-Bank of Evidence