Quantitative Approach

We believe that a major research for investor underperformance is that our brains are unfortunately prone to certain cognitive biases that mean we at times make irrational market decisions. For example an investor may hold on to a failing stock too long, refusing to take a loss and waiting instead to “get back to even”. A substantial body of research called “behavioral finance” explores these biases that seem to be hardwired into our genetic makeup.

Because of these cognitive biases, we feel that a rules based, quantitative approach to investing can help to mitigate the negative effect our emotions can have on our returns. 

We would rather rely on an objective, mathematical calculation such as moving price average, to define whether a fund is currently in an uptrend, than rely on our own subjective prognostications as to whether the market should go up or down in the short to medium term. Our mathematical approach generates distinct buy and sell signals for us and offers a high level of consistency.